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REVITALIZATION OF THE AGRICULTURE AND
AGRO-PROCESSING VALUE CHAIN
24 JUNE 2015
By Department of Agriculture, Forestry and Fisheries
Department of Rural Development and Land Reform
INTRODUCTION
The purpose is to update the Portfolio
Committee on Rural Development and
Land Reform on
the status of the State of the Nation
Address (SONA) priorities on Revitalization
of agriculture and agro-processing value
chains and Agri-parks.
the integration of Agricultural Policy
Action Plan (APAP) and Agri-parks.
2
Contents
3
Strategic Overview
Governmental initiatives
3
Strategic Overview
GROWTH TARGET: Annual increase of 0.5% (Current contribution to GDP: 2.5%)
1. High Inputs Costs [animals and other products (11,3%), Animal feed 10,2%) of total expenditure]
2. Competing land use
3. Anti competitive behaviour as a result of growing market dominance
4. Climate change: drought, floods, fires
Key G
row
th C
on
str
ain
ts
Challenges
1. Agri-Parks
2. Fast Tracking Land Reform
3. Producer Support
4. Nine (9) Strategic Value Chains
5.Research and Innovation
6.Market Access and Trade Dev
Current
Status (Jun.15’)
Index of production output in agro- processing, 2014-15 unchanged 103.9 (unadjusted)
Gross value add for Agriculture; Forestry & Fisheries increased by 5.6% in 2014.
Total jobs in Agriculture increased by 183 000, between 2014 and 2015 (total of 891 000) \
Key Interventions 2019
Target
Growth increase of 2.5% (0.5% p.a.)
Percentage change in Gross Value Add of 10% (2% p.a.)
Job increase of 500 000 (100 000 p.a.) and 1 million by 2030
4
Enablers
1. Policy Certainty
2. 122 million ha of land (10%
arable of which 1.5% is high
potential)
3. Agriculture and
agro-processing labour
intensive
4.Growing demand for food and
agro-products
Strategic Overview… Multiplier Effects
R1 million investment
on job creation
R1 investment on
fiscal revenue
R1 investment on
export receipts
R1 investment on
increase in GDP
5
Government initiatives:
- No critical challenges , and on
schedule or completed.
- No critical challenges, but behind
schedule.
- Critical challenges, and behind
schedule
- Undetermined
Contents
6
Strategic Overview
6
Activity Start
date
End
date
36 of the 44 districts have
confirmed sites
Feb-15 May-
15
Prototypical agri-park
completed; evaluation criteria
developed
Feb-15 May
2015
KEY DECISIONS
7
Agri-Parks
Strategic
Scope:
Crowding in private sector investment in agro-
processing; local economic development and
job creation
Target
(2016/17)
Establish Agri-Parks in 44 districts
Jobs target
(2019)
Detailed calculations will be based
on business plans per site
Gross Value
Add (2019)
Detailed calculations will be based
on business plans per site
Target or catalytic effect
CHALLENGES PROPOSAL
Technical capacity at
District level
Project Management
Support Unit
established
Fast Track regulatory
approvals
Utilise multi-sectoral
team established to
deal with EIA’s; water
approvals; etc to
reduce time
PROGRESS TIME
LEAD: DRDLR
Free State Agri-Parks
Activity Start date End date
Farmer and stakeholder consultation Feb 2015 June 2015
Business plans being developed (agro
processing; market access) (all Provinces)
June
2015
August
2015
Production plans and capacity building plans
underway for all sites (quickwin projects fully
costed);
• projects started to increase production
June
2015
July 2015
Infrastructure plans; designs; approvals;
construction (commence August 2015);
• construction started in NW
May
2015
July 2015
Market Access
• DAFF to lead in opening up market
opportunities, and providing market access.
• Provinces busy with market plans both
domestically and internationally
August
2015
September,
2015
Training and capacity building
• DAFF to lead in providing all required
training, both through extension services, and
private public partnerships with the private
sector.
