Honourable speaker
Madam Premier and Members of the Executive Council
Honourable members of the Provincial Legislature
Amafama ePhondo lethu, nabasebenzi basezifama, kunye
Nawo onke Amatsha-ntliziyo ngophuhliso lwaseMaphandleni
On 6 May 2009, the Premier of the Eastern Cape announced a reconfigured Ministry of Agriculture and Rural Development. This Ministry was mandated to champion rural development and facilitate agrarian transformation. The Premier and Government of the Eastern Cape expect a department that falls under this Ministry to ensure food security for our people in the short term, and sustainable and vibrant communities in the long term.
Today, I am honoured to present the 2009/10 Policy Speech to highlight the underlying policy imperatives, spell out policy targets for the year, and motivate for the allocation of budget to realise these policy objectives. In the process, I am providing the service delivery context within which our department operates.
Brief overview of the agricultural sector of the six pillars of the Eastern Cape’s Provincial Growth and Development Plan (PGDP) launched in August 2004, the Department of Agriculture carried the exclusive mandate of agrarian transformation and food security. The PGDP envisaged increased agricultural production, incomes and employment among the poorest households, particularly in the former homelands.
Over the past few years, a number of programmes were implemented in pursuance of this objective, and these include the Massive Food Production Initiative, Siyazondla Homestead Food Production, Integrated Agricultural Infrastructure Programme and the Land Reform Programme. The provincial government’s Five
Year Report at the end of the third term of government noted that although these food security programmes have largely been successful, making a huge impact on the recipient households and farmers, the performance of the agricultural sector generally is on the decline.
This observation correlates very well with the information on the performance of the agricultural sector sourced from Statistics South Africa, as depicted below.
Current prices - Rand million
Western Cape
1995: 4,817
1996: 5,144
1997: 5,684
1998: 5,913
1999: 6,000
2000: 6,028
2001: 7,211
2002: 9,608
2003: 8,745
2004: 9,063
2005: 8,480
2006: 10,320
2007: 13,438
Eastern Cape
1995: 1,420
1996: 1,295
1997: 1,453
1998: 1,531
1999: 1,719
2000: 1,727
2001: 2,116
2002: 2,074
2003: 2,342
2004: 2,248
2005: 2,023
2006: 2,448
2007: 3,115
Northern Cape
1995: 659
1996: 754
1997: 819
1998: 908
1999: 1,009
2000: 1,280
2001: 1,412
2002: 1,446
2003: 2,471
2004: 2,521
2005: 2,272
2006: 2,715
2007: 3,515
Free State
1995: 1,125
1996: 2,884
1997: 2,967
1998: 1,940
1999: 2,632
2000: 2,829
2001: 3,320
2002: 5,529
2003: 4,555
2004: 3,659
2005: 3,465
2006: 4,185
2007: 5,371
KwaZulu-Natal
1995: 5,284
1996: 6,235
1997: 6,816
1998: 7,642
1999: 7,052
2000: 7,687
2001: 9,154
2002: 10,909
2003: 10,446
