NAMC Strategic Plan
Presentation 2011/12
Presentation to the Parliament’s Portfolio Committee: Agriculture, Forestry
and Fisheries
11 March 2011
Mrs Ntombi Msimang - Chairperson: NAMC
Mr TR Ramabulana- CEO: NAMC
Mrs S Muvhulawa- CFO: NAMC
1
The NAMC in brief
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Established in terms of an Act of Parliament (MAPA,
1996) to advise the Minister and other Directly Affected
Groups on agricultural marketing policy
Four main objectives:
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Increasing of market access for all participants
Promotion of efficiency of the marketing of agricultural
products
Optimization of export earnings
Enhancement of the viability of the agricultural industry
2
Members of the NAMC Council
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The current members are:
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Mrs NM Msimang (Chairperson)
Dr ASM Karaan (Vice-Chairperson)
Mr AD Young
Prof JF Kirsten
Mrs SE Moolman
Mrs C Molo
Mr DB Montshwe
Mrs M Mannya
Mrs M Gill
3
Council Committees
Human Resources
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Mr A Young (Chairperson)
Mrs L Moolman
Mrs M Mannya
Audit Committee
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Mr Paul Slack (Chairperson)
Ms Mathebe Moja
Mr Raymond Matlou
Ms Mina Gill
Prof J Kirsten
4
Employment Equity
Senior Managers
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2 Female African (5 %)
4 Male African (10 %)
2 Male White (5 %)
Total Staff
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13 Female African (28 %)
11 Female White (28 %)
14 Male African (36 %)
4 Male White (8 %)
Realities in Agriculture
The situation…Employment !!!
Trends in employment by sector between 2001 and 2010
Trends in the agricultural sector’s share of the total
employment between September 2000
and March 2010
Source: DAFF, 2010
Source: DAFF, 2010
7
Key realities
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Current market structure shaped to largely
cater for existing mainstream market
participants
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Market structure at the processing and retail level
highly concentrated
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Inherited from previous regulated marketing regime and
government support incentives
Provides a breeding ground for a non-optimal
competitive environment
High entry barriers for smallholder farmers
8
Key actions
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Important paradigm shift (1) – Import Substitution
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Important paradigm shift (2) – Increase the size of the
cake
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Review biofuel policy
Realignment of export promotion policy and tools
“Buying local is lekker”
Leverage potential of quick wins
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Industries that could benefit include grain industry, meat industry,
cotton industry, fish processing, forestry
Develop new and expand existing development/incentive
schemes
Leverage contributions by private sector
Leverage potential of institutional markets
9
Facts on Administered prices
Agriculture
Electricity tariff increase compared to CPI
Tariff increase %
35
CPI - regulated prices
Tariff increase
for 2008, 2009
and 2010 higher
than the
Headline CPI
30
Percentage change
25
20
CPI higher than
the electricity
tariff increase
15
10
5
0
2007
Source: Eskom, 2011
2008
2009
2010
TOLL FEES - CLASS 3 VEHICLE ONE WAY
R551 in 2010;
34.1% increase
from 2006 to
2010
600
From Musina to Tswane FPM
From Paarl to Tswane FPM
From Durban to Tswane FPM
From Nkomazi to Tswane FPM
550
Rand per one way trip
500
R516 in 2010;
39.1% increase
from 2006 to
2010
450
400
R487 in 2010;
36.8% increase
from 2006 to
2010
350
300
250
200
2006
Own calculations based on SANRAL, 2011
2007
2008
2009
2010
R366 in 2010;
37.1% increase
from 2006 to
2010
% contribution to total cost of production
Average % contribution of regulated fuel, labour and
electricity cost to total production cost of animal feed
Labour, fuel and electricity % contribution to
Total Cost of Production, Sales, Admin and
Transport
56%
54%
52%
50%
48%
46%
44%
42%
2001
2002
2003
Own calculations based on data from AFMA, 2011
2004
2005
2006
2007
2008
2009
2010
Regulated fuel, labour and electricity cost for the
production of a kilogram poultry
2008 to 2009
up 28.2%
2009 to 2010
up 18.6%
Cost per kg produced index 2008=100
160
150
Electricity
Transport
Water
140
2008 to 2009
up 16%
2009 to 2010
up 33.9%
130
120
110
2008 to 2009
up 6.2%
2009 to 2010
down 2.4%
100
90
80
2008
2009
Own calculations based on data from role players in the industry, 2011
2010
Job Creation (NAMC, Statutory
Measure And Agricultural Trusts)
Major projects to drive job creation
Project
Investment
Value
R
Total
Employment
opportunities
2011/12
Total
Employment
Opportunities
2012 - 2014
Critical reforms
required to realise
the jobs
National Red Meat
Development Project
(NRMDP)
R42 million over 5
years
Project team
12 people
Project Manager, Project
Implementation manager,
Livestock
Coordinators/Field Officers,
Admin Assistant,
Auctioneer-ing programme
Project team
4 Additional Livestock
Coordinators/Field Officers
1.
