COMMERCIALIZATION OF BLACK PRODUCERS 25 MAY 2018

PRESENTATION OUTLINE Acronyms Commercialisation of Black Producers 2

ACRONYMS AgBiz : Agri Business Chamber BASA : Banking Association of South Africa CASP : Comprehensive Agricultural Support Programme DAFF : Department of Agriculture, Forestry and Fisheries DTI : Department of Trade and Industry ERP : Extension Recovery Plan IDC : Industrial Development Corporation MINTECH : Ministerial Technical Committee NAP : National Assessment Panel NEF : National Empowerment Fund NFNSCC : National Food and Nutrition Security Coordinating Committee OIE : World Organization for animal health SA GAP : South African Good Agricultural Practice SEFA : Small Enterprise Finance Agency 3

COMMERCIALIZATION OF BLACK PRODUCERS On 9 Feb 2017: The former President in the 2017 SONA pronounced that “Government will implement a commercialisation support programme for 450 black smallholder farmers” “Commercialisation of agriculture is a phenomenon where agriculture is governed by commercial consideration i.e. certain specialised crops are grown not for consumption in village but for sale in national and even in international market”. 4

COMMERCIALIZATION OF BLACK PRODUCERS The approach to commercialize black producers is two fold: The development phase for potential producers to operate at commercial level entails; Farm and farmer needs assessments of 50 farmers per province; Skills and capacity building including record keeping; Farm planning i.e. primary and secondary commodities; Assistance with business plan development; SA GAP certification; and Infrastructural and input support to enable achievement of turnover per annum of R500 000. 5

COMMERCIALIZATION OF BLACK PRODUCERS (2) The commercialization through blended funding (as outlined through Operation Phakisa initiative: Re- engineering of Agriculture Development Finance). This will happen through blended funding (loan and grant); the grant will be accessed through a central grant funding facility in partnership with the Land Bank. The partners in the programme include Banking Association of South Africa (ABSA, FNB, Standard Bank, Nedbank), AgBiz, Jobs Fund, Development Funding Institutions, DTI and IDC; The target is 450 black producers commercialized over 5 year period; and The programme to develop black producers was developed in partnership with the DTI, Land Bank, IDC and NEF and approved. 6

Commercialisation OF BLACK FARMERS – PROGRESS UPDATE The 450 commercial producers have been identified from all provinces. DAFF has received R370 million over MTEF 2017/18 to 2019/20 for transfer to the Land Bank for the blended funding model. Additional resources have been secured through CASP to augment the blended funding over the 2018/19 to 2020/21 period. However, for the programme to have a significant impact in transforming the sectors and ensure a critical mass of commercial black producers owning and controlling the value chains, a minimum of R1 billion is required in the grant funding facility at the Land Bank. The Memorandum of Agreement (MOA) between Land Bank and DAFF has been concluded and signed by both parties. 7

Commercialisation OF BLACK FARMERS – PROGRESS UPDATE (2) The DAFF has consulted with the Banking Association of South Africa and Agbiz and agreed to sign a standard MOU for partnering in commercializing black producers over a ten year period. Consultations with stakeholder took place during the Phakisa process as well as separate consultations with provincial departments of agriculture through MinTech meetings. The Joint MinMEC of DAFF and DRDLR was briefed on progress in March 2018. 8