Chairperson of the National Council of Provinces, Honourable Mahlangu
Chairperson of the Select Committee, Ms Noluthando Qikani
Esteemed Members of the NCOP
Chairperson of the Portfolio Committee in Agriculture, Honourable Johnson
Members of Executive Councils responsible for Agriculture in the provinces
The Acting Director-General of the Department of Agriculture, Forestry and Fisheries and other senior government officials
HODs from the provinces
Chief Executive Officers of the state-owned enterprises
Distinguished guests
Ladies and gentlemen
Sanibonani, dumelang, goei middag, good afternoon!
Africa has just hosted the World Economic Forum on Africa (WEFA) under the theme “Rethinking africa's growth strategy”.
Addressing the WEFA at the closing address, President Jacob Zuma said, “if we in Africa were to improve trade amongst ourselves we wouldn’t have to call for foreign direct investments, instead foreign investors would come to us on their own.”
To achieve this, we have to intensify the investment in infrastructure, improve on research and development and increase value chain activities.
With the dawn of democracy, the commercial agriculture sector carved a market in global trade where the current government vehemently assured and safe guarded markets.
Rewards from this vibrant sector must be equitably shared with the majority of our people. In attempting to address this, government is wrestling with the needs and hunger for land and agrarian transformation on the one hand whilst keeping and deepening the vibrancy of dominant developed commercial agriculture on the other hand.
The democratic government led by the ANC has been wrestling with this challenge. Over the years and with practical hind-sight, a compelling fact is the usefulness and reliance on free market forces to direct resources in resolving this issue of access to land to enable improved and sustained livelihoods. It is within this context that we will have to fashion a developmental state that must lead in the establishment of a vibrant and all inclusive economy in our countryside.
Honourable chairperson, the first step towards the realisation of this has been the integration of the three components; agriculture, forestry and fisheries; which has now been concluded and a fully fledged department established.
Intergovernmental relations
The department now has a broader mandate than before. By definition it is impossible for us to realise our mission without cooperating and collaborating with others. In this regard we will work closely with the Departments of Water and Environmental Affairs as well as with Rural Development and Land Reform, whose work overlaps in many respects with ours.
Repositioning the sector in global trade
It is important that we review and refine the implementation of our commitments to the World Trade Organisation (WTO). Our country has not fully utilised the provisions of the agreement in the WTO and substantial scope still exists for an increase in government support to South African farmers.
South African agricultural support notified to the WTO in recent years is about R6�"8 billion. This support is all classified as green box support by the WTO. Thus, this is support that is non trade and production distorting. This amount includes expenditure in relation to agricultural research, training and extension services, pest and disease controls, veterinary services and disaster aid. It also includes expenditure by other departments such as the Department of Education under the school nutrition programme, classified as domestic food aid.
There are various other provisions in the green box, related for example to environmental programmes and certain income support measures that South Africa has not made use of. Under these provisions, South Africa may substantially increase its support to the agricultural sector provided certain rules are adhered to.
Direct price support is classified as amber box support by the WTO. In this regard, the upper limit for South Africa is just over R2 billion. This support has last been utilised in the year 2000. It may be expected that this provision is reduced substantially once the Doha negotiations are concluded.
In addition to the amber box, WTO rules provide for a de minimise support. This support is not included in the amber box provided it is below a certain threshold. Under South Africa’s current commitments as a developed country, this threshold is approximately 10 percent of the gross value of production. The available amount under this provision can be as much as R9 billion per year that may be used for price and production distorting support.
In total, the policy space available for South Africa in price and production distorting support may be as high as R11 billion. South Africa did not make use of this support since the year 2000.
In addition, South Africa has not made use of the provision of just over R500 million for export subsidies. Article 6.2 of the agreement on agriculture provides for input and investment subsidies for resource poor producers in developing countries. This provision is uncapped. South Africa has not made use of this provision and there seems to be substantial space for supporting our farmers in this regard. South Africa has thus substantial policy space for an increase in farmer support, provided certain basic provisions are adhered to.
