Market Access Cross-cutting Benefits - Agbiz€¦ · Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. The

Cross-cutting Benefits

Allows women to enter agricultural markets on equal footing 94: number of women trained 43: number of female farmers purchased from

35 seasonal jobs on average created by each smallholder farmer

843 MT of commodities procured from South African youth groups Additional jobs created through the Initiative

Market Access

STATE OF AGRICULTURAL

ECONOMICS

RSA FOOD RELIEF TO LESOTHO

July 2015 NewletterVol. 1 Issue 1

Pretoria

HEMP an analysis?

OUR BEAUTIFUL FRUITSTABLE GRAPE SEASON

CONTENTS

AEASA Conference 2015

8Food Secure.Love thy neighbour; SA smallholder farmers provide food relief to Lesotho

0BEAUTIFUL COUNTRY! BEAUTIFUL FRUITS

14AgriBiz Matters

20Dry BeansDevelopment Scheme

29DAFFNorms & Standards

Contributors:Dr Simphiwe Ngqangweni

Bonani NyhodoChristo JoubertSifiso NtombelaSydwell LekgauThulisile Khoza

Lindikhaya MyekiRika Verwey

Ndumiso MazibukoMaltilda Van der Walt

Lizette MelletPhistos Mashamaite

Communications:Majara Monamodi

Designer & Photography:Sylvester Moatshe

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NAMC- NODE HOST INSTITUTION

The Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) is regional multi-stakeholder network formed in response to a call by Agriculture Ministers in the Eastern and Southern Africa region for a network that could provide independent evidence to inform policy harmonization at regional level (see www.fanrpan.org for details). The network is representative of key stakeholders in the Food, Agriculture and Natural Resources (FANR) which include governments, farmer organizations, researchers, the private sector, parliamentarians and the media. FANRPAN currently works in 16 countries: Angola, Botswana, Democratic Republic of Congo (DRC), Kenya, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

The National Agricultural Marketing Council role as a node host is to amongst others; policy dialogue meetings, commissioning and supervising national policy research, tracking national policy agenda and maintaining a database of ongoing policy research and policy processes in the country. N o t a b l e Policy Commission Briefs NAMC has facilitated with FANRPAN include the following; Comprehensive African Agriculture Development Programme and the Climate Smart Agriculture Policy Workshop.

For more information, contact Bonani Nyhodo at [email protected]

N DE H ST

About FANRPAN

The origins of the Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) date back to 1994, when the Ministers of Agriculture from Eastern and Southern Africa saw the need for an independent policy input to address chronic food insecurity and the challenges of managing natural resources. In 1997, the Deans of the Faculties of Agriculture from eight countries in the SADC met and agreed to set up FANRPAN in response to the decision of the ministers. Following the drafting of a constitution with support from USAID funding, FANRPAN was officially registered as a private voluntary organization (PVO) in Zimbabwe in 2003. FANRPAN has maintained its registration in Zimbabwe, although it has since moved its regional secretariat office to Pretoria, South Africa where it operates as a fully-fledged international office with diplomatic status. The broad objectives of FANRPAN are to:

- Promote the development of appropriate agricultural policies in order to reduce poverty,- Enhance food security in Africa, and- Promote sustainable agricultural development in Africa.

Since 2005, FANRPAN has pioneered regional learning and knowledge acquisition in agricultural and food security policy analysis and advocacy, initially in Southern and Eastern Africa, and latterly extending its contribution and reach to continental and global levels. Through strong collaborative and experiential learning with its constituent stakeholders at national and regional levels, FANRPAN has progressively developed its food and agricultural policy engagement and action cycle which is the cornerstone of its distinctive approach to innovation and learning for policy and capacity development at regional and national levels.

http://www.fanrpan.org/

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The Agricultural Economics Association of South (AEASA) is the professional organisation of Agricultural Economists in South Africa. It was established in 1961 and held its first annual conference in 1962. AEASA has positioned itself strategically for the 21st century to enable it to be relevant for all agricultural economists, thereby assisting them to serve their communities. The shared vision is that AEASA's products and services should support all agricultural economists active in the industry irrespective of race, language, gender, career choice and educational level.

AEASA CONFERENCE 2015

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The 2015 Agricultural Economics Association of South Africa (AEASA) conference will be hosted by the North-West Province from 30 September until 2 October 2015 at the Khaya iBhubesi conference venue. The venue is situated along the northern shores of the Vaal River in the Vredefort Dome; a few km outside Parys, 50 km from Potchefstroom and just over 120 km from OR Tambo International Airport.

This year’s conference promises to address some current issues in terms of the role of agriculture in South Africa’s much desired economic growth. What contribution can the sector make to the country’s economic development? What structural changes are needed within the sector? How conducive is the current policy environment and its institutions?

These will be some of the contemporary topics that will be discussed. Hence, this year’s conference theme is “Structure, conduct and performance of the South African agricultural economy in a fast changing social, political and economic environment” supported by the following sub-themes:

Sub-theme 1: Agricultural trade performance: Are we leading or following? Sub- theme 2: Are structural changes in agriculture addressing current realities? Sub-theme 3: Agriculture’s role in economic growth: Are we living up to the challenge? Sub-theme 4: Agriculture and employment: Myth or opportunity?

Sub-theme 5: Is agri-business playing its rightful role in a de-regulated environment?

A total of 45 papers will be presented, three workshops will be offered, and several invited speakers will share their expertise. This year’s Simon Brand Memorial Lecture will be presented by Prof Wim Naudé of Maastricht University in the Netherlands. He is a renowned development economist and holds a special chair in Business and Entrepreneurship in Emerging Markets. Prof Naudé has been involved in the World Bank’s recent stocktaking of African agriculture and he will share some of the findings.

AEASA CONFERENCE 2015

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Relativist economic literature tells us that much of the evolution of economic scholarship has been inextricably linked to historical, economic, sociological, and political forces that brought men and women to examine certain economic questions affecting them. Landreth and Colander (2001), for instance, posit that there is an apparent link between the emergence and content of classical economics and the industrialization of England, between Ricardian economics and the conflict between English landlords and businessmen, and between Keynesian economics and the Great Depression of the 1930s.

Depending on the period in history, economists have been influenced in their scholarship by both forces outside the actual profession (the “relativist” approach to scholarship) and by internal intellectual developments within the profession itself (the “absolutist” approach to scholarship). No approach is better than the other. The important responsibility of contemporary economists is to constantly develop their internal craft and improve analytical rigour, while at the same time remaining relevant in addressing pressing policy questions of their time. But this requires a conducive and proper institutional structure within which to operate.

This commentary argues that, unlike in most successful countries elsewhere both in the developed and developing world, public agricultural economics research capacity in post- apartheid South Africa is not optimally organized – and therefore not properly geared – to enable relevant and good quality economic research output. Instead one finds scattered islands of capacity within government – a situation that required concerted attention. If one considers historical developments in South African agriculture, one can argue that much (not all) public agricultural economics research during the Apartheid era was preoccupied with how to consolidate and grow large-scale commercial agriculture

in line with the policies of the day. Before the landmark democratic changes that took place in South Africa in the mid- 1990s, it is widely recognized that most of the agricultural economics capacity in the country resided within the then Department of Agriculture.

In fact, the national association for agricultural economists in South Africa, the Agricultural Economics Association of South Africa (AEASA), was founded in 1961 from within the Department of Agriculture. This provided a stable structure that enabled economists that were “under one roof” (of the Department of Agriculture in its various historical guises) and in close proximity to policy makers at the time, to undertake policy-relevant research. An upcoming commemorative book on AEASA recognizes the role that the Department of Agriculture has played in the past as the main employer of agricultural economics in SouthAfrica.

When political changes were introduced in 1994 and Apartheid was outlawed, the Department become the supplier of experienced agricultural economists into commercial banks, agribusiness and private sector in general as capacity exodus took place. The question that has remained for the past two decades has been how to provide a good institutional structure within the Department of Agriculture and its state- owned entities (SOEs) that will be responsible for (1) setting a research agenda that is relevant to the agricultural policy problems facing post- Apartheid South Africa, (2) attracting skilled and experienced agricultural economists while developing new future talent that has the ability to undertake rigorous economic analysis to inform policy making.

Against this background, this commentary looks at the role of the National Agricultural Marketing Council (NAMC) over the past several years in the provision of

evidence-based policy advice to the Minister of Agriculture and other key stakeholders.

The commentary argues that the NAMC is an important player in the bigger public agricultural economics research space in South Africa. The NAMC was established in terms of the Marketing of Agricultural Products Act (Act 47, 1996) with the mandate to provide the Minister of Agriculture, Forestry and Fisheries with strategic advice on all agricultural marketing issues. The four objectives of the Act are:• the increasing of market access for all market participants;• the promotion of the efficiency of agricultural products;• the optimization of export earnings from agricultural products; and• the enhancement of the viability of the agricultural sector.