2.
3.
4.
5.
6.
6 Custom feeding
programmes
18 herdsmen
14 Additional custom
feeding programmes
42 herdsmen
Local level
organisers/representatives
20 people
Local level
organisers/representatives
40 people
5 Auctioneering
companies
20 people
Add. auctioneering
companies
30 people
Farmers benefitting
5000
Farmers benefitting
12-13000
Funding must be secured
Baseline study
Infrastructure
Market information
Training
Designing tailor made
programmes per custom
feeding programme
16
Major projects to drive job creation
Project`
Company Investment Total
/SOE/Go- Value
Employment
vernment R
opportunities
2011/12
Total
Employment
Opportunities
2012 - 2014
Critical reforms
required to
realise the jobs
Vineyard
development
scheme
NAMC (in
collaboration
with the wine
industry and
department of
agriculture in
the Northern
Cape and
Free State)
R62 million for
570 ha of
vineyard
Permanent – 61
Seasonal – 100
Permanent – 124
Seasonal – 200
Funding required for:
1. Infrastructure
2. Operating capital
3. Training and extension
services
4. Market linkages
Grain crop
development
scheme
NAMC (in
collaboration
with the grain
industry and
cooperatives/
agribusiness)
R140 million
Permanent – 200
Seasonal – 300
Permanent – 200
Seasonal – 300
Funding required for:
1. Operational and
risk mitigation
funding
2. Training and
extensions
services
3. On farm storage
4. Mechanisation
17
JOB CREATION
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Deciduous Fruit Trust- tree planting project, +- R5,1 million CASP funds
administered in 2010 Total = R12,2 million. 1st Phase = 1,000 Ha by 2014
– 600 Ha in the Western Cape in partnership with WCDA.
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Winter Cereal Trust- Commercialisation of and promotion of wheat
production amongst developing farmers in the Free State, Western and
Southern Cape. Total expenditure for the development project is R4 067
549.
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Maize trusts- funding to the grain farmer development association to assist
small holder farmers in soil preparation, input costs, harvesting and storage
of grain.
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Oil and protein seed trust- assist 165 emerging farmers to plant 15 100ha
of sunflower. A total of 1250 temporary job opportunities will created during
the season.
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Trade
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TradeProbes (6 annually)
 Product and country profiles
 Trade related topics
Publication on Fruit Trade Flows
(weekly’s) and Fruit Flow reports
Collaborative trade studies, e.g.
 Determining the scope and
nature of Non-tariff Measures
prevalent in selected international
markets
 South Africa’s way ahead: Cape
to Cairo?
 Comparative analysis…:
European markets for SA
emerging table grape growers
Export promotion activities
 Hong Kong, Singapore, Malaysia
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Users and uses
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Users: Government Departments, NGO’s,
Industry Associations, Companies, Press
Uses: Export promotion, lowering
transactions costs, policy guidelines, better
informed exporters, increased exports
19
Trade - Export promotion activities
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Background
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Objectives
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Promotional activities in three countries, namely Hong Kong, Singapore, Malaysia
Several Hyper- and Supermarkets participated, e.g. Giant , Shop N Save, Cold Storage
In total 499 Hyper- and Supermarkets participated
Increase sales and awareness of the total range of South African fruit and vegetables available at the
time of the World Cup in particular during the last 2 weeks of the World Cup.
Grow sales and the range of South African product from after the World Cup till end of October.