2004: 10,400
2005: 9,673
2006: 11,537
2007: 14,183
North West
1995: 1,176
1996: 2,655
1997: 2,625
1998: 1,896
1999: 1,812
2000: 2,059
2001: 2,539
2002: 4,793
2003: 2,282
2004: 2,332
2005: 2,754
2006: 3,075
2007: 3,821
Gauteng
1995: 1,807
1996: 1,366
1997: 1,497
1998: 1,497
1999: 1,656
2000: 1,617
2001: 1,805
2002: 3,128
2003: 2,763
2004: 2,529
2005: 2,358
2006: 2,825
2007: 3,564
Mpumalanga
1995: 1,909
1996: 2,407
1997: 2,355
1998: 2,566
1999: 2,906
2000: 2,751
2001: 3,259
2002: 4,798
2003: 4,035
2004: 3,695
2005: 3,507
2006: 4,303
2007: 5,454
Limpopo
1995: 1,119
1996: 980
1997: 924
1998: 1,542
1999: 1,392
2000: 1,473
2001: 1,771
2002: 1,894
2003: 3,250
2004: 2,986
2005: 2,712
2006: 3,371
2007: 4,265
Value added at basic prices
1995: 19,317
1996: 23,721
1997: 25,140
1998: 25,434
1999: 26,179
2000: 27,451
2001: 32,588
2002: 44,179
2003: 40,889
2004: 39,432
2005: 37,243
2006: 44,778
2007: 56,727
Current prices - percentage contributions
Western Cape
1995: 24.9
1996: 21.7
1997: 22.6
1998: 23.2
1999: 22.9
2000: 22.0
2001: 22.1
2002: 21.7
2003: 21.4
2004: 23.0
2005: 22.8
2006: 23.0
2007: 23.7
Eastern Cape
1995: 7.4
1996: 5.5
1997: 5.8
1998: 6.0
1999: 6.6
2000: 6.3
2001: 6.5
2002: 4.7
2003: 5.7
2004: 5.7
2005: 5.4
2006: 5.5
2007: 5.5
Northern Cape
1995: 3.4
1996: 3.2
1997: 3.3
1998: 3.6
1999: 3.9
2000: 4.7
2001: 4.3
2002: 3.3
2003: 6.0
2004: 6.4
2005: 6.1
2006: 6.1
2007: 6.2
Free State
1995: 5.8
1996: 12.2
1997: 11.8
1998: 7.6
1999: 10.1
2000: 10.3
2001: 10.2
2002: 12.5
2003: 11.1
2004: 9.3
2005: 9.3
2006: 9.3
2007: 9.5
KwaZulu-Natal
1995: 27.4
1996: 26.3
1997: 27.1
1998: 30.0
1999: 26.9
2000: 28.0
2001: 28.1
2002: 24.7
2003: 25.5
2004: 26.4
2005: 26.0
2006: 25.8
2007: 25.0
North West
1995: 6.1
1996: 11.2
1997: 10.4
1998: 7.5
1999: 6.9
2000: 7.5
2001: 7.8
2002: 10.8
2003: 5.6
2004: 5.9
2005: 7.4
2006: 6.9
2007: 6.7
Gauteng
1995: 9.4
1996: 5.8
1997: 6.0
1998: 5.9
1999: 6.3
2000: 5.9
2001: 5.5
2002: 7.1
2003: 6.8
2004: 6.4
2005: 6.3
2006: 6.3
2007: 6.3
Mpumalanga
1995: 9.9
1996: 10.1
1997: 9.4
1998: 10.1
1999: 11.1
2000: 10.0
2001: 10.0
2002: 10.9
2003: 9.9
2004: 9.4
2005: 9.4
2006: 9.6
2007: 9.6
Limpopo
1995: 5.8
1996: 4.1
1997: 3.7
1998: 6.1
1999: 5.3
2000: 5.4
2001: 5.4
2002: 4.3
2003: 7.9
2004: 7.6
2005: 7.3
2006: 7.5
2007: 7.5
Value added at basic prices
1995: 100.0
1996: 100.0
1997: 100.0
1998: 100.0
1999: 100.0
2000: 100.0
2001: 100.0
2002: 100.0
2003: 100.0
2004: 100.0
2005: 100.0
2006: 100.0
2007: 100.0
c. Constant 2 000 prices - Rand million
Western Cape
1995: 5,228
1996: 5,582
1997: 5,862
1998: 5,787
1999: 6,173
2000: 6,028
2001: 6,074
2002: 6,507
2003: 6,274
2004: 6,461
2005: 6,867
2006: 6,559
2007: 6,759
Province: Eastern Cape
Year
1995: 1,755
1996: 1,726
1997: 1,809
1998: 1,707
1999: 1,830
2000: 1,727
2001: 2,145
2002: 1,904
2003: 1,822
2004: 1,844
2005: 1,951
2006: 1,807
2007: 1,860
Northern Cape
1995: 931
1996: 1,056
1997: 1,213
1998: 1,080
1999: 1,262
2000: 1,280
2001: 1,277