This mandate is broad enough so as to apportion an enormous burden and an expectation on the NAMC to provide evidence- based research to the principal agricultural policy maker (the Minister) and a wide range of other stakeholders. The NAMC is also expected to play a major role in shaping public discourse on more than just agricultural marketing but on broader agricultural economic issues, as can be appreciated from the MAP Act objectives.

The expectations have become more than just mere expectations over the past decade as challenges facing the South African agricultural sector became more pressing. Increasing demands on the NAMC to undertake major policy analyses and to answer key policy questions have proliferated in recent years against the backdrop of a deregulated marketing environment.

To position itself to take up these challenges, the NAMC established the Markets and Economic Research Centre (MERC) in 2007. The vision was to develop an economic and market

COMMENTARYDr Simphiwe NgqangweniSenior Manager : Markets and Economic Research CenterNational Agricultural Marketing Council

7

research programme that tracks economic trends and provides market information that is aimed at improving South Africa’s position in future global agricultural markets.

In order to address immediate capacity challenges, MERC’s strategy was to work in partnership with various centres of excellence, which shared the overwhelming workload.

Notable key partnerships were set up with the Bureau for Agricultural Policy (BFAP), the Trade Law Centre for Southern Africa (Tralac) and a few universities. Through this partnership model over 60% of its research output was generated, enabling the NAMC, over the past few years, to establish itself as a trusted institution by both private and public sector stakeholders.

The volume of work that needs to be undertaken is ever - increasing, rendering NAMC to work even smarter. The partnership model will continue to be utilised, as it seems to be the most sensible one in the face of a generally limited nationa pool of experienced agricultural economists.

The NAMC will also continue to build and nurture internal capacity and acquire the necessary tools to undertake good quality and relevant economic research within an environment where financial resources are becoming scarcer. This scarcity seems to be a good justification for consolidation of agricultural economics capacity in the country in a manner that will enable more organized agenda setting and execution of relevant analyses for agricultural policy making in the country. Whatever the future holds in this regard, the NAMC will arguably continue to make an important contribution

towards the shaping of agricultural policy

debate.

Agricultural economics research in South Africa’s public sector: the role of the NAMC

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The Way ForwardOpportunities for South Africa’s smallholder farmers

F D SECURE

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On 6 August 2014, the National Agricultural Marketing Council

(NAMC) received an unusual expression of interest. The

United Nations World Food Programme (WFP) signed a

Memorandum of Understanding (MoU) with the NAMC that

outlined two deliverables; to produce a standardised

training package for smallholder farmers on marketing,

pricing and trade, and to form part of farmer training days

– train farmers on marketing, trade and pricing of grains in an

open market system.

The NAMC superimposed a requirement that the training

material (Training Manual and PowerPoint presentation be

presented in English, while the actual training be done in

venecular of any of specific areas within South Africa). The

WFP was chosen by the Government of South Africa

(Department of International Relations and Cooperation

– DIRCO in collaborations with the Department of

Agriculture, Forestry and Fisheries – DAFF) to facilitate

the procurement of food to be given to Lesotho amounting to

R180 million over three years.

The minimum condition for the provision of the humanitarian

assistant (on the procurement side) was for the WFP to

procure a minimum of 40% from smallholder farmers.

Because of the difficulty in procuring from smallholder farmers,

the WFP made amendments to the quantity requirement

(reducing it from 50 tons to 30 tons).

According to the Department of International Relations and

Cooperation the urgent request came in 2012 from the

Lesotho government. The Lesotho government expressed

fear of its inability to feed its population due to the frequency

or re-occurrence of droughts resulting in the country’s food

shortage. Since the programme was establishment, South

Africa has been able to supply Lesotho consistently with food

relief.

Visiting Nazareth a village situated west from Maseru capital,

local women prepared staple food supplied by the WFP for the

Nazareth primary school.

Moeti Letumanyane the school principal appreciated

the intervention by the South African government (through

the WFP) as learners before came to school hungry and

where unable to concentrate in class. Ambassador Jerry

Matjilia Director General of DIRCO also visited the area in

2014 and remarked that the South African government was

impressed with the way the programme was being managed

and “knowing that there is enough food in the storage for the

whole term is confidence enough that the scheme is working”

he said.

A two year programme, the WFP was able to procure 4,374

metric tons of maize and sugar beans from South African

smallholder farmers, this accounting to 109% of the overall

target tonnage. Over 500 smallholder farmers and over

200 Government officials (agricultural advisors) across

South Africa received training in various capacities and

most farmers were offered contracts to supply WFP with tons

of maize, cereal and sugar beans. One such farmer was

Benedict Makoko from the Free State who secured a contract

to supply 90 metric tons of maize to WFP. An elated Makoko

admitted that the supply of maize at such quantities was his

first ever production yield and without the technical training

provided it would have not been possible. The WFP also

supplies smallholder with post-harvest handling equipment,

which are kept and maintained by the regional Agricultural

Departments.

The NAMC together with WFP developed a training manual

which was delivered and facilitated in all smallholder

training workshops. The focal point was on improving

smallholder farmer’s ability to market their produce in the

formal agricultural sector. Other crucial aspects the training

focused on was smallholder farmer’s ability to; understand

the factors and key actors within South Africa’s grain

and pulses market; understand key agricultural marketing

principles and areas for engagement; recognising factors

that define pricing strategies; engaging in formal agreements

and contract negotiations and understanding individual and

group marketing strategies.

Love thy neighbour: SA smallholder farmers provide food relief to Lesotho

Bonani Nhyodo | Ndumiso Mazibuko | Majara Monamodi

http://www.namc.co.za/upload/Facilitator-Guide-Grain-Marketing-Version-21-May-2015.pdf

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BEA TIFUL C UNTRY! BEAUTIFUL FRUITS South Africa’s table grapes season 2014/2015The current South African table grapes season commenced in November 2014 and will run until April 2015. By mid-February 2015, the industry had inspected and passed about 44 million equivalent cartons (1 carton =4.5 kg) for export markets. By the same time in the previous season, the industry had only inspected and passed 32 million cartons. The significant difference is attributed to the early-season harvest and better crop yield in the 2014/2015 season, which has seen the industry pushing more than 10 million cartons more in the first part of the season.

Table 1: Table grapes inspected and passed for export

1 carton =4.5 kgProduction region 2011/12 2012/13 2013/14 2014/15Northern Province 4 117 314 3 915 904 3 903 660 4 353 431Orange River 16 786 435 16 256 210 15 045 391 17 902 151Olifants River 2 012 585 2 225 425 2 331 167 3 210 409Berg River 8 532 649 8 534 202 6 145 518 10 449 468Hex River 5 303 353 6 665 715 3 856 398 8 567 725Total 36 752 336 37 597 456 31 282 134 44 483 184

Source: SATI (2015)

Figure 1 shows the export trends for table grapes to the global market over the past four seasons. It can be noted that the growth in exports of table grapes for the current season is mainly driven by improved production compared to the previous two seasons.

Figure 1: Export trends for table grapes Source: SATI (2015)

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Figure 2 highlights South Africa’s export market destinations for table grapes for the 2014/2015 season. The bulk of South African table grapes are exported to the European Union and the United Kingdom. By the end of week five, these markets had absorbed about 19.5 million cartons and 8 million cartons respectively. The Middle East is the third on the list of top market destinations for South African table grapes, with a total of 1.2 million cartoons for the current season.

Figure 2: Main export destinations for South African table grapes Source: SATI (2015)

Figure 3 shows South African domestic consumption (2013-2014) and price trends (2013-2014) in respect of table grapes. Domestic consumption dropped in 2014, while prices were higher in 2014 compared to 2013. October 2014 recorded the highest price for table grapes in the local market, mainly due to off-season higher demand and anticipation of the new domestic season. Consumption was low between June and October, pointing to the fact that table grapes are a seasonal crop. During this part of the season, the local South African market depends on the imports originating from northern hemisphere countries, which may be the reason for the extremely high prices, because consumers pay a price inclusive of the import tariff

Figure 3: Sales of table grapes in the domestic market Source: DAFF (2015)

Report is a summary extracted from the South African Fruit Trade Flow, Issue No. 17: February 2015,

Sifiso Ntombela | Yolanda Potelwa http://www.namc.co.za/upload/South-African-Fruit-Trade-Flow-February-2015-Issue-17.pdf

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ACCESS Agri-economics research portal

NAMC launched the agricultural economics research portal in April 2015. This was a soft launch to gauge the interest from academics, university students and agribusiness. Quite unexpectedly, the portal has received great reviews from NAMC stakeholders.

This portal showcases recent economic research output published at least quarterly by the NAMC. In some cases, new output will come out on a monthly basis (for example, the South African Supply and Demand Estimates Report). New research will be published occasionally as it becomes available.

