Service Level Agreement

1
 AGRICULTURAL RESEARCH COUNCILPresentation to
Parliament11 October 2007Presented By Chief
Executive Officer Dr Shadrack Moephuli
2
ARC DELEGATION

• Ms. Jean Davidson Council Chair
• Mr. Elton Bosch Council Deputy Chair
• Mr. Thabiso Mudau Stakeholder relations

3
MANDATE OF THE ARC

• OBJECTIVE To promote agriculture and the
  industry in order to contribute to the
  improvement of the quality of life of the people
  of RSA
• THROUGH
• Conduct research
• Develop technology
• Transfer technology that promotes agriculture and
  industry.

4
SPECIFIC ARC GOALS IN SUPPORT OF NATIONAL
PRIORITIES

• The sustainable use of the natural resource base
  and the environment
• The competitiveness of the South African
  agricultural sector
• Increased participation, equity and access to the
  sector (by resource-poor farmers)
• Support for the production of high quality, safe
  food, and
• Generating knowledge for an informed society

5
ARCS CONTRIBUTION TO NATIONAL INITIATIVES

• The ARC plays an important role in the following
  
• Comprehensive Agricultural Support Programme
  (CASP),
• Integrated Food Security and Nutrition Programme
  (IFSNP), Poverty Alleviation,
• Land Reform for Agricultural Development (LRAD),
• Accelerated and Shared Growth Initiative of South
  Africa (ASGISA),
• Government regulatory responsibilities, (eg
  sanitary and phytosanitary controls)
• Ensuring a sustainable use of limited natural
  resources (soil, water, and agro-biodiversity)

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Agricultural Research Council Research Farms,
institutes Offices
34
30
52
Potgietersrus
53-62
29
21-22
65
33
8
38-42
Johannesburg
80
50-51
28
Vryburg
75-78
25
26-27
17-18
5
24
16
Upington
37
45-48
Bloemfontein
Durban
6-7
32
35-36
Middelburg
72-73
9
2
1
20
43-44
79
East London
23
66-71
31
10
74
12-15
81
3
11
64
Cape Town
83
49
4
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ARCS CONTRIBUTION TO THE AGRICULTURAL SECTOR

• Optimum value addition on primary agriculture
  products to the agricultural value chain
• Sustainable use of natural resources
• Research on climate change
• Elimination of diseases and pests that undermine
  agricultural production
• Effective entry point control of imported
  weeds, pests diseases
• Development and growth of regional and
  international markets for agricultural products
• Commitment to regional initiatives eg NEPAD SADC

8

• ARCS ACHIEVEMENTS IN DELIVERING ON ITS MANDATE

9
Sugar Dry Bean

• The speckled sugar dry bean cultivar Sederberg
  was bred at ARC-GCI to improve the resistance of
  dry bean cultivars to fungal diseases.
• Sederberg is resistant to the fungal diseases
  rust and angular leaf spot and is resistant to
  bean common mosaic virus (BCMV).
• It is high yielding and widely adapted especially
  
  in the high rainfall areas
  where fungal
  diseases
  are a problem.
• ARC released Sederberg, a red speckled
• sugarbean (Type II growth habit) with rust
• (UR-11 and UR-13), ALS and Bean Common
• Mosiac Virus resistance.

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PRODUCTION GUIDELINES

• Another focus on competitiveness is improved
  production practices that lower production costs,
  increase profitability and add value to products
  9000 copies of Maize Information Guide (MIG
  2006) containing technical information were
  printed and mailed to 7000 producers. A total of
  1000 copies were also supplied to the Small-Scale
  farmer section of Grain SA for use in their study
  groups.
• Two Production guidelines, namely Guidelines for
  the Production of small grains in the Summer
  Rainfall Region and Guidelines for the
  Production of small grains in the Winter Rainfall
  Region were made available during April 2006 to
  6500 producers, extension officers and
  scientists. These production guides contain
  technical information and updated improved
  technologies such as effective growth regulators,
  herbicide resistance, seeding density, pest and
  disease control as well as information on
  explained cultivars.

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MAIZE

• A quality protein maize (QPM) cultivar SAM1109
  has been developed and breeder seed produced for
  seed companies, 420 tons of certified maize seed
  of open-pollinated cultivars were produced for
  resource poor and developing farmers, primarily
  in Limpopo, Mpumalanga and the Eastern Cape
  provinces, in partnerships with a small seed
  company.

