Mr Jannie de Villiers, the Chief Executive Officer of Grain SA,
Mr Neels Ferreira, Chairman of Grain SA,
Grain SA senior executives and employees,
Professor Jonathan Jansen, Vice-Chancellor and Rector of the University of the Free State,
Ladies and gentlemen
Allow me to begin by thanking Jannie de Villiers for the kind invitation extended to me to address this very important occasion, the open discussion forum which kicks off the two-day annual Congress of Grain SA. This Congress will, I believe, be focusing on new opportunities –a most appropriate focus, given all the changes implemented at Grain SA last year, including the relocation of its offices to Pretoria.
The theme of this year’s Congress, “New opportunities: Import replacement and export promotion” is therefore very fitting. It is a theme that will no doubt prompt lively debates, informative discussions and intelligent proposals and solutions –particularly because the delegates are well aware of the fact that our agricultural sector has to position itself to operate in a changing environment.
These much-needed changes reflect a concerted response from government, the agricultural sector and other partners and role-players. An amount of R4 billion has been set aside by Government to assist smallholder farmers. This ties in with the Department of Agriculture’s initiative called “Zero Hunger”, which identifies a central role for developing small-scale emerging agriculture by giving preferential procurement status to smallholder farmers, thus enabling them to supply goods efficiently and sustainably. The Department of Agriculture refers to this project as, and I quote, “government embarking on a comprehensive overhaul of the architecture of food production in our country.”
Let us therefore be under no illusions about this: the year 2012 will be a year of action in agriculture, with an increased focus on food production. This is why this annual Grain SA Congress is so important. Ladies and gentlemen, you are no doubt aware of the fact that on average, every grain producer in South Africa provides food for over 6000 of our citizens. This underlines the indispensable role that Grain SA, its members and affiliates play as food producers.
Food production in general, and grain production in particular, are issues that the Department of Science and Technology takes very seriously. Evidence of our Department’s commitment to rural development and food security is that we now have no fewer than ten research chairs in this field. This is part of the government’s flagship Research Chairs Initiative, managed by the National Research Foundation.
Last year’s World Food Prize Laureate, and former Ghanaian president, John Kufuor, wrote in an article in the City Press of 27 November 2011 that, and I quote, “Nothing better illustrates the crucial role that science must play in farming in Africa than the contrasts in agricultural productivity between our continent and the rest of the world. Food productivity has increased globally by 140% in recent decades, but the figures for sub-Saharan Africa over the same period show a fall.”
Mr Kufuor goes on to say that this discrepancy between Africa and the rest of the world shows how Africa’s agriculture has been cut off from the scientific advances that have virtually transformed farming yields in other parts of the world.
Ladies and gentlemen, the poverty and hunger statistics in Africa reveal the extent to which this continent has fallen behind in global food production. Furthermore, a third of the inhabitants of sub-Saharan Africa are chronically hungry - the highest percentage in the world.
And you might add to this scenario the menacing spectre of climate change, the brunt of which will be borne by Africa’s citizens.
Now that I’ve sketched this dark cloud, let me tell you about its silver lining. Unlike many other parts of the world, there is a great deal of underutilised land on the African continent, including a limited amount in South Africa, and there certainly is considerable potential to achieve productivity gains. It is in this area that science and good agricultural research have a vital role to play.
And, of course, increasing agricultural yields and bringing new land into production have an enormously important role to play in addressing the challenge of achieving food security for all. It is important for us to have the same conceptual understanding of food security. I would like to emphasise the three pillars used by the FAO to define food security:
- Sufficient quantity, that is, that enough food is available in the area or country;
- Affordability and/or accessibility, meaning that people can actually obtain an adequate amount of this food to meet their needs; and
- Nutritious and safe food for an active life.
This has been well captured in the recently released draft National Development Plan: “Food security exists when everyone has access to sufficient, nutritious and safe food at all times.”
The data suggest that, while there are still too many households having inadequate diets, in fact there has been a significant improvement since just a decade ago. Now with employment once again on the increase, we expect further declines in the number of hungry, food insecure households.
It is therefore quite clear that, as a country, we cannot only focus our policies on ensuring production of food in sufficient quantities - measures must be in place to ensure access to nutritious food at all times at household level.
