Meeting report

National Agricultural Marketing Council (NAMC)

Mr Ronald Ramabulana, Chief Executive Officer, NAMC, took the Committee through the statutory measures; the staple basket price; Strategic Infrastructure Project (SIP) 11; agriculture development schemes; and the NAMC stakeholder outreach programme.

Statutory Measures

18 industries were collecting statutory levies. During the 2015/16 period, a sum of R409 million had been collected. 20 industries were administering statutory measures relating to registrations, records and returns. A total of R421 567 208 had financed functions through statutory levies. These functions included research, transformation, administration, local and export promotions, quality control, plant improvement and production development. During the 2016/17 financial-year, statutory measures were going to be promulgated in the following industries: pork, citrus, dried fruit, olives, table grapes, wine, and wheat and soybeans.

The statutory levies had funded some transformation projects addressing low skills levels, employment equity, scarce and critical skills, land transition, and quality skills delivery. It had benefited more than 100 students, to the tune of R1 925 000.

Land Reform and Tree Planting Project

This project catered for the deciduous fruit industry. Among other issues, it sourced additional funding for land reform projects, evaluated business plans for new and existing projects, helped small farmers reach commercial status, and conducted feasibility studies. 150 people had benefited to the tune of R2 646 793.

Black dairy farmers’ projects

The sustainable commercialisation of existing black dairy farmers was promoted. The programme targeted the dairy industry. It had eight beneficiaries in the Free State and had spent R4 900 00. It optimised the level of milk production through infrastructural and other support services.

Enterprise Development Programme

This targeted the potato industry. It had helped 18 beneficiaries and had spent R3 067 871. It assisted in setting up, supporting, and growing viable new black-owned potato producing enterprises. It developed an economic programme that was aimed at sustainable potato production by small-holder farmers in order to utilise available land.

Preferred Cultivar, Preferred Country Programme -- Enterprise Development

This was aimed at the table grapes industry. It had benefited 513 enterprises to the tune of R635 657. The beneficiaries had been assisted to purchase and market scarce cultivars.

Mr Ramabulana said that the cost of the staple basket of food had increased by approximately 19% from January 2015 to January 2016. The NAMC had projected a further increase of 10% in quarter 1 of 2016. Based on the staple food share of the total consumer price index (CPI), double-digit food inflation was likely to happen from the second quarter of 2016. Food inflation was expected to increase (year on year) by 30% by the end of 2016. Based on the Stats SA basket, prices in rural and urban areas were largely comparable, except for a few cases.

With regard to SIP 11, the current focus was on the mobilisation of funding for many of the anchor projects. Currently, only R3 billion for funding had been secured. Three interventions had been made. The Witzenberg Initiative had created 12 000 new permanent jobs. The Department of Rural Development and Land Reform (DRDLR) had been assisted to implement 45 black economic empowerment (BEE) projects aimed at planting 4 000 ha with fruit. The Brandvlei Irrigation Scheme had created 6 000 new permanent jobs. An R800 million investment had been made to target an additional 4 000 ha. The One-Stop Shop for fruit exports had improved efficiency in fruit exports and compliance with export protocols.

The funding shortfall was to be addressed as part of the broader Revitalisation of Agriculture and Agro-processing Initiative. The following potential funders would be approached:

• The Department of Trade and Industry’s (DTI’s) Black Industrialist Programme;
• The Industrial Development Corporation (IDC), through the localisation and developmental initiatives;
• Departmental medium term expenditure framework (MTEF) funds;
• Other development finance institutions;
• Public-private partnership funding, as was currently the case with the Vaalharts-Taung Irrigation Scheme.

On the marketing of SA agriculture, he said South African agriculture faced a significant issue in terms of visibility in both export and local market. There was not enough appreciation of the role of agriculture and the food sector in the country’s economy and society. There was an opportunity for the consolidation of currently fragmented marketing campaigns into a single one that promoted the entire agricultural sector as a brand. NAMC was working through the Agriculture CEO’s Forum to design and implement an agriculture branding campaign to achieve the following:

• General public appreciation of the role of agriculture in society;
• Quantifying the role of agriculture in the economy through academic publications --  

(the NAMC, the Agriculture Research Council (ARC) and the Land Bank were to publish a book in this regard);

-     Promotion of South African agricultural products in the export market

 

Agricultural development schemes were designed and implemented to uplift black producers in the agricultural sector and to encourage their integration into the commercial mainstream. This programme was driven to address food security and domestic market access. Designs were guided by developmental impact and feasibility. These schemes worked in collaboration with different stakeholders for technical support, farmers’ support (including extension services), funding support, market access and compliance and certification.

