NAMC Annual Report Presentation to the Portfolio Committee on Agriculture and Land Affairs by

1
NAMC Annual Report Presentation to the
Portfolio Committee on Agriculture and Land
Affairs by

• TR Ramabulana

2
Strategic orientation

• Take cognisance of the mandate of the NAMC as
  instituted in terms of the MAPA (1996)
• Most important in this respect are the following
  sections of the MAPA, (see App for detail)
• Section 2(2)
• Section 7
• Section 9(1) (to comply with Section 9(2))
• Sections 16 and 17.

3
Objectives of the MAP Act

• The increasing of market access for all market
  participants
• Promotion of efficiency of marketing of
  agricultural products
• Optimization of export earnings from agricultural
  products
• The enhancement of the viability of the
  agricultural sector

4
Functions of the Council

• Investigate the establishment, continuation,
  amendment or revocation of statutory measures and
  other regulatory measures
• Prepare and submit to Minister for consideration,
  statutory measures and changes to statutory
  measures which the Minister directs it to prepare
• When requested by Minister and at least annually,
  report on the activities
• Undertake investigations and advice the Minister
  regarding
• Agricultural marketing policy and the application
  thereof
• The coordination of agricultural marketing policy
  in relation to national economic, social and
  development policies, and international trends
  and development
• The possibilities of promoting the objectives
  mention above
• The effect that marketing of products has on the
  objectives mentioned in above
• Monitor the application of statutory Measures and
  report thereon to the Minister at least every two
  years.

5
Legislative Mandate

• Established in terms of section 3 and 4 of the
  MAPA, No.47 of 1996
• The NAMC shall, when requested by the Minister
  or of its own accord, investigate the
  establishment, continuation, amendment or
  revocation of statutory measures and other
  regulatory measures affecting the marketing of
  agricultural products, evaluating the
  desirability, necessity or efficiency of the
  measures and, it necessary, proposing
  alternatives to the establishment, continuation,
  amendment, or repeal of a statutory measure or
  other regulatory measures and reports to and
  advise the Minister accordingly

6
Governance Structures

• Audit Committee
• Human Resources committee
• Risk committee
• Executive Committee
• Research committee
• Bargaining committee
• Management committee

7
Previous Council Members

• Dr. ASM Karaan (Chairperson)
• Mrs. D Ndaba (Vice-Chairperson)
• Mr. GP Dall
• Prof. JFK Kirsten
• Mrs. SE Moolman
• Mr. F Lawrence
• Mrs. L Keyter
• Mr. Z Duze
• Mrs. C Maku
• Mr. A Jefta

8
New Council Members

• Mrs. Ntombi Msimang (Chairperson)
• Dr. ASM Karaan (Vice-Chairperson)
• Prof. HD Van Schalkwyk
• Mr. AD Young
• Prof. JFK Kirsten
• Mrs. SE Moolman
• Mrs. C Molo
• Mr. DB Montshwe
• Mrs. M Mannya
• Mrs. M Gill

9
Corporate Governance Committee

• Audit committee
• Mr. Victor Nondabula (Chairperson)
• Mr. GP Dall
• Ms. M Moja
• Mr. F Lawrence
• Mr. R Matlou
• Human Resources Committee
• Mr. GP Dall (Chairperson)
• Ms. D Ndaba
• Ms. SE Moolman
• Ms. C Maku
• Ms. L Keyter
• Mr. Z Duze
• Mr. TR Ramabulana
• Risk Management Committee
• Ms. J Sethu (Chairperson)
• Mr. C Gladwin
• Mr. TPN Siala

10
Outputs and Service Delivery Trends
Sub-programme Outputs Outputs Indicators Performance
Council Meetings Agenda items Expected number Actual numbers
Council Meetings Council sittings 11 7
Council Meetings Submissions to the Minister 26 31
Council Meetings Ministerial enquiries 31 4
Council Meetings Executive Committee meetings 2 2
Council Meetings Management Committee meetings 46 44
11
Staff Representation as of 31st March 2007
Job Category Secretariat Secretariat Secretariat
Job Category Historical background Historical background Historical background
Advantaged Disadvantaged Total
CEO and senior Manager 4 4 8
Economists 3 7 10
Finance - 2 2
Secretaries 2 - 2
Administrative Assistance 1 2 3
Support - 2 2
Total 10 17 27
12
Section 7 Investigation

• Solutions for sustainable exports in the citrus
  industry
• Fresh produce section 7
• Wildlife section 7
• Sorghum section 7
• Wine industry section 7