April
2015
March
2016
8
Agri-Parks
PROGRESS TIME
LEAD: DRDLR Prototype Agri-Park
Completed
36 of 44 Agri-Park sites selected
Province Site (district municipality)
Eastern Cape Ncora (Chris Hani), Mtata (OR Tambo), Matatiele (Alfred Nzo), Lady Grey/
Sterkspruit (Joe Gqabi), Butterworth (Amatole)
Springfontein (Xhariep), Phuthaditjhaba (Thabo Mofutsanyane), Thabanchu (Mangaung), Wesselsbron (Lejwelephutsa)
Free State
Randfontein (West Rand) Gauteng
Tzaneen (Mopani), Groblersdal (Sekhukhune), Modimolle (Waterberg), Aganang (Capricorn), Nwanedi (Vhembe)
Limpopo
KwaDukuza (Ilembe), Umgeni LM area (Umgungundlovu), Horseshoe Farm -Izingqoleni area (Ugu) Dundee (uMzinyathi), Vryheid (Zululand), Dannhauser
(Amajuba), Ebutha farm (state land), Umzimkhulu (Harry Gwala), Eshowe (Uthungulu), Okhahlamba LM area (uThukela), Mkhuze (Umkhanyakude), KwaDukuza (Ilembe)
KwaZulu Natal
Bushbuckridge (Ehlanzeni); Mkhondo (Gert Sibande; JS Moroka (Nkangala) Mpumalanga
Kuruman (John Toalo Gaetsewe), Springbok (Namakwa) Northern Cape
Springbokpan (Ngaka Modiri Molema), Vryburg (Ruth Segomotsi Mompati),
Makapanstad (Bojanala)
North West
9
Activity Start
date
End
date
100 submissions received for piloting
50:50 policy, from which 10 properties
will be selected.
Februar
y, 2015
Septe
mber,
2015
Of the 242 074 ha, 100% are
acquired, and 100% are transferred.
April
2015
March
2016
KEY DECISIONS
10
Fast tracking Land Reform
Strategic
Scope:
• New policy framework for Land
Reform piloted and finalised.
• Agrarian transformation;
Target
(2019)
• 50:50 Policy Framework piloted
with 10 properties;
Production
Target
(2019)
• 2 million hectares of
strategically located high-value
agricultural land acquired for
key APAP commodities
Target or catalytic effect
CHALLENGES PROPOSAL
Protracted process
of acquiring land in
variuos provinces
Expedite the
completion of
revising business
process of acquiring
land to established
uniformity across
provinces
PROGRESS TIME
LEAD: DRDLR
Activity Start
date
End
dat
e
Comprehensive Producer Support Policy
Framework & Integrated Agriculture
Development Finance Policy, finalised for
cabinet submission.
Feb
2015
Aug
. 15
Implementation of AET strategy for
training of smallholder farmers.
Aprl-
15
Mar
-16
Cofimvaba agricultural school
revitalisation (DST funded)
Aprl-
15
Mar
-16
Total number of farmers supported
through CASP and Ilema: ~ 60 943
farmers, R2.1 bil
Aprl-
15
Mar
-16
KEY DECISIONS
11 Improving Producer Support
Strategic
Scope:
South Africa’s Producer Support Estimate is
currently 3,2%, versus 4,6% for Brazil, 7,1% for
the US, and 18,6% for the OECD average.
Improved producer support will create an
enabling environment improve comparative
advantage.
Target
(2019)
• To increase Producer Support
Estimate from 3,2% to 5%.
Target or catalytic effect
PROGRESS TIME
LEAD: DAFF
Challenge Proposal
Ineffective models of
producer support.
Absence of uniform
criteria and
definitions. Unable to
effectively plan,
invest or measure
smallholders
A new policy and model
for Producer Support
(with particular
emphasise on
smallholder) supported
by a review of the
existing financial
instruments
Slow pace in the
issuing of water
licences
Proposed Incentive
Programme for
Climate Smart
Agriculture (CSA)
remains unfunded.