Tariffs
The department will have to look closely for room to manoeuvre with regard to our tariff commitment. We are aware that space in this regard is limited due to the bilateral trade agreements concluded between the European Union with Southern African Development Community (SADC) and European Free Trade Association (EFTA).
In relation to WTO rules, considerable space still exists for an increase in the level of protection as for most products the bound rates are considerably higher than the current applied rates. However, applied rates can only be increased at the Most Favoured Nation (MFN) level and not at the level of bilateral agreements. An analysis, on a line by line basis, will be required to establish the actual policy space for agricultural products.
We will have to look at tariff lines that are excluded from tariff concessions under the various bilateral agreements, or, where the major supplier of a product is not part of one of the bilateral agreements.
We are convinced that substantial policy space exists in South Africa’s tariff book. Each line must be reviewed on its own merits to establish whether the space to increase tariffs is available at the practical level in view of South Africa’s bilateral trade agreements.
Policy, planning, monitoring and evaluation
One of the fundamental innovations of the current administration is the emphasis on planning, monitoring and evaluation. It is our view that the evaluation of the performance of government should not only be done at the end of the five year term.
It should be an integral part of our style of government. Monitoring and evaluation systems in the department, provincial departments of agriculture and state owned entities will be strengthened by the signing of memoranda of understanding and service level agreements with stakeholders before the end of the third quarter.
A comprehensive statistical database will be developed to address the insufficient data we have in our entire sector; particularly of black farmers.
Development funding facility
Honourable Chairperson, we aim to create a single funding instrument to promote agrarian transformation and development. This common development funding facility will consolidate all funds i.e. CASP, AgriBEE, MAFISA, LandCare and Illima/Letsema. The facility will ensure that agrarian support is accessible to all economic actors in the countryside.
Food security, economic development, trade and marketing
South African products have found their way to retail shelves globally. Following a commodity value chain approach, the department will support the sectors through investment in food processing technology as well as research and development.
The department will facilitate and enhance the development of new markets in the SADC region and in the African continent. The expansion of markets will go into Asia, South America and other Western markets.
To facilitate and increase on this trade, the department will increase access to valuable production and processing infrastructure for local products. This will also include diversification of export products through creation of organisations which will help smallholder farmers access markets and build links with the formal sector value chains.
Honourable Chairperson, the department has launched accredited cooperative learning materials for agricultural cooperatives. Training in this regard is commencing this month and is conducted by 63 facilitators in all nine provinces targeting to comprehensively train 250 cooperatives in this financial year.
Furthermore, there will be an up-scaling of existing co-operatives and other farmer formations along commodity lines to exploit economies of scale opportunities, promote bulk buying and create local markets. In all empowerment endeavours, special attention will be given to promote equitable representation of unemployed youth, women and disabled people to satisfy social requirements. The department will also seek to increase shareholding of the Historically Disadvantaged Individuals (HDIs) in the sector.
Agrarian reform projects
Honourable chairperson, our food security initiatives aim at improving food security amongst the most food insecure and vulnerable communities. This objective is broad and requires the involvement of other departments. Through the development of the National Food Security Framework, we will foster coordination of food security interventions through public private partnerships.
In addition, the department will roll-out a mechanisation programme in support of intensified food production in all nine provinces. In Mpumalanga we will further up-scale the province’s Masibuyele Emasimini campaign in all 18 municipalities reaching a total of 35,160 households with 62,583 ha cultivated. This mechanisation will especially support production and cultivation of indigenous crops. This project will be launched by our Honourable President on 17 June 2010 in Mpumalanga.
Honourable chairperson, the country’s rainfall patterns shows a shift of rainfall towards the eastern parts of the country; leaving the areas lying in the west drier. Irrigation infrastructure including portable water will be distributed especially in the former homeland areas for economic and social development.
Support for household production will continue with the distribution of support in the form of seeds, seedlings and fertiliser packs. This effort will revive the practice of cultivating food crops to achieve household food security.
Food safety
The issue of food safety together with traceability of products is emerging as one of the fundamental aspects in the global regulation of food trade. This is more the case as climate change has brought diseases and pest outbreaks, which require a tactical refocus on advanced prevention and response strategies.
