1. 1 NAMC Strategic Plan and Budget Presentation Portfolio Committee on Agriculture 06 March 2006 Strategic Positioning of SA Agriculture in Dynamic Global Markets

2. 2 Structure of Presentation Questions from last Portfolio Committee briefing Highlights for 2006/07 The Strategic Plan for 2007/08 Budget 2007/08 Strategic Positioning of SA Agriculture in Dynamic Global Markets

3. 3 Questions & Answers Improved communication with the Minister –Over four sessions with the New Minister –Numerous meetings with the Minister’s economic advisor Review of the Agricultural Marketing Environment –Report submitted to the Minister Strategic Positioning of SA Agriculture in Dynamic Global Markets

4. 4 Guiding Documents Marketing of Agricultural Product Act The Strategic Plan for South African Agriculture Draft Transformation Charter for Agriculture Accelerated and Shared Growth Initiative for South Africa Strategic Positioning of SA Agriculture in Dynamic Global Markets

5. 5 Highlights Strategic Positioning of SA Agriculture in Dynamic Global Markets

6. 6 Market Intelligence Undertook numerous studies aimed at monitoring developments in existing markets and changing direction of trade Examples of studies: –Computer analysis of the potential change to the SA, SACU, India, Mercosur/Brazil agricultural trading relationships –Possibilities for fruit export to Russia –Foreign market development for potato industry –A study to assess the impact of RSA Class 1 exports to Africa and Indian Ocean island countries Strategic Positioning of SA Agriculture in Dynamic Global Markets

7. 7 Markets and Economic Research Centre Collaborated with industry and other donors to fund market research to the value of R3,4 million Examples of research: –Nine sub-sector studies on those sectors identified as key to the success of ASGISA –SA-New Zealand Comparative study on effects of deregulation –Study on taxes in agriculture Strategic Positioning of SA Agriculture in Dynamic Global Markets

8. 8 Section 7 Investigations Fresh Produce Markets Game Section 7 Investigation Sorghum Section 7 Investigation Citrus Exports Section 7 Investigation Input Cost Monitoring Section 7 Investigation Strategic Positioning of SA Agriculture in Dynamic Global Markets

9. 9 Food Price Monitoring Collaboration with DoA, University of Pretoria & StatsSA Published Food Cost Review & Quarterly (4) Food Price Trends Capturing rural food price data from identified rural stores & Spazas The 2006 copy of the Urban and Rural Food Cost Review will be available in July 2007 Strategic Positioning of SA Agriculture in Dynamic Global Markets

10. 10 Use of Statutory Levies Collected Strategic Positioning of SA Agriculture in Dynamic Global Markets Total value of production R’ million Levies collected R’ million Levies available for PDIs R’ million Levy collection success rate Citrus2 90019.81.9 (11%)78% Cotton1243.70.49 (10%)100% Dairy4 01212.02.8 (36%)80% Deciduous Fruit Pome Fruit Stone Fruit Table Grapes 2 203 773 1 439 17.5 6.3 11.4 1.7 (10%) 0.6 (10%) 1.1 (10%) 96% 98% 95% Dried Fruit1922.00.2 (11%)98% Potato2 22113.31.5 (11%)99% Sorghum1720.80.1 (12%)67% Wine Winetech (Grapes) WOSA SAWIS 2 62637.411.8 (32%) 99% Winter Cereal2 97023.51.4 (6%)96% Red Meat (4 months) 2 8671.00.08 (8%)76% Total22,499149.124.0 (16%)

11. 11 Management and Control Leadership: –Council headed by M Karaan; 9 other Council Members - all part-time Management: –CEO –CFO –MANCOM –Research Committee –ATAF Committee Strategic Positioning of SA Agriculture in Dynamic Global Markets

12. 12 Markets and Economic Research Centre Strategic Positioning of SA Agriculture in Dynamic Global Markets

13. 13 R&D SCOPE AND NATURE Strategic Positioning of SA Agriculture in Dynamic Global Markets

14. 14 Markets & Economic Research Fund Research Fund of R10,3 million –Other donors encouraged to contribute –Fund ring-fenced for Economic Research purpose only –Introduced a peer review mechanism to evaluate terms of reference, proposals, reports –Fund will serve to address government objectives as outlined in the agricultural programme of action and support the development of trade policy support models Strategic Positioning of SA Agriculture in Dynamic Global Markets