To submit a list of
strategic projects to
DWS for fast tracking
To submit a proposal to
the Green Fund.
Competing demands
of land
PDALF & SPLUMA to deal with
protection of Agric. Land. In
consultation with DMR &
DRDLR, to finalise how deal
with co-existence with mining.
Break Down of National Training Programme
Province
Beneficiaries for Credit
Bearing Training
Beneficiaries for Non Credit
Bearing Training
Total Beneficiaries
To Be Trained
Eastern Cape 310 1930 2240
Free State 2010 855 2865
Gauteng 535 2770 3305
KwaZulu
Natal 765 196 961
Limpopo 9789 71 9860
Mpumalanga 0 3249 3249
Northern
Cape 0 1718 1718
North West 350 0 350
Western Cape 140 2924 3064
TOTAL 13 899 13 713 27 612
12
Activity Start
date
End
date
Private Sector Invest: To plant 687,300
hectares, producing 942,850 tons soya beans
(↑36,7%)
Apr-
15
Mar-
16
Public Sector Invest.
• Land under acquisition = 1 536ha
• Hectares of soya:3 647ha[-44,053ha]
• [Production in tons and total value add to be
determined ]
Apr-
15
Mar-
16
KEY DECISIONS
13
Production: Poultry
Strategic
Scope:
• To contribute to 1 million hectares of under-
utilised land in communal areas
• To contribute to 2% annual growth in Gross Value
Add in Agriculture.
Target
(2019)
• Add 14 481 jobs to the current 107 784 jobs
through increased poultry production of 663,500t
by 2019.
• Add 14 173 jobs through expansion of 238 500
hectares of soya production.
• Increased contribution to gross value of Agriculture
GDP from R32.9 bil (21.8%) to 41.13 (25%) by
2019.
Target or catalytic effect
Challenge Proposal
• Ready-to- roll
projects blocked
• Political intervention in
LP Project: 2000 jobs
+ revitalise disused
broilers
• Import
(dumping) e.g.,
AGOA
• Provinces to cluster
projects e.g. 5 GP
poultry projects into
bankable poultry
• High input costs • PPP with DTI, EDD
around IDC investment
in crushing facilities.
• Agri-Park to deal with
high input costs
Limpopo: Lebowakgomo Chicken Abattoir
PROGRESS TIME
LEAD: DAFF
14 SOURCE: …
14
Activity Start
date
End
date
Private Sector Invest (2014): No. of livestock:
13,896 cattle (↑0.25%); 24,048 sheep
(↓1.96%).
April
2015
March
2016
Public Sector Invest.
• Land under acquisition = 11 890ha (size of
farms)
• Total hectares for livestock production =
1.3 million ha (farm size) [Production output
in tons and total value add to be
determined]
• 140 Veterinarians will be deployed by Q4
April
2015
March
2016
KEY DECISIONS
15
Production: Red Meat
Strategic
Scope:
• To contribute to 1 million hectares of underutilised
land in communal areas
• To contribute to 2% annual growth in Gross Value
Add in Agriculture.
Target
(2019)
Targeting 75 448 jobs (41 100 jobs in beef and 34
348 jobs for mutton) translated from expanded
production of 286 200t (BFAP).
Target or catalytic effect
Challenge Proposal
20% growth in
consumer demand,
met by 10% imports
Import replacement
through the
commercialisation of
communal herds
Veterinary services
inadequate and I in
accessible
Funding proposal to
implement OIE gap
report recommendation
Commercialisation of
communal herd
owning 40% of
national herd.
Buy-in and PPP with
traditional authorities
for effective expansion
of the communal herd.
PROGRESS TIME
LEAD: DAFF
Free State: construction of the 14 animal
handling facilities
16 SOURCE: …
16
Activity Start
date
End
date
Private Sector Invest (2014): The sector is
projected to plant 481,300 hectares of wheat
(↑1% ).
