1. National Development Plan - Vision 2030: What role will agriculture play? Johann Kirsten Department of Agricultural Economics University of Pretoria

2. Contents Short overview of the National Planning Commission proposals for the agricultural sector The place and role of the agricultural industry in the proposals The role of extensionists in achieving Vision 2030 should be clear

3. National Planning Commission National Development Plan – released 11 November 2011; expanded version August 2012 Approved by Cabinet – 10 September 2012 Charting a new path to eliminate poverty and reduce inequality by 2030. Objectives include: – Reduce the number households earning below R419 per month by 2030 from 39% to zero – Gini coefficient to fall from 0.69 to 0.6 by 2030 – Create 11 million jobs by 2030 – Raise per capita income from R50 000 in 2010 to R120 000 by 2030 – National income of bottom 40% to increase from 6% to 10% – Education- all children in grade 3 to be able to read and write – Affordable access to quality health care – Household food and nutrition security – Increase investment in labour-intensive sectors-incentives to employ youth Vision 2013 for rural economy: – rural communities have greater opportunities to participate fully in the economic, social and political life – Driving force – expansion of irrigation, unutilised arable land 1 million jobs – Agriculture has the potential to create 1 million jobs

4. Employment in South African agriculture: 1911 -2014 Source: GF Liebenberg, 2015

5. Agriculture has the potential, but SA needs to:… Expand irrigation agriculture. There is evidence that the current 1.5 million hectares under irrigation (which produces virtually all of South Africa’s horticultural harvest, and some field crops, i.e. well over a third of total output) can be expanded. Bring some of the under-used land in the communal areas and under land reform projects into commercial production over a period of time that is commensurate with the aims and objectives of the land reform programme and South Africa’s food security needs. Expand commercial agriculture.

6. SA needs to….. Pick and support ‘winners’ from commercial agriculture – those sectors and regions which have the highest potential for growth and specifically for employment-creating growth. Support employment creation in the upstream and downstream industries. The potential for employment creation will come from the growth in output that will result from the first three strategies. Find creative combinations between these opportunities. This will include: – greater emphasis on land that has the potential or that has already been serviced with irrigation infrastructure, – giving priority to successful farmers in the communal areas as land reform beneficiaries, – and giving targeted support to industries and areas of high employment creation potential in order to maximise collaboration between existing farmers and land reform beneficiaries, etc. And… we assume “All appropriate policy frameworks, fiscal allocation for infrastructure development etc. are in place”

7. Total cultivated area Source: GF Liebenberg, 2011

8. Underutilized land From soil potential maps, a further expansion potential of some +- 3m ha potential arable land (maybe 2m ha conservatively) …..yes, some of the marginal land has been taken out of production Some of this is high potential land in the former homelands. Plus reports that a majority of the land reform projects are underperforming- on 5.9 million ha of land

9. Potential for expansion of irrigation agriculture Total upper limit of irrigation potential additional 707 000 ha. More realistic estimate 500 000 ha. Over next 10 years realistically not more than 145 000 ha. Ground water 270 000 ha.

10. More efficient irrigation practices Although SA still has some potential to expand irrigation, there are major constraints with respect to investment and infrastructure. ….not to mentioned the fact that less water could be allocated to agriculture in future Most of this potential expansion can be achieved as a result of savings through water loss control & improved irrigation efficiency. (Water Research Commission) Technical efficiency levels for irrigation practices: IRRIGATION METHOD EFFICIENCY LEVEL FLOOD55-65% SPRINKLER75-85% MICRO/DRIP85-95% Source: Reinders 1992

11. The identification of “winners” Three approaches to identify industries that can contribute to significant growth in employment: – Large export industries with high labour requirements. – High volume imports that can be substituted with locally produced goods. – Growing small industries with high labour requirements.

