NAMC%20Strategic%20Plan%20and%20Budget%20Presentation%20%20Portfolio%20Committee%20on%20Agriculture%2006%20March%202006

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NAMC Strategic Plan and Budget PresentationPort
folio Committee on Agriculture06 March 2006
Strategic Positioning of SA Agriculture in
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• Structure of Presentation
• Questions from last Portfolio Committee briefing
• Highlights for 2006/07
• The Strategic Plan for 2007/08
• Budget 2007/08

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• Questions Answers
• Improved communication with the Minister
• Over four sessions with the New Minister
• Numerous meetings with the Ministers economic
  advisor
• Review of the Agricultural Marketing Environment
• Report submitted to the Minister

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• Guiding Documents
• Marketing of Agricultural Product Act
• The Strategic Plan for South African Agriculture
• Draft Transformation Charter for Agriculture
• Accelerated and Shared Growth Initiative for
  South Africa

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• Highlights

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• Market Intelligence
• Undertook numerous studies aimed at monitoring
  developments in existing markets and changing
  direction of trade
• Examples of studies
• Computer analysis of the potential change to the
  SA, SACU, India, Mercosur/Brazil agricultural
  trading relationships
• Possibilities for fruit export to Russia
• Foreign market development for potato industry
• A study to assess the impact of RSA Class 1
  exports to Africa and Indian Ocean island
  countries

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• Markets and Economic Research Centre
• Collaborated with industry and other donors to
  fund market research to the value of R3,4 million
• Examples of research
• Nine sub-sector studies on those sectors
  identified as key to the success of ASGISA
• SA-New Zealand Comparative study on effects of
  deregulation
• Study on taxes in agriculture

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• Section 7 Investigations
• Fresh Produce Markets
• Game Section 7 Investigation
• Sorghum Section 7 Investigation
• Citrus Exports Section 7 Investigation
• Input Cost Monitoring Section 7 Investigation

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• Food Price Monitoring
• Collaboration with DoA, University of Pretoria
  StatsSA
• Published Food Cost Review Quarterly (4) Food
  Price Trends
• Capturing rural food price data from identified
  rural stores Spazas
• The 2006 copy of the Urban and Rural Food Cost
  Review will be available in July 2007

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• Use of Statutory Levies Collected

Total value of production R million Levies collected R million Levies available for PDIs R million Levy collection success rate
Citrus 2 900 19.8 1.9 (11) 78
Cotton 124 3.7 0.49 (10) 100
Dairy 4 012 12.0 2.8 (36) 80
Deciduous Fruit Pome Fruit Stone Fruit Table Grapes 2 203 773 1 439 17.5 6.3 11.4 1.7 (10) 0.6 (10) 1.1 (10) 96 98 95
Dried Fruit 192 2.0 0.2 (11) 98
Potato 2 221 13.3 1.5 (11) 99
Sorghum 172 0.8 0.1 (12) 67
Wine Winetech (Grapes) WOSA SAWIS 2 626 37.4 11.8 (32) 99 99 99
Winter Cereal 2 970 23.5 1.4 (6) 96
Red Meat (4 months) 2 867 1.0 0.08 (8) 76
Total 22,499 149.1 24.0 (16)
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• Management and Control
• Leadership
• Council headed by M Karaan 9 other Council
  Members - all part-time
• Management
• CEO
• CFO
• MANCOM
• Research Committee
• ATAF Committee

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• Markets and Economic Research Centre

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• RD SCOPE AND NATURE

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• Markets Economic Research Fund
• Research Fund of R10,3 million
• Other donors encouraged to contribute
• Fund ring-fenced for Economic Research purpose
  only
• Introduced a peer review mechanism to evaluate
  terms of reference, proposals, reports
• Fund will serve to address government objectives
  as outlined in the agricultural programme of
  action and support the development of trade
  policy support models

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• Trade Policy Support Models
• Models
• BFAP/NAMC Econometrics
• PROVIDE/DoA Computable General Equilibrium
• Tralac/NAMC- GTAP
• Free State University/NAMC Spatial Equilibrium
• Objective
• Better understanding and interpretation of SA
  International Trade policy
• Increased collaboration between economic
  researchers

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• Trade Intelligence
• Understand requirements of markets
• Market research
• Trends, key supplies, size, consumption patterns,
  channels of distribution, price formation, etc.
• Develop new markets
• Change direction of trade from Europe to Near,
  Middle and Far East
• Target countries with capita income of over
  5,000
• India, Vietnam, Kazakhstan, Iran, Bangladesh
  Oman
• Maintain access to existing markets
• Consumer research
• Market development campaigns

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Academic Support Programme
University Number of students MSc /PhD Research Topic
KwaZulu Natal 1 An institutional analysis of SA new Co-operative Act
1 Factors influencing the sustainability of smallholder co-operatives in KwaZulu-Natal
Stellenbosch 1 An enquiry into the potential for change management by selected wine producers co-operatives in the Robertson wine district
Venda 1 Economic analysis of Thohoyandou town and Tshakhuma informal fruit and vegetable markets
Ghent Strategies to promote competitiveness and equity in South African agribusiness A case of black economic empowerment in the Sa wine industry
Total 5
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• Fresh Produce Markets Investigation Report
  Roll-out
• Engagement with SALGA and DPLG to agree on
  implementation of recommendations
• Reconstitute Section 7 to facilitate
  implementation
• Appointment of special committee to look at
  amendments and/or redrafting of legislation
• Agricultural Products Agency Act, no. 12 of 1992
• Various Municipal By-laws
• Agricultural Products Standards Act (enforcement)
  