2002: 1,358
2003: 1,391
2004: 1,377
2005: 1,453
2006: 1,360
2007: 1,405
Free State
1995: 922
1996: 2,572
1997: 2,634
1998: 1,718
1999: 2,299
2000: 2,829
2001: 2,401
2002: 2,391
2003: 2,156
2004: 2,178
2005: 2,260
2006: 1,981
2007: 2,042
KwaZulu-Natal
1995: 6,509
1996: 7,570
1997: 7,540
1998: 7,609
1999: 7,408
2000: 7,687
2001: 7,667
2002: 8,027
2003: 8,221
2004: 8,278
2005: 8,731
2006: 8,075
2007: 8,336
North West
1995: 951
1996: 2,335
1997: 2,243
1998: 1,651
1999: 1,516
2000: 2,059
2001: 1,604
2002: 1,937
2003: 1,890
2004: 1,934
2005: 2,030
2006: 1,895
2007: 1,947
Gauteng
1995: 1,731
1996: 1,483
1997: 1,412
1998: 1,399
1999: 1,587
2000: 1,617
2001: 1,511
2002: 1,657
2003: 1,563
2004: 1,568
2005: 1,615
2006: 1,480
2007: 1,492
Mpumalanga
1995: 1,738
1996: 2,392
1997: 2,240
1998: 2,351
1999: 2,632
2000: 2,751
2001: 2,347
2002: 2,813
2003: 2,697
2004: 2,746
2005: 2,912
2006: 2,659
2007: 2,717
Limpopo
1995: 1,083
1996: 1,134
1997: 1,116
1998: 1,386
1999: 1,508
2000: 1,473
2001: 1,532
2002: 1,700
2003: 1,686
2004: 1,696
2005: 1,794
2006: 1,677
2007: 1,725
Value added at basic prices
1995: 20,850
1996: 25,850
1997: 26,070
1998: 24,686
1999: 26,213
2000: 27,451
2001: 26,558
2002: 28,292
2003: 27,700
2004: 28,083
2005: 29,614
2006: 27,493
2007: 28,283
d. Constant 2000 prices - percentage changes
Western Cape
1995:
1996: 6.8
1997: 5.0
1998: -1.3
1999: 6.7
2000: -2.3
2001: 0.8
2002: 7.1
2003: -3.6
2004: 3.0
2005: 6.3
2006: -4.5
2007: 3.1
Eastern Cape
1995:
1996: -1.7
1997: 4.9
1998: -5.7
1999: 7.2
2000: -5.6
2001: 24.2
2002: -11.2
2003: -4.3
2004: 1.2
2005: 5.8
2006: -7.4
2007: 3.0
Northern Cape
1995:
1996: 13.4
1997: 14.9
1998: -11.0
1999: 16.9
2000: 1.4
2001: -0.2
2002: 6.3
2003: 2.5
2004: -1.0
2005: 5.5
2006: -6.4
2007: 3.2
Free State
1995:
1996: 178.9
1997: 2.4
1998: -34.8
1999: 33.8
2000: 23.1
2001: -15.1
2002: -0.4
2003: -9.8
2004: 1.0
2005: 3.8
2006: -12.4
2007: 3.1
KwaZulu-Natal
1995:
1996: 16.3
1997: -0.4
1998: 0.9
1999: -2.6
2000: 3.8
2001: -0.3
2002: 4.7
2003: 2.4
2004: 0.7
2005: 5.5
2006: -7.5
2007: 3.2
North West
1995:
1996: 145.5
1997: -3.9
1998: -26.4
1999: -8.2
2000: 35.9
2001: -22.1
2002: 20.7
2003: -2.4
2004: 2.3
2005: 5.0
2006: -6.7
2007: 2.7
Gauteng
1995:
1996: -14.3
1997: -4.8
1998: -1.0
1999: 13.5
2000: 1.8
2001: -6.5
2002: 9.7
2003: -5.7
2004: 0.3
2005: 3.0
2006: -8.4
2007: 0.8
Mpumalanga
1995:
1996: 37.6
1997: -6.3
1998: 4.9
1999: 12.0
2000: 4.5
2001: -14.7
2002: 19.9
2003: -4.1
2004: 1.8
2005: 6.1
2006: -8.7
2007: 2.2
Limpopo
1995:
1996: 4.7
1997: -1.5
1998: 24.1
1999: 8.8
2000: -2.3
2001: 4.0
2002: 11.0
2003: -0.8
2004: 0.6
2005: 5.8
2006: -6.6
2007: 2.9
Value added at basic prices
1995:
1996: 24.0
1997: 0.9
1998: -5.3
1999: 6.2
2000: 4.7
2001: -3.3
2002: 6.5
2003: -2.1
2004: 1.4
2005: 5.4
2006: -7.2
2007: 2.9
Source: Statistics South Africa
Figure one shows the Gross Value Added (GVA) of agriculture, comparing our province’s performance to national over the period 1995 to 2007.