If you have any interesting agri- economics research and or agricultural research topic, study and presentation you want to collaborate with the NAMC on please kindly contact Mashudu Siobo at [email protected]. Your contributions could be featured here.

Are you a Directly Affected Groups?The MAP Act defines a directly affected group as any group of persons that is party to the production, sale, purchase, processing or consumption of an agricultural product, and includes labour employed in the production or processing of such a product.

Since 1997, the NAMC has been keeping a register of all the particulars received from the directly affected groups, for each agricultural commodity. Approximately 800 groups are currently registered with the NAMC. The register is used to bring applications for statutory measures to the attention of directly affected groups and to invite such directly affected groups to lodge any objections or representations relating to a request for intervention in the agricultural sector within a specified time.

The viewpoints of directly affected groups are incorporated in the NAMC’s recommendations to the Minister of Agriculture, Forestry and Fisheries.

Contact Lizette Mellet, [email protected] , tel 012 3451 8673, and fax 012 3451 1811

http://www.namc.co.za/research-portal/

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On 5 June 2014, the South African Pecan Nut Producers’ Association (SAPPA), on behalf of the directly affected groups in the pecan nut industry, applied to the Minister of Agriculture, Forestry and Fisheries, for the approval of the proposed continuation and amendment of the following statutory measures for a four year period:

• The registration of all producers, growers, proces sors, packers, importers and exporters of pecan nuts and/or pecan nut products.• The keeping of records and submission of returns by all producers, processors, importers and exporters of pecan nuts and/or pecan nut products, as may be required by SAPPA, relating to: • Pecan nut trees; • Volumes of pecan nuts and/or pecan nut products produced; and • Volumes of pecan nuts and/or pecan nut products imported and/ or exported.• Furthermore, that the levy of R0.15 per kilogram (excluding VAT), that will lapse on 9 March 2016, be continued and amended to the following levy rates per kg of pecan nuts for the next four year period:

2016/17 2017/18 2018/19 2019/20

In shell pecan nuts

25 c/Kg 25 c/Kg 30c/Kg 30 c/Kg

Pecan nut kernels

50 c/Kg 50 c/Kg 60 c/Kg 60 c/Kg

These proposed levies will be payable by producers, processors, packers, importers or exporters on all pecan nuts (that include in shell pecan nuts and pecan nut kernels).

The proposed levies could create an income of between R3.2 million and R5.1 million per year over the next four years based on a pecan nut production estimate of between 13 000 tons and 17 000 tons per year. SAPPA proposed that approximately 31% of levy funds will be used to fund research projects; 24% on market information and on market information and statistics; at least 20% on transformation and training; and the rest on plant improvement functions and certification,

communication, and trade and market access, on behalf of the pecan industry. The proposed levies would represent approximately 0.5% of the domestic producers’ selling price (first point of sale) of pecan nuts.

Registration, records and returns are necessary to:- Ensure the availability and provision of continuous, timeous and accurate information relating to pecan nuts and pecan nut products to all stakeholders in the industry, which is essential in ensuring informed decision making and a stable and profitable industry;- Ensure adherence to sound product handling, quality control systems and ethical trading; as well as transformation of the industry, and- Administer the proposed levy.

No records or returns shall be required in terms of this measure which discloses confidential information of a marketing nature, and in particular, no returns disclosing, inter alia, contracting parties; purchasers of pecan nut products; prices of services or the prices obtained for products, or any similar information.

The establishment of these measures will assist in promoting the efficiency of the marketing of pecan nuts and pecan nut products. The viability of the pecan nuts industry would thus be enhanced. The measures will not be detrimental to the number of employment opportunities or fair labour practice.

Directly affected groups in the pecan nut industry are kindly requested to submit any comments regarding support or objections relating to the proposed continuation and amendment of statutory measures to the NAMC in writing (fax 012 341 1911 or e-mail to [email protected]) before or on 10 July 2015, to enable the Council to finalise its recommendation to the Minister in this regard.

ENQUIRIES: Ms Lizette Mellet [email protected]

REQUEST FOR THE CONTINUATION AND AMENDMENT OF STATUTORY MEASURES IN THE

SOUTH AFRICAN PECAN NUT INDUSTRY, IN TERMS OF THE MARKETING OF AGRICULTURAL PRODUCTS

ACT, ACT NO 47 OF 1996

INVITATION TO DIRECTLY AFFECTED GROUPS IN THE PECAN NUT INDUSTRY TO FORWARD COMMENTS TO THE NAMC

STATUTORY MEASURES

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This how we do it14th Marketing Market Matters Workshop, 11-15 May 2015, Stellenbosch

For 14 years Making Markets Matters (MMM) has been at the fore of developing and capacitating African agribusiness entrepreneurs. Interestingly enough, the programme has been presented as far as Brazil and other Asian tiger countries. What it is perhaps strikingly different about the programme is its all encompassing business training model admitted Captain James Gicanga Karanja African Agribusiness Entrepreneur of the Year upon receiving his award.

Captain Gichanga Karanja an ex-Kenyan army General- soon after retirement, established a seed company called Freshco Seeds Kenya, LTD. The seed company is one of the fastest growing seed companies in Kenya currently producing 1800 metric tons of vegetable seeds including other commodities. Speaking at a gala dinner held at the Victorian hotel Lord Charles in Stellenbosch, one of the founders and current CEO of MMI Dr Ralph D Christy praised African governments for realizing the importance of capacitating agribusinesses. In Christy’s view, Captain Gichanga Karanja was a best example that showed how markets were transforming and strongly aided by emerging agribusinesses.

This is what Africa needs said Joyene Isaacs, Western Cape Agriculture HOD. Reality about Africa was that ‘we are not reporting on such achievements enough’ and thus it collapses the continent from moving forward with the business of agriculture.

Dr Joyce Chita from UKZN presented a side most not considered by agribusiness in taking them forward. Her research titled “challenges and opportunities for agro-smme in Global agribusiness” suggested that for SMME agribusiness to be successful perhaps consideration had to be in managing human assets (skills, knowledge, health, self determination) and social assets; networks, groups, trusts, access to institutions).

In truly reflecting Dr. Chita’s study recommendations, this is what MMM was designed to do. Making Market Matters is a four day training workshop programme with strong articulation on marketing, strategy, financial analysis, supply chain management and human resource management. MMI executive director Dr. Ed Mabaya said the difference about the programme compared to others was that it offered “excellent opportunities for SMME to build business relationships among each other and for larger businesses to connect with SMME’s.”

Holding South Africa’s version of agribusiness development, Khumbuzile Mosoma Senior Manager of NAMC said it was one of the reasons NAMC partnered with MMI. “In our current agricultural environment, the most predominant people looking for opportunities in agriculture were women and the NAMC was continuously looking into bringing more female agribusinesses to the programme” she said. NAMC sponsored 120 farmers to attend the training including one of the rising agribusiness entrepreneurs Lufefe Nomjana of Espinaca Innovations (see insert).

AGRIBIZ MATTERS

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Espinaca InnovationsLufefe Nomjana

NAMC heard of Lufefe Nomjana amazing story and invited the young men to Making Markets Matter to share his business philosophy and growing success. In 2012, Lufefe started his own bakery business. This was a different bakery one that emphasised healthy lifestyle eating.

After volunteering in one of the community centers planting spinach, Lufefe had an idea to offer something new for the Khayelitsha community. It was that inhibited culture of unhealthy eating in his community that drove him to combine staple, spinach to make nutrient spinach bread. He first sold the bread door to door until the transitioning into a green recognizable

stationary bakery on Spine road in Khayelitsha.

Today, Lufefe “Espinacas bakery serves over 200 Khayelistha community members selling over 53 loafs a day at a cost of R14. Espinaca has also diversified offering spinach rusks and muffins including soup.

Speaking to Lufefe on the sidelines of the workshop he said he was “humbled by the support and encouragement shown by experienced agribusiness in here.” Asked if he has tied any deal among the attendees “its promising my man and requests have been flooding in”.

Photo: http://www.hubspace.co.za/#!lufefe-nomjana/c1s4y

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A chorus reminiscent of women in rural areas going to plow the fields, now sitting in a formal setting glad to have received knowledge beyond their believes. This is Agribiz Training Matters, just a week apart from MMM, is hosted in conjunction with the Western Cape Department of Agriculture, Buhle farmers and Making Market Matters.The programme has provided training to over 250 female agribusiness entrepreneurs across South Africa.

It is a universal fact that a majority of smallholder farmers are women. South Africa is no different and for the past 6 years the NAMC has taken pride in selecting the most promising emerging female agribusiness and farmers from South Africa. The training is largely focused on providing the female farmers with the practical tenets of business management skills (with most never been near a classroom) and to also provide new insights of production management said McGreggor Ntuli of Buhle Farmers.

