1. National Agricultural Marketing Council Annual Report 2011/12
Presentation to the Portfolio Committee
Mrs. N Msimang (Chairperson)
Mr. TR Ramabulana (CEO)
Mrs. S Muvhulawa (CFO)

2. Content PART 1: GENERAL INFORMATION PART 2: ORGANISATIONAL OVERVIEW
PART 3: PERFORMANCE AGAINST PRE-DETERMINED OBJECTIVES
MARKETS AND ECONMIC RESEARCH CENTER DIVISION
STATUTORY MEASURES DIVISION
AGRIBUSINESS DEVELOPMENT DIVISION
AGRICULTURAL TRUST DIVISION
HUMAN RESOURCE MANAGEMENT DIVISION
PART 4: Expenditure trends for the year ended 31 March 2012

3. Part 1
General Information

4. Core Principles
Vision (To be an effective and efficient main advisor to the Minister of the Agriculture, Forestry and Fisheries (DAFF) and Industry on the marketing of agricultural products).
Mission (To advise the Minister of Agriculture, Forestry and Fisheries and directly affected groups on all agricultural marketing issues in the agriculture and food industry, taking into account the needs of stakeholders).
Values (accountable, act with integrity, value individual performance, value personal respect and equal treatment, act in partnerships with directly affected groups).

5. Strategic Objectives
Increasing market access for all market participants.
Promotion of efficiency in the marketing of agricultural products.
Optimisation of export earnings from agricultural products.
Enhancement of the viability of the agricultural sector.

6. Part 2
Corporate Governance

7. Council Members Council Members appointed in October 2011
Mrs NF Msimang Council Chairperson
Mr LD Maduna Council Vice Chairperson
Mr AM Cronje
Ms MM Gill
Dr LL Magingxa
Dr JL Purchase
Mr SC Symington
Mrs JM van der Merwe
Mr AD Young Council
Mrs TE Zimu

8. Council Members Out going Council Members
Prof M Karaan (Vice-Chairperson)
Mrs M Mannya
Mrs C Molo
Mr D Montshwe
Mrs SE Moolman

9. Pre-Determined Objectives
Part 3
Performance against
Pre-Determined Objectives

10. MARKETS AND ECONOMIC RESEARCH CENTER

11. Dissemination of market information
Disseminate Food Price Monitoring reports, Food Cost Review, Input Cost Monitor, TradeProbe and Fruit Flow reports through media
The target number of publications produced and distributed was met:
4 Food Price Monitoring reports
1 Food Cost Review
6 Trade Probes
6 Input Cost Monitoring reports
100 % Compliance

12. Trade analysis 100 % Compliance 320 % Compliance 200 % Compliance
The target number of 6 TradeProbe publications was produced and distributed.
The target number for trade profiles was 5, a total of 16 commodity and product specific trade profiles were completed and published in the TradeProbes.
The target number for trade profiles was 5, a total of 10 market profiles were completed and published in the TradeProbes.
100 % Compliance
320 % Compliance
200 % Compliance
All the reports were published and distributed to the media and on the NAMC website.

13. Linking farmers to markets
The target was 2 reports, a total of 6 reports on issues pertaining to market access to emerging farmers were released and distributed
300 % Compliance
The following reports were, amongst others, produced:
Case Studies of Emerging Farmers and Agribusiness in South Africa
Potato case study of a successful black farmer fuelled by potato passion
Moringa study – A tree giving life to rural communities
The following reports were, amongst others, produced:
Assessment of Agricultural Contracts For Market Access In South Africa: A Smallholder’s Perspective
Action based reports – Feasibility study reports for the Segalo lamb feedlot enterprise and Hlakanyane potato project were completed

14. Mapping, understanding and quantifying agro-food chains (including section 7 reports)
The target of 2 Agri-benchmark reports was met, the reports were published and information were dissemination.
The target was 4 agro-food chain reports, 8 reports were finalised and 3 working papers were finalised
100 % Compliance
The following reports were, amongst others, produced:
Revitalising cotton production on the Makhatini Flats
Value chain study of the South African fertiliser Industry
South African Paprika Value Chain Study
South African Sugar Industry study: Lessons, Justifications and Challenges
The Seychelles Broiler Value Chain Analysis: A Competitive and Comparative Study
200 % Compliance

15. Capacity Building 100 % Compliance 187 % Compliance
The target of 4 academic research support programmes was met
The target was 8 seminars per year, a total of 15 seminars were presented by agricultural experts
100 % Compliance
187 % Compliance

