NAMC Strategic Plan Presentation 2011/12
Presentation to the Parliament’s Portfolio Committee: Agriculture, Forestry and Fisheries
11 March 2011
Mrs Ntombi Msimang - Chairperson: NAMCMr TR Ramabulana- CEO: NAMC Mrs S Muvhulawa- CFO: NAMC
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The NAMC in brief
Established in terms of an Act of Parliament (MAPA, 1996) to advise the Minister and other Directly Affected Groups on agricultural marketing policy
Four main objectives: Increasing of market access for all participants Promotion of efficiency of the marketing of agricultural
products Optimization of export earnings Enhancement of the viability of the agricultural industry
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Members of the NAMC Council
The current members are: Mrs NM Msimang (Chairperson) Dr ASM Karaan (Vice-Chairperson) Mr AD Young Prof JF Kirsten Mrs SE Moolman Mrs C Molo Mr DB Montshwe Mrs M Mannya Mrs M Gill
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Council Committees
Human Resources
Mr A Young (Chairperson) Mrs L Moolman Mrs M Mannya
Audit Committee
Mr Paul Slack (Chairperson) Ms Mathebe Moja Mr Raymond Matlou Ms Mina Gill Prof J Kirsten
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Employment Equity
Senior Managers 2 Female African (5 %) 4 Male African (10 %) 2 Male White (5 %)
Total Staff 13 Female African (28 %) 11 Female White (28 %) 14 Male African (36 %) 4 Male White (8 %)
The situation…Employment !!!
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Trends in employment by sector between 2001 and 2010
Source: DAFF, 2010
Trends in the agricultural sector’s share of the total employment between September 2000
and March 2010
Source: DAFF, 2010
Key realities Current market structure shaped to largely
cater for existing mainstream market participants Market structure at the processing and retail level
highly concentrated Inherited from previous regulated marketing regime and
government support incentives Provides a breeding ground for a non-optimal
competitive environment High entry barriers for smallholder farmers
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Key actions Important paradigm shift (1) – Import Substitution
Industries that could benefit include grain industry, meat industry, cotton industry, fish processing, forestry
Important paradigm shift (2) – Increase the size of the cake Review biofuel policy Realignment of export promotion policy and tools “Buying local is lekker”
Leverage potential of quick wins Develop new and expand existing development/incentive
schemes Leverage contributions by private sector
Leverage potential of institutional markets
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Electricity tariff increase compared to CPI
Tariff increase for 2008, 2009
and 2010 higher than the
Headline CPI
CPI higher than the electricity tariff increase
Source: Eskom, 2011
TOLL FEES - CLASS 3 VEHICLE ONE WAY
Own calculations based on SANRAL, 2011
R551 in 2010; 34.1% increase from 2006 to 2010
R516 in 2010; 39.1% increase from 2006 to 2010
R487 in 2010; 36.8% increase from 2006 to 2010
R366 in 2010; 37.1% increase from 2006 to 2010
Average % contribution of regulated fuel, labour and electricity cost to total production cost of animal feed
Own calculations based on data from AFMA, 2011
Regulated fuel, labour and electricity cost for the production of a kilogram poultry
Own calculations based on data from role players in the industry, 2011
2008 to 2009 up 6.2%
2009 to 2010 down 2.4%
2008 to 2009 up 28.2%
2009 to 2010 up 18.6%
2008 to 2009 up 16%
2009 to 2010 up 33.9%
Up 52%
Up 3.6%
Major projects to drive job creation
Project Investment Value R
Total Employment opportunities 2011/12
Total Employment Opportunities 2012 - 2014
Critical reforms required to realise the jobs
National Red Meat Development Project (NRMDP)
R42 million over 5 years
Project team12 people Project Manager, Project Implementation manager, Livestock Coordinators/Field Officers, Admin Assistant, Auctioneer-ing programme
6 Custom feeding programmes18 herdsmen
Local level organisers/representa-tives20 people
5 Auctioneering companies20 people
Farmers benefitting5000
Project team4 Additional Livestock Coordinators/Field Officers
14 Additional custom feeding programmes42 herdsmen
Local level organisers/representa-tives40 people
Add. auctioneering companies30 people
Farmers benefitting12-13000
1. Funding must be secured2. Baseline study3. Infrastructure4. Market information5. Training6. Designing tailor made
programmes per custom feeding programme
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Major projects to drive job creation Project` Company
/SOE/Go-vernment
Investment Value R
Total Employment opportunities 2011/12
Total Employment Opportunities 2012 - 2014
Critical reforms required to realise the jobs
Vineyard development scheme
NAMC (in collaboration with the wine industry and department of agriculture in the Northern Cape and Free State)
R62 million for 570 ha of vineyard
Permanent – 61 Seasonal – 100
Permanent – 124 Seasonal – 200
Funding required for:1. Infrastructure2. Operating capital3. Training and extension
services4. Market linkages
Grain crop development scheme
NAMC (in collaboration with the grain industry and cooperatives/agribusiness)
R140 million Permanent – 200 Seasonal – 300
Permanent – 200 Seasonal – 300
Funding required for:1. Operational and
risk mitigation funding
2. Training and extensions services
3. On farm storage4. Mechanisation
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JOB CREATION Deciduous Fruit Trust- tree planting project, +- R5,1 million CASP funds
administered in 2010 Total = R12,2 million. 1st Phase = 1,000 Ha by 2014 – 600 Ha in the Western Cape in partnership with WCDA.