It is undeniable that most of these women farm on the basis of survival than actually realizing the potential of their farming and agribusiness enterprises. Seriena Vivashe one of the farmers from Gauteng was pleased with the application the training provided. At a gala dinner held after the four days training Vivashe speaking on behalf of the female group thanked the NAMC, MMI and Bhule Farmers for transferring knowledge that has been missing in their business operations. Key to growth is learning, understanding the environment you are in and why you are in it she said. According to Vivashe it became more apparent for the women, towards the end of the training workshop to realise that farming was about business and not charity.

Andre Young Chairperson of the NAMC was pleased that his organisation was not just talking transformation but delivering on it. He further pledged greater assistance to the programme as “it has tremendous strength to turn smallholder farmers and agribusiness into a competitive force” he said.

“I am a farmer now, I'm afarmer now”

Dr. Ralph D Christy CEO OF MMI from the US giving a lecture on agribusiness management. On the right is Mr. Nico Maluleke from Buhle Farmers Academy lecturing on the essentials of budgeting.

In partnership Sponsors

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Certificate

For successfully completing 4 days of training onManagement Training for Women Entrepreneurs

18 May – 21 May, 2015Stellenbosch, South Africa

ofAttendance

This certiicate is awarded to

Ralph D ChristyCEO: Market Matters

Neil de SmidtDirector: Buhle Farmers Academy

Group discussions were conducted, with one of the many reasons expresssed by female farmers being the difficulty in managing human resources of the respective enterprises. Seen here (on the right) is Dr Ed Mabaya providing advice and technical expertise

ABOUT BUHLE FARMERSBUHLE FARMERS’ ACADEMY was established in 2000 by the FOOD HEALTH HOPE FOUNDATION. The objective is to empower farmers through thorough practical skills training and holistic instruction to become competent in their abilities to understand and apply technical information, manage the farm as a production unit and a business, and market their produce profitably. Skills training and support in fact enables access to the many fine development initiatives from the State and the private sectors that are currently available.Buhle’s mission is to enable new and emerging farmers to establish themselves in viable farming businesses through effective skills training and support in order to alleviate poverty and promote sustainable economic development and resource use in South Africa.

“The experience provided & classroom engagement was phenomenal” - Gauteng Delegation

“If words could express our appreciation, we were delighted to be part of AgriBiz”_ Eastern Cape Delegations

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There has been a plethora of requests put into issue what

the Supply and Demand Estimates Report is all about.

Christo Joubert (Manager: Agro-Food Chains at NAMC)

member of the South African Grain and Oilseeds

Supply and Demand Estimates Committee provides a

synopsis of the purpose of the Monthly report.

The South African Grain and Oilseeds Supply and Demand Estimates Committee was established by the National Agricultural Marketing Council (NAMC) in 2012. This followed after Grain South Africa (GrainSA) applied for a statutory measure for grain traders to report on export and import contracts in 2011. The application was originally opposed by the South African Cereals and Oilseeds Trade Association (SACOTA), but much consultation and discussion, also with the Competition Commission, a Supply and Demand Estimates Committee (S&DEC) was established.

The primary aim of the S&DEC is to publish official grain and oilseeds supply and demand estimates on a monthly basis. The first official Supply and Demand Estimates (SASDE) report was published at the end of June 2013.

The Committee consists of officials from the South African Grain Information Service (SAGIS), the secretariat of the Crop Estimates Committee (CEC), three independent members recommended and appointed by industry, and officials of the NAMC. The purpose S&DEC is to convene monthly meetings to capture new information available in the market at a specific time. Involved is the CEC Crop Estimates

and information supplied by SAGIS, as well as information received from voluntary co- workers (anonymous to the committee) in the industry (in particular reference to imports and exports).

The NAMC is currently responsible for organizing and ensuring the smooth functioning of the Committee. This occurs through;

• Collection of trade, production and consumption information, by the NAMC. The information is processed and reported in an aggregated manner during the S&DEC meetings. • Extrapolation of historical data obtained from SAGIS where necessary. • Processing of the Crop Estimates Committee (CEC) information with regards to crop estimates in supply terms. • Calculation of an official estimate on grain and oilseeds stock levels, at a specific month, for the rest of the marketing year.

The S&DEC Report provides an analysis of the fundamental market conditions of the major grain and oilseeds industries in South Africa. It is widely considered to be the benchmark to which private and public agricultural forecasts are compared. S&DEC normally releases the report within four to five working days after the CEC release. Worthy to note is that the reports are released into the public domain in accordance with approval of the South African Competition authorities’ consent.

SUPPLY AND DEMANDESTIMATES COMMITTEE REPORT

Source: South African Grain and Oilseeds Supply and Demand Estimates Committee. 2013. Pretoria

19

The S&DEC is applicable to and used by the following groups:

• Academia • Financial and investment institutions • Government officials • Grain millers • Oilseed processors• Feed manufacturers • Grain and oilseed traders • Grain and oilseed importers and exporters • Grain and oilseeds producers • Grain and oilseed storage facilitators • Input suppliers towards the grain & oilseeds market • Monitoring institutions • Baking industry • Producer organizations • Research institutions and • Agro-logistic (road, rail and sea freight) entities and organizations

Get your-self a monthly copy by registering on the NAMC website and click on the subscriber button.

Alternatively contact Christo Joubert at [email protected]

SUPPLY AND DEMANDESTIMATES COMMITTEE REPORT

WHEAT (2014/15 Season)

Supply: The total supply of wheat is projected at 4 018 526 tons for the 2014/15 marketing season. This includes an opening stock (at 1 October 2014) of 488 526 tons, local commercial deliveries of 1 715 000 tons, whole wheat imports of 1 800 000 tons and a surplus of 15 000 tons.

Demand: The total demand (local and exports) for wheat is projected at 3 409 735 tons. This includes 3 100 000 tons processed for human consumption, 5 000 tons processed for animal consumption, 3 500 tons withdrawn by producers, 3 000 tons released to end consumers, 20 230 tons projected seed for planting and a balancing figure of 20 000 tons (net receipts and net dispatches). A projected export quantity of 18 000 tons of processed products and 240 000 tons of whole wheat is estimated for the 2014/15 marketing season.

Stock levels: The projected closing stock level at 30 September 2015 is estimated at 608 791 tons. At an average processed quantity of 258 750 tons per month, this represents available stock for 2.4 months or 72 days.

SOYBEANS (2015/16 Season)

Supply: The total supply of soybeans is projected at 1 129 054 tons for the 2015/16 marketing season. This includes an opening stock (at 1 March 2015) of 63 704 tons, local commercial deliveries of 912 850 tons, soybeans imports of 150 000 tons and a surplus of 2 500 tons.

Demand: The total demand (local and exports) for soybeans is projected at 1 039 800 tons. This includes 26 000 tons processed for human consumption, 120 000 tons processed for animal (full fat) consumption, 880 000 tons for crush for oil and oilcake, 3 000 tons withdrawn by producers, 3 000 tons released to end consumers, 5 300 tons seed for planting, and a balancing figure of 2 000 tons (net receipts and net dispatches). A projected export quantity of 500 tons soybeans is estimated for the 2015/16 marketing season.

Stock levels: The projected closing stock level at 28 February 2016 is estimated at 89 254 tons. At an average processed quantity of 85 500 tons per month, this represents available stock for 1.0 months or 32 days.http://www.namc.co.za/pages/research--publications/

publications/supply--demand-estimates

20

INTRODUCTION The National Agricultural Marketing Council (NAMC) strategic placement and relationship with public and private institutions built over many years enables the Agribusiness Development division to facilitate programmes that have the potential to achieve the government goals and outcomes. The Agribusiness Development Division (ADD) collaborates with various institutions both nationally and internationally in designing and implementing programmes aimed at increasing market access, encouraging new business development and building capacity of historically disadvantaged individuals.

In 2013, the NAMC designed and facilitated the implementation of Dry beans Development scheme in the Sekhukhune district of Limpopo province. The schemes was designed and implemented in partnership with the Limpopo Department of Agriculture (LDA), Tiger Brands foods (the buyer) and the Limpopo Economic Development Agency (LEDA). The schemes were designed and implemented to uplift the black producers in the agricultural sector and to encourage their integration into the commercial mainstream. The design was guided by the feasibility of the enterprise and its developmental impact to the district of Sekhukhune, Limpopo province.

WHY DRY BEAN DEVELOPMENT SCHEME

The dry bean initiative was triggered by the growing demand for the commodity in the formal markets. The NAMC secured an off-take agreement from Tiger Brands food (a leading food manufacturer and marketer of Fast Moving Consumer Goods product in Southern Africa) on behalf of growers to supply bags of small white beans of specific variety to its factory in Boksburg. Because the seed was first of its kind to be planted in the area, the pilot project was initiated and implemented in 2014 with Kopano agricultural cooperative. Twenty seven (27) tons of small white beans were produced from an 11 ha piece of land.