13
Food Price Monitoring

• One of the recommendations from the 2003 food
  price monitoring committee was that SA should
  have a food price monitoring desk for both urban
  and rural food prices.
• One annual Food Cost review
• Section on rural food price monitoring
• Four quarterly food price trends

14
Research Programmes

• Sub-sector studies
• Beef, Chicken meat, citrus, Viticulture, wool,
  Deciduous fruit, Potatoes, Goats, Rooibos, Honey
  bush)
• Opportunities in the Russian fruit market
• Impact of RSA class 1 exports to African, Indian
  Ocean Island countries
• SA Agricultural protection How much policy space
  is there?
• Examining the India, Brazil and SA (IBSA)
  triangular trading relations
• Support for potato market development in North
  and West Africa
• Strategies to promote competitiveness and equity
  in SA agribusiness the case of BEE in the SA
  wine industry
• BFAP Annual baseline
• Impact of deregulation on agricultural efficiency
  and productivity in South Africa
• www.namc.co.za/publications/published reports/
  2006 or 2007

15
Academic Support Programmes

• An enquiry into the potential for change
  management by selected wine producers
  cooperatives in the Robertson wine district. MSc
  programme
• Institutional analysis of SAs new cooperative
  Act. MSc programme
• Factors influencing the sustainability of
  smallholder co-operatives in Kzn. MSc programme
• An economic analysis of Thohoyandou Town and
  Tshakhuma informal fruit and vegetable markets.
  MSc programme

16
Market Development Programmes

• Strategic Objective
• Increased market access by black farmers
• Grain and oilseed
• Approved by Council and submitted to Minister
• Funding allocated by Maize Trust
• Implementation through Trusts
• Citrus
• Approved by Council and submitted to Minister
• Currently negotiating with donors
• Red Meat
• Approved by Council and submitted to Minister
• Possible funding through the new red meat levy

17
Advice on marketing and trade

• Strategic goal was to address issues that
  negatively affect the export of agricultural
  products
• Facilitated two workshops on
• Comparative country experiences with agricultural
  trade
• Application for exemption in terms of the
  competition Act

18
Export Promotions

• Netherlands
• Five agribusinesses visited Netherlands.
• Partnership with SA Agri Academy and Centre for
  the Promotion of imports from Developing
  Countries
• Purpose was to expose agribusinesses to different
  markets in Netherlands
• United States
• Black woman owned wine label, Sibeko wines
  launched in the US
• In partnership with Delta Airlines
• The following labels are now part of Deltas menu
• Cape Concert
• African Whisper
• Pssst!
• Sibeko

19
Skills Development and Training

• Making Markets Matter
• Export readiness course with CDI and Agri Academy
• Fair trade
• Marketing and technical requirements
• Finance, costing and farm management

20
Statutory Measures applicable during 2006/07
financial year
Industry Administrative Body Statutory Measure Statutory Measure Statutory Measure
Industry Administrative Body Levy Registration Records Returns
Citrus (Exports only) Citrus Growers Association v v v
Cotton Cotton SA v v v
Dairy Milk SA v v v
Deciduous Fruit DFPT v v v
Dried fruit DFPT v v v
Grains (maize, oilseed and winter cereal) SAGIS v v v
Lucerne Lucerne Trust v v v
Milk MPO v v v
Potato Potato SA v v v
Red Meat Red Meat industry Forum v v v
Sorghum Sorghum Trust v v v
Wine South African Wine Industry Council v v v
Winter Cereals Winter Cereal trusts v v v
Wool Cape wools SA v v
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STATUTORY LEVIES APPROVED
INDUSTRY ADMINISTRATING BODY LEVY INTRODUCED LEVY LAPSES DURATION
Citrus Citrus Growers Association of SA 25 Aug 2004 25 Aug 2008 4 years
Cotton Cotton SA 1 Apr 2004 31 Mar 2008 4 years
Dairy Milk SA 23 Dec 2005 23 Dec 2009 4 years
Deciduous Fruit Pome fruit Stone fruit - Table grapes Deciduous Fruit Producers Trust 4 Nov 2003 4 Nov 2003 12 Nov 2004 4 Nov 2007 4 Nov 2007 30 Sept 2008 4 years 4 years 4 years
Dried Fruit Deciduous Fruit Producers Trust 18 Apr 2005 31 Mar 2009 4 years
Potato Potato SA 10 Sept 2004 30 Jun 2007 3 years
Red Meat Red Meat Industry Forum 5 Nov 2005 5 Nov 2007 2 years
Sorghum Sorghum Trust 14 Feb 2003 28 Feb 2006 3 years
Wine and Grapes Winetech WOSA SA Wine Information Systems (SAWIS) 1 Nov 2005 1 Nov 2005 1 Nov 2005 31 Oct 2009 31 Oct 2009 31 Oct 2009 4 years 4 years 4 years
Winter Cereals Winter Cereal Trust 1 Oct 2002 30 Sept 2006 4 years
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TOTAL AMOUNT OF STATUTORY LEVIES COLLECTED
Total value of production Rmillion Levies collected Rmillion Levy collection success rate
Citrus 2 900 19.8 78
Cotton 124 3.7 100
Dairy 4 012 12.0 80
Deciduous Fruit Pome fruit Stone fruit - Table grapes 2 203 773 1 439 17.5 6.3 11.4 96 98 95
Dried fruit 192 2.0 98
Potato 2 221 13.3 99
Red Meat (4 months) 2 867 1.0 76
Sorghum 172 0.8 67
Wine Winetech (grapes) WOSA SAWIS ) ) 2 626 ) ) ) 37.4 ) ) ) 99 )
Winter Cereal Wheat Barley Oats Durum 2 625 321 13 11 21.0 2.1 0.3 0.1 ) ) 96 ) )
TOTAL 22 499 149.1
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Overview of status of statutory measures