Table one shows similar information compared to other provinces.
The performance and trend in figure one and table one reveal three
main observations:
Firstly, that the sector’s contribution to the national GVA has declined from 7,4% in 1995 to 5,5% in 2007. It may be of interest to note that in 2007, the Eastern Cape Agriculture GVA contribution to the national GVA represented almost a fifth of the KwaZulu Natal contribution (See Table 1).
Secondly, that in real term, the Eastern Cape agriculture GVA did not significantly increase. It only rose from R1,7 billion in 1995 to R1,8 billion in 2007 while the national GVA increased from R20,8 billion in 1995 to R28,2 in 2007 (See table one).
Thirdly, that in the recent period from 2004 to 2007, the Eastern Cape GVA has followed a similar growth pattern with that of the National GVA (See figure one).
In the period of the current global economic crisis, drought and our own economy in recession, the agricultural sector is likely to be amongst the most vulnerable, and it may not be easy to recover from this level of performance. This is already evident as the department continues to revise downwards the annual performance targets due to the ever increasing agricultural input costs.
Achievements and Challenges of the 2008/09 financial year
In the previous term of government, the department under the stewardship of Honourable Gugile Nkwinti initiated and pursued the Green Revolution Strategy anchored on the “Six Peg” Policy catering for fencing, dipping of livestock, dams, tractors, irrigation infrastructure and human resource development.
As at the end of the 2008/09 financial year, the following may be highlighted as the key achievements of the Green Revolution strategy:
* 50 118 rural and 5234 urban households have benefited from the Siyazondla food security programme
* mechanisation (38 tractors and implements and three combined harvesters)
* provision of 715 kilometre of fencing
* quick response to contain the locust outbreak in the Chris Hani District Municipality, and
* provision of R20 million worth of feed and refurbishment of 35 boreholes in drought stricken areas.
I also wish to acknowledge the contribution made by the ASGISA-Eastern Cape in crop and livestock development.
However, the implementation of the Green Revolution Strategy was not without challenges and worth noting amongst these were the following:
* increase in the cost of agricultural inputs (fuel, fertiliser, steel) and construction costs
* low rainfall that has had a general detrimental effect on agricultural production throughout the province.
Understanding Rural Development in the Eastern Cape
In the Eastern Cape, government started to conceptualise rural development as far back as October 2000 when a rural development summit was held in Mthatha. Unfortunately, before that work was completed, a new national programme, the
Integrated and Sustainable Rural Development Programme (ISRDP) was introduced to nodal district municipalities in the province. The lessons learnt in the implementation of this programme led to many provincial African National Congress (ANC) Conferences held since then resolving on the need for the development of a focused rural development strategy aimed at the debantustanisation of the former homelands.
Lately, the ANC’s 52nd National Conference, also recognizing that the bulk of the challenges of development and access to basic services is in rural South Africa, adopted a comprehensive resolution on rural development, and this has since been further elaborated upon as one of the five top priorities in the election manifesto of the ruling party. In part, this resolution commits this
ANC government to “accelerate the roll out of rural infrastructure, particularly roads but also other services including potable water, electricity and irrigation and ensuring in particular that the former Bantustan areas are properly provisioned with an infrastructural base for economic and social development, and that farm dwellers like all South Africans benefit from universal access to free basic services.”
Both the President and the Premier, in the State of the Nation Address and State of the Province Address respectively, further elaborated and provided the necessary detail on the government’s policy position on rural development.
Simply put, this policy aims at eliminating the urban / rural divide, it guarantees a better life for all irrespective of the geographic location, and, for the first time ever and perhaps most importantly, it enjoins government
working together with our rural communities to develop resource and implement programmes that are specifically designed to develop the rural Eastern Cape.
