L Johnson on behalf of Z Mkhize: Founding Congress of Sezela Cane
Growers Association

29 March 2007

His Majesty, King Goodwill Zwelithini
Mr Errol Koekemoer, Chairman of Sezela Cane Growers Association
Mr Johan van Wyk from Standard Bank
Mr Stan Munsamy, representing Illovo Sugar Limited
Mr Bruce Galloway of the South African Cane Growers Association
Ladies and Gentlemen

Master of ceremonies, allow me to convey an apology from the MEC for Finance
and Economic Development, Honourable Dr Zweli Mkhize, who could not deliver
this address in person. He is currently attending a special sitting in the
Provincial Legislature. At the outset I should confess my delight at being part
of this occasion. I would like to congratulate new board members of the
association who were elected this morning.

You are now faced with a challenge of designing the next phase over the next
few months. I have confidence that you will collectively take decisions on
several issues that will strengthen the sugar industry in the Southern African
Development Community (SADC) region. Currently South Africa, Mozambique,
Swaziland and Zimbabwe produce more than four-million tons of sugar yearly,
contributing over $500 million in foreign exchange earnings for the region
through sugar export. Thousands of jobs have been created, notable in
Mozambique the country that was previously ravaged by civil war.

Stakeholders in the sugar industry have projected the production capacity in
Mozambique to grow by 100 000 tons by 2009/10. The country currently produce 28
000 tons yearly compared to the 700 000 tons it produced prior to the civil
war. This growth demonstrates the importance of ensuring political stability. I
know that this is an exciting moment to all of you but make no mistake: you
have raised expectations in the region.

It is therefore important that your future work reflect the highest
standards and transparency. If you do that you will always enjoy the full
support of this government. The provincial government supports initiatives that
seek to give meaning to the New African Partnership for Africa's Development
(NEPAD). The primary objective of NEPAD is to "eradicate poverty in Africa and
to place African countries both individually and collectively on a path of
sustainable growth and development."

NEPAD emphasises partnership which is based on mutual respect, dignity,
shared responsibility and mutual accountability. Clearly, the merger of
small-scale growers, Indian growers and medium and large scale growers is proof
that indeed it is possible to move from confrontation to reconciliation and
commitment to creating an equal society. I have no doubt in my mind that the
effect of this merger will be felt across the SADC region.

You have already shown mutual respect and great leadership when you
negotiated the formation of this democratic organisation. The chairman of the
Cane Growers Association Mr Bruce Galloway was quoted recently saying "the new
structure will produce tangible results such as the holistic development of
small scale grower areas, thereby ensuring the sustainability of cane supply."
He is further quoted indicating that the duplication of activities will be
avoided and energies will be harnessed for the single outcome – the good of the
whole group.

Economic liberation

The transition of power to the new government in 1994 signalled the new
struggle: the "struggle for economic liberation." Government inherited an
economy in disarray with the majority of South Africans prevented from
acquiring skills that would make them eligible to participate in the economy of
the country. The civil society is asking government to sustain and enhance
rigorous efforts aimed at fast tracking the participation of the previously
disadvantaged communities in the mainstream economy. I share this view. The
formation of the association should be viewed as a catalyst for the
transformation of the agriculture sector. I am pleased to learn that this
sentiment was widely shared among all members this morning. Not in the distant
future we'll begin to see an increasing number of black people participating
fully at all levels: in plantations, in mills, in administration and
exports.

Government has an important role in establishing an enabling environment for
the development of its citizenry. The creation of this environment represents a
vital instrument for economic liberation. Direct measures of the provincial
government’s intervention relate to the following:

* Stimulating sustainable and shared economic growth through partnerships
with the private sector. In this regard, risk-sharing agreements have been
signed with financial institutions such as Standard Bank, ABSA and others to
ensure that emerging entrepreneurs such as small scale growers are not
excluded.

*Development of a comprehensive Provincial Spatial Economic Development
Strategy, a tool to identify areas of focus for the implementation of the
province’s development strategic objectives and priorities. The strategy
provides an analysis of where government is currently directing the bulk of its
capital development infrastructure expenditure; and redirect and reprioritises
this expenditure so that it supports growth and development in the identified
nodes and corridors to achieve maximum impact. The inland area has been
identified as being more agricultural. In view of this, it becomes extremely
important that municipalities begin to align their integrated development
planning (IDP) to the strategy.

* We have undertaken measures aimed at building appropriate physical
infrastructure needed to stimulate economic growth. Infrastructure expenditure
will grow to R9,8 billion in 2009/10.

Agriculture's contribution to Growth Domestic Products (GDP)

South Africa is dubbed the economic powerhouse of Africa comprising
around
25% of the entire continent's Gross Domestic Product (GDP). Over the last three
years the South African economy has averaged growth of 5% a year, well above
government's interim target of 4,5%. In 2005 the economy grew by 5,1%, which
follows growth of 4,8% in 2004. For 2006, the South Africa’s economy grew
by
5%. We intend to get our province to be the leading economy in South Africa
with the largest contribution to the national GDP. Currently, KwaZulu-Natal is
second to Gauteng with the contribution of approximately 16,6%. We are
targeting a growth of 8% by 2009/2014.

I am confident that the birth of the association will galvanise local
farmers to work towards positioning agriculture as the significant contributor
to the GDP. Already, I have been informed that cane growers in Sezela produce
1,6 million tons of sugar cane per annum with a gross value of approximately
R320 million. More than 5 000 jobs have been created. Figures released by the
World Bank in 2001 reveal that agriculture accounted for less than six percent
of national GDP and only nine percent of employment. The country has however
made undeniable success. The survey conducted by Statistics South Africa late
last year found 614 962 paid employees in large-scale formal agriculture. The
Western Cape accounted for 25,3% of these employees, followed by KwaZulu-Natal
with 13,4% of the total number of paid employees.

Agrarian revolution

What lies ahead is a daunting task of ensuring the development of the
small-scale farming is an obvious tool which will bridge the gap between the
first and second economies. Early this month, during the presentation of the
budget speech, honourable Dr Mkhize reiterated government’s commitment to the
implementation of the agrarian revolution programme. This programme
appropriately seeks to encourage previously disadvantaged communities to
participate in farming and most importantly, to reduce poverty. The Department
of Agriculture received R33,1 million for 2007/08, R26,9 million for 2008/09
and a further R168,8 million for 2009/10 mainly for the agrarian revolution. I
am sure that all of you will agree that this significant increase in the
allocation would enable the province to be agriculturally sufficient and to be
able to export food through the Dube Trade Port.

Sound environmental practices

In conclusion, I want to call upon the association to join hands with
government and industry stakeholders to put in place measures that will
minimise the negative impact of global warming. Global warming and climate
change are major environmental threats. Research indicates that agro-ecological
systems are the most vulnerable sectors in Africa. Climates of many countries
including South Africa are already too hot and further warming is expected to
reduce crop productivity. We need to develop and share the best farming
practices that will sustain our natural resources such as air, soil and
water.

Thank you.

Issued by: Department of Finance and Economic Development, KwaZulu-Natal
Provincial Government
29 March 2007
Source: KwaZulu-Natal Provincial Government (http://www.kzntreasury.gov.za)