Regarding market access, he said there was not enough progress in addressing the integration of black smallholder farmers into SA’s mainstream economy. One of the founding objectives of NAMC was to increase market access for all participants. NAMC was leading a project to develop a composite index as a measure of progress towards achievement of “market access for all participants”, especially for black smallholders. A reference group had been set up to advise on the development of the Smallholder Market Access Tracker (SMAT) index.

Mr Ramabulana informed the Committee that NAMC produced research output on topical issues on an annual basis, and was disseminated through various media platforms. More recently, NAMC had decided to be more proactive in disseminating its research output.  NAMC would also participate in commercial and smallholder farmer events such as farmers’ days or study groups to increase dissemination and accessibility of research findings.

Through the National Red Meat Development Programme, NAMC had assisted communal farmers to realise commercial value from their livestock. Since 2011, red meat Indaba events had been held to inform local stakeholders about the red meat development programme. These events had been held at various places in the Eastern Cape and would be extended into other provinces. The 2016 National Red Meat Indaba would be held either in KwaZulu-Natal or North West Province, with a possibility of provincial-level Indabas in all five provinces.

(Graphs and tables were shown to illustrate budget expenditure)

Agricultural Research Council (ARC)

Dr Shadrack Moephuli, Chief Executive Officer: ARC, focused his presentation on the strategic goals of the entity.

Strategic Goal 1

Its aim was to generate knowledge and technologies that would enhance the efficiencies in crop-based agriculture. ARC was working with Jermat Seeds and Capstone Seeds to market WE3127 and WE3128 hybrids in South Africa. Capstone had committed to produce 50 tonnes of certified seed, while Jermat had committed to produce 80 tonnes, to meet the demands of smallholder farmers for the 2016/17 summer planting season. There were continuing engagements with farmers in rural communities to promote Water Efficient Maize for Africa (WEMA) varieties and to document an impact analysis of WEMA products. The ARC had distributed 10 000 free seed packs to smallholders in Limpopo, Mpumalanga, North West, Free State and KwaZulu-Natal for them to try out the variety.

Strategic Goal 2

Its aim was to generate knowledge and technologies which would enhance efficiencies in

animal-based agriculture. The ARC had developed an attenuated heartwater vaccine. It was enabling access to the heartwater vaccine for all farmers. It was going to collaborate with Onderstepoort Biological Products (OBP) to develop product safety, production and packaging information for successful registration of the vaccine with the government. The vaccine was expected to be on the market in the next 12 to 24 months.

With regard to the Animal Improvement Scheme, there had been major achievements during the 2015/16 financial year. A milestone of 8 000 smallholder livestock farmers receiving ARC scientific services had been exceeded. This scheme provided access to scientific analysis, with advisory services on animal husbandry principles, breeding and reproduction, animal health, and nutrition. It also facilitated market access for smallholder farmers.

The ARC had partnered with the Industrial Development Corporation (IDC) in the project to improve the quality of breeding stock in the smallholder beef sector. The role of the ARC in this project was to breed high quality bulls and make them available to the IDC for distribution to smallholder farmers. This would improve access to good bulls by smallholder farmers, and restore genetic diversity among the cattle owned by smallholder farmers through prevention of indiscriminate cross-breeding.

The ARC had partnered with the Department of Rural Development and Land Reform in a dairy value chain project. This was aimed at developing a value chain in rural communities of the Eastern Cape and Limpopo in order to stimulate the rural economy. The project was expected to create employment opportunities for graduate students and entrepreneurs in the dairy value chain, and generate income for communities.

Strategic Goal 3

Its aim was to generate knowledge and technologies for the conservation and utilization of

natural resources. It was planned to have remote sensing/imaging and near-range sensing systems by 2030. This would include applications in research and production environments for decision-making, a complete range of technologies for sensing and detection, integration of data from different systems, and full integration of sensing systems for plant and animal phenomics.