The departmental scientific and research institutions, namely the Agricultural Research Council (ARC) and the Onderstepoort Biological Products (OBP) conducted a scientific analysis of the outbreak of the Rift Valley Fever (RVF) and also developed and distributed a new vaccine to bring the disease under control and containment.
Working together with the affected provinces, the department further strengthened the means to enhance a swift response to any future outbreaks. We are further engaged with Namibia and China to re-open markets which were closed because of RVF.
Comprehensive Agricultural Support Programme (CASP)
An important yardstick in measuring our performance has to be the extent in which our budget addresses subsistence and small scale farmers. These are the principal motive forces of the agrarian transformation in our country.
A budget of R862,4 million is allocated to CASP to address support for food production both for subsistence and for the market. The department will embark on projects in food production, agro-processing, infrastructure development (water, dams, irrigation systems and fencing), cooperatives and stokvels (social economy) as well as the green economy (agro-ecology).
The CASP outputs for this financial year include establishment of 1739 food security projects; creation of 760 jobs; training and improvement of knowledge and skills of 5 089 beneficiaries to ensure that 7 961 on and off-farm infrastructure targets are completed and are functioning.
Land care
For the past eleven years land care has taken the lead in promoting sustainable land management practices, reversing land degradation in rural areas and contributing towards job creation and poverty eradication.
In this current financial year, the programme will implement 1516 junior-care management projects, construct 2405 gabions and 300 conservation structures, erect 1424km of fence, create 14 257 jobs on landcare projects and eradicate 8725ha of alien invasive plants as well as improve 3 340 ha of grazing and manage 400ha of veld grazing. This will be supported by a budget of R54,5 million.
Extension and advisory service
Strengthening of agricultural extension services which include farm planning and economic advice to farmers will be strengthened by the further development of on-farm management tools through a centralised on-line farm system.
In this financial year, the department will recruit 253 extension personnel in support of the extension recovery plan. A total of 2482 extension officers will undergo extensive training and will be equipped with smart pens, to enable them to collect and analyse data on site.
All provinces will also pilot the use of the digital pen whose dual purpose includes monitoring the farm visits by extension officers. In order to ensure the visibility and accountability of this service, a national extension performance monitoring tool will be finalised.
Colleges of Agriculture
Honourable chairperson, the department will accelerate the process of transforming the 12 colleges of Agriculture into national agricultural training institutes.
The department will commence with the drafting of the Bill for Agricultural Training Institutes. The bill will enforce the approved governance and financing model for agricultural training institutes and the norms and standards for agricultural training institutes.
Forestry production and resources management
According to the latest forestry statistics collected in 2007, the sector employed 46,000 people. The challenge is that the sector has recently moved from a net exporter to a net importer of forestry products. Forestry contributed 1.6 percent to manufacturing GDP (0.3 percent to economy as a whole). Our strategic objectives are to stabilise the sector and maintain existing jobs in the short term, restore its status as a net exporter and position the sector for high-end niche products and markets in the long-term.
There is real scope for the industry to develop. Conservative estimates identified 100 000 ha in the Eastern Cape, 6 000 ha in Limpopo, 10 000 ha in Mpumalanga and 39 000 ha in KwaZulu-Natal for afforestation projects.
New afforestation has the potential to create 15 600 jobs country-wide. Further potential of employment opportunities is in the downstream processing industry. There is potential to improve yields of the existing category of existing plantations. There is also a possibility to convert existing wattle jungle into commercial plantations.
The sector must move towards the high-end value addition segment with focus on superior design coupled with niche products and niche markets. They must develop high quality furniture for distinguished income earners. It is critical that we compete through quality and high standards. To achieve this, the sector will have to improve its productivity. We will have to ensure that there are enough designers and artisans for the furniture industry as well as enough raw material and timber supply.
Plans are quite advanced to establish a furniture centre of competence. Such centre will facilitate the procurement of high level skills; address research and development needs of the industry as well as disseminate information on technological and industry trends. We will establish furniture clusters in KwaZulu-Natal (KZN), Western Cape and Gauteng. Clusters will promote the sharing of physical infrastructure, knowledge and information as well as joint marketing of products.