DRY BEAN DEVELOPMENT SCHEME July 2015SEKHUKHUNE DISTRICT LIMPOPO PROVINCE

21

EXPANSION OF THE PROJECT Because Tiger Brands aimed for a long term relationship with growers, five (5) farms were identified immediately after the pilot project to grow the crop in 2015 production season as part of the expansion plans. The NAMC then facilitated the development of a comprehensive business plan which analysed the viability of the enterprise as well as the areas that required some intervention. Farmers managed to plant 64 ha in total in the 2015 production season which produced a total of 108.6 tons. Harvesting took place in June 2015 and farmers received at least R9000 per ton. Farmers received R957 204.00 in profit collectively. The NAMC provided fertilizers to all farmers. The costs of harvesting were incurred by the growers themselves.

BUSINESS MODEL APPLIED

The model consists of Tiger Brands as the processor of the small white beans into tinned KOO product. Tiger Brands entered into contract with Northern Seed Producers (a company appointed by Tiger Brands to supply the right seeds, technically assist the growers to produce, harvest, clean and package the commodity on behalf of Tiger Brands). Northern Seeds Producers entered into agreement with growers. The company makes seeds available, assists the growers to plant, grow and harvest (technical support) the commodity, clean the beans after harvesting (remove stones, leaves etc) and package the commodity according to the specifications before it is delivered to Tiger Brands factory in Boksburg. The costs of harvesting are paid later after harvest. It takes approximately 105 days for the crop to be ready for harvest. Prices were determined before planting.

2016 PRODUCTION PLANS

Tiger Brands committed to assist growers to plant at least 200 ha of small white beans in the 2016 production season. This required high level commitment from all stakeholders involved including growers themselves. The NAMC will facilitate the process of identifying thegrowers with relevant infrastructureto produce for this market. Support in terms of machinery, especiallyduring harvesting can better improve the profit margin of the farmers. The idea is to link this initiative with the Fetsa Tlala programme of the Limpopo Department of Agriculture in order for it to contribute to government goals and objectives of eradicating poverty and foodinsecurity.

DRY BEAN DEVELOPMENT SCHEME July 2015

Phistos Mashamaite

“R957 204 in profits made”

22

Agriculture is a risky business, especially primary agriculture, since it is affected by natural factors which are beyond human control. Agricultural production is therefore affected by climate change which is showing itself through shifts in weather patterns. Severe heat, floods and droughts are examples of climate change which directly affect agricultural production. Too much rainfall leads to floods (see Figure 4), which negatively affects agricultural production as the yields are washed away. More heat will burn the crops under production especially if dry land is used for production. For crops under irrigation, more water is used, leading to increased cost of production. Human practices such as chopping down of forests can also lead to climate change as the region can become warmer.

Climate variability causes inconsistency in production and this leads to a lower volume of agricultural production than expected. When the volume of production is lower, markets might be in short of supply and this may serve as bridge of contract. Penalties might be that farmers participating in the market acquire low prices for the commodity supplied or total rejection of the products. The worst case scenario might be a situation in which the farmers loose the market. These serve as a disadvantage to farmers participating in the market.

Given the negative impact of climate change in South Africa, the NAMC has found it important to interact with smallholder farmers in the affected areas of Giyani to understand how climate change has affected their agricultural production and livelihood in general.

On the right is Mr J. Maluleke and his son, Mr T. Maluleke, who own a 5 ha vegetable farm in the greater Giyani Municipality. According to both farmers, they have experienced high rainfall during February and March 2014 which becomes counter- productive as it attracts pests and diseases. The rainfall also leads to rust and spoilage of the crop.

According to Mr J. Maluleke “too much water has had negative impact on tomato production”. He mentioned that the production yield was low; therefore they did not produce the quantity they promised to supply to the market. A low return on investment was received due to the negative impact of climate change because the produce was not of good quality. Currently the farms are experiencing high temperatures reaching a maximum of 40 °C, which is above the average daily mean recommended for optimum growth, yield and quality of tomatoes. According to the Department of Agriculture Forestry and Fisheries (Undated) hot, dry winds cause excessive flower drop while continuous moist, rainy weather conditions result in the occurrence and spread of diseases, which is why it is recommended that tomatoes be grown in dry areas under irrigation.

Mr Tinyiko Bilankulu, a vegetable farmer who also specialises in tomato production in the greater Giyani Municipality was also interviewed. Mr Bilankulu made mention that during autumn of the current year high rainfall was experienced which affected the timetable for pest management and weed control. Labour input had to be increased which led to increased input costs. The rain caused rust, cracking and over ripening. The markets were forced to reduce the price because the produce was not of good quality. A high percentage loss was experienced because most of the produce did not meet the market standard and some was even rejected by hawkers.

AGRI-PRENEURThe Impact of climate change on agricultural production

23

Figure 4: Impact of climate change on agricultural production

Climate change recommendationsSmallholder farmers should have reliable information on future weather estimates. This will assist farmers on the varieties of the crop to be grown. A drought tolerant variety is also recommended, which will help to reduce production risks. Necessary information on climate change needs to be made adequately available and assurance should be made that the information reaches all categories of farmers. A mechanism should be put in place to assist smallholder farmers in acquiring knowledge on how to measure climate variables themselves and make informed decisions on the commodities to be produced. There is a need for the development and implementation of effective adaptation measures in order to mitigate climate related risks. Awareness of the impact of climate change should be raised because not all farmers are well informed on the variability of climate change as well as measures to be employed towards adaptation.

The article was extracted from the soon to be published Agri-prenuer.Thulisile Khosa | Sydwell Lekgau.

Mitigation Strategies

Giyani is a dry area which is good for tomato production; the only problem is that the temperatures are above the average daily mean of 20 °C and 30 °C and there is an inadequate water supply in the area. Therefore, even if the plants receive water in the form of rain or irrigation the water does not penetrate into the soil, which makes water absorption by the plant difficult, leading to decline in percentage flowering and production volume. Smallholder farmers with the objective of obtaining a large profit from the harvest should consider using the tunnel system because they will be better able to control the temperature. Crop rotation is essential to reduce the build-up of pests and diseases.

24

South African Soybean Industry

Info Graph Compiled: Christo Joubert | Ndumiso Mazibuko | Majara Monamodi | Sylvester Moatshe

Disclaimer: Information contained in this document results from research funded wholly or in part by the NAMC acting in good faith. Opinions, attitudes and points of view expressed herein do not necessarily reflect the official position or policies of the NAMC. The NAMC makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this document and expressly disclaims liability for errors and omissions regarding the content thereof. No warranty of any kind, implied, expressed, or statutory, including but not limited to the warranties of non-infringement of third party rights, title, merchantability, fitness for a particular purpose or freedom from computer virus is given with respect to the contents of this document in hardcopy, electronic format or electronic links thereto. Reference made to any specific product, process, and service by trade name, trade mark, manufacturer or another commercial commodity or entity are for informational purposes only and do not constitute or imply approval, endorsement or favouring by the NAMC.

Main sources: USDA, USDA-FAS(2010), NAMC, TECHNOSERVE, SAGIS, ITC, PNS, GSA, SAFEX, AFMA

South African Soybean value chain, presentation by the Markets and Economics Research Centre- NAMC(2012)This study originated from a request by ITAC

25

In mid April, a total of 147 communal livestock farmers descended on the spectacular Msinga Livestock Auction Pen. This was by far the highest auction figure and farmer attendee recorded since its inception. 214 cattle’s were presented with 147 sold. One of the farmers sold 11 cattle’s pocketing around R48 950. According to Karen Melouney of the AAM livestock agents and auctioneers the event was a success as R825 851 was generated with the fraction of the amount allocated to the Msinga Farmers Association.

You may remember that the auction pen or ‘sale yard’ as it was called, was built in 2014 by the Department of Rural Development and Land Reform, and officially launched by President Jacob Zuma late last year. The auction pen was a result of a study commissioned by the Department of Economic Development. In its research outcomes, the department discovered that the area was the biggest if not the most populated rural area in South Africa with approximately 60% of households owning goats. This set a prime base for economic encouragement

with an initial investment of R1, 9 million set aside to build the auction pen. Msinga is an area huddled by the deep gorges of the Tugela Ferry and Buffalo Rivers, and it is currently experiencing infrastructure development. One of the prime projects is the Tugela Ferry Irrigation Scheme which according to the Department of Rural Development and Land Reform included repairs to the weir intakes, concrete canals and upgrading of the infield irrigation system to name a few.

The Msinga auction pen sits uniquely at the forum of development and economic activity as 10 km away is the Tugella Bridge that opens the area to economic participation. According to Dr. Xolile Ngetu of the National Red Meat Development Programme the bridge has made the area accessible for buyers or traders as it has eased transport logistics and made it convenient for livestock transportation.

The Msinga Auction pen has been incorporated in to the National Red Meat Development Programme.