Country self-sufficiency in all commodities is not achievable in most countries, and would not be a useful policy objective. Self-sufficiency in grains, especially those that constitute the staple diet of most people, is clearly desirable but is not a precondition for food security at household level and, as we have learnt, surplus grain production does not automatically translate into a food secure nation. However, availability of food in sufficient quantities which I will turn to now is an important part of the equation, and if “availability”flows from domestic production so much the better.
Increase in production (availability)
In general it would be safe to say that the economic policies of this government, which have been based primarily on market principles, have ensured a sufficient supply of food to meet the needs of our population. This, complemented by a comprehensive social protection system that, among other things, ensures that increasing numbers of even the poorest households in our society have the means to acquire sufficient food to meet their household needs.
Part of our proposal as government is to increase the number of hectares under irrigation; this will lead to an increase in agricultural production, but also hopefully result in higher employment on farms. However, most of the proposed increase in the area under irrigation is predicated on the adoption of more efficient irrigation systems, and as a knowledge-based society, we must constantly strive to find more effective and affordable technologies for this.
A second measure to increase food production is to improve the performance and efficiency of all land reform projects as well as the farmers who have been beneficiaries of this programme. Support to existing farmers in the former homelands, where the greatest concentration of poverty is still to be found, is equally important. This requires a substantial improvement in support services to black farmers, in the form of more effective and accessible extension services, recapitalisation, and other services.
Of course it is difficult for farmers to survive in the face of unfair competition from highly subsidised famers in other parts of the world. The government will proceed through the World Trade Organisation to fight agricultural subsidies, to improve market access for our products, and to conclude technical co-operation agreements to provide a platform for South African producers to produce sustainably for the long term.
We must note with appreciation the work done by Grain SA and other commodity organisations such as sugar and wool, to develop black farmers and to guide them through training and mentorship into the mainstream of our economy. An important question is whether we have appropriate technologies that allow smaller farmers to compete given their scale of operation.
South Africa has adopted a positive view towards the use of biotechnology as one of the pillars to maintain food security. Without the responsible use of biotechnology, there is little likelihood of the planet being able to feed itself sustainably.
A new comprehensive Bioeconomy Strategy is soon to be released by the DST. There is considerable emphasis in this strategy on the potential of biotechnology, both in support of primary agriculture and secondary processing.
However, in terms of any effort to boost production and productivity, we should be mindful of the bitter historical irony of this sector, whereby the rapid rise in productivity led to the long-term decline in commodity prices, making it ever harder for farmers to survive. This is one of the main reasons why South Africa today has far fewer commercial farms now than 50 or even 20 years ago. Thus, in seeking greater food availability, it should not done in such a way that it undermines farm profitability, with the possible disastrous result of further job losses on farms, while in any event not achieving long-term security of supply. Making farming more sustainable is no less important than making it more productive.
One important way of doing this is to promote conservation agriculture, and it is encouraging to note the increase in research spending has shifted in favour of conservation agriculture in recent years. Climate change is a reality and research is a critical building block to ensure that the world can produce enough food to feed itself under increasingly difficult circumstances. With the current world population predicted to grow to 9 billion people by 2050 there really is no choice.
Conservation agriculture also has the virtue of potentially lowering input costs, which also makes farming more sustainable. In fact, I would argue that the emerging emphasis of agricultural research, apart from conservation agriculture, should be on lowering costs, especially in such a way as to promote increased employment on farms, but with the general effect of making farming more sustainable and thus stabilising the sector.
Two final points on the "availability" part of the equation. Firstly, availability is not only about production, it is also about a country's ability to import when necessary. Even with best of research and the best of agricultural practices, our grains depend on rain, and crop failures will occur. The condition of availability therefore does not preclude imports, when conditions so dictate. But, in line with the theme of this Congress, it is in our national interest to reduce our dependence on imports.
And secondly, as stated in the definition of food security, it is not only about country availability, it is also about area availability. The full range of food that is necessary for a healthy and active life must be as available in the shops in Giyane, as in the shops of Sandton. More often than not, as we know, food prices in the remote rural areas, where poverty levels are most acute, are considerably higher than in the cities. Where production takes place, and who produces the food, could be as important as how much is produced. And this brings me to the next part of the food security equation, namely affordability.
Affordability
"Affordability" is a function of the price of the essential good (in this case food) and the amount of money the household has. While policies must address pricing issues, it is actually poverty, more than anything else, that makes food unaffordable.
