REVITALIZATION OF THE AGRICULTURE AND AGRO … › uploads › documents › news › ...Production: Red Meat Strategic Scope: • To contribute to 1 million hectares of underutilised

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


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%.


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.


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


• 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


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).


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


• 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



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 .


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


• 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:




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%.


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


projected to plant 3 900 hectares of sugar

cane and 18 million tons of cane crushed.

April

2015

Mar-

16


• 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.


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


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:




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.


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.


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.


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

Documents

REVITALIZATION OF THE AGRICULTURE AND AGRO … › uploads › documents › news › ...Production: Red Meat Strategic Scope: • To contribute to 1 million hectares of underutilised