REVITALIZATION OF THE AGRICULTURE AND AGRO-PROCESSING VALUE CHAIN

Size: px

Start display at page:

Download "REVITALIZATION OF THE AGRICULTURE AND AGRO-PROCESSING VALUE CHAIN"

Thomasina Candace Norris
6 years ago
Views:

1 REVITALIZATION OF THE AGRICULTURE AND AGRO-PROCESSING VALUE CHAIN By Department of Agriculture, Forestry and Fisheries Department of Rural Development and Land Reform 24 JUNE

2 INTRODUCTION The purpose is to up 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

3 Contents Strategic Overview Governmental initiatives 3 3

4 Key Growth Constraints Strategic Overview GROWTH TARGET: Annual increase of 0.5% (Current contribution to GDP: 2.5%) Current Status (Jun.15 ) Index of production output in agroprocessing, unchanged (unadjusted) 2019 Target Growth increase of 2.5% (0.5% p.a.) Challenges 1. High Inputs Costs [animals and other products (11,3%), Animal feed 10,2%) of total expenditure] 1. Agri-Parks Key Interventions 2. Fast Tracking Land Reform 3. Producer Support 4. Nine (9) Strategic Value Chains 5.Research and Innovation Gross value add for Agriculture; Forestry & Fisheries increased by 5.6% in Total jobs in Agriculture increased by , between 2014 and (total of ) \ Percentage change in Gross Value Add of 10% (2% p.a.) Job increase of ( p.a.) and 1 million by Competing land use 3. Anti competitive behaviour as a result of growing market dominance 4. Climate change: drought, floods, fires 6.Market Access and Trade Dev Enablers 1. Policy Certainty 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 4

5 Strategic Overview Multiplier Effects R1 investment on increase in GDP R1 million investment on job creation R1 investment on export receipts R1 investment on fiscal revenue 5

6 Contents Strategic Overview Government initiatives: - No critical challenges, and on schedule or completed. - No critical challenges, but behind schedule. - Critical challenges, and behind schedule - Undetermined 6 6

Agri-Parks CHALLENGES Technical capacity at District level Fast Track regulatory approvals KEY DECISIONS PROPOSAL Project Management Support Unit established Utilise multi-sectoral team established

7 Agri-Parks CHALLENGES Technical capacity at District level Fast Track regulatory approvals KEY DECISIONS PROPOSAL Project Management Support Unit established Utilise multi-sectoral team established to deal with EIA s; water approvals; etc to reduce time Free State Agri-Parks Strategic Scope: Target (2016/17) Jobs target (2019) Gross Value Add (2019) Target or catalytic effect Crowding in private sector investment in agroprocessing; local economic development and job creation Establish Agri-Parks in 44 districts Detailed calculations will be based on business plans per site Detailed calculations will be based on business plans per site Activity PROGRESS LEAD: DRDLR 36 of the 44 districts have confirmed sites Prototypical agri-park completed; evaluation criteria Start Feb-15 Feb-15 TIME End May- 15 May 7

Agri-Parks Prototype Agri-Park Completed PROGRESS LEAD: DRDLR Activity Start End Farmer and stakeholder

Production plans and capacity building plans underway for all sites (quickwin projects fully costed);

August ); construction started in NW Market Access DAFF to lead in opening up market opportunities, and

Provinces busy with market plans both domestically and internationally Training and capacity building DAFF

8 Agri-Parks Prototype Agri-Park Completed PROGRESS LEAD: DRDLR Activity Start End Farmer and stakeholder consultation Feb June Business plans being developed (agro processing; market access) (all Provinces) Production plans and capacity building plans underway for all sites (quickwin projects fully costed); projects started to increase production Infrastructure plans; designs; approvals; construction (commence August ); construction started in NW Market Access DAFF to lead in opening up market opportunities, and providing market access. Provinces busy with market plans both domestically and internationally Training and capacity building DAFF to lead in providing all required training, both through extension services, and private public partnerships with the private sector. June June May August April TIME August July July September, March

9 36 of 44 Agri-Park sites selected Province Eastern Cape Free State Gauteng Limpopo KwaZulu Natal Mpumalanga Site (district municipality) 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) Randfontein (West Rand) Tzaneen (Mopani), Groblersdal (Sekhukhune), Modimolle (Waterberg), Aganang (Capricorn), Nwanedi (Vhembe) 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) Bushbuckridge (Ehlanzeni); Mkhondo (Gert Sibande; JS Moroka (Nkangala) Northern Cape North West Kuruman (John Toalo Gaetsewe), Springbok (Namakwa) Springbokpan (Ngaka Modiri Molema), Vryburg (Ruth Segomotsi Mompati), Makapanstad (Bojanala) 9

10 Fast tracking Land Reform CHALLENGES Protracted process of acquiring land in variuos provinces KEY DECISIONS PROPOSAL Expedite the completion of revising business process of acquiring land to established uniformity across provinces Strategic Scope: Target (2019) Production Target (2019) Target or catalytic effect New policy framework for Land Reform piloted and finalised. Agrarian transformation; 50:50 Policy Framework piloted with 10 properties; 2 million hectares of strategically located high-value agricultural land acquired for key APAP commodities PROGRESS TIME Activity LEAD: DRDLR Start End 100 submissions received for piloting 50:50 policy, from which 10 properties will be selected. Of the ha, 100% are acquired, and 100% are transferred. Februar y, April Septe mber, March

