Agriculture and Land Affairs: Minister's Budget Speech


21 May 2008


21 May 2008
Madam Speaker
Members of Parliament
Members of the Portfolio Committee on Agriculture and Land Affairs
MECs for Agriculture and Land
Members of the Diplomatic Corps
Government officials
Invited guests from provinces
Learners from all provinces
Ladies and Gentlemen:

Like President Thabo Mbeki said: “It is business unusual with all hands on deck! Today I stand before you during the times when staple food prices in the world continue to rise.
Prophetically, the Freedom Charter declared that “Rent and prices shall be lowered, food plentiful and no-one shall go hungry.”
The Polokwane resolutions reiterated and called upon us to “embark on an integrated programme of rural development, land reform and agrarian change”. This budget vote will focus on all these issues. 
We are living in times of escalating food prices globally. According to the World Bank report food crop prices are expected to remain high in 2008 and 2009 and then begin to decline as supply and demand respond to high prices; however, they are likely to remain well above the 2004 levels through 2015 for most food crops.

Forecasts of other major organizations (FAO, OECD, and USDA) that regularly monitor and project commodity prices are broadly consistent with these projections.

The FAO Report of 2008 indicates that food prices have increased by 45% over the last nine to ten months. International stock levels of major staples are at long-run lows, which resulted in a serious shortage of major staples such as rice, wheat and maize.

Last week we participated in the United Nation’s Commission on Sustainable Development (known as CSD 16) where the focus was to review progress made on the implementation of the Johannesburg Plan of Action.

The problem of food security and rapidly rising food prices was the main issue raised by most of the countries and groups such as the G77 and China, the EU, and organs of civil society.

The other areas of focus included climate change, the need for increased investment in agriculture and rural development, security of land tenure and the urgency of the implementation of the African development agenda.

We, as the nations of the world, agreed to the implementation of programmes that will address all these important focal areas. In the words of the Secretary General of the UN, Mr Ban Ki Moon; “The first green revolution may have skipped most of the African Countries as it benefited the developed countries; we must ensure that the second green revolution is specifically for Africa  

The UN further called for dramatically increased Overseas Development Assistance (ODA); and thus contribute to the realization of the NEPAD agenda, which includes the development of infrastructure like roads, rail, ports and electricity; all of which would facilitate regional trade and development.   

Honourable Speaker, South Africa has also been affected by the rising prices, although our food prices have not increased at the same pace as in many countries worldwide.

According to the National Agricultural Marketing Council (NAMC) report released in February 2008 price increases for maize during the period from January 2007 to January 2008 increased by 33,2 % , wheat by 81% and sunflower by 81,02 %.

Some of you will recall that at its meeting held on 16 April 2008, Cabinet instructed me and a number of Ministers responsible for the Economic and Social clusters to develop a strategy to address this challenge we are working hard together to produce a strategy that will assist us in addressing the food prices. 

Madam Speaker, an Inter-departmental Task Team has been established by Cabinet and it has conducted an analysis and identified various factors that contribute towards high food prices in order to finalise an intervention strategy.

These include low availability of grains worldwide; unfavourable climatic conditions for the production of grain in major grain producing and exporting countries;  trade restrictions that were imposed by major grain exporting countries, such as Argentina;  the increased demand for animal proteins that in turn require grains as inputs for the production of more meat; increasing energy and fuel costs making transport of grains more expensive; increasing input costs especially fertilisers;  and potential misuse of market power on the input and output sides of the agro-food chains.

Madam Speaker, the collusive behaviour in some sectors of the economy, particularly in the food industry, is a matter of concern to many South Africans. Government is confident that the competition authorities will continue to be vigilant and take strong action to curb these negative practices that have also contributed to higher food prices.

Higher food prices impact negatively on the purchasing power of poor households. Thus it is important that our budget should also speak to providing cushions to the poor. Our short term intervention measures should ensure that they provide safety nets for the poor.

Given the risks currently facing the vulnerable groups due to high food prices, cabinet has instructed the Social and Economic Cluster departments to expand on programmes that support the vulnerable groups in our country.

These include social welfare grants, starter packs for household vegetable production, family gardens, and school feeding schemes as well as work for food project under the public works programme. In addition, Cabinet is considering proposals on the zero rating of chicken, sorghum meal and selected baby foods.

