AGRIPARKS TOWARDS AN INCLUSIVE AGRICULTURE ECONOMY
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1 AGRIPARKS TOWARDS AN INCLUSIVE AGRICULTURE ECONOMY DEPARTMENT OF AGRICULTURE AND RURAL DEVELOPMENT PRESENTATION TO THE CPSI Presenter: Mr Motlatjo Makaepea 29 JUNE 2017 KEMPTON PARK 1
2 Contents An introduction to Gauteng Overview of Gauteng Agriculture Economy Focus on Agriparks as a mechanism for inclusive participation of all farmers in the agriculture economy Conclusion
3 An introduction to Gauteng Province: Location Gauteng is the smallest province in South Africa with 1.7m ha of land surface area It occupies only 1.4% of RSA land surface area Population: 12.3m (23.7% - Largest % share of RSA population Census 2011) Gauteng has 3 of the 8 Metro Municipalities in the Country
4 Broader economic overview of Gauteng Gauteng is the economic powerhouse of South Africa The province contributes 33.9% to national GDP It furthermore contributes 10% to Africa GDP Major cities such as Johannesburg and Pretoria are in Gauteng Province. Built-Development pressure high The province has 4 largest fresh produce markets in the country Johannesburg Fresh Produce Market Tshwane Fresh Produce Market Springs Fresh Produce Market Vereeniging Fresh Produce Market
5 Contribution of agriculture to Gauteng economy Contribution of primary agriculture to Gauteng GDP is 0.5% Contribution of total agricultural value chain including secondary and tertiary agric tiers to GDP is 2.3% The province is 18% built-up with 17.3% of High Potential Agricultural Land Vacant land in the province is ha (52% of the total surface area) Vegetation: 2 biomes which are Grassland and Savanna Agriculture households in Gauteng
6 Gauteng Agricultural sub-sectors gross farming income Animal/Livestock products 10% Other products 2% Field crops 8% Horticulture 21% Livestock production is the lead agricultural sector with 59% of gross farming income Horticulture sector with specific reference to Vegetables and flowers is the 2 nd biggest income Animals/Livestock 59% earner with 21% of the gross farm income
7 Agriparks: National Context State of the Nation Address (SONA): Declared 2015 year of Freedom Charter Agriparks becomes a focal point for Agriculture development A sum of R2b was reprioritized for the program Department of Rural Development and Land Reform (DRDLR) becomes the National Custodian of the Program State of Province Address (SOPA) Township Economic Revitilization (TER) linked to Agri-Parks Agro-Processing as a viable tools to re-industrialise Gauteng (WRDM & Sedibeng) Gauteng becomes a leading province for development of Agriparks nationally by allocating its own resources 7 R60M
8 Agri-Parks - Formulation of the problem Low contribution of agriculture to the economy (0.4%) Lack of adequate land parcels for production Low productivity levels of smallholder farming sector Lack of infrastructure for value-adding and agro-processing targeted at smallholder farmers Inadequate clustering of smallholder agricultural produce for ensuring adequate volumes, access to markets and valueadded infrastructure Funding constraints impeding development of processing infrastructure at individual farm level
9 AGRI-PARKS: CONCEPT Agri-Parks which is a network comprised of clustered agricultural infrastructure for production and value-adding developed in the periurban areas Agri-parks based on Agriculture Policy Action Plan (APAP) and Industrial Policy Action Plan (IPAP) with priority given to Horticulture Value Chain and Grain-Poultry Integrated Value Chain. 9
10 AGRI-PARKS: CONCEPT The Agri-parks provides for: Secured, intensive bulk production of a specific agricultural commodity for economies of scale Agro-processing within a shared infrastructure (incubation), Marketing avenues of agri-infrastructure, Value adding and marketing within the boundaries of a single geographical farm or an agricultural holding. Model different from existing farming model (Based on - One locality) 10
11 AGRI-PARKS GOALS Agri-parks emphasise competitiveness Production of High-value commodity (Focus) Branding (Logo) & Visibility Localiztion Volumes & Quality of produce Retail presence Export capability
12 PRIORITY COMMODITIES FOR GAUTENG (AGRIPARKS PROGRAM) Horticulture Value Chain Grains Poultry Integrated Value Chain (4 th largest producer of Grains) Red Meat Value Chain Horticulture Value Chain (21% of Gauteng GVA) Vegetables Cut Flowers Herbs & Essential oils Opportunity: Proximity to large population and growing middle class Bulking up, quality assurance and branding 59% of Gauteng Gross farm income comes from Livestock predominantly in Feedlots Opportunity: Processing infrastructure for smallholder farmers and their integration. - Linkage to mobile abattoirs program
13 Agriparks / Agrihubs Protect Areas of High Potential Agricultural Land 7 Agricultural Hubs are Agricultural Development Zones delineated to protect High Potential Agricultural Land and focus agric development. The Agric Hubs encompass the Maize growing belt of Gauteng also known as Maize Traingle
14 Major Crop Commodities Spatial Distribution A total of ha is under cultivation with the following crops Grains (Maize & Sunflower) covers a large area of ha Vegetables Orchards (Peaches & Citrus) Flowers Essential oils and herbs Gauteng is the Number 1 producer of cut flowers with the exception of Proteas 4 th Maize producer in South Africa
15 AGRIPARKS CATCHMENT
16 AGRIPARKS LINKAGE TO NEIGHBOURING FARMERS