NRMDP takes over Msinga Auction Pen

26

HEMPHemp – true hemp, raw, processed, not spun; tow and waste of true hemp (HS code 5302)

Hemp is a plant under the genus Cannabinacaea, which also includes the species Cannabis sativa (Marijuana). The term 'Hemp' commonly refers to cannabis plants that are commercially grown for the use of fibre, oil and seed. The fibre is extracted from the stalk of the plant and oil from the seed and these can be used in textiles, foods, papers, body care products, detergents, plastics and building materials. This is the reason that hemp is often called industrial hemp. The core of public and political debate on hemp in South Africa is whether or not industrial hemp should be legalised for industrial or commercial use as opposed to spiritual use involving smoking the cannabis flowers.

This article reveals the international trade in hemp for industrial purposes. In addition, the article indicates some economic opportunities for South Africa.

Table 1 shows the world exports of hemp between 2003 and 2013, expressed in value terms and measured in millions of Rand. The world exported a total of R470 million in 2013. Netherlands commanded top list from R3.7 million in 2003 to R23 million in 2013; followed by China, Germany and Mauritius with a market share of 13 %, 6.9 % and 4.9 % respectively. It is worth noting that the majority of world leading exporters of hemp were on the European continent with only two countries in Africa.

The article is extracted from the International Trade Probe; Issue No 56, March 2015.

Lindikaya Myeki

27

Table 1: World Exporters of Hemp (HS Code 5302): 2013

Exporters Value R’000 Growth % Share%,2003 2013 2003–2013 2013

World exports 43846 47064 7NetherlandsChinaGermanyMauritiusItalySpainUKUSAEgyptSweden

37045200470606293777742020030

231146261324623052113159415171133845624

52420−31–2364208−80−44–1980

49.113.36.94.94.53.43.22.41.81.3

Source: Trade Map, 2015

Table 2 presents a list of the top ten leading importers of hemp between 2003 and 2013. The world value of imports amounted to R131 million in 2013. The largest importer was Germany with a total of R37 million in 2013. Noteworthy, Germany showed growth in imports at a rate of 410 %; followed by the Czech Republic and Spain, accounting respectively, for 28 %, 24 % and 18 % of the world’s market share. The rest of the countries forming the top ten leading importers of hemp included Belgium (R6 million), Japan (4 million), Switzerland (R3 million) and others.

Table 2: World's leading importers of hemp: 2003-2013Importers Value in R’ million Growth % Share %

2003 2013 2003–2012World 70 131 88GermanyCzech RepublicSpainBelgiumJapanSwitzerlandAustraliaFranceItalyKorea

74211320190

3732246433222

41063715411695819 04054−80814

28.024.318.34.73.32.32.21.61.41.3

Source: Trade Map, 2015.

28

Table 3 lists the top ten leading export destinations for South African hemp in 2014. It is worth noting that South Africa largely exports hemp to other countries on the African continent. This can be attributed to a wide range of factors such as, lack of hemp industry, low production and the legal status of hemp. Botswana topped the list with R119 million followed by Mozambique, Namibia and Zambia commanding a market share of 39.1 %, 4.3 %, 4.3 % respectively.

Table 3: The export markets for hemp (HS Code 5302): 2014Importers Value in R’ million Growth % Share %

2003 2014 2003–2012World 401 249 −38 100BotswanaMozambiqueNamibiaZambia

7336290

119971111

63169−62–

47.839.14.34.3

Exporters Imported value Growth % World 162ChinaUKLithuaniaUSA

54433232

33.326.519.819.8

Source: Trade Map, 2015

Table 4 presents the import markets for South African hemp in 2014, expressed in value terms and measured in thousand Rand. The first observation is that South Africa imports less than it exports. This can be attributed to the legal status of hemp in the country. South Africa imported a total of R162 thousand worth of hemp from the world. China, the UK and Lithuania were the largest suppliers of hemp with a market share of 33.3 %, 26.5 % and 19.8 respectively. The United States of America was also among the top list of import markets for South African hemp.

Table 4: Top import markets of South African hemp (HS Code 5302): 2014

New developments for hemp in South Africa

Agronomic and commercial research trials have been established at various sites in South Africa since 1999. These trials focused on exotic cultivars. These include Futura 75, Kompolti and others. The first trials were planted in the North West Province by the ARC experimental farm near Rustenburg. The other trials were planted by the ARC Institute for Industrial Crops in the Eastern Cape and Western Cape, Limpopo, Gauteng, Mpumalanga, KwaZulu-Natal and Northern Cape (DAFF, 2012). In the smallholder farming sector, three trial sites have been established by House of Hemp in collaboration with various stakeholders such as ARC, NHF, CSIR, Department of Health, DAFF, SAPS etc. There are three smallholder farmers that are under these trials, which are Evergreen Cooperative (EC), Qamata Hemp Farming cooperative (EC) and Inkumba Thembalethu Cooperative (KZN). It is anticipated that at the end of the research trials period, a report will be compiled with some recommendations on industrial hemp going forward. These developments are an indication that South Africa wants to respond to the growing global demand for industrial hemp.

NORMS AND STANDARDS COMPREHENSIVE FARMER SUPPORT

29

NO

RM

S A

ND

STA

ND

AR

DS

CO

MPR

EHEN

SIVE

FA

RM

ER S

UPP

OR

T

NORMS AND STANDARDS COMPREHENSIVE FARMER SUPPORT

The development of Norms and Standards has been a priority for DAFF because of the challenges in the provision of financial and non- financial support needed to assist the farmers to take their place in the economy and to assist with rural development which is part of the goals of the National Development Plan.

Norms and Standards for Comprehensive Producer

Support in SA

The main objective of the norms and standards is to transform the agricultural sector in South Africa and ensure that this sector contributes to the economic and rural development of the country. The following are sub-objectives:• The norms and standards should assist in the trans forming of the farmers in the sector from subsistence and smallholder farmers to commercial farmers. • To improve the efficiency of all segments of farmers thereby improving their production output.• Bring about collaboration in the agricultural sector between all the industry role players whether in national or provincial government, development financial institutions, state agencies and the private sector.• The effective and cost effective delivery of public funded agricultural financial and non- financial support.

AIM OBJECTIVE

30

March 2015 Editor: Majara Monamodi

Norms and Standards for Comprehensive Producer Support

in SA griculture has long nursed prevalent views and definitions delegated to a farmer. Government even embarked on

constructive surgery to position the term farmer to its developmental and transformation agenda i.e. from emerging farmer to smallholder farmer. Off course, these terms without doubt served a particular policy position or agenda during that early phase of our democracy. In recounting the past 20 years of democracy, with all the success and challenges experienced, time was ripe for the sector to apply a singular definition of a farmer followed by a range of support packages they may qualify for. It is for this reason a national workshop on Norms and Standards was called by the Director General for the Department of Agriculture, Forestry and Fisheries Professor Edith Vries, on March 5. This call was targeted at developing a national framework to guide government, financial providers, and funders of the sector to ascertain their scope, limit, area or boundary in providing finance and/or support packages to farmers. In plain references Norms and Standards was built as a “framework to guide the content, administration, implementation, monitoring and evaluation of farmer support programmes and services” said Khumbuzile Mosoma of the NAMC. It further provided guidance on how financial packages are to be structured. Importantly, it was commissioned to respond to the developmental needs of farmers. According to renowned agricultural economist Andrew Makenete, confusion prevailed in the sector precisely due to stakeholder’s roles and responsibilities not clearly defined. Mismatch of functions or mandate between the “Agri-Bee fund, CASP, MAFISA and others either overlapped or clashed” he said. Ultimately, this tended to create existing gaps resulting in abnormal financial structural administration. A case in point was made of support package programmes providing funding unto the same farmer without actually determining whether the said farmer received prior funding. This is where the national workshop focussed its attention; financial support packages, non financial support packages, capacity building and skills transfer and private public partnerships.

A

In his opening address NAMC CEO Ronald Ramabulana highlighted the current agricultural funding ‘doubling dipping’ as a cause for concern he said. What became apparent and a view shared by the forum was that financial reforms had to take place and be reviewed. Simply stated, if subsistence farmers were continuously offered the same funding at a capped ceiling without factoring existing conditions then funding packages would be rendered unsustainable. Fundamentally, rural farmers will still produce for the now to survive than produce more to secure their future i.e. increasing production volumes and access to markets. In summation, financial packages had to be modified to meet the demands and challenges of the sector and concurrent farmer’s experiences.

Dr Romanus Monji of the Peulwana Agrifinance stressed on the delimiting phenomenon of credit. By all accounts it would be insurmountable for banks to just give away credit to farmers without any guarantees. Agricultural financing had to straddle carefully in its service offering packages because development was skewing to a subsistance farmer mode than a developing farmer mode he said. Smallholder farmers were not creating any appetite for banks to be involved. Quite observantly it seemed the challenge laid in the following: was government winning the cause of capacitating a survival farmer to a smallholder farmer, and eventually a smallholder farmer to mainstream commercial farming?

