E Thabethe: Fruit Industry Plan

4 April 2007

Steering Committee convener, Anton Rabe
Members of the media
Programme Director
Ladies and gentlemen

For me it is always a pleasure to be invited to occasions such as this one.
The pleasure I feel is derived from the knowledge that that there is no way
that an organisation such as Fruit South Africa would invite the Minister for
Agriculture and Land Affairs and not have a basketful of fruit ready to hand
over. Do not worry if its value dictates that I declare it to Parliament, I
will.

Programme Director, the process of putting together this plan has been a
long and arduous one. It is therefore my pleasure to eventually see the hard
work of those who were involved from day one in 2004 finally come to fruition.
Looking at the calibre of the participants, I am sure you have done justice to
this work.

Ladies and gentlemen, much as the putting together of this plan had been
long and difficult, this is just the beginning. The most important challenge is
to implement it in the way we have intended it to be and I can assure you this
is not going to be plain sailing. The plan will be of no use to anyone if it
were to be watered down in its implementation. It will be a travesty if we were
to demean it by implementing it selectively.

I would also like to implore all of you who are involved to ensure that this
plan is taken to those it is intended to serve. In other words, sell this plan,
market it and make it known by the intended beneficiaries. Even the best of
plans have ended up gathering dust in our cupboards simply because no one knows
about them in the first place.

As I have yet to read the report there is not much I can say about it but
judging by the areas that it needed to cover, I am tempted to say that once we
start implementing it the South African Fruit Industry will never be the same
again. As you go about your business as an industry, you should take cognisance
of the activities of government pertaining to trade negotiations. This will
come a long way in making the right decisions at the right time. It will also
help you not to be caught napping.

As you all know the Doha Development Round negotiations of the World Trade
Organisation (WTO) were suspended in July 2006. Although there are several
dimensions to the difficulties that led to the breakdown, the core negotiating
issues revolve around agriculture and the inability or unwillingness of key
members to address in any decisive manner highly distorting trade measures that
frustrate development ambitions of developing countries.

A considerable amount of work has since been done, individually and together
with our alliance partners in the WTO to facilitate a resumption of the
negotiations. We are happy that the negotiations have formally been resumed in
Geneva early in February 2007 and we have hope that the negotiations can be
concluded before the end of this year.

The focus of our work will remain primarily to facilitate a substantial
reduction on trade and production distorting domestic support. In this regard,
additional concessions are expected from the United States of America (USA). On
market access, the European Union (EU) needs to be more specific in their
proposal so that we can make an accurate assessment of their recent indications
to improve their market access proposal. We are also continuing our work within
the developing country groupings to finalise detailed proposals relating to
special products and the special safeguard mechanisms for developing
countries.

The WTO remains the primary vehicle to achieve a fair international trading
environment. Recent Organisation for Economic Co-operation and Development
(OECD) studies have indicated that we have a long way to go to achieving a
level playing field where our producers can compete equitably with those in
other parts of the world. The average producer support equivalent for OECD
countries is 31%. In comparison, the producer support equivalent for South
Africa is 5%, Brazil 4% and China 6%. For the EU it is at 34%, Japan 58% and
the USA 20%. These figures confirm the correctness of our intention to focus on
trade and production distorting support in the WTO negotiations.

The USA is currently writing a new Farm Bill. Our engagement with
representatives of congress and the administration indicated that it would be a
difficult process to facilitate the necessary changes in USA agricultural
support policies. We are however, confident that they will take necessary bold
decisions to ensure a successful conclusion of the Doha Round.

Ladies and gentlemen, the Department of Agriculture continues to actively
participate in initiatives to integrate the Southern Africa's Development
Community (SADC) region with a view to improve the economy of the region
through increased market access and economic activities for our agricultural
products. The SADC trade protocol which makes provision for our products to be
trade freely within the region is on track to be attained in 2008. Our Heads of
States have endorsed milestones of integrating the region as stipulated in the
regional indicative strategic development programme. In this context we are
preparing for a SADC Customs Union in 2010, the year of the African Soccer
World Cup.

Contrary to popular belief, SADC is South Africa's major trading partner
after the EU. The value of South Africa's agricultural trade has grown by 44%
over the past six years since the implementation of the free trade
agreement.

However, South African agricultural exports to the region have shown signs
of decline occasionally as a result of trade diversions towards more lucrative
markets of China and the Middle East resulting in a negative trade growth of -7
% for 2005/06. These initiatives to deepen economic integration will
consolidate and improve the regional market access for all agricultural
products in the region.

Within Southern African Customs Union (SACU), we are considering entering
into a free trade agreement with the East African Community. This is a huge
market comprising of Kenya, Tanzania and Uganda with Rwanda on the verge of
joining. The difference in climatic conditions should provide opportunities for
both exports and imports for South African producers.

Ladies and gentlemen, I can go on and on about other activities the
government is engaged in to assist our sector to become competitive on the
global arena. I am, however, of the opinion that for us to be more competitive
we will need to be as inclusive as possible and do our utmost best to bring the
other previously excluded groups into the fold and this need to be done as
quickly as possible. As I said before, this plan is just the beginning and we
need to push forward. As Martin Luther King Jr said, "If you can't fly, run. If
you can't walk, crawl. But whatever you do, keep moving!"

At the end of the 19th century, South Africa's main agricultural exports
were wool, fruit and wine and this is essentially still the case today.
According to the National Agricultural Council, they contributed 58% of total
agricultural exports in 2004. Within fruit, both avocadoes and table grapes
have shown a substantial increase in their share of the total in the past
decade while wool has become relatively insignificant.

What is worrisome, however, is that the origin of farm exports has not
shifted much. Most farm exports still come from the Western Cape with recent
significant increases been seen only from the Northern Cape with table grapes.
I am hoping that with the implementation of this fruit industry plan, the
picture will change as more farmers from the previously excluded groups and
other areas in the republic join mainstream fruit production.

This will in essence also help in the development of our rural economies as
it will lead to job creation. Programme Director, the stemming of a tide of
economic refugees from the rural areas into the urban areas is of great
importance. They all flock to these metropolises with hopes of better lives,
only to find themselves in a quagmire of abject poverty. This reminds me of
this three line poem by a young aspirant poet. It reads thus:

"M Jo'burg
Johannesburg my city
Oh Jo'burg my city
Covered in Judas Gold, deception and lies,
Where men come to die!"

I thank you!

Issued by: Department of Trade and Industry
4 April 2007