17 Each Agripark will be a critical link between the formal markets and the smallholder farmers. The Agripark will serve as an intermediary and a distribution facility whereby the smallholder farmers `s produce will be aggregated and graded in accordance with formal markets requirements Management of each Agripark is to be undertaken on a privatepublic partnership to ensure a balance between with economic and development goals. AGRIPARKS OPERATING MODEL Smallholder farmer FORMAL MARKETS AGRIPARK Shared packaging & coldroom facilities Out-grower Model & On-site production Smallholder farmer Community gardens Off-take Agreements Smallholde r farmer
18 Generic Project Plan for all Agripark Sites KEY ACTIVITIES TIME 2014/ / / /18 1. Planning Agri-parks 2. Infrastructure Development 3. Entrepreneur Selection 4. Contract Markets Negotiations Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 5. Production (Scaled and Synchronised per commodity) 6. Logistic (Aligned to Contract Markets) 7. Maintenance 7.1. Servicing markets 7.2. Infrastructure 7.3. Relationships
19 RANDWEST AGRI-PARK FACILITIES Westonaria Agripark: Hydroponics, Packhouse and Administration Block and Training room Westonaria Agripark: Lettuce production Training room
20 Westonaria Agripark Hydroponics Vertical chamber
21
22 Investment in New Technology onsite As part of Re-industrialization the department has introduced the latest farming technology in the form of Vertical Growth Chamber farming system. The facility is also established at Rand West Agri-park facility. This is also in line with adaptation mitigation of climate change. The chamber is an intensive growth chamber for vegetable production; high yield is attained within short period of time. This technology has the potential to solve many problems associated with access to land and attain economic viability within a small space
23 Production of baby spinach on vertical chamber
24 AGRIPARKS TER LINKED - SEBOKENG ZONE 10 Size 3.16ha Perimeter 816M 24
25 Sebokeng Zone 10 Agri park
26 COJ Eikenhof Agripark - Fence, training and office building
27 MERAFONG AGRIPARK (EXPANSION) The Project includes: Construction of 16 x 300 m 2 hydroponics tunnels (100% complete) Construction of a 5000 m 2 shade net (100% Complete) Repairing of pump station (96% complete)
28 Eikenhof FPSU - 20 Tunnels and l water tanks
29 Fence, training and office building at the Eikenhof Agri-park
30 MERAFONG AGRIPARK (EXPANSION) The Project includes: Construction of 16 x 300 m 2 hydroponics tunnels (100% complete) Construction of a 5000 m 2 shade net (100% Complete) Repairing of pump station (96% complete)
31 Merafong Agripark Vegetable production
32 ONVERWACHT AGRIPARK FARMER PRODUCTION SUPPORT UNIT (FPSU) Commodities to be produced: Vegetables, Flowers and Herbs 32
33 The Innovation Hub Agri park - Food innovation
34 Greenhouse construction 90 % completed Entrance cabins, electrical installations tested and functional (extractor & circulation fans) wettable wall installed Water reticulation layered (Main line, drainage pipe, internal gutter down pipes, underground pipes and irrigation pipes) Thermal screens installed CONSTRUCTION STATUS
35 CONSTRUCTION STATUS. continue 10 % remaining (plastic covering) Side walls to be covered upon completion of automated system to be housed in the pack house Complete covering without automated climate control will accelerate destruction of the plastic
36 Risks and challenges RISKS AND CHALLENGES MITIGATION Acts of vandalism and theft Disruption by non-project participants Group dynamics affecting operational capabilities Water and electricity costs and interruptions Poor market uptake or inability to service offtake agreements (Need at least guarantee offtake from state institutions) Full-time on site security Legal binding agreements for all the project participants Continuous Cooperative capacitation On-site back-up generators Support of agri-entrepreneurs with inputs and logistics support Poor commitment from agro-entrepreneurs operating in the Agripark Legal binding agreements for all the project participants
37 Success factors Crowding of agricultural and rural development investment in the Agri-Park model including land reform programmes Management Institution of the Agri-parks (Subject to land tenure system) Availability of state land to develop the identified agri-parks (DRDLR to list its properties) Funding availability and project management support (DRDLR is working on the financing model) Committed beneficiaries (Agri-entrepreneurs) Dedicated technical and management support Formidable partnerships with industry and DRDLR, DAFF and Municipalities (Site Approval)
38 Spin offs Each Agri-park is expected to contribute a minimum of 30 jobs onsite with emphasis on youth, it is anticipated that 150 jobs per agri-park when each Agri-park is operating at full capacity. Agri-parks will contribute to increased productivity, competitiveness and agro-industrialisation. Consolidation and aggregation of interventions is critical. Critical skills - Farmer Entrepreneurial capacity to be enhanced. Local and international partnerships to be undertaken.
39 Gauteng Agricultural Development Strategy (GADS) Extension Services Agri-input support program (Letsema) West Rand Agriculture Training Institute* Biotechnology Strategy Agro-processing Strategy Household Food Security Program Floriculture program GDARD strategies supporting Agriparks
40 Thank you 40
DEPARTMENT OF AGRICULTURE AND RURAL DEVELOPMENT GAUTENG PROVINCE AGRIPARKS PROGRAMME
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