Gauteng MEC for Economic Development, Environment, Agriculture and
Rural Development Lebogang Maile’s Opening Remarks at the Gauteng
Agro-Processing Industry Summit, Soweto, 12 March 2015.
Honourable Premier, David Makhura
Deputy Minister of Trade and Industry, Honourable Mzwandile Masina;
Department of Agriculture, Forestry and Fisheries,………………………
Leaders and representatives of private sector partners and associations
Honourable Delegates and distinguished Guests
This Summit carries both historic and symbolic significance. It is historic in the
sense that despite Gauteng being the hub of agro-processing and the base
for many multinational food companies, this is the first time that government,
farmers, financial institutions and the research community are gathered under
one roof to dissect and explore prospects for transformation and further
development of the sector.
At a symbolic level, this summit is a clear testimony to the fact the Gauteng
has placed agro-processing at the centre of our drive for increased
localization, re-industrialisation and job creation.
The theme for this summit is wisely chosen to communicate the message that
agro-processing, as one of the priority sectors identified by the Gauteng
government, carries significant weight and has an important role to play in the
realization of our vision to build a transformed, modernized Gauteng that
boasts industrial capability, social cohesion and equality.
Ladies and gentlemen
In the preceding weeks we have had in-depth conversations about the state of
the sector, its challenges and prospects for growth. We held these talks with
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various stakeholders including smallholder farmers, commercial farmers,
farmers’ association, retail groups and the academic and research community.
In this Summit, we therefore build from the premise that we are closer than we
have ever been to crafting a common vision that will define and shape
Gauteng’s agro-processing sector over the years to come. Our sincere
gratitude goes to those who participated in this process.
Ladies and gentlemen, I am aware that there are many who wonder why a
highly urbanized province such as Gauteng places such importance on the
agriculture. After all Gauteng only occupies only 1.4% of the country’s
landmass, which is minuscule when compared to the 30.6% land mass
occupied by Limpopo Province. The reason is simple. We are looking at this
question not in terms of where we are or the space we currently occupy but
where we seek to go.
We believe that agro-processing, along with a clear strategy for economic
diversification, can give the economies of the West Rand and Sedibeng a new
lease on life. These two economies, which are still reeling under the pressure
imposed by the global economic crisis, are currently growing at 1% and 0,7%
respectively, with worrying levels of unemployment.
We are of the firm view that with the decline of mining activity and the
attendant consequence of de-industrialisation, the agricultural industry
presents real possibilities for a shift in the orientation of these regions. More
importantly, as an industry that can propel growth in other sectors, agroprocessing will place Gauteng’s economy on a different economic trajectory.
There are a few other good cases which demonstrate how state support can
aid the transformation project and help emerging farmers to gain a foothold in
the agricultural sector. These include the Zivuseni Agricultural Cooperative,
Terameth farming project and even the Tropical Mushroom farm worker
scheme in Magaliesburg. However, as great as these initiatives are, they
constitute only a small drop in an ocean of an industry that is still
untransformed and monopolistic in nature.
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I urge summit delegates to reflect on the concrete steps we can take to
multiply the efforts born out of cooperation between the state and the private
sector in this space. The Heineken Brewery partnership for black farmers is
but one example.
Ladies and gentlemen,
Our intentions to grow the sector will not be realized unless we address the
bottlenecks that you encounter in conducting your business.
As the leadership of the province, we are alive to the challenges that are
facing the sector.
The engagements and consultations that were held prior to this summit
identified a number of issues that stand as hurdles to greater prosperity,
inclusion and the overall growth of the agricultural industry in this province.
Like most businesses, market access is a thorny issue for smallholder farmers.
A significant number of you also spoke passionately about what is called
“adverse incorporation”. You told us that we should not only stop at
advocating the inclusion of black farmers into commercial food value chains
but that we should critically ask: on whose terms is this inclusion and who
does it really benefit?
Our attention was drawn the reality that the skewed power relations between
small holders farmers and buyers in the form of food processors and retailers
often leaves emerging farmers on shaky ground when engaging in
transactions with established business.
It is for this reason that we are giving privilege to public procurement,
especially in the fields of health and education, as an important lever that we
can utilize to support emerging farmers. But even as we stress the need for
public procurement to serve the imperative of creating markets for resource
strapped smallholder farmers, this will never be enough to build an enduring
and transformed agricultural sector.
Quite clearly, our engagement with corporates in the food retail space is
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important. I must say that quite a few big retail businesses have received our
call for partnership and cooperation with enthusiasm.
This Summit must inspire a paradigm shift in the consciousness of agribusiness. By this I mean that it is no longer sufficient for agribusiness to treat
the question of inclusion of the predominantly black smallholder farmers as an
“optional extra” or just another avenue for corporate social responsibility.
Agribusiness must perceive itself as a partner in our journey for
comprehensive agrarian reform. In other words, favourable market access for
black farmers must become an integral part of how the sector conducts its
business.
State capacity, especially the inadequacy of our extension services, received
the spotlight in our engagements with you. Equally important is the need for
public and private sector driven funding, business development and capacity
building programmes for emerging farmers in areas such as agricultural
practices and standards, marketing and packaging. This directs us to come up
with a comprehensive package to assist smallholder farmers to gain a
foothold in the agribusiness value chains.
Another prominent issue is the over concentration of agri-business markets
where few big companies are in control of various facets of the business. This
high concentration is evident in the upstream aspects of the sector such as
fertilizer, seeds, animal feed and pesticides and downstream. The
downstream side of the industry presents us with the same scenario with a
few dominant food processors, retailers and supermarkets controlling the
largest part of the market share.
This over concentration is obviously a worrying factor for us, not least
because it stunts our ability to address hunger food insecurity and the
inclusion of black farmers and township based entrepreneurs.
Lastly, a number of policy questions pertaining to the corrosive impact of crop
and livestock imports on our domestic agriculture came to the fore during our
consultations with you. This is an opportunity to place on the national agenda
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a call for the protection of agriculture in general, not only for the benefit of
commercial farmers but smallholder farmers as well.
Most of the challenges that I have listed are not insurmountable. They can be
resolved. To do this, we need to change how we work in significant ways.
We must emerge out of this Summit with a strategy that dovetails our agenda
to promote food security, integrate black farmers, lessen our dependence on
food imports, empower poor communities to take charge of their nutritional
needs by among others supporting community and household food gardens
on a massive scale.
The agricultural sector is an integral part of radical transformation that we
want to see in this province. With these words I want to urge all of us present
here to engage frankly and robustly.
We must emerge not only with a declaration and resolutions but a resounding
commitment to use agriculture as a launching pad toward the realisation of
the Transformation, Modernisation and Re-Industrialisation programme.
I thank you.
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