Strategic Goal 4

This was aimed at generating knowledge, solutions and technologies for food safety, quality and improved efficiencies in the agriculture value chain. Its focus was on improving quality and yield through developments in food sciences and technologies, improving the shelf life of agricultural products and food, and developing new animal products. These would increase the number of new food and non-food products and processes, and improve the quality and safety of food through agro-processing. It would also provide tools for animal and plant disease studies, and provide knowledge and information for decision support systems.

Strategic Goal 5

Its objective was to translate research outputs in order to generate knowledge, facilitate decision-making and contribute to transformation in the agriculture sector. More than 10 000 smallholder farmers had been trained in various provinces of SA. 1 600 extension personnel, including animal health technicians, had been trained. 9 000 scientific services had been rendered to smallholder farmers, and strong partnerships had been forged with provincial departments, municipalities, and traditional leaders of agriculture and rural development in various provinces.

Strategic Goal 6

Its objective was to apply resource management practices to a high performing

and visible organisation. Its focus was, among other things, on funding revenue and cost management, skills and capacity development, Information Communication Technology (ICT), the provision and control of various tools of trade, and sound corporate governance.

Dr Moephuli concluded by saying that the looming budget cuts were going to lead to an inability to fill critical vacancies, limit student intake, affect vaccine development projects, and affect multi-year projects.

(Graphs and tables were shown to illustrate budget expenditure)

South African Veterinary Council (SAVC)

Dr John Adam, Councillor: SAVC, said that the review and update of legislation was relevant for all. A Standing Review Committee dealt with the transformation of the legislation. The intention was to maintain standards but at the same time to be relevant to the needs of the people of the country and improve access to veterinary services for all. A standing Standards of Training Committee had been established to address national and regional standards.

The SAVC had been engaging with Minister Zokwana since 2014 because it regarded the relationship with the Minister as critical for the implementation of strategic plans and recognition of the veterinary profession in its role to ensure safe and secure food, to control the spread of diseases, and to render animal health services to all people.

The SAVC included a heritage committee which aimed to unify the veterinary profession -- to celebrate its pioneers and contributors to veterinary services. The IT upgrade was the first milestone which had taken effect on 1 April 2016. It was hoped this would improve communication between stakeholders and be an effective service to the veterinary profession.

With regard to the mobilisation of resources, budgetary constraints were always a consideration. The goal of the SAVC was to mobilise resources so as to create an effective administration and to find a balance between operations and strategy.

The One Health Concept formed an integral part of the strategic implementation. The concept had been defined by the Food Safety and Security Committee in July 2014. Its objective was to look at animal production, small-scale farmer support, disease management, animal research, exotics (bees, inland fish, and crocodiles), and companion and working animals’ health.

The SAVC had 6 154 registered members as at 16 February 2016. Its main concerns were around permits for veterinarians in terms of the Threatened and Protected Species regulations, Wildlife Ranching South Africa, and medicines -- the two Acts regulating medicines (Acts 101 of 1965 and 36 of 1947). The lack of control of veterinary medicines and stock remedies posed a serious risk for food safety and security.

The Amendment Act 16 of 2012 had come into operation on 9 November 2015. The implementation of compulsory veterinary community service had commenced early in 2016 and would improve access to veterinary services for all people. An inspectorate had been established to investigate matters as from 2016. It was expected to bring some solutions to the problems associated with the use of veterinary medicines, particularly in food producing animals.

(Graphs and tables were shown to illustrate budget expenditure)

Discussion

NAMC Presentation

Mr L Ntshayisa (AIC) wanted to know how the entity assisted smallholders to gain access to markets.

Mr Ramabulana responded that most of the time the transaction lasted for a short time. This was due to size, infrastructure constraints, and coaching. Now theNAMC tended to design the programmes with the Department of Agriculture, Forestry and Fisheries (DAFF) so that the whole process was comprehensive.

Ms A Steyn (DA) wanted to find out why bread and food price increases had come earlier than expected.

