A blueprint for inclusive growth

There is notable progress in the process of the drafting of the Agriculture and Agro-Processing Master Plan (AAMP) which will be a blueprint for accelerated and inclusive economic growth in the agricultural sector. Having learnt from the recently signed Sugar and Poultry master plans, it is envisaged that the AAMP will include concrete targets for inclusion of black farmers in the mainstream agricultural value chains. The drafting of the AAMP is being led by the NAMC, as commissioned by the Department of Agriculture, Land Reform and Rural Development (DALRRD), in collaboration with the Bureau for Food and Agricultural Policy (BFAP) and the University of Johannesburg’s Centre for Competition, Regulation and Economic Development (CCRED). BFAP and CCRED’s involvement is commissioned by the Department of Trade, Industry and Competition (DTIC). At the latest stakeholder meeting held on 29 March 2020, Minister Thoko Didiza lauded the progress made and directed the AAMP team to complete outstanding drafting work in preparation for formal social partner/stakeholder negotiations which will culminate in the eventual signing. The remaining process is estimated to take about two to three more months to complete.

Industry Trusts Workshop

In March, the NAMC hosted is Annual Industry Trusts workshop virtually due to the COVID-19 pandemic. Representatives from the DALRRD, the Department of Justice and Constitutional Development (DoJ&CD), administrators of the industry trusts and other key stakeholders in the agricultural sector were in attendance to highlight key challenges facing the industry trusts.  The preliminary results of the 2020 survey on the status of the agricultural industry trusts shows that the current asset value declined from R2,3 billion in 2019 to R2.2 billion in 2020, a loss by over R60 million between the two years. Most of the trusts have been impacted by the COVID-19 pandemic.

We expect the markets to rebound and bring a much-needed relief to the asset growth. Without these funds, industry body such as the grains, winter cereal, potatoes, and others, will regress on the work of transforming the sector including the advancement of research and development.

It is worth noting that South Africa continues to struggle through the impact of the first and second waves of COVID-19. Therefore, as South Africa continues to face challenges, the agricultural sector is one of the few that has contributed positively to South Africa’s GDP and is more likely to improve its value going forward. The COVID-19 regulations identified agriculture as an essential service to ensure that food production continues while following all food safety and public health requirements. This has ensured continuous production and supply of food for both the domestic and international markets.

South Africa’s trade performance

The fruits industry continues to be a beacon of hope for South Africa’s exports. In 2020, South Africa exported 10 percent more fruit than in 2019 despite the COVID-19 crisis. The citrus fruits were mainly exported to global markets in 2020 and such included oranges (35%), grapefruit (14%), lemons (12%) and soft citrus (11%). The Netherlands has traditionally been the most important buyer of South African fruit. In 2020, almost a quarter (about 23%) more fresh fruit was exported to the Netherlands than in 2019. South African fruit exports are estimated to increase even further in 2021 season due to favorable weather conditions and the opening up of African markets. All stone fruits exports are estimated to increase by 61% in 2021 season, while citrus is estimated to break all previous export season records with an estimated 158.7 million cartons in 2021.

Policy advisory

Earlier in March, the portfolio committee on Agriculture, Land Reform and Rural Development heard first hand from the Agricultural Produce Agents Council (APAC) about the state of South Africa’s agricultural fresh produce industry. The DALRRD has proposed the amendment of the Agricultural Produce Agents Act. Jointly with APAC, the NAMC will closely monitor the application and implementation of statutory measures in especially the fruit industries who have generally not been happy with the proposed bill.  

Policy advisory notes on climate change are to be published in the next week or so, they are guided by a recently completed household survey that the NAMC conducted through the Agricultural and Food Systems Resilience: Increasing Capacity and Advising Policy (AFRICAP) project.  This work was conducted in the Thabo Mofutsanyane and Lejweleputswa district municipalities in the Free State province.  This follows a partner institution viability assessment (PIVA) initiative to determine the capacity development needs of the four countries implementing the AFRICAP project.

Subsequent to the assessment the recommendations or findings of the PIVA exercise on NAMC included that the NAMC needs to work on regional collaborations and resource mobilisation. The resource mobilization training is scheduled to take place from the 30 to 31 March and 1 April 2021.

Market access for smallholder farmers

The NAMC facilitated agricultural training for 20 farmers in order to assist them in building successful and thriving businesses. 11 farmers producing subtropical fruits in Vhembe district, Limpopo were capacitated in business management. This is a collaboration between the NAMC and Subtrop. To promote youth involvement in the agricultural sector, the NAMC facilitated the participation of 9 livestock youth in a virtual diseases training (Rift Valley Fever, other Viral Diseases, Brucellosis and other Reproductive diseases) that was presented by Agricultural Research Council (ARC) in order to establish themselves in viable farming businesses.

During the month of March, the NAMC took a pioneering step and collaborated with the Free State Department of Agriculture, Land reform and Rural Development (DALRRD), NGO’s and the Free State Department of Social Development (DSD) in creating market opportunities for the smallholder farmers within the province. The DSD was identified as the market for these farmers through their Community Nutritional Development Centres (CNDC’s), with meat products and vegetables.  There is a total of 12 farmers (4 males and 8 females), operating on a total of approximately 50 hectares of land, who are ready to supply the market. The farmers are situated in Clocolan and Ficksburg within the Thabo Mofutsanyana District (Setsoto Local Municipality).

The NAMC designed a market access model for 11 rabbit farmers that are operating on 20 hectares of privately owned land in Boston area, IMpendle Local Municipality (KwaZulu- Natal). The design of this model was triggered firstly, by the need to address food insecurity and to assist the smallholders achieve sustainable livelihoods and, secondly, to promote the local demand and consumption of the rabbit meat, taking into account that only 20% is consumed domestically whilst the 80% of South Africa’s rabbit meat is destined for export markets.

During the period under review, a technical support planfor goat farmers from the King Cetshwayo District Municipality (KCDM), KwaZulu-Natal province was completed.  The plan outlines the required technical support interventions for the farmers and it also defines the roles and responsibilities of the key stakeholders.  A total of 15 goat famers participated in the survey owning approximately 10 000 goats (each farmer owning between 150 to 400 goats). The majority of the farmers are operating on communal land which is about 400 hectares in total.

Concluding remarks

The recently enacted African Continental Free Trade Area (AfCFTA) has opened up opportunities for South Africa to diversify its export markets through greater trade with other African countries. This however calls for capital investment in both hard and soft infrastructure so as to reduce the existing bottlenecks across the continent. This should as well entail considerations for affordable airfreight interventions for perishable cargo that earns the economy premium prices. In the case of product diversification, agro-processing should be accorded the more attention it deserves, more so that there is the AAMP in the pipeline for the agricultural sector.