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

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NAMC Annual Report Presentation to the Portfolio
Committee on Agriculture and Land Affairs by
TR Ramabulana
Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Content of Presentation
• Business Plan 2005/06
• Annual Report 2005/06
• New developments 2006/07
• Markets and Economic Research Centre
• Enterprise Development

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• NAMC Strategic Programmes
• Council Activities
• Outreach/ Marketing Schemes
• Statutory Measures
• Research (Section 7 Investigation)
• Food Price Monitoring
• Budget

Strategic Positioning of SA Agriculture in
Changing Global Markets
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Output Service Delivery Trends of Council
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
Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Corporate Governance Structures
• Audit Committee
• Human resources Committee
• Risk Management Committee
• Executive Committee
• Management Committee

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Outreach/Marketing Schemes
• Target 38 workshops reaching 2500 farmers
• Achieved 21 workshop reaching 1736 farmers
• Reasons Changed strategy since outreach didnt
  provide key support such as markets access,
  capacity building, finance, etc
• New strategy focused on business linkages using
  Agribusiness and Technical Assistance Fund
• Example of farmers assisted on database attached

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Enterprise Development
• Main ED deliverables are development of a
  database of black owned enterprises, the
  implementation of a business linkages model use
  of Agribusiness Technical Assistance Fund .
• The assistance provided to emerging enterprises
  could be group into the following categories
• Training courses Making Markets Matters,
  International Negotiation Skills and Business
  Management skills
• Production of Promotional material Business
  Cards, Information Booklets and Pull-ups stands
• Business plans and Feasibility studies
• Attendance of Major Conferences All Fresh
  Conference, Market Access Conference Southern
  Hemisphere Fresh Produce Conference
• International Marketing Visits Major
  supermarkets in Netherlands and United Kingdom
  Royal Agricultural Show

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Enterprise Development
• Marketing Schemes- Government Supported Industry
  Driven.
• Detailed black farmers consultation
• Farmers business support models
• Business linkages model
• Franchise model
• Co-operative model
• Management and growth of Database of emerging
  enterprises
• Agribusiness Technical Assistance Fund
• Linkages with major buyers
• Export promotion
• Distribution of Market information to emerging
  enterprises
• Re-alignment of trusts to empowerment objectives

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Statutory Measures
• 11 industries collected statutory levies
• R130 million was collected this represents only
  0.7 of production value at first point of sale
• Approximately 43 of levies were collected to
  finance research, 15 for information, 14 for
  transformation and 13 for export promotion
• In August 2005, the NAMCs guideline of levies
  for transformation purposes changed from 10 to
  20 of levies collected
• In the past 5 years, the market share of emerging
  farmers in the 10 industries (production)
  increased from 1.2 to 4.1
• Cotton industry the highest approximately 20
  of production is coming from emerging farmers

Strategic Positioning of SA Agriculture in
Changing Global Markets
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Statutory Measures
  Total value of production R000 Levies collected R000 Levies available for PDI R000 Levies collection success rate
Citrus 2 600 15.0 1.3 94
Cotton 240 4.8 0.6 100
Deciduous Fruit - Pome fruit - Stone - Table grapes 2 124 737 1 796 14.5 6.1 11.2 1.9 0.3 0.7 96 98 95
Dried fruit 136 1.5 0.2 97
Potato 2 529 14.3 1.4 99
Sorghum 200 1.2 0.1 89
Wine - Wintech (grapes) - WOSA - SAWIS 2 791 12.7 16.9 6.0 4.1 3.4 0.9 100 100 100
Dairy 3 812 6.3 1.9 28
Winter cereals 2 847 19.6 1.3 90
Total 19 812 130.1 18.1  
Strategic Positioning of SA Agriculture in
Changing Global Markets
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Estimated funding for Research in
Autralia(2003)
Industry Industry contribution Gov. contribution
Pork A 3,990,000 A 3, 340,000
Wool A 60, 220,000 A 16, 170,000
Dairy A 13, 450,000 A 14, 050,000
Fisheries A 5, 120,000 A 17, 390,000
Forest wood products A 3, 690,000 A 2, 950,000
Grains A 65, 050,000 A 39, 150,000
Grapes and wines A 7, 850,000 A 7, 050,000
Horticulture A 31, 050,000 A 29, 620,000
Livestock A 26, 650,000 A 26, 650,000
Sugar A 5, 240,000 A 4, 310,000
Tobacco A 0, 210,000 A 0, 210,000
Cotton A 7, 140,000 A 7, 280,000
Strategic Positioning of SA Agriculture in
Changing Global Markets
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Statutory Measures Introduced
Sub-Programme Measure
Livestock New dairy statutory measure (Levy, record returns, registration)
Livestock New red meat statutory measure (Levy, record returns, registration)
Horticulture Appointment of Inspectors in Potato Industry
Horticulture Amendment of the notice for statutory measure in the potato industry
Horticulture Four year wine statutory measure
Field Crops Appointment of Ministerial trustees on the Lucerne, Sorghum oil and protein seed development trust
Field Crops Extension of the maize marketing scheme
Field Crops New four year Winter Cereal statutory measure
Field Crops Continuation of measures (registration, record and returns) in cotton
Field Crops Amendments to statutory measures (registration, record and returns) maize, winter cereals, sorghum and oilseed
Field Crops New statutory levy on sorghum
Strategic Positioning of SA Agriculture in
Changing Global Markets
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CONTROL BOARDS STILL IN EXISTENCE AS AT 31 MARCH
2006
NAME OF ENTITY NUMBER OF EXTENSIONS GRANTED REASON FOR CONTINUED EXISTENCE
Maize Board 11 Outstanding issues including court cases relating to the collection of outstanding levies
Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Section Seven Investigations
• Fresh Produce section 7 investigation
• Game (wildlife ranching) section 7 investigation
• Solutions for sustainable export in the citrus
  industry
• Sorghum industry study
• Purpose
• Advise the Minister on any statutory intervention
  need
• Provide industry with intelligence necessary to
  increase competitiveness of the sector