In this regard, the following work has been done:
* the provincial government’s coordinating structures, at cabinet level, have been put in place
* a draft Provincial Rural Development strategy has been developed and was presented at the Executive Council Lekgotla two weeks ago
* the Premier announced in the SOPA that Mhlontlo Local Municipality will be the provincial pilot site for rural development.
In the next few weeks, we will do the following:
* broaden consultation on the Provincial Rural Development strategy, leading up to the white paper and, possibly, provincial legislation.
* package a programme to “massify” food production this year, and this will be launched by the Premier on Mandela Day (18 July 2009) early enough for this year’s ploughing season.
Rural development through agrarian transformation:
The 2009/10 Programme of Action
Of the eight priorities contained in the government’s Medium Term Strategic Framework announced by the Premier, our department, operating in coordination with other departments of the Economic Growth and Infrastructure Cluster, relates directly to three strategic priorities, namely, speeding up economic growth and transformation of the economy to create decent work and sustainable livelihoods, building social and economic infrastructure, and rural development, land and agrarian reform, and food security.
In the next few weeks, the department will undergo a strategic planning process to review its business in the light of the reconfigured mandate and the new priorities of government.
For purposes of the 2009/10 financial year, we will endeavour to expand and / or complete the policy initiatives of the third term of government, whilst we incrementally integrate the rural development component into the work of the department. After all, in the context of the Eastern Cape, we consider agrarian transformation as the main driver for rural development in the province, and further that agrarian transformation should be underpinned by an accelerated land reform programme.
Hence, learning from the successes of the Green Revolution Strategy, and its overwhelming support amongst the farming communities of our province, we intend to retain the key elements of this strategy. This means that this financial year’s budget will in the main be deployed to support the provision of more dipping tanks, tractors, fencing for crops and livestock, and irrigation infrastructure.
In the 2009/10 budget presented earlier this year, the Department of Agriculture (as it existed at the time) was allocated R1,4 billion for this financial year, increased by 13,3% compared to the previous financial year’s budget.
Although the summary of the proposed expenditure is annexed to this Policy Speech, I wish to highlight the following key areas of expenditure and service delivery across the seven programmes of the department:
* Programme one: Administration
Of the total budget of the department, 63% (amounting to R880,885 million) is for expenditure on personnel. This is largely so because the department received claims from employees amounting to R126 million in respect of the Human Resources Operational Project Team (HROPT) or Judge Browde / White Commission cases and outstanding payments for 2nd and 3rd Notches. These claims are verified by the task team set up jointly by the employer and unions, and payments are made for deserving cases. This is not an easy exercise because of many years of outstanding implementation of the relevant judgment and resolutions leading to impatience on the part of the affected employees and their unions.
* Programme two: Sustainable Resource Management
Linked to the Expanded Public Works Programme, 708 land care jobs will be created to protect grazing land against excessive soil erosion in all districts, and an amount of R2.2 million has been set aside for this purpose.
* Programme three: Farmer Support and Development
The department will continue with the development of the six large irrigation schemes and Magwiji irrigation in Sterkspruit, and R37 million has been set aside for this purpose.
All 420 ha at Zanyokhwe irrigation scheme will be under crops this year. Our intention is to take Zanyokhwe irrigation scheme to the level at which it was, and beyond, before it became dysfunctional. R30 million is allocated to support two major tea estates, namely Magwa and Majola.
R52 million has been set aside for the establishment of an ethanol processing plant in Cradock. This plant will be using sugar beet and other crops as feedstock for ethanol production.
In keeping with the mandate drawn from the PGDP, our department has allocated R44,3 million for food security programmes, particularly Siyazondla, as our flagship programmes this financial year. We will also continue to work with ASGISA-Eastern Cape to further “massify” our massive food programme.
R45 million will be transferred to the Eastern Cape Rural Finance Corporation (ECRFC) to carry out that institution’s mandate.
* Programme four: Veterinary Services
The responsibility of this programme has been expanded to include livestock improvement and pasture production. Instead of focusing only on veterinary services, the programme will now also focus on the whole livestock development, and R20 million has been set aside for this purpose.
The dipping function and the annual sheep scab campaign remain critical in the work of the department, and we have allocated R12 million for these programmes.
* Programme five: Technology Research and Development Services
R9,5 million has been set aside for Research on all alternative animals, crops, marine and aquaculture that enable adapted production under subsistence and small farmer production conditions.