11 Improving Producer Support 11 KEY DECISIONS Challenge Ineffective models of producer support. Absence of uniform criteria and definitions. Unable to effectively plan, invest or measure smallholders Slow pace in the issuing of water licences Proposed Incentive Programme for Climate Smart Agriculture (CSA) remains unfunded. Competing demands of land Proposal A new policy and model for Producer Support (with particular emphasise on smallholder) supported by a review of the existing financial instruments To submit a list of strategic projects to DWS for fast tracking To submit a proposal to the Green Fund. PDALF & SPLUMA to deal with protection of Agric. Land. In consultation with DMR & DRDLR, to finalise how deal Strategic Scope: Target (2019) Activity 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. To increase Producer Support PROGRESS Estimate from 3,2% to 5%. Start LEAD: DAFF Comprehensive Producer Support Policy Framework & Integrated Agriculture Development Finance Policy, finalised for cabinet submission. Implementation of AET strategy for training of smallholder farmers. Cofimvaba agricultural school revitalisation (DST funded) Target or catalytic effect Feb Aprl- 15 Aprl- 15 TIME End dat e Aug. 15 Mar -16 Mar -16 Total number of farmers supported Aprl- Mar

12 Break Down of National Training Programme Province Beneficiaries for Credit Beneficiaries for Non Credit Total Beneficiaries Bearing Training Bearing Training To Be Trained Eastern Cape Free State Gauteng KwaZulu Natal Limpopo Mpumalanga Northern Cape North West Western Cape TOTAL

Production: Poultry Challenge Ready-to- roll projects blocked Import (dumping) e.g., AGOA KEY DECISIONS Proposal Political intervention in LP Project: 2000 jobs + revitalise disused broilers Provinces to cluster projects e.

13 Production: Poultry Challenge Ready-to- roll projects blocked Import (dumping) e.g., AGOA KEY DECISIONS Proposal Political intervention in LP Project: 2000 jobs + revitalise disused broilers 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 Strategic Scope: Target (2019) Activity Target or catalytic effect To contribute to 1 million hectares of underutilised land in communal areas To contribute to 2% annual growth in Gross Value Add in Agriculture. Add jobs to the current jobs through increased poultry production of 663,500t by Add jobs through expansion of hectares of soya production. Increased contribution to gross value of Agriculture GDP from R32.9 bil (21.8%) to (25%) by PROGRESS TIME LEAD: DAFF Private Sector Invest: To plant 687,300 hectares, producing 942,850 tons soya beans ( 36,7%) 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 ] Start Apr- 15 Apr- 15 End Mar- 16 Mar

14 SOURCE: 14 14

Production: Red Meat Challenge 20% growth in consumer demand, met by 10% imports Veterinary services inadequate and I in accessible Commercialisation of communal herd owning 40% of national herd.

effective expansion of the communal herd.

areas To contribute to 2% annual growth in Gross Value Add in Agriculture.

15 Production: Red Meat Challenge 20% growth in consumer demand, met by 10% imports Veterinary services inadequate and I in accessible Commercialisation of communal herd owning 40% of national herd. KEY DECISIONS Proposal Import replacement through the commercialisation of communal herds Funding proposal to implement OIE gap report recommendation Buy-in and PPP with traditional authorities for effective expansion of the communal herd. Free State: construction of the 14 animal handling facilities Strategic Scope: Target (2019) Activity Target or catalytic effect To contribute to 1 million hectares of underutilised land in communal areas To contribute to 2% annual growth in Gross Value Add in Agriculture. Targeting jobs ( jobs in beef and jobs for mutton) translated from expanded production of t (BFAP). PROGRESS LEAD: DAFF Private Sector Invest (2014): No. of livestock: 13,896 cattle ( 0.25%); 24,048 sheep ( 1.96%). Public Sector Invest. Land under acquisition = ha (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 Start April April TIME End March 2016 March

16 SOURCE: 16 16

17 Production: Wheat and other crops Challenge Import 50% of wheat. Progressive replacement of wheat by canola and soya KEY DECISIONS Proposal Research on suitable wheat cultivars Strategic Scope: Target (2019) Target or catalytic effect 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. To increase production from 1,2 mil tons by an additional tons by To create an additional 8,000 new jobs to the existing 28,000 by % of input cost is from fertilizer. DMR, DTI and DAFF to review feasibility of SA becoming self reliant in fertilizer and in agricultural mechanisation. Activity To expand areas planted by an additional 61,000 hectares. PROGRESS LEAD: DAFF Private Sector Invest (2014): The sector is projected to plant 481,300 hectares of wheat ( 1% ). Start Apr- 15 TIME End Mar- 16 Public Sector Invest. Total hectares for Wheat (CASP and Ilima Letsema) = 150 hectares (farm size) [- 96,110ha p.a] April March

