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24 February 2009

Programme director
The Premier of KwaZulu-Natal, Mr S Ndebele
Minister of Trade and Industry Mr Mpahlwa
Deputy Minister Trade and Industry Me Thabethe
MEC Department of Economic Development Dr Mkhize
Director General of the province
Honourable Members of Parliament
Head of departments
Head of Public Entities
Honourable councillors
The leadership of National African Farmers Union (NAFU), WARD and YARD
Professors of higher learning institutions
Participants from other countries representing East, West, Central, Southern
Africa and Canadian Cooperative Movement
Ladies and gentlemen

First of all let me express my gratitude to the provincial Department of Economic Development and University of Zululand for giving me the honour and the privilege to come and represent the sector in this important event on cooperatives.

Let me start with a quote from the most influential diplomat and development activist in the world, the former Secretary General of the United Nations, as he observes, “That the contribution of cooperatives can build to achieve the millennium goals of full and productive employment, eradicating poverty, enhancing social integration and promoting the advancement of women. For the co-operative movement to fulfil this potential, government needs to develop and sustain a supportive environment that allows autonomous cooperatives to grow.

The values of cooperation equity, solidarity, self help and mutual responsibility are cornerstones of our shared endeavour to build a fairer world,” Kofi Annan, 29 June 2001. The United Nations (UN) General Assembly encourages governments to review cooperative legislation, so that their cooperatives can contribute to the achievement of the goals of the development of nations, including the meeting of basic human needs.

The International Labour Organisation (ILO) agrees with the UN General Assembly’s endorsement of cooperatives. The principles of self-help, self-management and self-responsibility are all part of the promotion of co operatives in the pursuit of development. ILO recommendation No 193 says that “Cooperatives empower people by enabling even the poorest segments of the population to participate in economic progress, they create job opportunities for those who have skills but little or no capital and they provide protection by organising mutual help in communities.” Juan Somavia ILO Director-General, June 2002.

In South Africa, the legal instrument for the creation of cooperatives resides with the Department of Trade and Industry. The Department of Agriculture plays a very important role in facilitating the creation of a legal, economic, administrative and institutional environment that promotes private initiatives such as the formation of cooperatives. This is through the provision of on and off-farm infrastructure, training and capacity building, knowledge and information management, access to markets, credit research and regulatory services to reduce transaction costs including risks so that markets for products and resources work more efficiently. The department has designed appropriate programmes to support cooperatives in the agriculture sector, guided by Department of Trade and Industry national cooperative policy and strategy.

The objective of the policy is to create an enabling environment for promoting and supporting the development of viable and sustainable cooperatives
* facilitate access to financial and non-financial support for cooperatives
* increase the competitiveness of the agricultural cooperative sector to take an advantage of opportunities emerging in national, regional and international markets.

Functional targets include inputs supply, marketing, on-farm services, producers, and multipurpose cooperatives in the agriculture sector. The International Cooperative Alliance set an international standard of cooperatives identity statement in 1996 by defining cooperative as an autonomous, association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

Cooperatives are important because they are appropriate vehicles for employment creation; economic empowerment; small, medium and micro enterprise (SMME) promotion; rural development; enhancing food security; enhancing social reforms and it facilitates access to production inputs and markets that could promote their development.

They have comparable social advantage over conventional business enterprises because they are cost effective due to member commitment and participation; generate economies of scale and scope through horizontal and vertical integration of their cooperative association; establish links between the informal and formal sectors and put economic and social development on a broader base.

Honourable guests, we all know that cooperatives are facing a number of challenges such as lack of production resources (land, finance, training, etc); failure to compete with other businesses, members’ lack of identity with their cooperatives, cooperative movement, fragmented structures, etc. The Presidency in 2007 challenged the departments to devise programmes that would address the aforementioned challenges. This assignment influenced the Department of
Agriculture and Land Affairs to put forward an Accelerated Land and Agrarian Reform Programme (LARP), underpinned by Five Pillars which are:
* Redistribute 5 million ha of white owned agricultural land to 10 000 new agricultural producers
* Increase black entrepreneurs in the agribusiness industry by 10 percent
* Provide universal access to agricultural support services to the target groups including cooperatives
* Letsema-Ilima Campaign, increase agricultural production by 10 to 15 percent
* Increase agricultural trade by 10 to 15 percent

As a country, we have been grappling with issues of how to breathe life into our rural communities and we have identified the development of cooperatives as a vehicle to achieve this. The LARP, therefore, seeks to ensure that co-operatives in the sector are able to participate in the mainstream economy, through the creation of opportunities for an effective integration of small scale producers, traders and processors into the formal markets along the entire value chain; and link co-operatives with knowledge institutions, authorities and other institutions involved in agribusiness and create of clusters that engage cooperatives in integrated processing operations ensuring a farm to fork set up. Cooperatives are there to compliment other government initiatives such as land reform; provide a useful model to the sub-region on agro-industrial development, creation of agribusiness and agri-input suppliers and serving as marketing hubs and communication service centres for emerging farmers.