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• Support to Agricultural Economics Association of
  South Africa (AEASA) Making Markets Matter
  (MMM)
• MERC will continue to support the two annual
  events. The events will be used to
• Test research results with AEASA members (premier
  agricultural association)
• Identify future research items
• Provide a platform for the Agricultural Economics
  fraternity to advise on implementation strategies
  for various NAMC and DoA programmes
• Train black agribusinesses on various business
  management issues
• Networking platform for black agribusinesses

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• Agri benchmark
• The NAMC will be part of the international agri
  benchmark initiative.
• Initial focus
• Grain and beef sub sector
• Benefits
• Being able to provide competitiveness indicators
  based on international comparisons
• Comparing different policy instruments
• International expert panel

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• Electronic Research Library
• Latest NAMC research report available on request
• Fresh Produce Section 7 investigation
• Game (wildlife ranching) Section 7 investigation
• Solutions for sustainable export in the citrus
  industry
• Sorghum industry study
• Wheat to bread value chain study
• Possibilities for fruit exports to Russia
• Impact of RSA class 1 fruit exports to African
  and Indian Ocean Island countries
• Sub-sector studies (Regulatory constraints
  challenges, possible government intervention to
  remove bottlenecks)
• Study on taxes on the agricultural sector
• Supply and demand models for potato industry
• Rural and Urban Food price monitoring
• Input cost monitoring
• Impact of deregulation on agricultural efficiency
  and productivity

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• Other Activities
• Undertake Section 7 Investigations on
• Honey production
• Mohair
• Olives
• Information Management Systems
• Rural Urban Food Cost Review
• Quarterly Food Price Trends
• Input cost Monitoring

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Enterprise Development
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• Key Activities
• Marketing Schemes
• Farmers business support models
• Business linkages model
• Franchise model on niche products, eg. olive
  marketing (targeting women as beneficiaries)
• Management and growth of database of emerging
  enterprises
• Agribusiness Technical Assistance Fund
• Linkages with major buyers of produce
• Export promotion
• Distribution of market information to emerging
  enterprises
• Re-alignment of trusts to AgriBee objectives

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• Summer Grains Schemes
• Start Date 2007/08 planting season
• Focus
• Input cost insurance
• Mentorship/extension support
• Initial soil preparation
• Temporal post harvest grain storage
• Partners Co-operatives
• Funding R40 million from Maize Trust, Oilseed
  Trust
• Target 5000 black grain farmers over 5 years

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• Other schemes
• Citrus
• Access to international markets
• Extension service through pack houses and agents
• Part payment of packing costs for black citrus
  exporters
• Cost sharing of trees with black farmers
  expanding orchards
• Livestock
• Innovation fund for abattoirs and feedlots
  sourcing livestock directly from black farmers
• Training on livestock marketing
• Fresh Produce Markets
• Through the implementation of Section 7 report on
  fresh produce markets
• Reduction of commission by black agents from
  current 5 to 2,5
• Staged payment into fidelity fund by black agents
• Space for black agents

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• Agribusiness Technical Assistance Fund
• Allocated R2 million to the Agribusiness
  Technical Assistance Fund to support black owned
  Agribusinesses in the database
• Fund ring-fenced for Black Agribusiness Technical
  Support only
• A policy on the use of the fund has been
  developed
• The fund will be used on a cost sharing basis
  with agribusiness contributing a certain amount
• The black owned agribusinesses will be assisted
  through existing industry structures, eg. ABC,
  Trust, etc.
• Agribusiness will be encouraged to apply for
  specific technical assistance, eg. appointment of
  technical advisors on AgriBEE transactions,
  business plan, certification, export promotion,
  training, etc

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• Statutory Measures

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• Key Activities
• Statutory Measures Investigations
• Monitoring and review
• Registration of Directly Affected Groups
• Conducting of pools
• Records and returns
• Crop Estimate Liaison Committee oversight

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• Statutory Measures Investigation
• Pigs statutory measures (Levies, Records
  Returns)
• Red meat (cattle and goats) statutory measures
  (Levies, Records Returns)
• Wool statutory measures (Records and Returns)
• Wine statutory measures (Levies adjustment for
  inflation)
• Stone and Pome fruit statutory measures (Levies,
  Records and Returns)
• Grapes statutory Measures (Levies, Records and
  Returns)

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• Administration and Budget

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• Budget

Council and Admin MERC Enterprise Development Statutory Measures Total
Salaries 4,987,000 3,500,000 950,000 900,000 10,337,000
Admin 3,851,520 1,132,480 565,000 295,000 5,844,000
Operational expenses 654,000 10,500,000 2205,000 250,000 13,609,000
Stores 210,000 0 0 0 210,000
Total 9,702,520 15,132,480 3,720,000 1,445,000 30,000,000
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• Administration
• The Council has the following governance
  structures that will continue to comply to
  Treasury Regulations and the PFMA
• National Agricultural Marketing Council
• Executive Committee
• Audit Committee
• Management Committee
• Human Resources Committee
• Risk Management Committee
• Bargaining Committee
• Research Committee

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• Dare to Dream
• We have established smart targets
• Stretch greater than reach
• Measurable
• Agreement on what to measure
• Record progress
• Time limits set
• Through the implementation of the differentiation
  policy, we will be able to
• Identify each employees talents and stretch them
  to achieve set targets
• Manage around non talents

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• Emerging Issues
• Redrafting of the Marketing of Agricultural
  Products Act
• Need for policy on costs sharing with industry on
  key activities
• Research
• Export promotion
• Trade marks
• Academic support
• Reporting line for the NAMC

Strategic Positioning of SA Agriculture in
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