The South African government has identified that growing the economy and thereby creating jobs, is one of the best ways to address poverty and, indeed, to improve food security. We have already surpassed the UN millennium goal of halving the number of people living on or below US$1 per day. We must now raise our sights on making similar gains in reducing the number of people living on less than US$2 per day.
While producing surpluses of staple foods, such as maize, is an effective means of ensuring the cheapest possible food prices in the shops, if farmers are not making a profit, then the production system is actually not sustainable. The key question then is what policies or interventions could assist in achieving not just surplus maize production, but profitable and therefore sustainable production, without direct subsidies (which are not sustainable) and without price interventions.
The substantial infrastructure investment programme recently announced by President Zuma in his State of the Nation Address could, among other things, have the effect of lowering the cost of doing business in the agricultural sector, make food more abundantly available, and therefore affordable, while at the same time boosting the share of the final shop price that ends up in farmers’pockets. Over the past few years, the government has committed itself to providing the necessary investment in the upgrade of infrastructure such as electricity, road, rail and ports. Poor infrastructure, especially transport costs, substantially contributes to food prices in South Africa. We would particularly like to note the role played by the NAMC in helping us identify some of the worst culprits responsible for rising transactions costs.
Another contribution by government to lowering the cost of food has been the increased activity of the Competition Commission. A free market without proper competition is not a solution for affordable food in South Africa. I would like to call on the farming community to report any suspicion of misuse of market power, or anti-competitive behaviour, in the production of food. We have taken note of the development of increased on-farm storage. This is not only to the benefit of national food security, but is also driving down the storage cost of grain in the country.
Nutrition and food safety
Having touched on availabilty and affordabilty of food, I would like to briefly touch on food safety and nutrition. I believe this is an area that needs far more attention. Partnerships between the Department of Science and Technology, and institutions like the Maize Trust, the Winter Cereal Trust and others need to be established. I am looking forward to hearing the results of our combined efforts on mycotoxin research. Meanwhile the industry deserves praise for the way in which they have established the mycotoxin network of researchers in South Africa. The feedback from the international peer review is very encouraging. Keep up the good work!
Household food security
At the end of the day, our biggest single challenge remains the total eradication of hunger an malnutrition wherever it occurs. Or the attainment of "zero hunger" as the Department of Agriculture has called it.
This government is committed to substantially improving household food security. But the achievement of this goal will only be possible through a combination of the measures I have already spoken about, and the addition of other critical measures.
Household income is the most important. While the 15 million people who are currently receiving some form of government grant is not the ideal we are striving for, in reality it is the most important single intervention that has managed to rescue household from hunger and chronic malnutrition.
In the absence of secure permanent jobs, the Expanded Public Works Programme, and more so the Community Works Programme provides opportunity to get some income to the household, while at the same time either maintaining or expanding infrastructure that our economy needs for it to flourish.
And then we should not under-rate the impotence of feeding schemes, such as community soup kitchens. Again, it is not the long term answer, but is essential to bring relief in the interim. I believe there should be a massive expansion in local feeding schemes.
The School Nutrition Programme has been successful in ensuring that millions of children get at least one nutritious meal a day, but this limited to school days, which means there has be something more if we are serious about achieving a condition where nobody goes to bed hungry, and no child is malnourished.
I have tak note of the various bursary schemes administrated by the grain and oil seed trusts. This is a crucial element in building capacity. We have also identified the increase and improvement of productivity in the communal areas as a strategy to improve household food security. This is a challenge where we need your support and advice in bringing these fallow hectares into production.
I would like to compliment Grain SA on the excellent work you are doing to support the development of black grain farmers, which you pursue with commitment, creativity, and good common sense. I believe Grain SA is setting an example which is serving to raise the bar for how established agriculture can contribute to South Africa’s agrarian reform. We look forward to co-operating with you amongst other things through the Recapitalisation Programme, which was designed that black farmers who have benefitted from land reform become commercially sustainable producers as soon as possible. We do however acknowledge that it cannot just happen overnight.
Conclusion
In conclusion, Chairperson, I would like to emphasise that food security and research are inseparable from each other. The link between these two and the solution for long-term household food security lies in our partnerships, and I would like to encourage all of you to continue working with government in finding solutions to ensure enough affordable, healthy food for our nation.
Sterkte vir die seisoen wat voorlê. Ons besef dat julle manne en vroue uitgelewer is aan die natuur en dat dit ‘n baie moeilike reënjaar is. Dankie vir wat julle doen om die land en sy mense te voed.
Thank you.
