South Africa: Agri-Parks Program Guo Li and Luc Christiaensen Agriculture Global Practice and Job Groups, The World Bank Multi Donor Trust Fund Jobs Council Meeting, Let’s Work Partner Meeting Washington DC, April 18,

2 South Africa’s triple challenge… High inequality Gini of 0.69 (2011); High and increasing unemployment rate : from 22.8% in 2008 to 25.4% in 2014 High poverty incidence (food poverty line): 20.2% in 2011 Some reasons (among others) behind these challenges… Not-smallholder oriented; Lack of vertical and horizontal coordination; Progress on rural transformation since 1994 has been very limited and “business as usual” is not an option

3 Emerging opportunities National Development Plan (NDP, South Africa 2030): choosing to concentrate on agriculture and rural development (among other priorities), as key to tackle the triple challenges. A core mechanism: development of a system of Agri-Parks (AP), in 44 District Municipalities around the country, with the objective of: Supporting the integration of small-scale agricultural producers, particularly disadvantaged black farmers (target beneficiary group), into modern value chains, promote skill development, bring more underutilized, state-owned land into production, reduce the need for rural-urban migration, and boost aggregate rural employment.

4 Agri-Park is… An innovative network of infrastructure and farmer support services, aimed at improving farmer production, storage, processing, logistics, and marketing in a District Municipality’s comparative advantage value chains. The government provides platform (infrastructure, over 10 years); operation will be market- driven. An Agri-Park has three units: a) the hub: the administrative nerve-center of the network and supports shared services dealing with post-production activities, quality control, logistics, financing, and providing a training center and agricultural research facilities; b) the farmer production support units (FPSU): which provide rural outreach and extension, connecting hub services directly with farmer’s fields to enhance skills, improve productivity, and raise product quality; c) the rural urban market center unit (RUMCU), which links up small rural producers with buyers in urban and international markets, operates holding- facilities, distributes market intelligence, and searches for new market opportunities.

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6 The AP is an innovative cooperative effort between government, private sector, and community: The government is developing the initial platform or basic infrastructure for the AP to get it started; Ownership of this infrastructure will be completely transferred to the community; The principal investors in the APs will be private -- seed, fertilizer, and equipment companies, and banks and other services providers. The communities will manage and operate the APs together with the private investors and government representatives via a Board of Directors; User fees will be charged to all users; The APs will be managed by a professional manager and his or her management team; Boards of Directors will be made up of the AP manager, community farmer representatives, AP private investor representatives, and a government representative.

7 Main Trust Fund activities: Impact evaluation of the AP approach will be developed; The efficiency of different implementation sub modalities will be evaluated different models from international experience for PFSUs to work with farmers on communal land others to be identified in consultation with government Vetting of AP business plans for MDTF supported sites (3 or 4); Policy inputs to the national AP program based on MDTF supported sites;

8 Impact Indicators: Employment, earnings and poverty in rural areas for those directly affected and those in the hinterlands; In the selected MDTF supported sites, number of successful projects (e.g., how many value chains isolated black farmers have been effectively integrated, for measuring sustainability); Business plans in the selected MDTF supported sites are vetted and functioning; A workable monitoring (data collection, data management, and data analysis system) and evaluation system is up and running in the TF selected areas; Policy impact on the rest APs nationwide. Mission in May or June to discuss this with the government in more detail