12. The employment creation matrix

13. Export Industries Source: Abstract of Agricultural Statistics, 2010 200020092010 Growth (2010/2000) R 000 Citrus fruit1 491 7805 375 3686 575 6724.41 Wine1 690 8965 990 4235 722 4983.38 Grapes1 266 1203 438 2693 654 3922.89 Deciduous fruit912 6353 758 3023 640 1723.99 Maize502 5753 788 3242 232 4164.44 Ethyl alcohol545 8181 546 3082 077 1393.81 Sugar1 856 4443 872 7531 812 5980.98 Preserved fruit, nuts860 4161 596 7121 553 9911.81 Fruit, vegetable juices646 7311 431 9171 517 3902.35 Wool351 6131 290 0361 330 8353.78 Food preparations238 268780 339884 9623.71 Total15 752 26747 459 44446 129 9952.93

14. Import Industries Source: Agricultural Abstract of Statistics, 2010 200020092010 Growth (2010/2000) R 000 Rice 939 0293 782 8043 092 4803.29 Palm oil 323 3661 933 4672 187 6366.77 Soya-bean oil-cake 469,907937 5032 014 8964.29 Wheat 633 8502 337 9972 003 4913.16 Meat and edible offal of poultry 304 0721 558 0831 754 2775.77 Tobacco 396 7391 599 4401 247 9923.15 Food preparations 344 8111 027 9551 013 3342.94 Sunflower- and cotton-seed oil 313 833754 504787 2762.51 Preparations in animal feed 208 583567 224599 4022.87 Dried leguminous vegetables 129 290569 616573 9474.44 Total 10 061 625 35 039 208 34 618 0723.44

15. Macadamias Olives Avocados Pecan nuts Figs Herbs Organic Rooibos Tea Cherries Berries Smaller Industries

16. Livestock Current production Potential expansion Tonnes Labour multiplier Additional jobs on farm Linkages multiplier Up/down stream jobs Poultry1 327 000663 5000.022214 7440.01439 479 Eggs386 440193 2200.04007 7290.01432 760 Dairy2 613 674522 7350.028614 9350.01548 042 Beef628 000282 6000.01434 0370.00712 019 Pork171 43025 7150.01854760.0093238 Sheep meat98 200117 8400.00839820.0071842 Wool45 50020 4750.00831700.0083171 TOTAL1 826 08443 07423 550

17. SASAE and the Vision 2030 Which are the relevant aspects in the National Development Plan for SASAE, Provincial departments of Agriculture and commodity organisations: – “Develop strategies that give new entrants access to product value chains and support from better resourced players” – “Convert some under-used land in communal areas into commercial production” – “Job creation in downstream industries” – “effectiveness of extension officers need to improve” – “White commercial farmers, agribusinesses and organised agricultural industry bodies can help bring these objectives to fruition”. – “Innovative means for agricultural extension and training by the state in partnership with industries should be sought”

18. Commodity organisations and the Vision 2030 Commodity organisations are critical in achieving the vision Many commodity organisations are already doing good work in the spirit envisaged by the plan. Aspects that could receive further attention: – greater support for innovative public-private partnerships – expand innovative market linkages for small-scale farmers in the communal and land reform areas – improve and extend skills development and training in agricultural sector – including a new-cadre of extension officers – continue the work on new farmers’ associations – will provide greater collective power to poor producers, better skills and greater income – expansion of commercial agriculture in current commercial agricultural system is limited – needs to happen elsewhere.

19. Will SA farmers and agribusinesses invest in agriculture? Sentiment critical Security of expectations over political and economic future Leadership in agriculture and politics Need clear and consistent agricultural policy and policy on land. Smart subsidies and incentives to encourage employment and investment.

20. Potential impact of the NDP on agriculture The NDP provides some hope that SA government recognises the potential role of the agricultural sector in achieving Vision 2030 Suggests that we are serious about agriculture and issues of rural poverty But… can DAFF, DRDLR and PDAs implement the programmes and remove the duplication and uncertainty and improve coordination to make this a reality?

21. Recent developments (efforts to operationalise the NDP) Agricultural Policy Action Plan (APAP) – Value chain approach – But in essence redoing the Agricultural Sector Plan of 2001 – Expand production on unutilised land plus Agriparks – Perhaps to micro and omit the bigger issues that constrain action and growth: Land reform policies (instability, inconsistency, not focused) Availability of water Duplication and inefficient allocation of state funds Poor implementation Sentiment! Sudden shift to “Operation Phakisa” – “Big fast results” methodology

22. Closing remarks The NDP provides a solid framework and target for the growth of the agricultural sector The only dilemma is that we have been planning since 2000!! We need to think about the policies and programmes in other departments that could constrain agriculture: – Energy – Water – Land – Environment – Trade and Industry – …and many other constraining regulations