• 10 industries collected just over R149 million
• Spending
• 42 spend on research
• 17 spend on emerging farmers development
  projects
• 15 on information
• 10 on export promotion
• Collection rate
• The lowest rate was in sorghum at 67

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Function Financed through levies
Function Amount Spent R of Total
Administration 9 915 444 7
Transformation 24 024 252 17
Export Promotion 14 708 319 10
Research 60 089 089 42
Information 21 484 958 15
Plant improvement 2 484 958 2
Local promotion 1 083 032 1
Market Access 6 490 874 5
Quality Control 3 886 179 3
Total 143 929 703 100
25
Total levy expenditure for the period under
review compared to the previous two surveys
26
Commodity Related Activities

• Dairy
• Milk SA restructured following recommendations of
  the task team appointed by industry to ensure
  proper representation at the board
• Cotton
• Industry still in distress
• The recent increases in price pf cotton will
  bring relief to farmers, but the sustainability
  of cotton SA and cotton trusts still in question
  

27
CONTROL BOARDS STILL IN EXISTENCEAS AT 31 MARCH
2007
NAME OF ENTITY NUMBER OF EXTENSIONS GRANTED REASON FOR CONTINUED EXISTENCE
Maize Board 12 Court cases relating to the collection of outstanding levies
28
SUMMARY OF THE FINANCIAL STATUS OF INDUSTRY
TRUSTS
TRUST DATE ESTABLISHED TOTAL INHERITED ASSETS (transferred from former Boards) R CURRENT VALUE OF ASSETS R
Citrus Trust February 1999 1 319 255 15 370 234
Cotton Trust September 1997 8 289 880 7 455 520
Deciduous Fruit Industry Trust August 1998 500 000 10 958 742¹
Lucerne Seed Industry Trust August 1997 2 952 398 1 870 044
Maize Trust August 2000 264 128 772 685 475 616
Meat Industry Trust Red Meat Research Development Trust May 1998 May 1998 44 363 570 15 000 000 28 950 936² 25 887 642
Mohair Trust September 1997 145 888 150 177 126 107
Oil and Protein Seeds Development Trust October 1997 63 801 064 146 200 000
Sorghum Trust February 1999 6 554 135 8 905 582
Winter Cereal Trust November 1997 11 239 713 45 060 919
Wool Trust International Wool Trust August 1997 September 2003 64 276 853 IWS (Wool Trade Mark) 166 168 000 2 370 909
SA Wine Industry Trust December 1998 112 955 750 170 000 000
Potato Trust Potato Industry Development Trust October 1993 September 2004 22 000 000 0 0 9 444 806
Dry Bean Trust October 1993 6 145 000 6 145 000
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Budget Utilization

• INCOME R13,639,000
• Made up of
• Transfer from DoA R12,710,000
• Other income (Interest earned and Sponsorships)
  R 929,000
• EXPENDITURE R18, 972,000
• Made up of
• Personnel expenditure R 8,243,000
• Administration R 2,376,000
• Professional services R 7,992,000
• Depreciation R 305,000
• Finance Costs R 56,000

30
Irregular Expenditure
Incident Step taken Amount
Existing finance lease Due to changes in accounting procedures 2006 R442,000 2007 R497,000
New finance lease Amending the photocopier contract to a period of 36 months 2006 R66,000 2007 R56,000
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Issues

• Funding
• Ministerial approval for R30 million
• Received R13,2 million
• New Marketing Act
• Outline the proper positioning of the NAMC