15. 15 Trade Policy Support Models Models BFAP/NAMC – Econometrics PROVIDE/DoA – Computable General Equilibrium Tralac/NAMC- GTAP Free State University/NAMC – Spatial Equilibrium Objective Better understanding and interpretation of SA & International Trade policy Increased collaboration between economic researchers Strategic Positioning of SA Agriculture in Dynamic Global Markets

16. 16 Trade Intelligence Understand requirements of markets –Market research Trends, key supplies, size, consumption patterns, channels of distribution, price formation, etc. –Develop new markets Change direction of trade from Europe to Near, Middle and Far East Target countries with capita income of over $5,000 India, Vietnam, Kazakhstan, Iran, Bangladesh & Oman –Maintain access to existing markets Consumer research Market development campaigns Strategic Positioning of SA Agriculture in Dynamic Global Markets

17. 17 Academic Support Programme Strategic Positioning of SA Agriculture in Dynamic Global Markets UniversityNumber of students MSc /PhD Research Topic KwaZulu Natal1 An institutional analysis of SA new Co-operative Act 1Factors influencing the sustainability of smallholder co-operatives in KwaZulu-Natal Stellenbosch1An enquiry into the potential for change management by selected wine producers co- operatives in the Robertson wine district Venda1Economic analysis of Thohoyandou town and Tshakhuma informal fruit and vegetable markets GhentStrategies to promote competitiveness and equity in South African agribusiness: A case of black economic empowerment in the Sa wine industry Total5

18. 18 Fresh Produce Markets Investigation Report Roll-out Engagement with SALGA and DPLG to agree on implementation of recommendations Reconstitute Section 7 to facilitate implementation Appointment of special committee to look at amendments and/or redrafting of legislation –Agricultural Products Agency Act, no. 12 of 1992 –Various Municipal By-laws –Agricultural Products Standards Act (enforcement) Strategic Positioning of SA Agriculture in Dynamic Global Markets

19. 19 Support to Agricultural Economics Association of South Africa (AEASA) & Making Markets Matter (MMM) MERC will continue to support the two annual events. The events will be used to: –Test research results with AEASA members (premier agricultural association) –Identify future research items –Provide a platform for the Agricultural Economics fraternity to advise on implementation strategies for various NAMC and DoA programmes –Train black agribusinesses on various business management issues –Networking platform for black agribusinesses Strategic Positioning of SA Agriculture in Dynamic Global Markets

20. 20 Agri benchmark The NAMC will be part of the international agri benchmark initiative. Initial focus: –Grain and beef sub sector Benefits: –Being able to provide competitiveness indicators based on international comparisons –Comparing different policy instruments –International expert panel Strategic Positioning of SA Agriculture in Dynamic Global Markets

21. 21 Electronic Research Library Latest NAMC research report available on request: –Fresh Produce Section 7 investigation –Game (wildlife ranching) Section 7 investigation –Solutions for sustainable export in the citrus industry –Sorghum industry study –Wheat to bread value chain study –Possibilities for fruit exports to Russia –Impact of RSA class 1 fruit exports to African and Indian Ocean Island countries –Sub-sector studies (Regulatory constraints & challenges, possible government intervention to remove bottlenecks) –Study on taxes on the agricultural sector –Supply and demand models for potato industry –Rural and Urban Food price monitoring –Input cost monitoring –Impact of deregulation on agricultural efficiency and productivity Strategic Positioning of SA Agriculture in Dynamic Global Markets

22. 22 Other Activities Undertake Section 7 Investigations on: –Honey production –Mohair –Olives Information Management Systems –Rural & Urban Food Cost Review –Quarterly Food Price Trends –Input cost Monitoring Strategic Positioning of SA Agriculture in Dynamic Global Markets

23. 23 Enterprise Development Strategic Positioning of SA Agriculture in Dynamic Global Markets