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Food Security, Nutrition and Health

• Vitamin A deficiency 33
• Model for household food production nutrition
  education, cultivation growth monitoring
  programm
• MRC ARC International Collaboration
• Food based approach to alleviate vitamin A
  deficiency
• Introduction of orange fleshed sweet potato,
  other vit. A rich vegetables carrots, swiss
  chard, butternut etc.
• Biofortification
• Training in 6 provinces E. Cape, Free State,
  Limpopo, Gauteng and Mpumalanga 200 school
  garden projects

13
CULTIVATION OF GRAPES

• Establishment of vineyard
• Low cost soil preparation
• Planting of cuttings from vines known for mass
  grape production
• Production of Villard blanc 39 tons per Hectare
• Eksteenskuil producers

14
COMPETITIVENESS MARKET ACCESS

• 45 SA drief fruit industry depends on nectarines
• New nectarine cultivars
• Yellow skin world first
• Plant Breeders Rights
• Red/yellow skin good for poor handling and
  storage environments
• Fruit dont lose firmness as rapidly easier to
  harvest and market over a longer time

15
BIOCONTROL

• Mango scale is a major pest.
• In 1996 a parasitoid was imported from Thailand,
  mass-reared at the ARC in Nelspruit, released in
  many mango producing areas of Mpumalanga and
  Limpopo for the biological control of mango
  scale.
• In 2006, another major survey was conducted in
  most mango producing areas ranging from Mussina
  in the north of Limpopo to Port Edward in the
  south of KZN to determine the current status of
  the imported biocontrol agent. The parasitoid was
  recovered from all sites, even in areas such as
  Tshipise and Thohoyandou in Limpopo and the
  entire KwaZulu/Natal, where it had never been
  released.
• This confirms the successful establishment and
  remarkable distribution of the parasitoid in all
  mango producing areas in South Africa.

• Impact of biological control enables most mango
  producers to rely on natural control, using an
  estimated 40 less toxic insecticides.

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ANIMAL PRODUCTION

• PUTUVELD model GIS prediction for production
  potential and climate risk for grasslands
• Production traits for Dairy Cattle 1000 Farmers
  benefitted.
• Breeding index for feedlot profitability
  completed, used in 9 provinces and reached /-
  1000 farmers.
• Established rangeland monitoring programme with
  DoA.
• Technology to control and manage build up of
  lactic acid in ruminants feedlot animal can eat
  more and produce more milk, improved weight gains
  etc.
• LidcatTM technology for positive identification
  of livestock stock theft deterrent
• Performance tests on livestock owned by communal
  farmers raised market prices of beef animals
  from black farmers

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ANIMAL DISEASES

• Developed and validated a test for detection of
  infection of cattle with Brucella abortus
  Brucella Rapid Test (BRT)
• Easy to use and interpret
• Combined with vaccination strategy to protect
  uninfected female animals
• Developed an improved test for Rift Valley Fever
  that uses a recombinant protein instead of the
  whole virus. Currently validating the test and
  will commercialize if successful.
• Classical swine fever (CSF) surveillance is
  ongoing and in the affected province of the
  Eastern Cape, in excess of 12,998 samples have
  been tested.
• Ongoing surveillance of transboundary animal
  disease (e.g. Foot and Mouth African swine
  fever).
• Training on serological diagnosis of avian
  influenza to enhance SADC country participants
  abilities for surveillance of AI.
• Continued the Pesticide Residue Monitoring
  programme

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The Public Support Services Division

• Poor farming practices bad crop rotation
  resulted in accumulation of soil borne plant
  pathogens impact has been diminishing crop
  yields among commercial and small scale farmers
  in KZN.
• Early warning forecast of locust outbreak
  information to DoA through the ICOSAMP
  (Information Core for Southern African Migrant
  Pests) ARC coordinates and releases to SADC
  Countries.
• Herbicide trials on pompom weed indicate a
  growing alien invasive, particularly in Gauteng.
  
• Identified 5 potential biological control agents
  for an emerging weed (balloon vine) during a
  field survey in Argentina.
• Identified plant feeding mites on imported fruit
  tree cuttings with pest species not present in
  RSA. Prevented inadvertent importation of new
  alien invasive species and potential pests.
• Developed land suitability maps for 6 biofuel
  crops (sunflower, soya bean, maize, grain
  sorghum, sugar cane and sugar beet).

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The Public Support Services Division (cont.)