16. Statutory Measures
The MAP Act makes provision for the introduction of four statutory measures, namely –
Statutory levies (section 15)
Control of exports (section 16)
Records and returns (section 18), and
Registration (section 19)
Statutory measures must promote the objectives of the MAP Act, which are as follows –
Increase market access for all market participants
Promote the efficiency of the marketing of agricultural products
Optimize export earnings for agric products, and
Enhance the viability of the agricultural sector

17. Levies collected past 11 years

18. FUNCTIONS FINANCED THROUGH STATUTORY LEVIES
2011 survey
Functions
Amount spent R
Percentage of total levy expenditure %
Administration 6
Transformation 23
Research 27
Local promotions 12
Export Promotions 15
Information 10
Quality control 4
Plant improvement 2
Production development 1
TOTAL
100
Levy income 2009 = R263 mil

19. Summary of statutory measures applicable in South Africa
2012
INDUSTRY
Administrating body
Statutory Measures
Levy
Registration
Records & Returns
Citrus (export only)
Citrus Growers Association 
Cotton
Cotton SA
Dairy
Milk SA
Deciduous fruit (pome & stone)
HORTGRO Services
Dried fruit
Dried Fruit Technical Services
Fynbos (proteas)
Grains (Maize, Oilseeds, Sorghum, and Winter Cereals)
The South African Grains and Information Services (SAGIS)
Lucerne
Lucerne Seed Organisation
Mangoes
Subtrop
Milk
Milk Producers’ Organisation
Mohair
Mohair SA
Olives
SA Olive
Pecan nuts
SA Pecan Producers’ Association
Pork
SA Pork Producers’ Organisation
Potatoes
Potatoes SA
Poultry and eggs
Southern African Poultry Association
Red meat
Red Meat Levy Admin

20. Summary of statutory measures applicable in South Africa (cont...)
INDUSTRY
Administrating body
Statutory Measures
Levy
Registration
Records & Returns
Sorghum
Sorghum Trust 
Table Grapes exported
SA Table Grape Industry
Wine
SAWIS, WIDA, Winetech and WOSA
Winter Cereals
Winter Cereal Trust
Wool
Cape Wools SA

21. Levies collected per commodity - 2011 survey
Product
Total value at first point of sale R
Levy income
Levy income as % of the value of the product %
Levy collection rate %
Citrus (exported)
0.87 99
Cotton lint
1.83
114
Dairy products
0.35 96
Deciduous fruit
3.37
Dried fruit
0.39 97
Mangoes
1.67 85
Pork
0.55
104
Potatoes
0.43
103
Poultry and eggs
0.75
Red meat
0.11
113
Sorghum
0.78 69
Table grapes
0.60
Wine
1.82 98
Winter cereal
1.06 87
TOTAL

22. Pre-determined objectives
Performance against
Pre-determined objectives
2011/12 financial year
Target
Performance
Achievement
Statutory measure investigations 30 38
127%
Statutory measures gazetted 20 29
145%
Report: Status of statutory measures 1
100%
Crop Estimated Liaison Committee meetings 2
Updating of Register for Directly Affected Groups

23. NAMC’s monitoring functions (4 aspects)

24. 1. Level of statutory levies
Section 15 of the MAP Act stipulates that statutory levies should not be more than 5% of the price of an agricultural product at the first point of sale
Evaluation over a period not longer than three years
Currently it is 0.6%

25. 2. Administration costs
The NAMC guidelines say that less that 10% of levy income be used for admin cost
The NAMC has other guidelines stipulating what should be regarded as admin cost
Currently, total admin cost is app 6% of total levy income

26. 3. Transformation costs
NAMC guidelines stipulate that app 20% of levy income be spent on transformation
We also have a transformation policy indicating what should be regarded as transformation activities
Currently, 23% of total levy income is used for transformation activities

27. 4. Status of statutory measures report
In terms of section of the MAP Act, the NAMC has to monitor the application of statutory measures
Shall evaluate and review such measures at least every two years
We decided to do it annually
Reports to be released by July every year

28. Agribusiness Development

29. Agribusiness Development
During the 2011/2012 financial year the NAMC through its Agribusiness Development Division collaborated with various institutions in the public and private sectors to
increase market access,
encourage new market development, and
build capacity of the developing producers
Apart from our agricultural industry partners, the NAMC collaborated with other institutions to support emerging producers, for example
Provincial Governments;
Land Bank; PPECB; DTI and its agencies
International Trade Centre of the United Nations (ITC)