For example, the department this year will breed and distribute the Dexter, a small, good milk producing hardy animal.
* Programme six: Agricultural Economics
R3,5 million has been allocated to develop and support, in each of the districts, one individual and one farming group into fully fledged commercial agri-businesses. The programme will support the establishment of sustainable Agri-BEE operations as well as local value adding opportunities. In this regard, the potential transactions include tea, pineapples, angora goats, and Lucerne production.
In November 2009, the department will co-host an International Mohair conference to be held in Ikhwezi and Camdeboo Municipalities, and R5,35 million has been set aside for this purpose.
* Programme seven: Structure Agricultural Training
R29,3 million will be spent on training programmes for emerging farmers in the department’s Farmer Support Centres. R20 million will be transferred to the Fort Cox College in support of the work of that institution.
Institutional arrangements, social mobilisation and support
Following the Premier’s announcement of a reconfigured Ministry of Agriculture and Rural Development, this year will mostly be spent preparing for the formal launch of the new Department of Agriculture and Rural Development on 1 April 2010.
This work will include internal and external consultations on the organisational design that will be best suitable for the successful carrying out of the task mandated to us. It is envisaged that some of the functions being undertaken by the current Department of Agriculture will be rationalised and re-aligned with the new area of rural development.
The department will invest more in scientific research and agricultural extension officers. The support functions of the department will also be strengthened to ensure efficiency and better effectiveness.
We realise that we can never succeed unless, through our leadership, two things happen: firstly, that as government departments we, not only understand but, ensure that we do things differently. This refers to the coordination of planning and implementation of programmes, and the strengthening of our capacity to monitor the implementation and to evaluate the impact of such programmes. The Office of the Premier will play a critical and leading role in this area.
Secondly, the mobilisation of communities and stakeholders, particularly local government, traditional leaders and farmers, not just to support, but to be the champions of these programmes. This must not be rural development designed and done for the benefit of rural communities and farmers, but rural communities and farmers mobilised and equipped with skills and resources to prioritise and implement their own development programmes.
We have also noted the need for better and strengthened provincial political oversight on the work done by the Eastern Cape offices of the former department of Land Affairs, particularly on matters of land reform and restitution. Rural development in the Eastern Cape will not happen unless we speed up and finalize the outstanding land claims and accelerate land reform.
The Premier also announced in the SOPA that the envisaged rationalisation and consolidation of government agencies operating in the rural economy. Over the next six months, we will conduct the necessary consultations, and this process is envisaged to culminate in the white paper and legislation giving birth to a provincial rural development authority, and possibly an implementing rural development agency coming into operation on 1 April 2010.
Indicative of the seriousness with which we take this task, the Honourable MEC for Finance and I have already started a process towards the establishment of a provincial Rural Development Fund, and the aim is to launch this Fund before the end of this year. It is almost a certainty that, following due processes, ECRFC (commonly known as Uvimba) will be phased out as a result of this development, and its functions will be integrated in the work of the new entity.
This year, we will also finalize the outstanding institutional matters that have resulted in prolonged periods of instability at the Fort Cox College. Formal discussions will also be taken up with the Walter Sisulu University on the preliminary work undertaken to ensure the optimal utilisation and development of the Tsolo Agricultural and Rural Development Institute.
Conclusion
Honourable speaker, we are aware that we are indeed facing a mammoth task. Both the President and Premier have given clear direction of what needs to be done and we cannot say we did not know. We are also conscious that we can only accomplish this daunting task, and do more, if we work together with the province’s farmers, farm workers and rural communities.
I acknowledge the leadership role of the Head of Department, Advocate Nyondo, and have no doubt that he and his team understand the huge expectations that the ANC, Premier and our communities have placed upon us. The manner in which we shall execute this financial year’s programme will give a good indication of whether the cloth that the Premier has cut out for us in the department fits our size.
Honourable Speaker, I now table this Policy Speech and the Department’s, ECRFC’s and Fort Cox’s Annual Performance Plans and Operational Plans. I wish the Portfolio Committee all the best in their consideration of the Department’s Budget for 2009/10.
I thank you.
Issued by: Department of Agriculture and Rural Development, Eastern Cape Provincial Government
18 June 2009