We also plan to promote Charcoal production through exploiting the huge reserves of wattle that are in the Eastern Cape and KZN. This will create jobs in the rural areas as there are low capital requirements to participate in this subsector. R900 000 investment can employ 50 people. A potential exists for wood waste management both in saw milling and furniture manufacturing.
Our challenge in this sector therefore is new afforestation; skills development and technology upgrading; value addition for small enterprises as well as promoting competitiveness and high value products in the furniture industry.
Environmental Impact Assessments (EIAs) can be very costly for resource-poor communities. The department is going to support the afforestation programme by paying for the costs for conducting these EIAs so that licenses can be issued to allow planting to proceed.
Honourable members, the potential of forestry as a sector is vast and beyond timber, it includes medicinal plants, edible fruits and harvesting carbon credits. To address key issues in this sector, the department has received an allocation of R501,4 million.
Marine and fisheries coastal management
The integration of the fisheries function has been finalised. We are now one family. Our immediate challenge is to conclude the small-scale fisheries policy. This is important both for food security and sustainable income generation.
Honourable Chairperson, our marine resources are not infinite. It is therefore important for us to develop our inland fisheries capacity through hatcheries to support a vibrant aquaculture sector. In addition, more work will have to be done to explore and exploit the Mari-culture potential.
To this end, an aquaculture demonstration centre is currently being constructed on the Gariep Dam, in the Free State Province with the support of the Chinese government. The centre will provide training and research for the development of our inland fishing opportunities.
We have to address the illegal fishing in the one million sq kilometre of our Exclusive Economic Zone (EEZ). In this regard, government security agencies have come on board to work with us to address this menace. A government cabinet process is at an advanced stage to get approval for the conditional re-opening of the commercial abalone fisheries.
Honourable chairperson, R6 million has been allocated for the interim Social Relief for entities and individuals adversely affected by the previous closure of abalone harvesting. A further R213 million will be invested in job creation opportunities to benefit fishing communities along our coastal provinces. The intension is to develop sustainable coastal livelihoods, eliminate illegal fishing and build fishing infrastructure including the development of hatcheries.
Stakeholder relations
Honourable chairperson, further transforming this country is not going to be easy, but it is necessary and unavoidable. Our doors remain open to all the social players in our sector. An approach is needed to deliver a dignified means of existence for the majority of South Africans. This requires that all stakeholders should keep their doors open and explore all options to find solutions to the sometimes uncomfortable challenges facing us in the sector.
One of our unacknowledged and yet important stakeholders, are the workers in our sector. These are the men and women who work on the farms, forest plantations and the seas. These are the unsung heroes and heroines, who live and work under very difficult circumstances. They feed the nation yet they do not always have food security.
Honourable chairperson, already we are engaged in a series of Farm Worker Summits unfolding in all provinces and this will culminate in the National Farm Worker Summit in July 2010.
Ons sal alle deelnemers in die landbousektor bymekaar moet bring om saam te besluit oor hoe die landbou, bosbou en viserye bedryf die ekonomie in ons land kan stimuleer. Gesamentlik moet ons werkbare planne op die tafel sit om seker te maak dat almal in ons land, veral die armes, voedsel sekerheid het.
Conclusion
Together with the Deputy Minister of Agriculture, Forestry and Fisheries, Dr Pieter Mulder we thank all the MEC’s responsible for agriculture, portfolios; the Acting Director-General and the entire staff component of the Department of Agriculture, Forestry and Fisheries.
We also thank the chairperson and members of the NCOP as well as all stakeholders in the agriculture, forestry and fisheries sectors. Lastly, I would like to thank the state-owned entities in the sector for their cooperation and support to ensuring that programs that are to be delivered will be successful.
I thank you
Issued by: Department of Agriculture, Forestry and Fisheries
18 May 2010
Source: Department of Agriculture, Forestry and Fisheries (http://www.daff.gov.za/)