30. Development Schemes
The NAMC continued developing and implementing schemes with its industry partners and other public and private institutions.
The main purpose of the schemes are
to encourage the integration of black producers into the commercial mainstream
During the year under review the NAMC continued facilitating the implementation of the Vineyard scheme in collaboration with the Northern Cape department of Agriculture
Over 400 beneficiaries are benefiting from this scheme
Over 100 on-farm jobs have been created through this scheme

31. Development Schemes continues.....
The NAMC collaborated with the Land Bank in facilitating the implementation of the Sunflower scheme in the North West
Initially there were 27 farmers targeted, but due to the unavailability of funds only 9 participated
The producers planted sunflower on 1200 ha
An off-take agreement was secured from an oilseed trader
Efforts are being made to include more farmers this coming planting season

32. Training
During the 2011/2012 financial year the NAMC supported close to 225 emerging producers on various training programmes
One of the training courses is tailor-made for women entrepreneurs
Below are some of the highlights
Agribusiness Training course for Women
The NAMC hosted a three day training course for 32 women entrepreneurs
The objective of the course was to capacitate women entrepreneurs through marketing, financial and strategic management to assist them to built successful and thriving businesses.
The NAMC collaborated with provincial department, Land Bank, SAWEN, Cornell University and Buhle Farmers Academy

33. Training continues... Making Markets Matter Training Course
The NAMC in collaboration with its industry partners supported 20 agribusinesses to attend an intensive 5 day business development training workshop, which was also attended by other African agribusinesses,
The workshop is an intensive business development training workshop that prepares black agribusinesses from all over the African continent to operate their businesses successfully
The workshop was hosted by the NAMC in collaboration with Cornell University from the USA
The NAMC collaborated with Agri MEGA Empowerment Solutions, Hortgro,South African Pork Producers’ Organisation and Mpumalanga Economic Growth Agency to financially support the emerging producers to attend the training workshop

34. Training continues... Collaboration with Agricultural Colleges
Fort Cox College
Sixteen (16) fruit growers attended the course which was facilitated by Perishable Product Export Control Board (PPECB).
The objective of the training course was to equip fruit growers that are exporting through agents and those with potential to export with the necessary knowledge on
food quality and
safety standards
In order to comply with the importing countries’ procurement requirements

35. Training continues... Madzivhandila Agricultural College Glen College
Fifteen (15) emerging producers from Limpopo Province were capacitated on GlobalGap issues.
The training was facilitated by PPECB, and Madzivhandila
College provided the logistics.
The objective of the workshop was to introduce farmers in fruit production to the importance and technicalities of GlobalGap.
Glen College
Sixty-nine (69) producers from around the Free State
Province were capacitated during this collaboration.

36. Export Programme
During the 2011/2012 financial year, the NAMC collaborated with its industry partners and international organisations to support emerging producers with their endeavours to export
Below are some of the highlights
The NAMC in collaboration with Western Cape department of agriculture are collaborating on a Flemish funded government to support 15 emerging producers to export their products
The NAMC signed four (4) strategic agreements with exporters and industry associations to support the emerging producers
The collaboration will continue in the next financial
Fifteen (15) land reform projects with an average of 20 beneficiaries were identified for support.

37. Agricultural Trusts

38. Objectives of the Agricultural Trust Division
The Agricultural Trust division was established to manage and coordinate the communication process between the Minister for Agriculture, Forestry and Fisheries and Agricultural Industry Trusts.
The Industry Trusts are bodies that were established after the disbandment of the control boards in the 70’s, the assets were then transferred into the 13 Agricultural Trusts.
To date, the assets of the Industry Trusts amount to R1,7 billion that are managed by board of trustees, in which the Minister is represented.
The 26 ministerial trustees are entrusted to ensure that the Industry Trusts carry out the objectives in the Trust deeds, by aligning them to government transformation mandate.

39. 26 Ministerial Trustees Industry Trust Administrators
Citrus Trust
Ms Elsa Taylor
Mr Godfrey Rathogwa
Ms Phindi Kema
Mr Tieho Mafeo
Cotton SA Trust
Mr Koot Louw
Mr Sipho Ngxongo
Deciduous Fruit Industry Development Trust
Mr Anton Rabe
Mr Mxoli Poto
Mr Trevor Abrahams
Ms Shulay Erasmus
Ms Malmsey Rangaka
National Lucerne Trust
Mr Derrick Engelbrecht
Ms Mina Gill
Maize Trust
Mr Leon Du Plessis
Mr Karabo Peele
Dr Thamsanqa Hewu
Ms Penny Daly

