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27 May 2008

Honourable Speaker,
Honourable Minister Xingwana and Members of this house,

This budget vote is tabled at a time when agriculture is on the receiving end of electricity outages, raising inflation and interest rates; rocketing fuel prices and the issue if food security and land reform that are topping the list of priorities of Agriculture. I am mindful of the words of the Honourable Xingwana, when she recently said:
"Through our co-ordinated efforts and actions which include sustainable empowerment initiatives, the challenges can be absorbed and turned into successes."

We are very aware of the of the fact that the soil of this country was not given to us by our parents but that it is borrowed to us by our children, Therefore my efforts and those of the Western Cape Department of Agriculture have for the past four years been to work vigorously towards liberty for the people of the Western Cape and to make sure that we develop and protect the land which our children is borrowing to us. It is the mission of this Government to provide to our people the freedom to own and cultivate land and to experience the right of food security and access to safe and nutritious food necessary for an active and healthy life. The Constitution of our country recognises food security as a fundamental human right and our labours have been focused on turning this right into a reality.

Food insecurity is indeed a vague concept for many people in this country. According to the Food and Agriculture Organisation (FAO) there are world-wide around 852 million men, women and children who are chronically hungry due to extreme poverty, while up to 2 billion people lack food security intermittently due to varying degrees of poverty.

It is our task to enable people to have the financial means to buy food and on the other hand to help people to produce their own food within their limited means.

One of the most pressing issues is the rise in food prices and we can rightfully ask; what is happening with the price of food? The most recent report by the National Agricultural Marketing Council indicates that the January 2008 year on year increase in the Consumer Price for Food was 13,4%. This means that the cost of the food basket bought by the average South African has increased significantly faster over the past year than the official three to six percent inflation target of the Reserve Bank. In the case of certain individual products this increase was even significantly higher. Specific mention can be made of increases in the price of onions (69,4%), cooking oil (66%), pumpkin (59,4%), potatoes (47%) and oranges (45,4%). Similarly, the SAFEX spot price of wheat has increased from the low of R1 235 per ton on 25 February 2005 to a high of R4 298 on 26 March 2008. This is a significant increase of close to 250 percent over this three-year period.

It is important to understand what is driving this increase in the price of agricultural commodities. The South African agricultural economy (by implication also including that of the Western Cape) is open to the international environment. It follows that the prices of agricultural commodities in general are being driven by the international price of that product. As the exchange rate translates the international price into the domestic price, the second factor determining the domestic price of food is the exchange rate. The third major factor influencing food prices is the movement of domestic industries between import and export parity (due to the associated change in the transport margin). This, in turn, is the function of local climatic conditions and relative price movements between commodities. Finally, the domestic competitive structure of an industry has got an impact on the effectiveness and transparency of price forming.

What is not driving the farm-gate prices of agricultural commodities are the domestic price of diesel, labour, land, land reform, fertiliser, and claimed 'illegitimate' margins in the supply chain? These factors will influence the profit margins of various individual and collective role-players, but not the prices of farm commodities.

Let us then apply this rationale to the record-high prices of wheat:
a. Land being transformed to carbohydrate production (sugar can, maize, wheat) and lipids (sunflower, soy, canola) that will serve as feedstock for the Biofuels industry led to a sharp increase in global wheat prices.
b. The drought in Australia, one of the major export producers of wheat, led to historical lows in wheat stocks.
c. Changing consumption patterns, driven by rapid economic growth, in China and India led to increased demand for certain commodities.
d. Around the turn of the year the Rand was one of the most rapidly depreciating currencies.
e. Global economic conditions have led to renewed interest in commodities.

Die stygende voedselpryse is vir ons 'n uiters ernstige saak en as 'n Regering is ons intens bewus van die gevolge hiervan. Suid-Afrikaanse huishoudings word in 10 LSM (LSM = Life Style Measure) groepe ingedeel. In LSM 1 (die armste groep) word omtrent 70% van beskikbare kontant aan voedsel spandeer, terwyl in LSM 10 (die rykste groep) dit net 10% is.

Die armste mense word dus die meeste geraak deur stygings in voedselpryse en indien dit nie versag word nie sal ons beslis ongewenste reaksie in Suid-Afrika sien. Die vraag is nou wat om hieromtrent te doen:
a. Die grootste fout sou wees om voedselpryse (veral vir produsente) op 'n laer vlak vas te pen. In hierdie stadium het ons juis die aanmoediging nodig sodat soveel as moontlik voedsel geproduseer word.
b. Ons kan landbouproduksie stimuleer. Dit is egter nie 'n korttermyn intervensie nie, maar ons het beslis nodig om die produktiwiteit in die landbou te verhoog. Dus, navorsing, voorligting en opleiding in landbou is noodsaaklik ten einde groter hoeveelhede voedsel beskikbaar te stel.
c. Ons sou direkte subsidies aan verbruikers kon betaal ten einde hulle in staat te stel om voedsel te bekom. 'n Hele aantal vrae bestaan egter rondom die bekostigbaarheid van sulke subsidies, die administratiewe koste verbonde aan geteikende subsidies, lekkasie van subsidies, bepaling van parameters en die aanwending daarvan.
d. Voedselsekuriteit projekte is beslis 'n opsie 'n hier moet ons dink in terme van beide gemeenskap gebaseerde projekte en ook in terme van individuele groentetuine.