• Utilized coarse resolution satellite imagery
  (used for drought monitoring and crop estimation)
  to develop products from data retrieved from the
  geostationary MSG (Meteosat Second Generation)
  satellite.
• National asset register comprised of a collection
  of over 13 000 maps land suitability
• The National Collections of insects, arachnids,
  nematodes and fungi of the ARC are among the most
  important and comprehensive biological and
  taxonomic reference resources of their kind in
  Africa.
• Spiders as biological control agents

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PARTNERSHIPS RESEARCH

• In Partnership with the International Centre for
  Development Oriented Research in Agriculture
  (ICRA), ARC has conducted 16 field studies with
  provinces on various priority research issues
  identified by provinces. The aim of the studies
  was (i) to enhance inter-disciplinary teamwork
  among researchers, (ii) link research and
  extension in responding to farmer's priorities,
  (iii) empower farmers to identify and elaborate
  on their research needs and enable farmers to
  contribute their own knowledge into the research
  agenda, and (iv) provide insight for researchers
  to design responsive interventions.

Participatory Research with Farmers
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INDIGENOUS KNOWLEDGE SYSTEMS

• Commercialisation of Indigenous plants
• Devils Claw Project Two hundred
• farmers (200) are participating in the
• production and processing of Devils Claw
• indigenous medical plant in Ganyesa, North
• West Province in partnership with NW
• Department of Agriculture, Bophirima
• Municipality, and Traditional Leaders. ARC
• Skills transferred to farmers include artificial
• propagation, grading weighing, packaging ,as
• well as business management and marketing
• of the processed product. Commercialisation of
• This ARC Research Product resulted in the
• creation of a Public Company owned and
• operated by beneficiaries Sekamo
• Pharmaceuticals cc for Devils Claw.

Devils claw spiny fruit showcasing claw-like
structures
22
BIOFUELS/SMME DEVELOPMENT

• Oil Seed Crop Production for
• Biofuels
• Oil Seed Crop Farmers In partnership with
  Limpopo Department of Agriculture, 35 farmers in
  Limpopo, were trained on production technologies,
  business skills and activities that will enable
  them to become sustainable SMMEs linked to
  Biodiesel Production for the Biofuels industry.

Farmers participating in practical soil
preparations at the Farmer Development Centre
in Tompi Seleka
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Human Resources Overview

• The ARC Invested 3 of our labour cost (including
  statutory skills-levy contributions) in human
  resource development. A large portion of this
  was invested in the Professional Development
  Programme and the ARC Transformational Capacity
  Building Programme on the formal and informal
  training of core staff. The bulk of the budget
  went to skills development to support employment
  equity.
• The Professional Development Programme had 60
  candidates, 26 males and 34 females. Of the 60
  candidates, two completed their PhD studies and
  eight completed MSc degrees.
• Continued with the capacity building programme
  which was launched in April 2005. The purpose of
  the programme is to create a pool of young
  scientists from the previously disadvantaged
  groups. During the period under review the
  programme had 126 candidates.

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QUALITY OF SCIENTIFIC CAPACITY
Qualifications of Staff Number of Total Staff (2698) Research Staff (923)
Research staff with PhD degrees 170 6.30 18.40
Research staff with masters degree 260 9.60 28.20
Professional Engineers Veterinarians 20 0.70 2.20
Staff enrolled for Masters/PhD degrees 118 4.40 12.80
Staff enrolled for Engineering/Veterinary degrees 4 0.10 0.40
Total Staff 2,698
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DEVELOPMENT OF SCIENTIFIC CAPACITY
Study Programme Male Female Total
PhD 12 3 15
MSc 32 35 67
BSc (Hons) 4 10 14
BTech 7 10 17
BAgric 2 3 5
NDipl 1 5 6
Adv Dipl 1 1 2
TOTAL 59 67 126
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MANAGING OUR FINANCES
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AUDITOR GENERALS REPORT AUDIT COMMITTEE
REPORT FOR 2005/06
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AUDIT QUALIFICATION

• Non-compliance with IAS 16 Property,
• Plant and Equipment
• -The useful lives and residual values of
  property, plan
• and equipment were not reviewed in the current
  period
• as required by IAS16 Property, Plant and
  Equipment
• Existence of Accounts Receivable
• The receivables balance includes an amount of
  R49,7 million which the entity claims is due to
  it in respect of VAT on the Parliamentary grant
  that is recoverable from the transferring agent.
  At the date of this report, the entity had not
  received any confirmation from the transferring
  agent in respect of the acceptance of this
  liability.