We have also embarked on a private sector mobilisation project to ensure that we look into mechanisms of donating food and addressing costs of agricultural inputs, such as fertilisers, seeds which impacts heavily on our after school …

Further, we will ensure that programmes for the production of wheat, maize, soya and milk production are intensified. We have also embarked on a programme to mobilise the private sector to ensure that we look into mechanisms of donating food and addressing costs of agricultural inputs, such as fertilisers, which impacts heavily on the subsistence and emerging farmers.

“Lehumo le tswa tshimong … ma ke sibuyele emasimene …
“n boer maak ‘n plan”

The total contribution of Agriculture into the economy since 2001 has gone up from R27 billion to R36 billion in 2007 but investment in Agriculture lags behind when compared with other sectors.
Recent analyses by the NAMC indicate that investments in Agriculture have been low; this has impacted negatively on production and research.
In 2003 there was a commitment from the African Union Heads of State and governments in Maputo that “we should further commit ourselves in allocating at least 10% of National budgetary resources to Agriculture. The budget for agriculture has increased over the past three years but it still remains far below the commitment in Maputo.
Madam Speaker – In 2007/08 we commenced with the extension recovery plan through profiling the state of extension and advisory services in all nine provinces. The results illustrated understaffing by 5 490 extension officers and a need to intensify training and visibility.

To this end an extension recovery plan with a funding of R500 million over the MTEF period 2008-2011 will be rolled out in all nine provinces to address capacity deficiencies and create a more visible and accountable extension service. We will introduce a green book which will monitor visits of extension officers and all field officers like animal health technicians.

In this current financial year, our recruitment plan will target at least 1 000 extension personnel from among young people and women. Through a partnership agreement with the government of Kenya extension specialists will be seconded to support the Department of Agriculture in the development of structures and systems for the delivery of support of the Land and Agrarian Reform Project and other initiatives.

The Department of Agriculture further commissioned a study to investigate the best possible mechanisms to transform colleges of agriculture into National Agricultural Training Institutes and to position these institutions as Centres of Excellence in terms of various agro-ecological zones and Centres for Rural Wealth Creation.

We have come to a conclusion that these institutions should also provide mandatory and targeted training programmes to extension and advisory services and farmers.

Last year, I outlined our Land and Agrarian Reform Project (LARP) aimed at accelerating and aligning Land and Agrarian in South Africa. LARP was announced by the State President as project number 7 amongst the 24 Government’s Apex of Priorities.

LARP will assist government in realizing the vision of eccelerating land reform and transformation of the agricultural sector. LARP will focus primarily on the following objectives
Redistribute 5 million hectares of white-owned agricultural land to 10 000 new agricultural producers
Increase Black entrepreneurs in the agribusiness industry by 10 %.
Provide universal access to agricultural support services to the target groups.
Increase agricultural production by 10 to 15 % for the target groups, under the ILIIMA-LETSEMA Campaign.
 Increase agricultural trade by 10 to 15 % for the target groups.

LARP is a joint project of the Department of Land Affairs, the national Department of Agriculture, provincial departments of agriculture, agricultural State-Owned Enterprises and sector partners.

Madam Speaker, we are happy to announce that work is being done between government and the private sector to translate the commitments made by the private sector into formal Public Private Partnership agreements.

Through these partnerships, we hope to bring to bear the expertise, infrastructure, information and resources of the private sector, on a risk sharing basis, to the implementation of a sustainable land and agrarian reform dispensation in our country.

The Department of Land Affairs has also developed the Settlement Implementation Support (SIS) strategy, which addresses, amongst others, livelihood, enterprise and technical support; integrated natural resource management and sustainable settlements; capacity and institutional developments; functional and spatial integration and finally Area-based Planning and Provincial Growth and Development Strategies (PGDs). The SIS strategy is an intergral part of LARP.

In addition to the above we shall also focus on investing in high capital intensive projects which will address the rehabilitation of our irrigation schemes and dipping services. In line with the Un Secretary General statement and LARP we shall launch the green corridor which will be our contribution to African green revolution. Through our Ilema –Letsema  we shall be massifying and increasing production through projects such as the Taung/Valhaarts irrigation scheme,, Lusikisiki grain production, and Makathini grain and livestock production.