To support this, the department has designed and implemented a Commodity Approach Model (CAM) which is the model that encourages primary cooperatives at local level to cooperate along commodities to explore economies of scale and linkage to commodities for better access to markets, savings mobilisation and technical capacity. The model seeks to mobilise farmers according to commodities at ward level to enhance knowledge sharing amongst members, increase market share through volumes, linkage creation, strengthening of the relationship with all role players in the value chain and creation of demand driven production.
Promoting the development of primary cooperatives and around the development of the agro–cluster can increase the supply for domestic and international food production thus creating wealth for all the beneficiaries, building entrepreneurs and creating jobs.

In this province of KwaZulu-Natal, this model is practically been implemented through the collaboration of the provincial Departments of Health, Economic
Development, Agriculture and Environmental Affairs. Smallholder producers’ such as primary agricultural cooperatives are encouraged to group themselves into commodities and establish secondary cooperatives to ensure that they are able to benefit from opportunities provided by government. For example, the Department of Health identified local cooperatives as major suppliers of vegetables and other agriculture commodities.

Lack of training/capacity building is one of the impediments to cooperatives. In order to address this challenge the department designed a cooperative assessment tool to identify gaps and training needs of existing cooperatives at all levels. Standardised and accredited cooperative training manuals targeting all role players within a cooperative are being finalised. The outcome of the assessments will inform the planning and implementation of intervention strategies and programmes aimed at assisting these cooperatives.

Our response to these challenges facing cooperatives, has been the introduction of various programmes in the department that support cooperatives such as Comprehensive Agriculture Support Programme (CASP), Micro Agricultural Financial Scheme of South Africa (MAFISA), AgriBEE, Land Reform for Agricultural Development (LRAD), and mentorship programmes. These programmes are implemented at the provincial level in collaboration with the provincial department of agriculture, municipalities, private sector, community-based organisations (CBOs), Non-Government Organisations (NGOs), agencies, financial institutions and education institutions.

For continuous support to ensure sustainability of these enterprises there is a need to track and monitor performance on a regular basis and to establish trends which will inform intervention strategies. The department designed a Cooperative Data Analysis System (CODAS) which is a tool responding to the key challenge faced by cooperative enterprises in terms of information management.

The Director-General of Food and Agricultural Organisation Jacques Diouf had this to say to the global citizens, “One is deeply concerned about the impact of rising food prices on the world’s poor. The sharp increase in the prices of food threatens to undermine recent gains in poverty reduction and frustrates the progress towards the Millennium Development Goals (MDGs).”

In this environment of high food price crises our country is facing a huge challenge in terms of poverty, high unemployment rate and food insecurity within poor communities, both rural and urban. The province is hosting this conference at a time when the world and our country are facing a high food price crisis, which has added significantly to the problems that are faced by the rural poor and unemployed.

Government is responding to this challenge by developing strategic interventions that are short, medium and long term in nature, which will help us fight these high food prices. Some of these interventions include programmes such as the social relief of the distressed, for households to address their immediate needs through access to food. The school food feeding programme has been extended to include more schools, thus further ensuring school children have access to meals. The household food programme has been doubled from 70 000 to 140
000 households, in this regard R10 million has been allocated to KwaZulu-Natal towards the starter packs.

We have also launched the Illema/Letsima campaign to increase food production, targeting fallow land in our communal areas, through our message of promoting one household one food garden, to ensure food security at household level. It is through the development of our cooperatives and working with community based organisations, that such programmes are being implemented and delivered. An amount of R16 million has been allocated towards the Illema/Letsima campaign in KwaZulu-Natal. The LARP programme will continue to ensure that the rights of women, especially in our rural areas are protected, in particular the right to land.

We will continue to fast-track the redistribution of land to small scale farmers, women and the youth. It is through the establishment of cooperatives with these groups, that we will increase food production. As part of the campaign against high food prices, the Ministry for Agriculture and Land Affairs will hold a symposium on 6 March 2009, which will involve all the role players in the agro-processing value chain. The objective of this symposium is to look at all causes of high food prices and to invite all stakeholders and thus collectively find measures to fight these high food prices.

Let us therefore work together to develop these cooperatives in order to eradicate poverty, reduce unemployment and create a better life for all.

I thank you.

Issued by: Department of Agriculture
24 February 2009
Source: Department of Agriculture (http://www.daff.gov.za/)