Mr Ramabulana said the increase had been agreed upon a long time ago. The National Treasury had had no choice but to implement the agreement. Grain SA had threatened Treasury with legal action, but there had been no need for it. Concerns had been raised with Grain SA. The jump in food prices had happened quickly. Information had been provided to the Competition Commission, which was expected to do its own investigation. Wheat prices in South Africa were determined by imports. Wheat was not profitable and that was the reason why commercial farmers did not want to produce it. It was projected that inflation was going to increase by 30% year-on-year.

Mr H Kruger (DA) asked if the Enterprise Development Research unit had any relationship with the Department of Small Business Development (DSBD), and whether the NAMC had made any interventions in terms of market access for informal vendors.

Mr Ramabulana said they had no agreement with the Department of Small Business Development. It was the DAFF that had a relationship with the DSBD. Concerning intervention for informal vendors, he explained that a number of investigations had been done on fresh produce markets. The challenge was on how the vendors who bought from fresh producers were supported. It was difficult for the informal vendors to buy in large volumes using cashless methods. The Daff’s “Project Rebirth” was aimed at addressing these challenges. The business plan was going to be developed thoroughly so that it could be implemented properly.

Mr C Maxegwana (ANC) enquired about the form the red meat Indabas took in terms of participants, and asked for clarity on the 70% of budget allocated for personnel, because the footnote reflected areas not covered by the personnel budget.

Mr Ramabulana said that the red meat Indabas brought all the smallholder farmers and buyers together. The stakeholders got the chance to engage with the relevant state entities to identify market opportunities, and it provided a platform for all those in the value chain to get to know each other. Concerning the budget, he said in the previous financial year there had not been an increase in staff complement. The entire budget of the entity had increased by 6% and the organisation had been guided by the National Treasury. The personnel budget was 35% of the R150m allocation. The entity out-sourced other services. The footnote excluded the fee of project managers who were running projects.

Mr Kruger asked how many fresh produce markets were run by municipalities.

Mr Ramabulana said most of them were municipal-owned, except for the one in Cape Town.

Mr R Cebekhulu (IFP) remarked that it appeared that the NAMC was focusing on producers who were into money-making schemes and was not paying attention to rural smallholder farmers in terms of infrastructure development, because many livestock owners needed dams. He asked if the NAMC had mechanisms in place to see if the large portion of imported wheat was produced the right way – to see if it was organic, and not genetically modified.

Mr Ramabulana, regarding dams, reported that most communal dams in the Eastern Cape were dry because of the drought. Boreholes were now in use in every facility. He also said SIP 11 had other ancilliary programmes which assisted small-holder farmers. Concerning the imported wheat, he said the wheat was tested for fungal infection. It was the DAFF and ARC that were in a better position to look at the quality of the wheat.

Ms Steyn wanted clarity on the one million tons of maize to be imported from the US; the NAMC’s crop estimation; and the 6% budgeted for professional services. She also asked if SIP 11 was linked to AgriParks.

Mr Ramabulana, on maize imports, said the country imported not more than 100 000 tons per month. A shipment was expected from the US around August or September this year. A written response in terms of figures would be forwarded to the Committee. Concerning the 6% for professional services, he said this referred to funds for research, sponsorship, agri-business and technical assistance given to small-holder farmers. Regarding the SIP 11 links with AgriParks, he explained that both programmes were aligned to the Industrial Policy Action Plan (IPAP). SIP 11 ensured that there was alignment between IPAP and AgriParks.

The Minister of Agriculture, Mr Senzeni Zokwana, referred to crop estimates, and explained that crop estimates always varied and this depended on the rains. The estimates changed now and again. The work that had been done on them had been carried out by people who knew what they were doing, and who did not have a political agenda. On the concerns of the imported wheat, he said that 50% of the wheat South Africans were consuming had been imported even before the drought. Climate conditions that kept on changing had had an impact on the production of wheat and it had to be remembered that wheat was a winter crop.

ARC Presentation

Mr Cebekhulu voiced a concern about meat safety, saying that when one bought from wholesalers located at bus and taxi ranks, the meat was of a lower quality than that available in supermarkets. It was worrying to see consumers treated so differently.

Dr Moephuli responded that this needed a detailed analysis. Street sellers were individual buyers. Supermarkets bought in bulk from abattoirs. When one sold fresh produce in the sun, the quality changed, even if it was maize. This had implications for food safety, and was more regulatory.