24. 24 Key Activities Marketing Schemes Farmers business support models –Business linkages model –Franchise model on niche products, eg. olive marketing (targeting women as beneficiaries) Management and growth of database of emerging enterprises Agribusiness Technical Assistance Fund Linkages with major buyers of produce Export promotion Distribution of market information to emerging enterprises Re-alignment of trusts to AgriBee objectives Strategic Positioning of SA Agriculture in Dynamic Global Markets

25. 25 Summer Grains Schemes Start Date: 2007/08 planting season Focus : –Input cost insurance –Mentorship/extension support –Initial soil preparation –Temporal post harvest grain storage Partners: Co-operatives Funding: R40 million from Maize Trust, Oilseed Trust Target: 5000 black grain farmers over 5 years Strategic Positioning of SA Agriculture in Dynamic Global Markets

26. 26 Other schemes Citrus –Access to international markets –Extension service through pack houses and agents –Part payment of packing costs for black citrus exporters –Cost sharing of trees with black farmers expanding orchards Livestock –Innovation fund for abattoirs and feedlots sourcing livestock directly from black farmers –Training on livestock marketing Fresh Produce Markets –Through the implementation of Section 7 report on fresh produce markets –Reduction of commission by black agents from current 5% to 2,5% –Staged payment into fidelity fund by black agents –Space for black agents Strategic Positioning of SA Agriculture in Dynamic Global Markets

27. 27 Agribusiness Technical Assistance Fund Allocated R2 million to the Agribusiness Technical Assistance Fund to support black owned Agribusinesses in the database –Fund ring-fenced for Black Agribusiness Technical Support only –A policy on the use of the fund has been developed –The fund will be used on a cost sharing basis with agribusiness contributing a certain amount –The black owned agribusinesses will be assisted through existing industry structures, eg. ABC, Trust, etc. –Agribusiness will be encouraged to apply for specific technical assistance, eg. appointment of technical advisors on AgriBEE transactions, business plan, certification, export promotion, training, etc Strategic Positioning of SA Agriculture in Dynamic Global Markets

28. 28 Statutory Measures Strategic Positioning of SA Agriculture in Dynamic Global Markets

29. 29 Key Activities Statutory Measures Investigations Monitoring and review Registration of Directly Affected Groups Conducting of pools Records and returns Crop Estimate Liaison Committee oversight Strategic Positioning of SA Agriculture in Dynamic Global Markets

30. 30 Statutory Measures Investigation Pigs statutory measures (Levies, Records & Returns) Red meat (cattle and goats) statutory measures (Levies, Records & Returns) Wool statutory measures (Records and Returns) Wine statutory measures (Levies adjustment for inflation) Stone and Pome fruit statutory measures (Levies, Records and Returns) Grapes statutory Measures (Levies, Records and Returns) Strategic Positioning of SA Agriculture in Dynamic Global Markets

31. 31 Administration and Budget Strategic Positioning of SA Agriculture in Dynamic Global Markets

32. 32 Budget Strategic Positioning of SA Agriculture in Dynamic Global Markets Council and Admin MERCEnterprise Development Statutory Measures Total Salaries4,987,0003,500,000950,000900,00010,337,000 Admin3,851,5201,132,480565,000295,0005,844,000 Operational expenses 654,00010,500,0002205,000250,00013,609,000 Stores210,000000 Total9,702,52015,132,4803,720,0001,445,00030,000,000

33. 33 Administration The Council has the following governance structures that will continue to comply to Treasury Regulations and the PFMA: –National Agricultural Marketing Council –Executive Committee –Audit Committee –Management Committee –Human Resources Committee –Risk Management Committee –Bargaining Committee –Research Committee Strategic Positioning of SA Agriculture in Dynamic Global Markets

34. 34 Dare to Dream We have established smart targets –Stretch greater than reach –Measurable –Agreement on what to measure –Record progress –Time limits set Through the implementation of the differentiation policy, we will be able to: –Identify each employees’ talents and stretch them to achieve set targets –Manage around non talents Strategic Positioning of SA Agriculture in Dynamic Global Markets

35. 35 Emerging Issues Redrafting of the Marketing of Agricultural Products Act Need for policy on costs sharing with industry on key activities: –Research –Export promotion –Trade marks –Academic support Reporting line for the NAMC Strategic Positioning of SA Agriculture in Dynamic Global Markets