18 SOURCE: 18

Production: Fruit and Vegetables Challenge SPS matters (CBS) 19 Fresh Produce markets derelict KEY DECISIONS Proposal Infrastructure investment in NFPM in collaboration with CoGTA Western Cape:

19 Production: Fruit and Vegetables Challenge SPS matters (CBS) 19 Fresh Produce markets derelict KEY DECISIONS Proposal Infrastructure investment in NFPM in collaboration with CoGTA Western Cape: Hortgro tree planting project Ceres Strategic Scope: Target (2019) Activity Target or catalytic effect 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. 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 PROGRESS by 20%. TIME LEAD: DAFF Private Sector Invest: To put ha under production, with an expected export volume of 1,7 million tons, a total production ~2.6 million tons. Start Apr- 15 End Mar- 16 Public Sector Invest. Total hectares under production for Fruit and Vegetables = ha (farm size) o Orange River Vineyard Project, female smallholders, 500ha Wolfberg Fruit Processors Agri Hub (DST) Apr- 15 Mar

20 SOURCE: 20

21 Production: Sugar Challenge Land claims KEY DECISIONS Proposal To encourage that all sugar plantations under land claims are kept under sugar production through strategic partnerships. Strategic Scope: Target (2019) Activity Target or catalytic effect To contribute to 1 million hectares of underutilised land in communal areas To contribute to 2% annual growth in Gross Value Add in Agriculture. Expand small scale grower production in communal areas by hectares by jobs preserved, new jobs created through the renewable energy and biofuels interventions. 2% biofuels penetration about 400 million PROGRESS litres per annum) into national liquid. TIME LEAD: DAFF Private Sector Invest (): The sector is projected to plant hectares of sugar cane and 18 million tons of cane crushed. Public Sector Invest. Total hectares under sugarcane production = hectares (farm size) ha p.a. Production in tons to be determined Start April April End Mar- 16 Mar ch

Production: Wine Challenge Greatest's contributor to agricultural exports/trade but is the least transformed sector KEY DECISIONS Proposal PPP agreement, and charter for the industry to address

22 Production: Wine Challenge Greatest's contributor to agricultural exports/trade but is the least transformed sector KEY DECISIONS Proposal PPP agreement, and charter for the industry to address transformation Western Cape: De Goree (Robertsons) Strategic Scope: Target (2019) Activity Target or catalytic effect 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. There is currently ha under vineyard production and there is a potential to increase by ha by Wine industry employs people and will expand by to a total of by Wine industry contributes R30 billion to South African GDP there is a potential to increase up to R32 billion in LEAD: DAFF PROGRESS 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. Public Sector Invest: Total hectares: ha (farm size) RECAP and Enterprise Dev. Production in tons to be determined Start April April TIME End March 2016 March

23 23 SOURCE: 23

24 Technology Dev. and Innovation 24 Challenge Under investment (- 0.1%) in R&D o Capacity: no s, expertise o Infrastructure Inability to apply/integrate innovation Aging senior researchers KEY DECISIONS Proposal Proposal (cost benefit anaflysis) for investment in the research and innovation value chain Kwazulu Natal: Post-graduates in Agric. Engineering at the Univ. of Kwazulu Natal Strategi c Scope: Target (2019) Activity To contribute to 1% annual growth in Gross Value Add in Agriculture. R&D agenda linked to key sectoral interventions and Value-chains: 2 3 % of Agriculture GDP invested in R&D annually An effective integrated sector R & D governance system PROGRESS Critical mass of competent and appropriately TIME skilled and placed researchers Start and extension End personnel. LEAD: DST Model for R&D governance structures developed with clear TORs completed Target or catalytic effect RFP for R&D projects issued 15 post graduates funded (DAFF) and 135 students (post graduate + interns) by DST Apr-15 Apr-15 Mar-16 Mar-16 E-agriculture - DST-funded initiative at ARC. Apr-15 Mar-16 Status Manufacture and distribute WEMA drought resistant maize seed Apr-15 Mar-16 24

25 Market Access and Trade Challenge 75% of local procurement under discussion between National Treasury and Department of Small Business Development KEY DECISIONS Greater synergy between IPAP and APAP Proposal DAFF to apply for designation of certain products for smallholders. IPAP and APAP 2016/17 to determine common commodities to support and Activity strategic approach. Activity Start LEAD: DTI SADC-EU-EPA SA will be allowed, for the first time to export 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) Strategic Scope: Target (2019) Target or catalytic effect 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. 200 GAP certified smallholders Implementation of 75% local procurement specific to smallholder producers. PROGRESS 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 TIME End Mar ch 16 25

26 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

27 KE YA LEBOGA THANK YOU

ALIGNMENT BETWEEN AGRIPARKS AND DAFF PROGRAMS LAND AND MINERALS SELECT COMMITTEE 28 JULY 2015

ALIGNMENT BETWEEN AGRIPARKS AND DAFF PROGRAMS LAND AND MINERALS SELECT COMMITTEE 28 JULY 2015 LAYOUT BACKGROUND BACKGROUND ON AGRI-PARKS FOCUS BACKGROUND ON FETSA TLALA FETSA TLALA: INTEGRATED FOOD PRODUCTION