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AUDIT EMPHASIS OF MATTER

• Auditor-General raised Emphasis of matter items
• Weaknesses in internal control
• Implementation of Supply Chain Management
• Changes to financial statements
• Performance information
• WHATS THE OUTCOME FOR 2006/07?

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Matters emphasised in the Auditor-General report 1999 - 2000 2000 - 2001 2001 - 2002 2002 - 2003 2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007
Legislative compliance x x  - x x x - -
Forensic investigations x  - -  - - -  -  - 
Internal control x x x -  - x x -
Provision for post-retirement medical aid benefits x x  - - - - - -
Pension fund contributions x  - - - - - - -
Transfer of land and buildings from the state x x  - - - - - -
Going concern x x x -  - - - -
Depreciation and impairment of land and buildings  - x   -  - - x -
Performance information  - -  x x x - x -
Implementation of SCM - - - - - - x  - 
Changes to financial statements - - - - - - x  -
Financial statements - unqualified opinion yes yes yes yes yes yes no yes
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Summary of Financial performance for nine years
AGRICULTURAL RESEARCH COUNCIL AGRICULTURAL RESEARCH COUNCIL AGRICULTURAL RESEARCH COUNCIL AGRICULTURAL RESEARCH COUNCIL AGRICULTURAL RESEARCH COUNCIL AGRICULTURAL RESEARCH COUNCIL AGRICULTURAL RESEARCH COUNCIL AGRICULTURAL RESEARCH COUNCIL AGRICULTURAL RESEARCH COUNCIL AGRICULTURAL RESEARCH COUNCIL
NINE YEAR REVIEW NINE YEAR REVIEW NINE YEAR REVIEW NINE YEAR REVIEW NINE YEAR REVIEW NINE YEAR REVIEW NINE YEAR REVIEW NINE YEAR REVIEW NINE YEAR REVIEW NINE YEAR REVIEW
  2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/9
  R '000 R '000 R '000 R '000 R '000 R '000 R '000 R '000 R '000
INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT
Parliamentary Grant 434,175 457,186 320,708 276,140 267,552 267,683 276,278 274,519 286,410
External Income 259,798 196,966 224,514 212,252 239,513 261,036 167,915 157,909 129,716
Total Expenditure 697,259 652,931 552,177 495,984 473,672 496,521 450,333 440,692 474,862
Total Remuneration Cost 415,974 395,965 315,853 284,228 263,630 289,804 284,589 285,397 295,300
Other Expenditure 281,285 261,089 236,324 211,756 210,042 266,556 165,744 155,295 179,562
Investment Income 11,693 11,183 12,761 13,955 9,568 6,293 6,173 8,311 13,823
Net Surplus\(Deficit) 8,955 12,910 6,069 6,363 36,893 (21,347) 33 47 (44,913)
                   
BALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET
Property, plant and equipment 521,596 396,961 380,999 375,683 385,441 395,214 544,452 545,236 547,572
Other Assets 2,231 1,236 850 845 183 188 185 131 96
Current assets (excluding cash) 79,629 128,735 73,394 67,475 75,407 65,857 66,264 47,130 35,848
Cash resources (net of bank overdraft) 96,656 152,823 152,412 102,679 80,512 65,541 20,157 25,683 57,650
Total Assets 700,112 679,755 607,655 546,682 541,543 526,800 631,058 618,180 641,166
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SEVEN YEAR REVIEW GRAPH
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NEW DIRECTION

• Scientific capacity excellence
• Broadening diversity skills base
• Improving internal systems (HR, Financial risk
  management policies)
• Communicating research outputs visibility,
  relations with user groups
• Organizational structure performance
• Competitiveness for research funds
• Collaboration adjunct posts, students
• Capital Expenditure infrastructure

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CONCLUSION

• The year under review has been one of many
  changes in the ARC, particularly in leadership.
• Responding to compliance requirements has brought
  challenges on Human Resource Management and the
  need for new policies and systems.
• Improvements in performance continue at the
  forefront of the ARC researchers and other
  personnel.
• The Council and employees of the ARC wish to
  thank the Honourable Minister, Ms. Lulu Xingwana
  for her leadership and support.
• We also thank the support and leadership of the
  Agriculture and Land Affairs Portfolio Committee.
  
• THANK YOU!