Apr-
15
Mar-
16
Public Sector Invest.
• Total hectares for Wheat (CASP and Ilima
Letsema) = 150 hectares (farm size) [-
96,110ha p.a]
April
2015
March
2016
KEY DECISIONS
17
Production: Wheat and other crops
Strategic
Scope:
• To contribute to 1 million hectares of under-utilised
land in communal areas
• To contribute to 2% annual growth in Gross Value
Add in Agriculture.
Target
(2019)
• To increase production from 1,2 mil tons by an
additional 200 000 tons by 2019.
• To create an additional 8,000 new jobs to the
existing 28,000 by 2019.
• To expand areas planted by an additional 61,000
hectares .
Target or catalytic effect
PROGRESS TIME
LEAD: DAFF
Challenge Proposal
Import 50% of
wheat .
Progressive
replacement of
wheat by canola
and soya
Research on
suitable wheat
cultivars
40% of input cost
is from fertilizer.
DMR, DTI and
DAFF to review
feasibility of SA
becoming self
reliant in
fertilizer and in
agricultural
mechanisation.
18 SOURCE: …
Activity Start
date
End
date
Private Sector Invest: To put 64 510 ha under
production, with an expected export volume of
1,7 million tons, a total production ~2.6 million
tons.
Apr-
15
Mar-
16
Public Sector Invest.
• Total hectares under production for Fruit and
Vegetables = 31 059 ha (farm size)
o Orange River Vineyard Project, female
smallholders, 500ha
• Wolfberg Fruit Processors – Agri Hub (DST)
Apr-
15
Mar-
16
KEY DECISIONS
19
Production: Fruit and Vegetables
Strategic
Scope:
• To contribute to 1 million hectares of under-utilised
land in communal areas
• To contribute to 2% annual growth in Gross Value
Add in Agriculture.
Target
(2019)
• Currently, over 50% of fruit produced is exported,
and less than 20% of fruit and 46% of vegetables
are sold through National Fresh Produce Markets
(NFPM).
• To increase the output of NFPM by 10% and
exports by 20%.
Target or catalytic effect
PROGRESS TIME
LEAD: DAFF
Western Cape: Hortgro tree planting project –
Ceres
Challenge Proposal
• SPS matters
(CBS)
• 19 Fresh
Produce
markets
derelict
Infrastructure
investment in NFPM
in collaboration
with CoGTA
20 SOURCE: …
Activity Start
date
End
date
Private Sector Invest (2015): The sector is
projected to plant 3 900 hectares of sugar
cane and 18 million tons of cane crushed.
April
2015
Mar-
16
Public Sector Invest.
• Total hectares under sugarcane
production = 2 957 hectares (farm size) - ↓2776ha p.a.
• Production in tons to be determined
April
2015
Mar
ch
201
6
KEY DECISIONS
21
Production: Sugar
Strategic
Scope:
• To contribute to 1 million hectares of under-
utilised land in communal areas
• To contribute to 2% annual growth in Gross
Value Add in Agriculture.
Target
(2019)
• Expand small scale grower production in
communal areas by 28 655 hectares by
2019
• 8000 jobs preserved, 34 303 new jobs
created through the renewable energy and
biofuels interventions.
• 2% biofuels penetration about 400 million
litres per annum) into national liquid.
Target or catalytic effect
PROGRESS TIME
LEAD: DAFF
Challenge Proposal
Land claims To encourage that all
sugar plantations under
land claims are kept
under sugar production
through strategic
partnerships.
Activity Start
date
End
date
Private Sector Invest (2014): The sector is
projected to plant a little over 100,000
hectares of vineyards, a total of 2 000ha of
new plantings, and about 1.5 million tons of
wine grapes.
April
2015
March
2016
Public Sector Invest: Total hectares: 1 544 ha
(farm size) RECAP and Enterprise Dev.