The Department of Land Affairs has completed a viability review of 1200 projects funded through our Land Redistribution for Agricultural Development (LRAD) grants. The results of this review will assist us in developing interventions to revive those projects struggling to ensure that all productive agricultural land remains in production and sustainable use.

 We are also pleased to announce that we will soon be approving a substantial increase of LRAD grants to make more money available to qualifying land reform beneficiaries. The minimum grant for qualifying applicants will increase from R20 000.00 per individual to R111 125.00 and the current maximum grant of R100 000.00 per qualifying individual will be increased to R430 085.00.

Madam Speaker, the Department of Land Affairs has responded to the calls for a national state land audit. In March this year, we completed the audit of some 228 000 parcels of state land on our national database amounting to some 23 million hectares of land. More work will be done again this year to ensure that we have a comprehensive asset register of all state owned land in South Africa.

Madam Speaker, the question of tenure for farm dwellers remains high on our priority list. In this regard, we are working with the Department of Justice and Constitutional Development, the Legal Aid Board, farmer unions, Civil Society Organisations and legal fraternity to increase our collective capacity to provide legal representation, monitor evictions and other human rights violations on farms.

We commend the decision of the Land Claims court which restored the dignity of the Mokoena family in Limpopo by granting them an order to bury their family member on the farm where he had lived for many years. We also condemn the murder of our farmers and farm workers wherever they occur.

With the settlement of land claims, the Commission for Restitution of Land Claims  has settled  more than 95 % of total claims lodged and is left with only 4 998 very complex, rural claims. 

Madam Speaker, a number of challenges are still confronting us in the finalisation of the outstanding land claims. This challenges  include

The cases in the land claims court
Dispute with land owners around land prices and the validity of the claims
Disputes around traditional leadership and boundaries and
Community and family disputes
As a result of these challenges between 2 to 3 % of these claims may not be finalised in this financial year

The Commission remains committed to ensuring that all land claims are eventually settled and to that end, a Memorandum to Cabinet and an Action Plan for the finalisation of the 4 981 outstanding claims have been submitted to Cabinet.

The economic models for settling forestry claims and claims with mineral rights (e.g. Anglo-American, SAPPI, and MONDI) are in the final stages and should also assist in addressing some of the more challenging claims. 

We are working closely with the Department of Environmental Affairs and Tourism, SANPARKS and other agencies towards the finalisation of Co-management Agreements for the claims on protected areas.

The department has finalised the audit of the State land, which consisted of 280 000 land parcels which is 23 million ha. This exercise is very key in ensuring that there is efficient public land administration, the starting point of which is that the relevant sphere of government should ascertain what immovable asset they actually own - or should own - so that such asset is vested in the correct sphere for utilisation of land for agricultural purposes, housing and other economic and development needs of our country.

The Comprehensive Agriculture Support Programme (CASP) has been reprioritized to respond timeously to the demands of LARP. Hence flexibility has been built into the administration of this facility aimed at growing new farmers and assisting developing farmers to increase production of strategic agricultural products and contribute towards national food security and increasing our exports.

Monitoring of the implementation of CASP will be strengthened to deal with administrative inefficiencies in some areas as well as eliminating perceived corrupt practices in their roll-out.

In 2005 the Micro-agricultural Financial Institutions of South Africa (Mafisa), we rolled out in three provinces, Limpopo, Eastern Cape and KZN.  Since its launch, communities from the Sekhukhune district, O R Tambo, Amathole, Alfred Nzo, Ukhahlamba, Chris Hani Waterberg, Mopani and Vembe districts have benefited from the programme. We will be rolling out in all other provinces.
Madam Speaker, the landmark AgriBEE Charter was signed off during March 2008, placing the transformation of the sector well on track. P
reparations are also underway to establish an AgriBEE Charter Council that will report to the Black Economic Empowerment Advisory Council. The council will be appointed in terms of the Act by the Minister of Trade and Industry.

The AgriBEE Charter Council will inter alia oversee the work programme that will culminate with the promulgation of a Section 9 Agricultural Sector Code, which will have the same status as the B-BBEE Codes of Good Practice. This will contribute towards enterprise development and job opportunities; and in so doing contribute to the 2014 Millennium Development Goal vision of halving poverty among our people.