Winter Cereal Trust- Commercialisation of and promotion of wheat production amongst developing farmers in the Free State, Western and Southern Cape. Total expenditure for the development project is R4 067 549.
Maize trusts- funding to the grain farmer development association to assist small holder farmers in soil preparation, input costs, harvesting and storage of grain.
Oil and protein seed trust- assist 165 emerging farmers to plant 15 100ha of sunflower. A total of 1250 temporary job opportunities will created during the season.
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TradeProbes (6 annually) Product and country profiles Trade related topics
Publication on Fruit Trade Flows (weekly’s) and Fruit Flow reports
Collaborative trade studies, e.g. Determining the scope and
nature of Non-tariff Measures prevalent in selected international markets
South Africa’s way ahead: Cape to Cairo?
Comparative analysis…: European markets for SA emerging table grape growers
Export promotion activities Hong Kong, Singapore, Malaysia
TradeTrade
Users and uses Users: Government Departments, NGO’s,
Industry Associations, Companies, Press Uses: Export promotion, lowering
transactions costs, policy guidelines, better informed exporters, increased exports
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Background Promotional activities in three countries, namely Hong Kong, Singapore, Malaysia Several Hyper- and Supermarkets participated, e.g. Giant , Shop N Save, Cold Storage In total 499 Hyper- and Supermarkets participated
Objectives Increase sales and awareness of the total range of South African fruit and vegetables available at the
time of the World Cup in particular during the last 2 weeks of the World Cup. Grow sales and the range of South African product from after the World Cup till end of October.
Actions In store displays In store competitions Press advertising Point of sale material Aggressive bulk displays Hard and soft copies of newspaper adverts, copies of pictures of displays and point of sale materials
and some of the winning displays
Trade - Export promotion activities Trade - Export promotion activities
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Results The total U$ purchases for the group from South Africa, for 2010 vs the purchases for 2009, grew from
± U$14 million to ± U$18 million in 2010 A 28.5% sales growth in U$ terms Total Container Volume for 2010: +108 Containers Vs 2009 Volume A 48% increase in volume
Trade - Export promotion activities Trade - Export promotion activities
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Export promotion through statutory levy funding.. (Wine) WOSA (Wines of South Africa) promotes South African
wines, mainly in EU, but also in USA, Canada, key African countries such as Angola and Nigeria, as well as India, China, Japan and South Korea
In 2008, SA exported over 400 mil litres, Export strategy –
Enhancing SA’s image Developing new markets Assisting in building capacity Improved infrastructure for exports via Wine-on-line
Current budget app R37 mill / annum
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Export promotion through statutory levy funding .. (Deciduous Fruit) Deciduous fruit
Apples, pears, plums, apricots, peaches and nectarines
A Market Development Campaign in the UK and Germany
Producer funded (R20 mil / annum) as well as grant from DTI (R10 mil / annum)
Volume growth target of 10-15 % over 5 years has been set
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Export promotion through statutory levy funding .. (Grapefruit) Citrus Growers Association
Consumer campaign in UK and Japan“South African Grapefruit’
Beautiful country, beautiful fruit” Funded by statutory levies – app R9 mil / annum
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Background Several companies found guilty for non-compliance Competition Act Thereafter some of these companies pulled out of industry associations This amongst others mean they are not willing so share information Problem: This information necessary to, for example, calculate GDP, Consumer
Spending, Logistics Planning,, Employment Numbers, etc
This is a complex issue due to the structure of the primary and secondary agricultural sector No case law in South Africa to provide guidance