• Production in tons to be determined
April
2015
March
2016
KEY DECISIONS
22
Production: Wine
Strategic
Scope:
• To contribute to 1 million hectares of under-utilised
land in communal areas
• To contribute to 2% annual growth in Gross Value
Add in Agriculture.
Target
(2019)
• There is currently 99 463 ha under vineyard production
and there is a potential to increase by 4 707 ha by
2019.
• Wine industry employs 289 151 people and will
expand by 10 000 to a total of 282 625 by 2019.
• Wine industry contributes R30 billion to South African
GDP there is a potential to increase up to R32 billion in
2019.
Target or catalytic effect
PROGRESS TIME
Western Cape: De Goree (Robertsons)
Challenge Proposal
Greatest's
contributor to
agricultural
exports/trade but
is the least
transformed sector
PPP agreement, and
charter for the industry
to address
transformation
LEAD: DAFF
23 SOURCE: …
23
Activity Start
date
End
date
Status
• Model for R&D governance structures
developed with clear TORs completed Apr-15 Mar-16
• RFP for R&D projects issued
• 15 post graduates funded (DAFF) and 135
students (post graduate + interns) by DST
Apr-15 Mar-16
• E-agriculture - DST-funded initiative at ARC. Apr-15 Mar-16
• Manufacture and distribute WEMA drought
resistant maize seed
Apr-15 Mar-16
KEY DECISIONS
24
Technology Dev. and Innovation
Strategi
c Scope:
• To contribute to 1% annual growth in Gross
Value Add in Agriculture.
• R&D agenda linked to key sectoral
interventions and Value-chains:
Target
(2019)
• 2–3 % of Agriculture GDP invested in R&D
annually
• An effective integrated sector R & D
governance system
• Critical mass of competent and appropriately
skilled and placed researchers and extension
personnel.
Target or catalytic effect
PROGRESS TIME
Challenge Proposal
• Under investment (-
0.1%) in R&D
o Capacity: no’s,
expertise
o Infrastructure
• Inability to
apply/integrate
innovation
• Aging senior
researchers
Proposal (cost
benefit anaflysis)
for investment in
the research and
innovation value
chain
LEAD: DST Kwazulu Natal: Post-graduates in Agric.
Engineering at the Univ. of Kwazulu Natal
24
Activity Activity Start
date
End
date
SADC-EU-EPA • SA will be allowed, for the first time to
export 150 000 tons of sugar into the EU duty-free on an annual basis.
• Wine will be allowed into EU on a duty free basis, up from 47 million litres to 110 million litres.
Tripartite Free trade area (COMESA; SADC and EAC)
• 20 Farms are identified for final audits and SA-GAP certification.
• Negotiations initiated with Fort Cox College to expand existing MOU to offer record keeping workshops nationally to support for PPECB’s SA-GAP certification programme.
April
15’
Mar
ch
16’
KEY DECISIONS
25
Market Access and Trade
Strategic
Scope:
• To increase market access for agriculture, forestry and
fisheries products, both domestically and
internationally (increased export trade and import
replacement)
• Equitable and active participation by SMMEs and
smallholders across the value chain.
Target
(2019)
• 200 GAP certified smallholders
• Implementation of 75% local procurement specific to
smallholder producers.
Target or catalytic effect
PROGRESS TIME
LEAD: DTI
Challenge Proposal
75% of local
procurement under
discussion between
National Treasury and
Department of Small
Business Development
DAFF to apply for
designation of
certain products for
smallholders.
Greater synergy
between IPAP and APAP
IPAP and APAP
2016/17 to
determine common
commodities to
support and
strategic approach.
RECOMMENDATIONS
It is recommended that the Portfolio
Committee
Take note of the status of the SONA
priorities on Revitalization of agriculture
and agro-processing value chains and
Agri-parks.
Take note of the integration of APAP and
Agri-parks.
26
KE YA LEBOGA
THANK YOU