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14 March 2005

Mr Matlala, President of NAFU
Members of the NAFU Executive
Honoured guests
Ladies and gentlemen

You may recall that in 1998 the then Deputy President, Mr Thabo Mbeki delivered his two nations speech during a Parliamentary debate on reconciliation, noting that South Africa consisted of two unequal nations, one with access to a developed economy, education and infrastructure and another, larger in proportion and poor with the worst affected being women in the rural areas. This nation lived under conditions of gross underdevelopment in terms of the economy, education and infrastructure. This latter nation was ill equipped to exercise its right to equal opportunities.

We are now into our eleventh year of democracy and much has been achieved by Government towards improving the conditions of both these economies. I would like to draw from President Mbeki’s State of the Nation Address on 14 February this year to highlight some of the these achievements and to underline the key challenges that lie ahead for us, in particular for the agriculture sector.

At the centre of South Africa’s recent achievements is the success we have had in moving away from our divided past towards the vision contained in the Freedom Charter that “South Africa belongs to all who live in it, black and white.” We have laid a good and sound foundation for national reconciliation, national cohesion and unity. We note in the recent past a growing shared new patriotism for and the recognition of the reality of a South Africa truly belongs to all who live in it, united in their diversity.

While we can be proud of these achievements they also undoubtedly set a challenge to us all for the second decade of Liberation and as the President indicated last month we must achieve new and decisive advances towards the further entrenchment of democracy in our country. We need to continue the transformation of our country into a genuinely non-racial, non-sexist society. We must tirelessly seek to open the vistas towards the spiritual and material fulfilment of each and every South African and secure the safety and security of all our people.

The eradication of poverty and underdevelopment, within the context of a thriving and growing First Economy and the successful transformation of the Second Economy remains a central challenge. This vision we have for ourselves we share for as a contribution to the victory of the African Renaissance and the achievement of the goal of a better life for the peoples of Africa and the rest of the world.

There is an expectation that the current economic upswing, which economists point out is the longest upward phase in the business cycle since WWII, will be sustainable in the future. This bodes well for the improvement of job opportunities and addressing unemployment. For the First Economy Government’s programme for the coming year is based on the broad objectives of increasing investment in the economy, lowering the cost of doing business, improving economic inclusion and providing the skills required by the economy.

A key element of addressing the Second Economy is to create opportunities and accelerate broad-based empowerment. In this context elements of the Codes of Good Practice for Broad-based Black Economic Empowerment were released for public comment late last year, and once this process is finalised, it will be possible step up the conclusion of Charters, including AgriBEE and introduce governance and oversight structures. Related to these efforts is the progress made in setting up the Small Enterprise Development Agency, to improve our government's performance in the critical area of the development of small and medium enterprises.

Having reviewed the regulatory framework as it applies to small, medium and micro-enterprises government will, before the end of the year, complete a system of exemptions for these businesses with regard to taxes, levies, as well as central bargaining and other labour arrangements, enabling these to be factored into the medium-term expenditure cycle.

The imperative of more efficient delivery of services is a focus of and challenge to all spheres of Government.

Improved delivery is the intended outcome of certain current coordination initiatives of Government and improved integration is expected among all spheres of government in both policy development and implementation.

The national challenges and imperatives spelled out by the President are echoed in the agriculture field. Fundamental is that many South Africans are still going to bed hungry and many in people in rural areas are unemployed. In agriculture empowerment opportunities have not yet been adequately explored.

What has been done and what is in place or in the pipeline to deal with the challenges?

Foremost, the agriculture sector has risen to the challenge of the two economies. NAFU, AgriSA and the Department of Agriculture in 2001 devised the Strategic Plan for the Agriculture Sector, with the remarkable vision of a united and prosperous agriculture. The three main objectives of the Sector Plan, namely greater and more equitable participation, global competitiveness and sustainable use of the natural resource base, have been entrenched in agricultural policy making, departmental restructuring and improved service delivery.

The Department has now been restructured in order to more effectively implement the Sector Plan and the final staffing of this new structure is underway. The department has established the following key programs to carry forward the implementation of the sector plan imperatives:

Farmer Support and Development to develop policies, norms and standards to expedite farmer support, food security and rural development, agricultural finance and cooperatives development as well as agricultural risk management. This program is forms the basis of our agrarian reform and food security insurance to farmers and households respectively. Due to the volatile nature of agricultural environment, risk management was also considered as a key portfolio within the department to mitigate the impact of natural disasters on agriculture. Central in this program is financial support that will be made available to farmers in the form of the credit scheme announced by the President during his State of the Nations Address.

Agricultural trade and business development was established to increase equitable access to marketing, trade and entrepreneurial development opportunities in the sector and enhance Black Economic Empowerment (BEE). Specific market access and entrepreneurial development projects biased towards the agrarian reform beneficiaries have been identified and will be implemented soon. For the department to make impact on these projects, active partnerships with NAFU are require and we will in the immediate future engage NAFU to ensure that implementation of the projects meet real developmental needs.