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Markets Economic Research Centre (MERC)
• The NAMC has established the MERC
• Research Areas
• Trade intelligence
• Competitiveness
• Supply chains analysis
• Statistics
• Rural Livelihoods
• Products
• Markets and Economic Research Fund
• Section 7 Committees
• Academic support programmes
• Research library

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Changing Global Markets
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• Examples of Research Projects
• Possibilities for fruit exports to Russia
• Study to assess the impact of RSA class 1 fruit
  exports to African and Indian Ocean Island
  countries
• ASGI-SA Sub-sector studies (Regulatory
  constraints challenges, possible government
  intervention to remove bottlenecks)
• SA-New Zealand comparative study on effects of
  deregulation
• Study on taxes on the agricultural sector
• Supply and demand models for potato industry
• Rural and Urban Food price monitoring
• Input cost monitoring
• Input of deregulation on agricultural efficiency
  and productivity

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Marketing and Trade
• Trade Intelligence
• 3rd Generation issues
• Tariffs
• Industry growth perspective
• Marketing of Brand SA Agriculture

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Changing Global Markets
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• Trade Intelligence
• Monitor traditional markets and inform export
  industry
• Provide intelligence about new markets
• Use Agriculture Trade Attaches
• Lobby for increase in number of Agric. Trade
  Attaches
• Improve relations between SA agric export
  industries and Trade Attaches
• Generate intelligence on
• Products
• Markets and Constraints
• Competitors
• Price

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Changing Global Markets
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• Trade Attaches
• South Africa has Agricultural Trade Attaches in
  the following countries
• Brussels- Mr. Winston Makabanyane
• China- Mr. Mono Mashaba
• USA- Dr. Simphiwe Mkhize
• Italy- Ms. Margaret Mogapi
• Switzerland- Ms. Gerda van Dyk

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• Trade Intelligence
• The NAMC undertook numerous studies aimed at
  assisting the fresh produce export industry to
  monitor developments in traditional markets as
  well as explore emerging markets. Studies
  undertaken include amongst other the following
• Possibilities for fruit exports to Russia
• A study to assess the impact of RSA Class 1
  exports to African and Indian Ocean island
  countries.
• Foreign market development for potato industry

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Changing Global Markets
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• Tariff
• Forge close working relationship with
  International Trade Administration Commission
  (ITAC)
• Objective
• Assist industries with the necessary research
  that will help build a good case for any tariff
  application
• Undertake research that will also help
  incorporate development issues (rural
  development, employment, AgriBEE, job creation)
  into any tariff investigation process.

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Changing Global Markets
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• Food Price Monitoring
• Targets achieved
• Produced an annual publication known as Food Cost
  Review
• Distributed as widely as possible
• Produced quarterly food price trends press
  release
• Monitor 75 different products
• Monitor both urban and rural food prices (2006)

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• UTILIZATION OF 2005/06 NAMC BUDGET
• INCOME R14,042,000
• Made up of
• Transfer from DoA R12,163,000
• Other income (Interest earned and roll-over)
  R 1,879,000

Strategic Positioning of SA Agriculture in
Changing Global Markets
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• ACTUAL EXPENDITURE R14,109,000
• Made up of
• Personnel expenditure R 7,393,000
• Administration R 3,203,000
• Professional services R 1,542,000
• Surplus R 1,971,000

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Changing Global Markets
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• Emphasis of Matter
• Without qualifying the audit opinion, the AG drew
  attention to the following
• Implementation of supply chain management
• Performance information
• Value added tax
• Irregular expenditure

Strategic Positioning of SA Agriculture in
Changing Global Markets
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Staff Representation as at 31 March 2006
Job Category Council Council Council Secretariat Secretariat Secretariat
Historical background Historical background Historical background Historical background Historical background Historical background
Advantaged Disadvantaged Total Advantaged Disadvantaged Total
Part-time 5 5 10 10
Section Head 2 3 5
Economist 2 3 5
Financial staff - 2 2
Secretaries 3 - 3
Admin staff 1 1 2
Support - 2 2
Total 5 5 10 8 11 29
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Changing Global Markets
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• Limitations and Future
• Limited execution powers to be addressed through
  the review of the MAPA
• Limited funding R16 million/ year.
• Other countries, e.g. AbareEconomis in Australia
  A125 million/ year ERS in USA US65/year.
• Future focus areas
• Economic and market research
• Trade intelligence
• Export promotion
• Marketing schemes
• Statutory measures

Strategic Positioning of SA Agriculture in
Changing Global Markets