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Agri South Africa: Ministerial speech
Agriculture, Forestry and Fisheries Minister Tina Joemat-Pettersson: Speech at the Annual General Meeting of Agri South Africa
Muldersdrift
9 October 2009

Acknowledgements: FANRPAN acknowledges Department of Agriculture, Forestry and Fisheries as the source of this speech


I am pleased to be joining here today, continuing with our stakeholder relations, where we collectively strategise and grow the sector, remove blockages that stand in the way of productivity and re-establish this beautiful country as a net exporter of high-quality food, timber and fibre products to Africa and the rest of the world.

Our role has found prominence in the strategic priorities outlined as follows:
  • speeding up economic growth and transforming the economy to create decent work and sustainable livelihoods
  • rolling-out a massive programme to build economic and social infrastructure
  • strengthening the skills and human resource base
  • rolling-out a comprehensive rural development strategy linked to land and agrarian reform and food security
  • pursuing African advancement and enhanced international cooperation and affirming that South Africa builds its competitiveness globally.
Certainly, these pronouncements on the critical role played by this sector towards contribution in the livelihoods and food security, foreign currency earnings, provision of employment as well as the multiplier effects of supplying raw materials to other sectors of the economy, are clear.

This massive task can be managed successfully if we collectively put our hands to the plough. The presence of Dr Pieter Mulder in the department ensures that the integrated approach to service delivery finds expression in our work. The 18th century philosopher Samuel Johnson said, “Agriculture not only gives riches to a nation, but the only riches she can call her own.”

Programme Director, our sector has occupied the centre stage where the world and the country at large are looking to us for answers to questions of economic viability and basic food security. Our role is complicated by the unpredictable global events. During 2008, crude oil prices climbed to a record high of US$145 per barrel before sliding back to around US$40 per barrel but still inclining upwards as reflected in recent petrol price increases. The impact of high fuel prices had negative implications on food production and food affordability both at producer level because of high input costs and at the consumer end.

South Africa’s net trade of agricultural products to the world remains positive in the face of the world economic recession. According to the South African Revenue Service on the World Trade Atlas database, during the first quarter of 2009, South Africa’s total agricultural exports to the world increased by 57 percent from R7,6 billion in the first quarter of 2008 to R11,9 billion in the first quarter of 2009. During the same period, imports grew by 8 percent from R8,5 billion to R9,2 billion, resulting in a positive trade balance to R2,7 billion in first quarter of 2009 and an improvement from a deficit of R0,9 billion in the corresponding quarter of the previous year.

Although our major export trade partners are the EU where we experienced an increased export trade from R13,7 billion to R17,8 billion between the two seasonal years under consideration, South Africa’s agricultural exports to SADC also rose by over 170 percent from R4,5 billion to R12,5 billion between the two seasonal years under consideration owing to high exports of maize, sugar and sunflower seeds.

Principles embodied in the draft agricultural tariff policy framework has been incorporated into the Department of Trade and Industry (thedti) trade policy framework. This development will ensure that our approach to tariffs take into consideration the special characteristics of the sector in terms of promoting food security, rural development and overall livelihoods in rural areas.

Furthermore, we are developing an agricultural production strategy aimed at developing an approach for the sustainable production of key commodities such as grains and livestock. Consultation processed with stakeholders such as you will commence before the year draws to a close. This will ensure that your inputs into how best we can manage production will definitely enrich the strategy.

We have the world’s oldest customs union, the Southern African Customs Union (SACU), established in 1910, and only six years younger than Agri SA. We have noted with concern the arrangements made by Botswana, Lesotho and Swaziland with the European countries that might result in varying tariff arrangements between SACU and the European Union (EU) and therefore potentially in subsidised products from the EU entering our borders and competing with local produce.

This matter is discussed at the economic cluster. In addition, South Africa will continue to negotiate with our partners towards a full economic partnership agreement with the EU. We remain positive that we will achieve this goal. Our role in the Southern African Development Community (SADC) is crucial and has in recent times expanded from provision of produce to expansion of skills and economic activities in the sector. We note with interest the expression of Agri SA to expand production activities to neighbouring countries, particularly to the Democratic Republic of Congo (DRC).

The government certainly encourages this type of expansion and to pave the way, has commenced with partnership arrangements initially on a five country agreement we have entered into with South Sudan, Uganda, the DRC and Zambia. You will recall that we have previously entered into an agreement with Mozambique and that led to the formation of the Joint Agribusiness and Department of Agriculture Forum for Africa (JADAFA), to unlock opportunities for engagement with countries in the region. The agreements will be further increased potentially to include Burundi, further opening-up structured government to led opportunities for our commercial farmers.

