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)
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
Part 1
General Information
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).
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.
Part 2
Corporate Governance
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
Council Members
Out going Council Members
– Prof M Karaan (Vice-Chairperson)
– Mrs M Mannya
– Mrs C Molo
– Mr D Montshwe
– Mrs SE Moolman
Part 3
Performance against
Pre-Determined Objectives
MARKETS AND ECONOMIC
RESEARCH CENTER
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
100 % Compliance
• 6 Input Cost Monitoring reports
Trade analysis
•
•
•
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.
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
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.
100 % Compliance
The following reports were, amongst others,
produced:
• Revitalising cotton production on the Makhatini
Flats
•
The target was 4 agro-food chain reports, 8 reports
were finalised and 3 working papers were finalised
200 % Compliance
• 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
Capacity Building

The target of 4 academic research
support programmes was met
100 % Compliance

The target was 8 seminars per
year, a total of 15 seminars were
presented by agricultural experts
187 % Compliance
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
Levies collected past 11 years
Percentage levy increase since 2001
% increase
R 400,000,000
60.0
R 350,000,000
50.0
R 300,000,000
40.0
R 250,000,000
R 200,000,000
30.0
R 150,000,000
20.0
R 100,000,000
10.0
R 50,000,000
R0
0.0
2001
2002
2003
2004
2005
Levy Income Rand
2006
2007
% increase
2008
2009
2010
2011
FUNCTIONS FINANCED THROUGH STATUTORY LEVIES
2011 survey
Functions
Amount spent
R
Percentage of
total levy
expenditure
%
Administration
19 392 734
6
Transformation
79 842 022
23
Research
91 811 308
27
Local promotions
40 615 282
12
Export Promotions
50 913 157
15
Information
34 220 159
10
Quality control
15 200 307
4
Plant improvement
7 448 390
2
Production development
2 773 883
1
342 217 242
100
TOTAL
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)
HORTGRO Services