Economic Research Analysis was established to render agricultural economic and statistical services in support of agricultural economic development.

Statistics and economic research commissioned by this unit helps the department to develop production and farming models as tools that could easily be adopted by farmers in their production and enterprise planning decisions irrespective of farm size. This is a critical resource for agrarian reforms beneficiaries for their farm planning post settlement.

A new programme, Agricultural Production, was established to provide national leadership for sustainable plant and animal agricultural production and ensure support for agricultural research, technology development and transfer.

This is for us a production advisory nerve centre of the sector on any matter relating to plant and animal production systems. Farmers are therefore urged to make use of this unit to ensure sustainable production systems.

Sustainable resources management and use to promote sound management and sustainable use of land and water resources in agriculture National Regulatory Services develops and monitors risk management strategies, policies and legislation for the control of animal and plant diseases in order to ensure food safety and promote public health.

It is our plan to successfully implement the above key programmes with the objective they will help us to rid the sector of duality and unequal access to resources and opportunities. We further hope to utilise resources at the department's disposal to help communal farmers to become an integral part of the commercial agricultural value chains.

However, we cannot do this alone. We need NAFU and other organised structures to form sustainable partnerships on development and transformation continuum. The sector plan has also given rise to a number of key priorities and programmes, for example the agricultural credit scheme, the comprehensive agriculture support programme (CASP) and the broad-based agricultural BEE (AgriBEE) framework, initiatives aimed at addressing the key strategies of promoting equitable access to resources for agricultural development, enhancing global competitiveness and ensuring the sustainable use of South Africa's natural resources.

The agricultural credit scheme is a government intervention to spread micro-credit and saving services to economically active, poor rural people and households, small farmers and agribusinesses. The scheme will contribute to: stimulating the extension of financial markets and economic growth; improving national household food security; increasing employment in the rural areas (thus reducing migration to urban centres); and reducing poverty and inequalities in land and enterprise ownership (with a particular focus on women, youth and the disabled).

The Department of Agriculture will administer the scheme in collaboration with the Land Bank and the Postbank, which will provide technical, management, advisory and outreach support through their branches. The scheme will be aligned with other government programmes that offer support to farmers, such as the land redistribution for agricultural development (LRAD) programme, with a view to avoiding duplication. The department will use the funds accumulated in the agricultural debt account to finance the scheme. These funds have been recovered from commercial farmers who were assisted through loans by the former Agricultural Credit Board, abolished in 1998.

Over the past number of years, considerable resources have been directed a t providing access to land for agricultural production to previously disadvantaged individuals, but farmer support and advisory services have not kept pace with the disbursement of land grants. However, as expenditure on land restitution and redistribution declines significant resources will be directed towards post- settlement agricultural support services.

The implementation of the Comprehensive Agricultural Support Program (CASP) is indicative of serious commitment that government has undertaken on agricultural development and support. We cannot do this alone. I therefore urge NAFU to be our close ally in ensuring that this programme becomes a great success on a long term basis. You are the beneficiaries.

The comprehensive agriculture support programme (CASP) is a central focus for the department, targeting the beneficiaries of land and agrarian reform. CASP is the response to the lack of an adequate provision for agricultural development. During 2004/05, infrastructure (on-farm and off-farm) was identified as one of CASP's key priorities, and financial resources were allocated for this, targeting poor areas. The type of infrastructure financed includes water infrastructure, fencing, dipping tanks and stock handling facilities.

What remains is the phasing in of other basic services that form part of the programme, including research development and infrastructure, technical and advisory services, marketing information and development, national regulatory services and training and capacity-building. Spending on this second phase will include an allocation for: agricultural inputs, targeting household food producers and subsistence farmers in the poverty nodes and communal areas; the mechanisation programme; the agricultural starter packs; and marketing infrastructure.

In response to the second imperative of the Sector Plan, namely the objective of greater participation in the sector, my department has started to develop both a policy framework for black economic empowerment in the sector and has so far worked closely with the cotton, wine, grain and livestock industries in developing commodity specific action plans in accordance with the Sector Plan objectives for growth and equity in these industries. The Department plans to facilitate this process with other commodity groupings and respective representative farmer's organisations. The development of such specific action plans has the advantage of providing agreement and focus on the key outcomes that require collaboration between the different stakeholders and sets up an important basis for collaboration between government and its agencies and the industry involved.

While agriculture has provided more and better opportunities for participants in the sector over the past ten years, through increased access to foreign markets, smallholder participation in value chains (emerging farmers now have access to equity ownership in AgriBEE, enabling them to increase production), institutional change, and greater co-operation among the major role-players in the sector, the sector's contribution towards broad-based empowerment is set to change gear in the next year with the conclusion of the AgriBEE Charter, which is eagerly awaited.