Actions
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In store displays
In store competitions
Press advertising
Point of sale material
Aggressive bulk displays
Hard and soft copies of newspaper adverts, copies of pictures of displays and point of sale materials
and some of the winning displays
20
Trade - Export promotion activities
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Results
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The total U$ purchases for the group from South Africa, for 2010 vs the purchases for 2009, grew from
± U$14 million to ± U$18 million in 2010
A 28.5% sales growth in U$ terms
Total Container Volume for 2010: +108 Containers Vs 2009 Volume
A 48% increase in volume
21
Export promotion through statutory levy
funding.. (Wine)
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WOSA (Wines of South Africa) promotes South African
wines, mainly in EU, but also in USA, Canada, key
African countries such as Angola and Nigeria, as well as
India, China, Japan and South Korea
In 2008, SA exported over 400 mil litres,
Export strategy –
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Enhancing SA’s image
Developing new markets
Assisting in building capacity
Improved infrastructure for exports via Wine-on-line
Current budget app R37 mill / annum
22
Export promotion through statutory levy
funding .. (Deciduous Fruit)
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Deciduous fruit
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Apples, pears, plums, apricots, peaches and
nectarines
A Market Development Campaign in the UK and
Germany
Producer funded (R20 mil / annum) as well as
grant from DTI (R10 mil / annum)
Volume growth target of 10-15 % over 5 years has
been set
23
Export promotion through statutory levy
funding .. (Grapefruit)
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Citrus Growers Association
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Consumer campaign in UK and Japan
“South African Grapefruit’
Beautiful country, beautiful fruit”
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Funded by statutory levies – app R9 mil / annum
24
MERC focus areas
Information Exchange
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Background
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This is a complex issue due to the structure of the primary and
secondary agricultural sector
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Several companies found guilty for non-compliance Competition Act
Thereafter some of these companies pulled out of industry associations
This amongst others mean they are not willing so share information
Problem: This information necessary to, for example, calculate GDP, Consumer
Spending, Logistics Planning,, Employment Numbers, etc
No case law in South Africa to provide guidance
The road ahead
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Compile document for the Competition Commission spelling out detailed needs at the
industry and country level
Workshop the document with Competition Commission
Set guidelines for industry on information exchange
Work on proper public agricultural information system
25
Training
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Making Markets Matter Training Course
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Its an intensive 5 day business development training workshop for African
agribusinesses,
In partnership with University of Stellenbosch and Cornell University
80 agribusinesses attended the Course
The farmers were trained on the following issues
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Cash flow management, Marketing strategy, financial analysis
AgriBiz Training course for Women
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As a follow up to the above training course, the NAMC designed a 3 day
training course specifically for women that are involved in agriculture
The course offers training in marketing, financial and strategic
management .
30 women entrepreneurs attended
The NAMC is conducting an after care programme so that participants can
implement what they have learnt from the course into their businesses
Statutory Measures
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The MAPA act provides for the following
statutory Measures:
Levies
Records and returns
Conducting of pools
Control of exports
Registrations
Appointment of inspectors
27
Existing statutory measures
INDUSTRY
Administrating body
Statutory Measures
Levy
Registration
Records &
Returns
Citrus (export only)
Citrus Growers Association
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Cotton
Cotton SA
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Dairy
Milk SA
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Deciduous fruit (pome & stone)
Deciduous Fruit Producers Trust
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Dried fruit
Deciduous Fruit Producers Trust
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Grains (Maize, Oilseeds,
Sorghum, and Winter Cereals)
The South African Grains and Information
Services (SAGIS)
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Lucerne
Lucerne Seed Organisation
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Mangoes
Subtrop
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Milk
Milk Producers’ Organisation
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Mohair
Mohair SA
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Pork
SA Pork Producers’ Organisation
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Potato
Potatoes SA
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Poultry and eggs
Southern African Poultry Association
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Red meat
Red Meat Industry Forum
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28
Existing statutory measures (cont...)
INDUSTRY
Administrating body
Statutory Measures
Levy
Registration
Records &
Returns
Sorghum
Sorghum Trust
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Table Grapes
SA Table Grape Industry
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Wine
SAWIS, Winetech and Wosa
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Winter Cereals
Winter Cereal Trust
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Wool
Cape Wools SA
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29
FUNCTIONS FINANCED THROUGH STATUTORY
LEVIES
Functions
Amount spent
R
Percentage of
total levy
expenditure
%
Administration
16 759 976
6
Transformation
61 832 155
22
Export Promotion
33 114 219
12
Research
90 169 729
33
Information
24 264 856
9
Production development
2 832 839
1
Plant improvement
2 658 981
1
39 319 855
14
5 924 738
2
276 877 338
100
Local promotion
Quality control
TOTAL
30
New applications
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Bee / honey industry
Proteas
Pecan nuts
Olives
Rooibos tea
Maize
31
Budget Allocation: 2011/12 – 2013/14
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The NAMC has received an MTEF budget
allocation letter for the period from DAFF.
The budget allocations are as follows:
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2011/12:
2012/13:
2013/14:
R 35 899 000
R 30 115 000
R 32 220 000
32
Budget Allocation Cont’
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This resulted in the following percentage fluctuation for the period:
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From 2010/11 – 2011/12:
From 2011/12 – 2012/13:
From 2012/13 – 2013/14:
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The decrease of R5 million in 2012/13 is due to the following:
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The NAMC has in the previous financial year received additional funding to
expand the export promotion programme that will afford 100 emerging
agribusinesses the opportunity to participate in international trade.
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15% increase
16% decrease
7% increase.
This funding was for the MTEF period 2009/10 – 2011/12 only.
33
Budget Allocation Cont’
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Other source of Income
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The NAMC is anticipating to generate income from the investment of the
grants to be received from DAFF at the beginning of the financial year
2011/12. The following are the projected interest to be generated:
2011/12:
R 1 350 000
2012/13:
R 1 200 000
2013/14:
R 1 400 000
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Total Income for the MTEF period then results in:
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2011/12:
2012/13:
2013/14:
R 37 249 000
R 31 315 000
R 33 620 000
34