40. 26 Ministerial Trustees Cont…
Industry Trust
Administrators
Ministerial Trustee
Meat Industry Trust
Ms Alet du Plessis
Dr Steven Cornelius
Dr Vuyelwa Penxa 
Dr Ziyanda Majokweni
    
Mohair Trust
Mr Deon Saayman
Ms Sarah Louw
Oil and Protein
Seeds Development Trust
Mr Gerhard Keun
Mr Derrick Montshwe
Potato Industry
Development Trust
Ms Elsabe Els
Ms Nonie Mokose
Sorghum Trust
Mr Leon Du Plessis
Ms Dudu Mashile

41. 26 Ministerial Trustees Industry Trustm Administrators
Sorghum Trust
Mr Leon Du Plessis
Ms Dudu Mashile
Winter Cereal Trust
Mr Awie Coetzee
Mr Katlego Gaoraelwe
Mr Tato Make
Dr J le Roux
Ms Mmaphefo Mabe
Dr Phindile Lukhele-Olorunju
Mr Maseli Augustinus Letuka
S. A. Wine Industry Trust
Mr Charles Erasmus
Ms Sharron Marco-Thyse
Mr Willem Williams
Mr Barry Stemmert
Ms Fatima Shabodien
Prof. Diale Rangaka
Wool Trust
Mr Andre Van de Venter
Mr Zandisile Wapi

42. Capacity Building Induction of new ministerial trustees
Four (4) new ministerial trustees went through an induction programme, were they were orientated on background of the NAMC, the objectives of the respective Trusts, their role in the respective trusts and their responsibility to the NAMC as well as the Minister.
Training workshop on Corporate Governance
All ministerial trustees attended a workshop on King III: Corporate Governance. The purpose of the workshop was educate trustees on good governance in business environment, as well as roles and responsibilities of being a Trustee
Agricultural Trust Workshop
On the 8 March 2012, the Agricultural Industry role players, has an opportunity to be addressed by the Minister. The Minister further stressed the need of working together to grow the sector.
Industry Trusts were also given the opportunity to present their transformation initiatives for the year.

43. National Red Meat Development Programme (NRMDP)
Also house within the Agricultural Trust Division, is the National Red Meat Development Programme.
The programme is aimed at providing markets for the rural livestock farmers. Although presently based in EC, the programme will be expanding KZN, NW and MP in the coming financial year.
Custom Feeding Programme
The NRMDP maintained the operations of the 3 Custom Feeding Programmes in Nchora, Mount Frere and Fort Cox College of Agriculture. Part of the intake of animals, 180 farmers were educated on animal health, husbandry and markets for livestock.
Three (3) additional herdmen were employed for the Nchora CFP. A intern in animal production was also employed to manage the 2 CFP’s.

44. Auctions
The programme has been a pioneer in the re-establishment of auctions in the Province, in particular amongst the communal areas. In total, a gross income of R has been injected into the NRMDP activity areas of the Eastern Cape, with cattle going through the formal market and the income directly into the rural economy.
Pre-slaughter Agreements
The programme has made tremendous strides to securing a market for the animals with the large retail chains. Further negotiations still pending.

45. Beef Cattle Farming Indaba ‘Prosperity Through Livestock Farming’.
The NAMC went on an aggressive fundraising drive for the programme by hosting the Beef Cattle Farming Indaba on 27 October 2011 at the Fort Cox College of Agriculture.
Beside fundraising the event was also an education tool to farmers in the areas to educate farmers of the the wealth they have of livestock and opportunities available.
The event was graced by all role players within the Red Meat Industry as well as government

46. Human Resources Management

47. The service provider was identified.
To develop workforce plans and strategies that seeks to attract; develop and retain talent
The HR developed the terms of reference to review the Human Resource Plan.
The service provider was identified.
Three positions were created on the structure:
Information Technology Manager
Technical Assistant
Post Doctorate Fellowship

48. Attract; develop and retain talent Conti…
The following positions were advertised and filled:
Communication Officer
Trust Officer
Economist
Receptionist
Administrator
Internships for the Red Meat Project

49. Attract; develop and retain talent Conti…
Five (05) employees tendered their resignations and exist interviews were conducted:
Senior Researcher
Economist:
Finance Clerk:
Administrator and
Internship

50. Learning & Development
As part of skills development sixteen (16) employees registered for various Degrees.
Sixteen (16) employees were sent for various training.
A workshop on the Disciplinary hearing was conducted and (09) employees attended the workshop.

51. To invest in Human Capital to improve effectiveness in the workplace workforce
The Employee Wellness Strategy was developed and approved. Through the Wellness Plan, the Men and Women Diversity Forums were undertaken as part of the Change Management.
The World Aids Day was commemorated in December and staff members visited the Orphanage Centre to learn about people living with HIV/AIDS and cancer.