The period for public comments on the AgriBEE Framework that was published by the Ministry in July last year closed on 20 Dec and the Steering Committee should conclude its report to the Minister soon, where after the final Charter will be negotiated and finalised and, following publication, will guide the further transformation process in the sector.

The Sector Plan relies on the partnership approach and thus you will note that many of the initiatives that my Department have taken in the last number of years have been more targeted at and responsive to the needs of its stakeholders.

As a result of the social compact emanating from the sector plan, active partnerships with business have been established, in research and in technology development and transfer, through the consultative National Agricultural Research Forum. Implementation of the sector plan is based on a commodity-industry-enterprise approach, with collaborative business partnerships responsible for developing integrated commodity-industry enterprise-specific action plans and driving implementation. A number of commodity action plans have been or are in the process of being developed, like for cotton, grain, livestock, wine and fruit and the participation of NAFU members in these initiatives is welcomed and encouraged.

A most important challenge for the agriculture sector is to provide sufficient, affordable food, both at the household level and in the international and regional context from a food security perspective and as an important earner of foreign exchange. Currently approximately 40% of the income in agriculture is derived from exports. The deregulation of local and international markets and preferential trade agreements with a number of countries and trading blocs has created significant trade opportunities for South African agriculture and farmers.

However, through our interaction with the stakeholders in the Agricultural Trade Forum we have identified the highly damaging consequences to our agriculture of production and trade distorting subsidies. Therefore we are following a stringent approach in all our negotiations of not making concessions on products that benefit from such subsidies.

Access to markets including export markets is a major driver of development in agriculture in South Africa. The Department of Agriculture's vision for agriculture trade within the broader trade strategy for the country and the Southern African Customs Union, is to enhance and maintain international, regional and domestic market access for South African agricultural products (primary, as well as processed) and ensure that the sector contributes to its full potential in the economy.

We want to encourage the effective participation of old and new entrants into the sector. Furthermore, to promote the increase in the supply of highly competitive South African agricultural goods internationally, regionally and on domestic markets. To sustain the integration of the sector in the global economy in order to encourage internal and external competition and allow greater access to markets, technology and capital for South African agriculture. This will ensure that agriculture makes an optimal contribution to economic growth, food security and job creation and contributes substantially to the reduction of income disparities.

Ensuring disease-free animal and plant products, thus improving public health, remains a priority for the department. This has a direct bearing on agriculture's ability to provide safe and nutritious food to the South African public as well as South Africa's ability to take advantage of trade opportunities.

Land degradation is a serious threat to agricultural biodiversity. My Department will continue to promote sustainable land-use practices and further research in this respect in commercial and subsistence farming areas. A planned spatial framework for sustainable development, as part of the agricultural geographic information system AGIS, will provide tools for identifying areas with similar production possibilities and will also indicate how sensitive the natural resource base is to degradation.

The Department of Agriculture has seen rapid growth in its commitments to and participation in international co- operation programmes over the last decade. This follows South Africa's high standing in the international community and underscores its responsibility to take leadership in certain international fora for the benefit of its own people the peoples of Africa and developing countries in general.

The participation of NAFU members with the government delegation at the International Federation of Agricultural Producers and the International Grain Council is appreciated and recognised.

The driving force behind the department's strategy in Africa is NEPAD's comprehensive African agriculture development programme. We are interacting more with African and international partners and stakeholders to create greater access to financial, technical and institutional support for the implementation of NEPAD. We hosted the 23rd Food and Agriculture Organisation of the United Nations (FAO) Africa regional conference, which agreed on a set of actions within the context of the NEPAD agriculture development programme and reviewed the implementation of the programme.

The underlying principle for the department's engagement with Africa is that regional stability and the sustainable development of African economies is in the interests of the whole continent. The overwhelming number and scope of requests by individual African countries for technical agricultural assistance from South Africa has meant that these requests can no longer be managed through the usual bilateral arrangements. A dedicated technical assistance programme has thus been set up. This investment by South Africa is an important enabler for regional development, which has potential long-term benefits for South Africa.

We intend to increase our interaction in the African region in the year that lies ahead, in particular encouraging intra- African trade, assisting with technical expertise and the research agenda and the promotion of Africa’s position in the global environment.

I would like to congratulate NAFU for having organised this summit because it gives us a neutral platform to deliberate on agricultural development matters particularly as they relate to sectoral transformation towards unity and prosperity.

If we fail in this endeavour our future generations will go hungry, there will be a continued rural to urban migration thus loosing the vital farming skills needed, there will be continued unemployment and poverty with no hope of development, but most tragically, we will not be able to secure our promise of halving the number of hungry people by half in 15 years to come.

I thank you

Issued by: Ministry of Agriculture and Land Affairs
14 March 2005
Source: Department of Agriculture and Land Affairs (http://www.nda.agric.za)