The road ahead Compile document for the Competition Commission spelling out detailed needs at the
industry and country level Workshop the document with Competition Commission Set guidelines for industry on information exchange Work on proper public agricultural information system
MERC focus areasMERC focus areasInformation ExchangeInformation Exchange
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Training
Making Markets Matter Training Course Its an intensive 5 day business development training workshop for African
agribusinesses, In partnership with University of Stellenbosch and Cornell University 80 agribusinesses attended the Course The farmers were trained on the following issues
Cash flow management, Marketing strategy, financial analysis
AgriBiz Training course for Women As a follow up to the above training course, the NAMC designed a 3 day
training course specifically for women that are involved in agriculture The course offers training in marketing, financial and strategic
management . 30 women entrepreneurs attended The NAMC is conducting an after care programme so that participants can
implement what they have learnt from the course into their businesses
Statutory Measures
The MAPA act provides for the following statutory Measures:
Levies Records and returns Conducting of pools Control of exports Registrations Appointment of inspectors
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Existing statutory measures
INDUSTRY Administrating body Statutory Measures
Levy Registration Records & Returns
Citrus (export only) Citrus Growers Association
Cotton Cotton SA
Dairy Milk SA
Deciduous fruit (pome & stone) Deciduous Fruit Producers Trust
Dried fruit Deciduous Fruit Producers Trust
Grains (Maize, Oilseeds, Sorghum, and Winter Cereals)
The South African Grains and Information Services (SAGIS)
Lucerne Lucerne Seed Organisation
Mangoes Subtrop
Milk Milk Producers’ Organisation
Mohair Mohair SA
Pork SA Pork Producers’ Organisation
Potato Potatoes SA
Poultry and eggs Southern African Poultry Association
Red meat Red Meat Industry Forum
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Existing statutory measures (cont...)
INDUSTRY Administrating body Statutory Measures
Levy Registration Records & Returns
Sorghum Sorghum Trust
Table Grapes SA Table Grape Industry
Wine SAWIS, Winetech and Wosa
Winter Cereals Winter Cereal Trust
Wool Cape Wools SA
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FUNCTIONS FINANCED THROUGH STATUTORY LEVIES
Functions Amount spentR
Percentage of total levy
expenditure%
Administration 16 759 976 6
Transformation 61 832 155 22
Export Promotion 33 114 219 12
Research 90 169 729 33
Information 24 264 856 9
Production development 2 832 839 1
Plant improvement 2 658 981 1
Local promotion 39 319 855 14
Quality control 5 924 738 2
TOTAL 276 877 338 100
Budget Allocation: 2011/12 – 2013/14 The NAMC has received an MTEF budget
allocation letter for the period from DAFF. The budget allocations are as follows:
2011/12: R 35 899 000 2012/13: R 30 115 000 2013/14: R 32 220 000
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Budget Allocation Cont’ This resulted in the following percentage fluctuation for the period:
From 2010/11 – 2011/12: 15% increase From 2011/12 – 2012/13: 16% decrease From 2012/13 – 2013/14: 7% increase.
The decrease of R5 million in 2012/13 is due to the following:
The NAMC has in the previous financial year received additional funding to expand the export promotion programme that will afford 100 emerging agribusinesses the opportunity to participate in international trade.
This funding was for the MTEF period 2009/10 – 2011/12 only.
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Budget Allocation Cont’ Other source of Income
The NAMC is anticipating to generate income from the investment of the grants to be received from DAFF at the beginning of the financial year 2011/12. The following are the projected interest to be generated:
2011/12: R 1 350 000 2012/13: R 1 200 000 2013/14: R 1 400 000
Total Income for the MTEF period then results in: 2011/12: R 37 249 000 2012/13: R 31 315 000 2013/14: R 33 620 000
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