Daar is nog vele ander opsies. Ter ondersteuning van die Minister se inisiatiewe poog ek en my Departement om soveel moontlik met ons eie beskikbare begroting te doen om die kwessie aan te spreek. So ook word geld spandeer aan navorsing, opleiding en die ondersteuning van bestaande sowel as nuwe boere.

Die Wes-Kaapse landboubergroting van R344 704 miljoen, word as volg verdeel: R54,145 miljoen aan Volhoubare hulpbron bestuur, R96,146 miljoen aan ons program FSD (Farmer Support and Development), R39,537 miljoen aan Veeartsenydienste, R54,110 miljoen aan Tegnologie Navorsing en Ontwikkeling, R8,833 miljoen aan Landbou-ekonomie en R30,843 miljoen aan gestruktureerde Landbou-opleiding.

Die Departement maak 'n integrale deel uit om armoede te verlig en werk te skep en daarom het ons oor die laaste vier jaar daarin geslaag om byna 99 000 persoonsdae se werk vir werklose mense (en veral vroue en die jeug) te skep deur hulle onder andere in te span vir die uitwissing van indringerplante. Vanjaar beoog ons om 25 000 persoonsdae se werk te skep. Hieruit is dit duidelik dat landbou nooit net te make het met produkte of die natuur nie, maar dat die welstand van die mens sentraal staan in ons strategie en aanwending van die begroting.

Ten opsigte van die maatskaplike welstand van plaaswerkers het ons na afloop van ons konferensie oor alkohol en dwelmmisbruik, 'n taakspan op die been gebring om 'n Dwelm Meesterplan te formuleer wat in lyn is met die Nasionale Plan. Hierdie plan is voltooi en maak ons sodoende die eerste Provinsiale Departement om n plan op die tafel te plaas.

By ons volstruis 'centre of excellence' ondersteun ons *n bedryf wat werk verskaf aan duisende mense en terselfdertyd valuta genereer vir Suid-Afrika via die uitvoer van die verskillende volstruisprodukte. Een van die rigtings wat ons tans ondersoek is die moontlikheid van kunsmatige inseminasie vir volstruise. Indien suksesvol, kan hierdie metode grootskaalse finansiële voordele vir produsente inhou. 'n Ander fokus is op die voeding van die diere. Hou in gedagte dat die koste van voer tot 70-80% van die totale koste van *n volstruisproduksie-eenheid opmaak. 'n Besparing van 10% in hierdie koste kan die bedryf tot R55 miljoen bespaar. Een van ons top navorsers werk aan 'n gerekenariseerde volstruis groei en optimiseringsmodel wat die mededingendheid van produsente positief sal beïnvloed.

In her speech the Honourable Minister referred to certain projects that were supported by our Departement, but let my highlight a few others.

Ons Program Volhoubare Hulpbronbestuur het sedert 2004, R15,036 miljoen aan 20 projekte bestee, veral rondom watervoorsiening en besproeiingsinfrastruktuur, wat in baie gevalle aan mense water gebring het wat nooit voorheen toegang tot water gehad het nie. Van hierdie projekte is:
In Matjiesrivier near Oudtshoorn, two earth canals were replaced with pipelines and water tanks provided to 12 households. Two further earths canals were completed, replaced by pipe lines for 6,7 km, a small balancing reservoir constructed, water tanks provided to 15 households, irrigation equipment supplied for 20 ha and 50 ha of land prepared and planted with lucerne providing 155 beneficiaries on 29 farms with access to clean drinking water at their houses. Total cost of the project was R5,5 million

The 49 Bongolethu Farmers near Oudtshoorn benefited from the repair and enlargement of an irrigation storage dam and the further upgrading and supply of irrigation equipment at a cost of R848 000

Kobeeberg project near Vanrhynsdorp is now supplying water for domestic and animal use to 9 farms though a borehole, pumps, storage tanks and a 18 km pipe line. 200 beneficiaries now have drinking water for the first time. Total cost of project was R 2,4 million of which R 600 000 was contributed by National Department of Agriculture

Speaker let me end by saying that we will continue to support those who work the land and those with a dream with its roots in agriculture.

I thank you.

Enquiries:
Alie Van Jaarsveld
Cell: 084 604 6701

Issued by: Department of Agriculture, Western Cape Provincial Government
27 May 2008