Elder Mtshiza CASP Chief Director supported this assertion and flatly refuted claims that support packages for farmers were failing “Some farmers granted funding proved successful and in most cases were denied credit by banks, while other farmers were not able to access markets or it was difficult for them to compete in that market” she said. Clearly, it was impossible for government to assume all trades of developing a farmer especially when food security and climate change was becoming a tipping issue for agriculture. From discussions emanating from the workshop, a motion was encouraged to start developing private public partnerships. Altogether the assembly managed to assist the Reference Group and the research team to determine, debate, and deliberate on the norms and standards guide for the agricultural sector. We now look forward to the release of the preliminary report which will be made available in the coming months.

Delegates from various industries landed attention and inputs to the document/ guideline

Another partnership between the Department of Agriculture, Forestry & Fisheries & the National Agricultural Marketing Council Design & Photography: Sylvester Moatshe

Agriculture has for long accommodated the various views and definitions delegated to a farmer. Even Government over the years embarked on constructive mission to position the term “farmer” to developmental and transformational agenda. Twenty years we celebrated as a country- with all the success and challenges experienced- the time was ripe for the agricultural sector to apply a singular or common definition of a farmer including the range of grants they may qualify for.

A Reference Group was set up by the Department of Agriculture, Forestry and Fisheries in preparation for a national workshop on norms and standards. The workshop was hosted on 5 March 2015 with already made guidlines developed by the Reference Group to engage the members of agricultural sector to agree on developing a national framework to guide government, financial providers, and funders of the sector to ascertain their scope, limit, area or boundary in providing finance and/or support packages to farmers.

In plain references Norms and Standards workshop was built as a “framework to guide the content, administration, implementation, monitoring and evaluation of farmer support programmes and services” said Khumbuzile Mosoma of the NAMC. It further provided guidance on how financial packages are

to be structured. Importantly, it was commissioned to respond to the developmental needs of farmers. According to renowned agricultural economist Andrew Makenete, confusion prevailed in the sector precisely due to stakeholder’s rolesand responsibilities not clearly defined. Mismatch of functions or mandate between the “Agri- Bee fund, CASP, MAFISA and others either overlapped or clashed” he said. Ultimately, this tended to create existing gaps resulting in abnormal financial structural administration. A case in point was made of support package programmes providing funding unto the same farmer without actually determining whether the said farmer received prior funding. The workshop mainly gave attention to ; financial support packages, non financial support packages, capacity building and skills transfer and private public partnerships.

What became apparent and a view shared by the forum was that financial reforms had to take place and be reviewed. Simply stated, if smallholder farmers were continuously offered the same funding at a capped ceiling without factoring existing conditions then funding packages would be rendered unsustainable. There was an arguement that the financial packages had to be modified to meet the demands and challenges of the sector, concurrent to farmer’s experiences.

Norms and Standards for Comprehensive Producer Support in SA

NATIONAL WORKSHOP CONVENED BY DAFF & NAMC

31

NATIONAL WORKSHOP CONVENED BY DAFF & NAMC

March 2015 Editor: Majara Monamodi

Norms and Standards for Comprehensive Producer Support

in SA griculture has long nursed prevalent views and definitions delegated to a farmer. Government even embarked on

constructive surgery to position the term farmer to its developmental and transformation agenda i.e. from emerging farmer to smallholder farmer. Off course, these terms without doubt served a particular policy position or agenda during that early phase of our democracy. In recounting the past 20 years of democracy, with all the success and challenges experienced, time was ripe for the sector to apply a singular definition of a farmer followed by a range of support packages they may qualify for. It is for this reason a national workshop on Norms and Standards was called by the Director General for the Department of Agriculture, Forestry and Fisheries Professor Edith Vries, on March 5. This call was targeted at developing a national framework to guide government, financial providers, and funders of the sector to ascertain their scope, limit, area or boundary in providing finance and/or support packages to farmers. In plain references Norms and Standards was built as a “framework to guide the content, administration, implementation, monitoring and evaluation of farmer support programmes and services” said Khumbuzile Mosoma of the NAMC. It further provided guidance on how financial packages are to be structured. Importantly, it was commissioned to respond to the developmental needs of farmers. According to renowned agricultural economist Andrew Makenete, confusion prevailed in the sector precisely due to stakeholder’s roles and responsibilities not clearly defined. Mismatch of functions or mandate between the “Agri-Bee fund, CASP, MAFISA and others either overlapped or clashed” he said. Ultimately, this tended to create existing gaps resulting in abnormal financial structural administration. A case in point was made of support package programmes providing funding unto the same farmer without actually determining whether the said farmer received prior funding. This is where the national workshop focussed its attention; financial support packages, non financial support packages, capacity building and skills transfer and private public partnerships.

A

In his opening address NAMC CEO Ronald Ramabulana highlighted the current agricultural funding ‘doubling dipping’ as a cause for concern he said. What became apparent and a view shared by the forum was that financial reforms had to take place and be reviewed. Simply stated, if subsistence farmers were continuously offered the same funding at a capped ceiling without factoring existing conditions then funding packages would be rendered unsustainable. Fundamentally, rural farmers will still produce for the now to survive than produce more to secure their future i.e. increasing production volumes and access to markets. In summation, financial packages had to be modified to meet the demands and challenges of the sector and concurrent farmer’s experiences.

Dr Romanus Monji of the Peulwana Agrifinance stressed on the delimiting phenomenon of credit. By all accounts it would be insurmountable for banks to just give away credit to farmers without any guarantees. Agricultural financing had to straddle carefully in its service offering packages because development was skewing to a subsistance farmer mode than a developing farmer mode he said. Smallholder farmers were not creating any appetite for banks to be involved. Quite observantly it seemed the challenge laid in the following: was government winning the cause of capacitating a survival farmer to a smallholder farmer, and eventually a smallholder farmer to mainstream commercial farming?

Elder Mtshiza CASP Chief Director supported this assertion and flatly refuted claims that support packages for farmers were failing “Some farmers granted funding proved successful and in most cases were denied credit by banks, while other farmers were not able to access markets or it was difficult for them to compete in that market” she said. Clearly, it was impossible for government to assume all trades of developing a farmer especially when food security and climate change was becoming a tipping issue for agriculture. From discussions emanating from the workshop, a motion was encouraged to start developing private public partnerships. Altogether the assembly managed to assist the Reference Group and the research team to determine, debate, and deliberate on the norms and standards guide for the agricultural sector. We now look forward to the release of the preliminary report which will be made available in the coming months.

Delegates from various industries landed attention and inputs to the document/ guideline

Another partnership between the Department of Agriculture, Forestry & Fisheries & the National Agricultural Marketing Council Design & Photography: Sylvester Moatshe

Dr Romanus Monji of Peulwana Agri - finance touched on the delimiting phenomenon of credit. By all accounts it would be insurmountable for banks to merely provide credit to farmers without any guarantees. Agricultural financing had to straddle carefully in its service offering packages because development was skewing to a survivalist farmer mode than a developing farmer mode he said.

Elder Mtshiza CASP DDG refuted claims that support packages for farmers were failing. Some farmers granted funding proved successful and in most cases were denied credit by banks, while other farmers were not able to access markets or it was difficult for them to compete in that market she said.

Clearly, it was impossible for government to assume all trades of developing a farmer especially when food security and climate change was becoming a tipping issue for agriculture.

From discussions emanating from the workshop, a motion was encouraged to start developing private public partnerships. Altogether the assembly managed to assist the Reference Group to determine, debate, and deliberate on the norms and standards guide for comprehensive producer support.

We now look forward to the release of the preliminary report which will be made available in the coming months.

REFERENCE GROUP Reference Group task is to oversee the design and implementation of the Norms and Standards. It is comprised of the following members:a. Ms Elder Mtshiza - DAFFb. Mr Ronald Ramabulana - NAMCc. Mr Stanley Senamolele - National Treasuryd. Dr Jemina Moeng - DAFFe. Mr Masiphula Mbongwa - DRDLAf. Ms Unati Spiers - DTIg. Dr Moraka Makhura - Landbank h. Mr Harry Moeng - Landbanki. Prof Johan van Rooyen - Stellenbosch University j. Dr Langelihle Simela - AFASAk. Mr Kosie van Zyl - AGRISAl. Dr Romanus Monji - Peulwana Agri Financem. Mr Silas Sitholimela - LDAn. Mr Mike de Klerk - Consultant

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NAMC SEMINARS Beyond Knowledge Production

Partial Equilibrium Modelling appreciates the discovery of prices under different market structures. This modelling

tool can be used to estimate prices to reach equilibrium pricing conditions in various agricultural commodity

markets. Suited for researchers to interpret and present empirical results to assist role players in the agricultural

industry with policy and business decisions. Partial Equilibrium models focuses on all industries in a country.

Furthermore it addresses policy and business decisions.