Charity begins at home. It is critical that our local commercial farmers lead in showing kindness, especially to farm workers and their families to be able to extend the same degree of Ubuntu to other citizens in the African continent. This is where Agri SA must help the South African government to expedite the issue of increased landownership among black people, transfer of skills through master-mentorship and other similar opportunities while adhering to social aspects such as the security of tenure, education and other facilities needed by farm workers.

Already there are working models in some of the farms, all we need is to learn from these and strengthen areas that are still lagging behind. From this premise, we will assist in creating much more harmonious agricultural communities that are able to look after each other and that will assist especially in the fight against criminal elements that bring discord among the farming communities.

The competitiveness of the agricultural and forestry value chains depends heavily on an efficient and effective agro-logistical support system designed to ensure the efficient flow of food and fibre across the economy. The seamless logistics system is also required to support the cost effective movement of both in-bound and outbound agricultural and forestry based cargo.

I have, however, noted that there are some inefficiency that have been identified on the agro-logistics and infrastructure system that unfortunately contribute to the inefficient movement of bulk agricultural and forestry cargo. These range from poorly maintained rural road networks to underutilised rail branch lines.

Good rural roads infrastructure is in all cases critical to link farmers in rural areas to mainstream markets while poor road networks become a disincentive for further investment in agriculture. Programme Director, please allow me to thank Agri SA for the list of feeder roads that have been identified for upgrading and please note that your request is being discussed with the Department of Transport on how best to address the issue.

I have further noted that the economy is sitting on an economic asset in the rural areas in the form of rail branch lines that are currently underutilised. In our quest to move agricultural freight from road back to rail, my department is working closely with the Departments of Transport and Public Enterprises as well as Transnet Freight Rail to revive some of the unused lines.

We have done our homework and the needs of the sector with regard to logistics needs are well known. We will continue to engage our partners in government to remove the identified logistics constraints in an effort to reduce the cost of moving agricultural and forestry freight across the economy.

Ladies and gentlemen, our focus on agricultural, forestry and fishery production activities has matured with the years. Henceforth, we categorise our farmers into subsistence, smallholder and commercial farmers. While our intervention at subsistence farmer level is rudimentary and seeking to support with basic agricultural, forestry and fisheries starter packs, our main interest is in the smallholder and commercial farmers.

These groups will receive support and assistance that will enable them to continue producing enough for local consumption and to respond to export demands. To this end, we will have established a one-stop shop Facility that will provide a comprehensive range of services (from finance to technical support).

The department will be rolling-out a rescue package to assist distressed farmers indebted to the Land Bank. Working together with the bank, an assessment exercise was undertaken to identify farming operations that can be rescued. I am pleased to announce that we have identified 77 farms that are earmarked for such assistance.

To improve further on our planning, the department will improve on the current Agricultural Statistics that are currently reflecting historical commercial statistics which do not reflect the dual economy of the sector. This will build on the recent agricultural census conducted by Statistical South Africa which, we realised, did not reflect and acknowledge the developing sector.

Our baselines will define subsistence, smallholder and commercial enterprises accordingly. Currently, we have embarked on a Farmer Register Pilot project to begin registering these three groups. The goal is to develop the farmer register which clearly reflects developing farmers in the country by 2011/12. A report on this pilot project is available on the Department of Agriculture, Forestry and Fisheries (DAFF) website.

Revival of rural economy is one of the main objectives of government. The success of the objective will be achieved through cooperation between government and the private sector. Currently, rural communities are not fully utilising the natural resources at their disposal owing to a wide range of reasons, ranging from lack of investment in rural areas to a lack of finance for production inputs.

Government has taken a decision to setup the agenda for rural development, within this agenda sustainable use of natural resources has been identified as one of the critical areas in order to ensure maximum returns on agricultural products. Value addition will also be taking place in these areas.

The government will increase investment in the areas of agro-processing and strengthen the institutional structures that are necessary for sustainable development. It should also be appreciated that all this cannot be achieved if a multidisciplinary approach is not adopted and supported by all stakeholders.

We will strengthen our stakeholder relations and build strong partnerships where concerns of the sector will be managed to ensure that agriculture, forestry and fisheries take their rightful place in the economy. Together with the Deputy Minister and the department, we will continue with our stakeholder engagements to intensify efforts of collaboration.

In conclusion, I would like to acknowledge the contribution and commitment of our farmers in ensuring that South Africa is still food secure. In conclusion, as the great 20th century hero, our former President Mr Nelson Mandela said, “Let there be work, bread, water and salt for all.”

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