The Minister added that the veterinarians made sure the meat consumers get from the supermarkets was of good quality. However, it was difficult to monitor food security among those who were in the informal sector. He praised the ARC for finding a vaccine for the heartwater disease.

Ms Steyn commented on strategic risks. She said there was a loss of credibility because there were no standardised quality systems. The contribution of agriculture to the GDP was getting low. More money was needed for research. The Committee needed to engage with entities on research allocations.

The Chairperson agreed with Ms Steyn, saying the government had adopted Operation Phakisa in the agriculture budget in order to look into the matter of research allocations.

Ms Steyn further wanted to know how much money the entity had received from the Bill Gates Foundation, and what the update was on the programme.

Dr Moephuli, on strategic risks, said it was important to understand what one’s risks were when one was in an organisation. The ARC had evaluated the top ten risk areas and the implications they would have for the business. The entity needed to find solutions to these risk areas.  With regard to research, he said the ARC had conducted an experiment on the drought tolerant maize seed. It was not a study yet. The drought tolerant seed had been experimented on, even in the driest parts of the country. The farmers had reported on their experiences about this drought resistant seed. It was still going to be produced more because the project was multinational in nature. About the Bill Gates grant, he said the ARC had received $20 million over a five-year period. This had covered the conception and the rollout of the drought resistant maize seed.

Mr Z Mandela (ANC) wanted to know what the ARC was doing to ensure that coloureds in the Western Cape had access to land for agriculture and that Indians in KwaZulu-Natal were active in the agriculture sector. What was the ARS doing to make the field attractive to young people because it appeared that it was only old people who were interested in the sector, and that males appeared to dominate? The ARC had said nothing about the disabled. He wanted to find out how the ARC was engaging rural communities about the problem of drought and what its findings were about rural people’s livestock.

Dr Moephuli, on Indians and coloureds, explained that this was an issue of demographic data that they would have to look at within the ARC for employment equity purposes. The ARC was training coloureds in viticulture and soil management, and there was work the entity was doing with Indians in KwaZulu-Natal. About attracting the young, he said it was a question of being able to recruit and retain them. Unfortunately, one could not get a 21 year old with a PhD. The ARC was busy building capacity within the organisation. Most employees were between the ages of 25 and 40 years.

Ms Makgomo Umlaw, Group Executive: Human resources and Legal Services, ARC, regarding disability and increasing coloured and Indian involvement, said that the employment of the disabled was below 1%, while the number of coloureds in the ARC was higher than that of Indians. There were Indians in the ARC from KwaZulu-Natal who were trained in agricultural engineering, but they were based in Pretoria.

Dr Andrew Magadlela, Group Executive: Animal Sciences, ARC, concerning livestock findings in rural areas, reported he was unsure if the Mbashe areas had been visited. Inititiatives and interventions have been introduced in other areas where they had taken the Animal Improvement Scheme. Specifics would be forwarded to the Committee in writing.

Mr Maxegwana asked what the plans of the ARC were in dealing with areas affected by budget cuts. What progress had been made in the integration of the ten Ncera farms and had the process been affected by budget cuts?

Dr Moephuli reported that the global conference they attended recently had pointed out that public investment in agriculture had been in decline globally. 60% of the ARC funding came from the Parliamentary grant, and 40% came from other sources like the Department of Science and Technology, the National Research Foundation (NRF), the Department of Rural Development and Land Reform, and the Technology Innovation Agency.  However, intellectual assets belonged to the ARC and the ARC charged money for soil testing. He said budget cuts had implications for the filling of vacancies, developing vaccines, and mitigating against diseases. Pertaining to Ncera, he reported that the DAFF had still to approach National Treasury in order to finalise the Ncera integration process, because Ncera had a big piece of land that could be used for research practicals.

The Chairperson wanted to know if the ARC had identified the potentials in provinces in order to assist the government to invest in the right direction. Were there other projects the entity was busy with, excluding the one it had with the Department of Rural Development and Land Reform?

Dr Moephuli, on identified potentials, said there was maize production in KwaZulu-Natal. The land was available but it belonged to the Ingonyama Trust. If it could be used, it would alleviate poverty in that region. There were other projects they were busy with, like veld management, scientific testing, etc. The list would be sent to the Committee. The list had not been included in the presentation because it focused only on selected key issues that the entity felt were important for the Committee to know.