For example, Maize is the most important grain crop in South Africa, being both the major feed grain and the sta-

ple food of the majority of the South African population. About 54% of maize produced in South Africa is white

and the remaining 46% is yellow maize (2014). White maize is primarily used for human consumption, while

yellow maize is mostly for animal feed production. Domestic supply and demand factors in this industry will be

used as a function for price (market) equilibrium, i.e. the equilibrium pricing condition. The objective is to achieve

market equilibrium through “closing” the model within a partial equilibrium framework that has the ability to

generate reliable estimates and projections of endogenous variables under a certain market regime. In this article

the model closure and price formation of the South African maize industry (with specific reference to the yellow

maize industry), is analysed.

The NAMC quarterly convene seminars related to research development. It is a platform catered to peer review research papers and outcomes, project developments and policy discussions

31 March 2015

PARTIAL EQUILIBRIUM MODEL: PRESENTATION BY RIKA VERWEY

Rika Verwey Senior Economist: Agro-Food Chains [email protected]

Full Presentation available: http://www.namc.co.za/pages/published-reports/presentations

“The objective is to achieve market equilibrium

through “closing” the model within a partial

equilibrium framework ”

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NAMC SEMINARS Beyond Knowledge Production
















31 March 2015







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NAMC SEMINARSBeyond Knowledge Production

“Quantifying the socio-economic impact of infrastructure investment in agro-processing sector”

General Equillibrium Model; Presentation by Sifiso Ntombela

The model is designed for policy analysis purposes. Policy issues such as (i) impact of wage increases on the economy; (ii) impact of tariff increase or decrease in a specific sector and country at large; (iii) impact of carbon tax policy on economic growth and (iv) impact energy crisis on economic growth. You can also use it to understand the impact of recent xenophobic events on countries exports and employment.

It is mainly for advising policy makers so they make policy decisions based on informed research and analysis of the economy. Academics can also use the model for teaching purposes.

One of its greatest advantages is that it captures the linkages between various sectors within the economy. For example, whatever happens in the electricity industry its impact on other sectors will be captured by this model. It is able to tell which industries will be winners or losers for any policy proposed.

The model will be applied to various policy questions affecting agriculture. In most policy studies agriculture has been left out and with the use of this model it can change for the better.

http://www.namc.co.za/upload/EconomicModells31March.pdf

31 March 2015

The NAMC quarterly convenes seminars related to research development. It is a platform catered to peer review research papers and outcomes, project developments and policy discussions.

35

“The study seeks to evaluate the impact of SIP 11 investment in the economy of South

Africa. The study employs a computable general equilibrium model”

Sifiso NthombelaSenior Economist: TradeMarket and Economic Research [email protected] NAMC

SEMINARS Beyond Knowledge Production
















31 March 2015







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The NAMC is part of project rebirth. During 2014 the rebirth of markets project was initiated. One of the key issues identified was the lack of a national guiding principles and objectives to provide guidance to municipalities for the fresh produce markets.

The role of fresh produce markets was and still is to provide the necessary facilities to compensate for and cover the growing gap in the market that is emerging. The fresh produce markets allow for equal trade opportunities for large scale commercialized farmer and small holder farmers producing small quantities of fresh produce.

There are 18 commission-driven NFPMs in South Africa, with the Johannesburg Fresh Produce Market being the largest followed by Tshwane, Cape Town and Durban respectively.

As early as 1997, there were concerns regarding the South African NFPMs mainly arising from the significant deterioration in infrastructure and service standards, together with collapse in management which seriously affected the rendering of efficient and commercially competitive services to farmers, market agents and buyers, and thereby also on the ability of the domestic fresh produce marketing system to transform and provide market access to smallholder producers.

As quality has become a primary focus of supply chain management in many of the large retailers, quality assurance and quality control have become an integral part of their fresh produce procurement process. NFPMs need to focus on quality

assurance and quality control in order to regain the large retail share of the market. The most suitable definition of quality in the fresh produce industry is one that includes attributes of food safety, nutrition, sensory/organoleptic (colour, taste, freshness and smell), value/function (size, packaging and shelf-life) and process (traceability, e.t.c).

In 2013 the continuing deterioration in service standards in the NFPMs triggered key stakeholders in the fresh produce industry mainly fresh produce market agents through IMASA (Institute of Market Agents of South Africa) and producers through PSA (Potatoes South Africa) to eventually approach the Department of Agriculture, Forestry and Fisheries for immediate intervention and partnership to address the persistent challenges faced by the markets. This led to the evolution of a new initiative termed “Project Rebirth” aimed at improving the operations, service standards `and transforming the fresh produce markets of the republic.

This resulted in the development of the COBPs for fresh produce markets. The codes were developed by the steering group members consulting with the following stake holders (producer representatives, market representatives, market agents representatives etc.)

The document has strategic outcomes with ten key pillars to revive the operations of NFPMs, which are: • Regulatory environment; • Communication / stakeholder engagement; • Consignment control & inspections; • Food safety, hygiene and

cleanliness; • Safety & security; • Information management; • Risk & financial management; • Transformation; • Infrastructure; and • Human capital development.

Supporting each pillar in the CoBP are ten Strategic Outcomes envisaged to be achieved with each. In order to ensure that each pillar is achieved, the CoBP identifies six variables to assist stakeholders with implementation, namely: • Purpose/s of each pillar; • Indicators of performance; • Activities; • Evidence of compliance; • Time-frames; and • Responsibility and/or accountability.

Over the past year and half since the inception of the Steering Committee on Project Rebirth there have been some notable positive developments in some of the Fresh Produce Markets and improved cooperation and support from municipal authorities that own these markets. The following positive developments are worthy of note:

• The Port Elizabeth Fresh Produce Market, which has recently been a flashpoint, has acquired a new acting market manager who is busy establishing an operational team and reviving internal controls within the market. The revenue of the market is stabilising and there is positive feedback and cooperation between the market agents and the new market manager. The Steering Committee is quite confident that the market is heading towards the right direction and a

PROJECT REBIRTH: WHAT IT ENTAILS CODES OF BEST PRACTICE(COBP) FOR NATIONAL FRESH PRODUCE MARKETS AS IT PERTAINS TO MARKET MANAGERS, MARKET AGENTS, PRODUCERS , LABOR AND SERVICE PROVIDERS

http://www.namc.co.za/upload/Codes-of-Best-Practices-for-NFPMs-Final-Version.pdf

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PROJECT REBIRTH: WHAT IT ENTAILS CODES OF BEST PRACTICE(COBP) FOR NATIONAL FRESH PRODUCE MARKETS AS IT PERTAINS TO MARKET MANAGERS, MARKET AGENTS, PRODUCERS , LABOR AND SERVICE PROVIDERS

turnaround strategy is being developed to detail major interventions and steps that the market will undertake to revive its operations, along the lines of the CoBP. There are notable positive changes with regard to maintenance of the basic market infrastructure (after the R1.4m injection from the municipality), hygiene standards and involvement of municipality in the affairs of the market.

• The East London Fresh Produce Market has been allocated a budget of R10 million to be used for market infrastructure refurbishment and resuscitating the operations of the market. The market will draft its turnaround and investment plan and define how the budget will be utilized efficiently to achieve the outcomes envisaged in the CoBP. A new market manager has also been recently appointed at the market.

• The Pietermaritzburg Fresh Produce Market is experiencing constraints due to a lack of permanency and continuity at market manager level. The market is currently undergoing some notable infrastructure renovations and efforts are underway to improve the state of hygiene and cleanliness, after the Msunduzi Municipality allocated R15 million for infrastructure upgrades.

• The total collapse of management at the Vereeniging Fresh Produce Market will soon be remedied with the Sedibeng District Municipality committed to appointing an acting market manager to resuscitate the operations of the market who will be supported by a specialist project team from the municipality. The municipality has further requested human resource capacity / mentorship from the Tshwane Fresh Produce Market to support the newly appointed acting market master for a period of six months. A draft project plan to resuscitate the operations of the market has been drawn up.

• The Springs Fresh Produce Market has acquired a new market manager who is steering the market on a new trajectory. Major infrastructure renovations begun in 2013 after the municipality allocated R24 million towards reviving the operations of the market and there is positive collaboration among the stakeholders at the market.

• The Matjhabeng Local Municipality has committed itself to sort out management capacity at the market and to re-invest a portion of the revenue generated by the facility towards the upkeep and

maintenance of the infrastructure.

• The Cape Town Market Management together with the market agents and producers are to craft a strategy/business plan outlining the value proposition and unique selling points of the market, to allow it to compete with parallel channels around it. Additionally, a full-time deputy CEO has been appointed to focus on the affairs of the fresh produce market to address the perceived absence of market management.

The whole sector is already engaged and focussed to improve the NFPMs through project rebirth. The NFPMs will be responsible for ensuring compliance with the codes. The steering group will continue to monitor the NFPMs.

ReportMathilda van der Walt

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