Over the past few years, we have seen outbreaks of plant and animal diseases in locations where they never occurred. This is attributed to amongst others climate change and increased global trade. The introduction of harmful foreign pests and diseases remain the single most serious threat to building and maintaining a prosperous agricultural sector. In a quest to reinforce our bio-security systems, we received R235 million over the MTEF cycle to strengthen our bio-security system.

As a proactive contingency measure,
Onderstepoort Biological Products (OBP) and the DoA will strive to implement a contingency plan to ensure the availability of vaccines against animal diseases, which have a potential major economic impact on South Africa (Strategic Vaccines). We are strengthening relations through joint ventures with SADC, Africa and the EU.

We have noted challenges with regard to access to vaccines in order to prevent animal diseases. The OBP and the Department of Agriculture will fast-track animal primary animal care programme which will ensure access to vaccines to the rural communities. This is a targeted support programme for subsistence and emerging farmers.
In OBP it is thus important that we invest in “Good Manufacturing and Laboratory Practice” (GMP/GLP).

The Freedom Charter further says that “
All people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions”.

Food safety standards for national and international produce shall be strengthened through the Perishable Products Export Control Board. Only last month, our entity certified nineteen emerging farmers to export their produce to the lucrative European Markets, advancing our Government’s objective of “broader participation in the growth of the economy”.

In order to improve the credibility of our certification system, the Department of Agriculture and the PPECB are working together in reviewing the mandate of the PPECB which will improve our food safety system. We shall also broaden access to markets by looking into other markets in the Far East, Middle East and the rest of Africa.

Long-term investments in agricultural research and development at the Agricultural Research Council (ARC) have resulted in improved productivity and competitiveness in the sector.  Crop improvements, such as research on barley cultivars continue to provide increased productivity among a diverse set of farmers from across the country.

During the 2008/09 financial year, the ARC will implement a new approach towards the transfer of technology, which includes strengthening networks with key stakeholders by increasing the participation of black farmers in the Livestock Recording and Improvement Scheme, training 1 000 farmers in various technologies to increase productivity and extending training and advice on the development of feedlots to access markets for new and emerging  beef farmers.

The Agricultural Research Council will continue to focus on identifying and developing solutions that enable us to manage the potential adverse impacts of climate change. For this reason, we note the progress made by the ARC in identifying wheat breeding lines that are resistant to stem rust virus infection and resistant to drought. This is a step in the right direction towards ensuring wheat production and food availability; which in turn could mean lower bread prices.

Madam Speaker – despite its challenges, the Land Bank continues to play a crucial catalytic role in the implementation of government policies and programmes to support commercial and emerging farmers. The bank has put in place a number of stabilizing measures in order to reinvent itself to deliver on its mandate. We have established a credible board that is now focusing on putting in place a top management structure of the bank.

In addition to the agricultural sector review process, yesterday in the Presidential Working Group, we agreed to work together on the escalating food prices, safety and security and water pollution. We have agreed on the composition of the agricultural advisory council. In addition we agreed that by the end of July we will have a document which we will have agreed to.

In conclusion, I would like to extend my appreciation to my Deputy Minister, Adv. Dirk du Toit for his support, knowledge and wisdom on agricultural and land matters. I would also want to thank the
MECs for Agriculture and Land for their support and cooperation. The Portfolio Committee on Agriculture and Land Affairs, and the Select Committee on Land and Environmental Affairs, oversight role is highly appreciated. Let me extend my appreciation of the support and commitment of the Presidents of the farmers unions together with their members.

I thank also the Women in Agricultural and Rural Development, for their dedication towards agriculture, rural development and women empowerment. Our Land and Agrarian reform programme will have to take into consideration the concerns and rights of women especially rural women and vulnerable groups.  I also want to thank YARD for their hard work. In June 2008 I will be launching Youth in Agriculture and Rural Development.

I am also grateful to the leadership provided by the Heads of the Agriculture industry in committing to work together with government to promote progress and transformation in the sector.
Furthermore, I would like to thank my dedicated team led by the Acting – DG and DG of both departments of Agriculture and Land Affairs and their staff, the staff in my office, the Chief Land Claims Commissioner’s, Chairs and boards of the SOEs and their CEOs and the HODs of provincial departments for all their support.




No related


No related documents