Ms Steyn asked if it was possible for the ARC to come and brief the Committee about its assets, especially unused ones that were a liability and could be sold to close the gaps left open by the budget cuts.

Dr Moephuli replied that they had put together an asset management plan. There were three categories of assets:

• those they could do without;
• those they could use after 10 years;
• those they used on a daily basis.

Some assets had been handed over to the Departments of Basic Education and Human Settlements. These included the schools and houses built in the township near the ARC testing station for the employees of the ARC and their children.

The Minister remarked that when one gave provinces money, one had no say on where they had to spend the money. The issue would be raised in MinMec. There was a need to discuss the idea of establishing a Feed Bank, where entrepreneurs could go to sell the feed they manufactured.

SAVC Presentation

Mr Kruger asked why it was difficult for young people to be admitted to universities to study veterinary science.

Dr Adam said it was a worldwide phenomenon. The costs of veterinary training were very high. The course was very expensive and it depended on supply and demand. Students were chosen on their academic performance. There had been adaptations to the admission policies. The number of students coming to Onderstepoort comprised mostly females, and few males.

Mr Ntshayisa wanted to know why inland fish were classified as an exotic.

Dr Adam said he did not have all the facts, though the matter had been discussed with Fisheries at the previous meeting. He said that veterinary services were now becoming specialised.

Ms Z Jongbloed (DA) wanted to find out why veterinarians were not trained at universities, but only at Onderstepoort, and asked if it was still the case that veterinary students had to do compulsory community service. What was the percentage of people who were having access to veterinary services?

Dr Adam pointed out that Onderstepoort was a faculty of the University of Pretoria. Students went there because it was the only faculty in the country and no other university had been given a chance to have it. Talks had been held with Fort Hare University for the establishment of a faculty for veterinary studies. Regarding access to veterinary services, he said that the Council could advise on that. There was a big drive to make the profession inclusive. Currently, it was white-female dominated. It was not a glamorous field. On compulsory community service, he reported there were problems when it came to facilities, especially in rural areas. It was difficult to dispatch veterinarians there if there was no infrastructure in place.

Dr Clive Marwick, President: SAVC, said that the compulsory community service was an important aspect when looking at accessing veterinary services, especially in rural areas. Giving the veterinarians access to medicine and equipment was necessary. The Eastern Cape had 80 animal health technicians who had now gone through the right training. The problem was the registration money, so help was needed from the Committee to make sure they were registered.

Ms Steyn wanted to find out if the lack of vaccines in SA had any impact on the services of the SAVC. Was there anything the Committee could help with in terms of legislation? Where could one get the latest information on current diseases? Lastly, she enquired how far the SAVC was on World Organisation for Animal Health (OIE) requirements.

Dr Adam said that the development of vaccines cost a lot of money. It was something that one had to consider, because there were diseases that were uniquely African. The monitoring of diseases was not done in rural areas, but it was done a lot in the Western Cape. Regarding help with legislation, he said the Committee could provide assistance with Acts 36 and 107. At the moment, help was coming from the Ministry, especially with Act 36, though the process was very slow. On OIE requirements, he reported that the Council had done nothing yet. Reports with up-to-date information on diseases had been given to the OIE, and that was where information could be accessed.

The Chairperson remarked that the Committee had been fighting with the DAFF because it placed veterinarians in urban areas and townships because there were facilities there, which did not exist in rural areas. The majority of veterinarians were in Cape Town and Gauteng. The interventions were supposed to be in line with the mission of the SAVC.

Mr Cebekhulu wanted to find out who controlled the release of the vaccines to make sure they were not used for wrong purposes.

Dr Marwick replied that Scheduled 5 and 6 vaccines were controlled by Act 107. The scheduled vaccines were used only by a qualified veterinarian.

The Minister reported that the outbreak of diseases in Limpopo was in the public domain. The DAFF had never hidden any information on the outbreak of diseases. Farmers in affected regions were always informed by veterinarians. The SAVC must not be made to answer on things that were supposed to be accounted for by the likes of OBP, for example. There needed to be a forum where the agricultural entities could meet for information-sharing sessions and report on matters affecting the sector.

The meeting was adjourned.