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



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


Levies collected per commodity - 2011 survey
Product
Citrus (exported)
Total value at first
point of sale
Levy income
R
R
Levy income as
% of the value
of the product
%
Levy
collection rate
%
5 000 000 000
43 724 911
0.87
99
92 000 000
1 683 411
1.83
114
Dairy products
8 378 627 222
29 292 893
0.35
96
Deciduous fruit
1 476 879 891
49 709 574
3.37
96
Dried fruit
478 842 000
1 891 342
0.39
97
Mangoes
65 589 060
1 093 151
1.67
85
Pork
3 063 400 000
16 774 658
0.55
104
Potatoes
5 746 720 817
24 557 928
0.43
103
Poultry and eggs
3 596 000 000
26 797 820
0.75
99
Red meat
18 946 000 000
21 592 522
0.11
113
Sorghum
215 000 000
1 672 287
0.78
69
Table grapes
2 945 298 984
17 462 504
0.60
97
Wine
3 619 400 000
65 840 238
1.82
98
Winter cereal
3 733 929 000
39 587 939
1.06
87
57 357 686 974
341 681 178
0.60
Cotton lint
TOTAL
Performance against
Pre-determined objectives
2011/12 financial year
Target
Performance
Achievement
Statutory measure investigations
30
38
127%
Statutory measures gazetted
20
29
145%
1
1
100%
2
2
100%
1
1
100%
Report: Status of statutory measures
Crop Estimated Liaison Committee
meetings
Updating of Register for Directly Affected
Groups
NAMC’s monitoring functions
(4 aspects)
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%
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
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
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
Agribusiness Development
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)
29
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
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
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
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
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
Training continues...
• Madzivhandila Agricultural 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.
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.
Agricultural Trusts
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.
26 Ministerial Trustees
Industry Trust
Citrus Trust
Administrators
Ms Elsa Taylor
Ministerial Trustee
Mr Godfrey Rathogwa
Ms Phindi Kema
Mr Tieho Mafeo
Cotton SA Trust
Mr Koot Louw
Mr Sipho Ngxongo
Mr Anton Rabe
Mr Mxoli Poto
Deciduous
Fruit
Mr Trevor Abrahams
Industry
Ms Shulay Erasmus
Development Trust
Ms Malmsey Rangaka
National
Lucerne Mr Derrick Engelbrecht Ms Mina Gill
Trust
Mr Leon Du Plessis
Mr Karabo Peele
Maize Trust
Dr Thamsanqa Hewu
Ms Penny Daly
26 Ministerial Trustees Cont
Industry Trust
Administrators
Ms Alet du Plessis
Ministerial Trustee
Dr Steven Cornelius
Dr Vuyelwa Penxa
Dr Ziyanda Majokweni
Mr Deon Saayman
Mr Gerhard Keun
Ms Sarah Louw
Mr Derrick Montshwe
Ms Elsabe Els
Ms Nonie Mokose
Mr Leon Du Plessis
Ms Dudu Mashile
Meat Industry Trust
Mohair Trust
Oil and Protein
Seeds Development
Trust
Potato Industry
Development Trust
Sorghum Trust
…
26 Ministerial Trustees
Industry Trustm
Sorghum Trust
Administrators
Mr Leon Du Plessis
Mr Awie Coetzee
Winter Cereal Trust
Mr Charles Erasmus
S. A. Wine Industry
Trust
Wool Trust
Mr Andre Van de Venter
Ministerial Trustee
Ms Dudu Mashile
Mr Katlego Gaoraelwe
Mr Tato Make
Dr J le Roux
Ms Mmaphefo Mabe
Dr Phindile LukheleOlorunju
Mr Maseli Augustinus
Letuka
Ms Sharron Marco-Thyse
Mr Willem Williams
Mr Barry Stemmert
Ms Fatima Shabodien
Prof. Diale Rangaka
Mr Zandisile Wapi
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.
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.
• 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 R7 577 840 has been injected
into the NRMDP activity areas of the Eastern Cape, with 1 978
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.
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
Human Resources Management
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
•
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
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
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.
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.
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.
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.
Part 4
Expenditure trends for the year
ended 31 March 2012
54
Financial Overview:
• The NAMC received funding of R 36 049 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 37 541 million.
• Total expenditure amounted to R 36 577 million.
• This resulted in surplus funding of R 956 thousand.(This figure included
non-cash flow expenditure such as depreciation and finance charges)
Statement of Financial Performance for the year
31 March 2012:
2010/11
2011/12
R’000
R’000
Revenue
33,667
37,541
11.5%
Non- Exchange revenue
32,645
36,604
12.1%
1,022
937
-8.3%
34,683
36,577
5.5%
3,070
2,999
-2.3%
Personnel Expenditure
20,917
22,848
9.2%
Operating Expenditure
10,140
10,232
1%
532
458
-14%
Finance cost
24
40
66.7%
Profit/(Loss) on disposal of asset
18
(8)
-144%
(998)
956
Exchange revenue
Expenses
Administrative Expenses
Depreciation & Amortisation
Surplus / (Deficit) for year
% Change
Expenditure Categories: 31 March 2012:
2010/11
2011/12
Expenditure Categories:
R’000
R’000
Personnel
20,917
22,848
9%
Operating
3,302
4,050
23%
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%
1,451
555
-62%
Rental: Office space
Donor funds
% Change
Expenditure Categories: 31 March 2012:
Cont’
Expenditure trends per programme:
Name of
Programme
Actual
expend
iture
2010/1
1
R’000
Actual
expendit
ure
2011/12
R’000
Varian
ce
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.
R’000
Expenditure trends per programme Cont…
Name of
Programme
Actual
expendit
ure
2010/11
R’000
Actual
expendit
ure
2011/12
R’000
Varian
ce
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
R’000
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%
Statement of Financial Position: Cont’
Outcome of the audit 2011/12:
• Unqualified audit opinion with no emphasis of
matter.
Baseline allocation: 2011/12 – 2015/16:
2011/12:
2012/13:
2013/14:
2014/15
2015/16
R’000
R’000
R’000
R’000
R’000
36 049
30 115
32 764
34 332
35 545
END
OF
PRESENTATION