52. To review align and benchmark HR policies and systems
The following policies were developed and approved:
Employee Wellness Strategy
Occupational Health & Safety policy
Farewell Policy
Funeral Policy
The Employee Self Service was updated to monitor the leave utilisation.

53. Performance Management and Development
HR coordinated the Performance evaluation for the financial year.
The finalisation of the performance was conducted in March 2012.
Eligible employees were rewarded with bonuses.

54. Expenditure trends for the year ended 31 March 2012
Part 4
Expenditure trends for the year ended 31 March 2012 54

55. Financial Overview:
The NAMC received funding of R million during the 2011/12 financial year from the Department of Agriculture, Forestry & Fisheries as the annual grant. Other and Sponsorship income amounted to R 555 thousand. The net interest generated from investments amounted to R 937 thousand.
Therefore, the total income for the year was R million.
Total expenditure amounted to R million.
This resulted in surplus funding of R 956 thousand.(This figure included non-cash flow expenditure such as depreciation and finance charges)

56. Statement of Financial Performance for the year 31 March 2012:
2010/11
2011/12
% Change
R’000
Revenue
33,667
37,541
11.5%
Non- Exchange revenue
32,645
36,604
12.1%
Exchange revenue
1,022
937
-8.3%
Expenses
34,683
36,577
5.5%
Administrative Expenses
3,070
2,999
-2.3%
Personnel Expenditure
20,917
22,848
9.2%
Operating Expenditure
10,140
10,232 1%
Depreciation & Amortisation
532
458
-14%
Finance cost 24 40
66.7%
Profit/(Loss) on disposal of asset 18
(8)
-144%
Surplus / (Deficit) for year
(998)
956

57. Expenditure Categories: 31 March 2012:
2010/11
2011/12
% Change
Expenditure Categories:
R’000
Personnel
20,917
22,848 9%
Operating
3,302
4,050
23%
Rental: Office space
939
944 1%
Research, workshops & investigations
5,899
5,238
-11%
Other administrative
3,608
3,505 3%
Total
34,665
36,585 6%
Baseline Allocation
31,194
36,049
15%
Donor funds
1,451
555
-62%

58. Expenditure Categories: 31 March 2012: Cont’

59. Expenditure trends per programme:
Name of Programme
Actual expenditure
2010/11
R’000
2011/12
Variance
Reasons for variances
Finance & Admin
7,782
7,632
(150)
Variance of 1.9%.
Human Resources
2,998
3,398
400
Variance of 13%. This is a result of annual salary increases. This amount includes training & development as well as communications & promotions.
Agribusiness Development
3,619
3,158
(461)
Variance of 13%. The decrease is directly related to the cut in MTEF budget allocation.
Agricultural Trust
3,951
4,042 91
Variance 2%. National Red Meat Development Programme. Project expenses include direct costs such as feed, transport of animals, medicines and vetinary expenses; as well as indirect expenditure such as salaries, office rent, flights, accommodation, conferences, training etc.

60. Expenditure trends per programme Cont…
Name of Programme
Actual expenditure
2010/11
R’000
2011/12
Variance
Reasons for variances
Statutory Measures
1,468
2,091
623
Variance of 42%. Increase in expenditure due to appointment of new economist. This lead to increase in overall increase in division’s expenditure: travelling, S&T, telephone etc.
MERC
10,740
11,251
511
Variance of 4.8%. Increase in number of Section 7 and workgroup investigations
Increase in operational expenditure: flights, accommodation, conferences etc.
Council
1,120
1,269
149
Variance of 13%. The provision made for Council was under budgeted and adjusted during the virement process.
CEO
2,987
3,744
757
Variance of 20%. %. Increase in expenditure due to appointment of Compliance and Risk Officer and Administration secretary.
Total
34,665
36,585
1,920

61. Statement of Financial Position:
2010/11:
2011/12:
% change
Reserves
1,542
2,498
62%
Non-current assets
1,458
1,500 3%
Receivables
262
662
153%
Cash & Inventories
1,644
1,957
19%
Liabilities
1,822
1,621
-11%

62. Statement of Financial Position: Cont’

63. Outcome of the audit 2011/12:
Unqualified audit opinion with no emphasis of matter.

64. Baseline allocation: 2011/12 – 2015/16:
2011/12:
2012/13:
2013/14:
2014/15
2015/16
R’000
36 049
30 115
32 764
34 332
35 545

65. END OF PRESENTATION