PRESENTATION OF THE ANNUAL REPORT OF THE NATIONAL AGRICULTURAL MARKETING COUNCIL TO

1. PRESENTATION OF THE ANNUAL REPORT OF THE NATIONAL AGRICULTURAL MARKETING COUNCIL TO THE PORTFOLIO COMMITTEE 12 NOVEMBER 2004 BY Mr MG Rathogwa – Chairperson Ms D. Ndaba – Council member Mr V.W. Mvabaza – Council member Market driven production pays

2. LEGISLATIVE MANDATE The NAMC was established in terms of sections 3 and 4 of the Marketing of Agricultural Products Act, No. 47 of 1996 (hereinafter referred to as the Act) as amended by Act No. 59 of 1997 and Act No. 52 of 2001. The mandate of the NAMC is spelled out in section 9(1)(a) of the Act, which reads as follows: The NAMC shall, when requested by the Minister or of its own accord, investigate the establishment, continuation, amendment or revocation of statutory measures and other regulatory measures affecting the marketing of agricultural products, evaluating the desirability, necessity or efficiency of the measures and, if necessary, proposing alternatives to the establishment, continuation, amendment or repeal of a statutory measure or other regulatory measure and report to and advise the Minister accordingly.

3. Furthermore, section 9(1)(e) of the Act stipulates that the NAMC may undertake investigations and advise the Minister regarding: • agricultural marketing policy and its application; • the coordination of agricultural marketing policy in relation to national economic, social and development policies and international trends and developments; • the possibilities for promoting the objectives of the Act, mentioned in section 2(2) of the Act; and • the effect that marketing of products has on the objectives mentioned in section 2(2) of the Act.

4. In addition, in terms of section 9(1)(f) of the Act, the NAMC shall monitor the application of statutory measures and report thereon to the Minister and shall review such measures at least every two years.

5. RELEVANCE OF THE NAMC IN THE DEREGULATED MARKETING ENVIRONMENT: 1. Globalization is taking place at a faster pace and this demands provision of timeous, accurate and relevant information to participants. 2.  The second economy needs more support, more especially in marketing information, which is the key to business operations.  3.   Demand for government intervention in terms of statutory levies is increasing. This needs a dedicated institution to investigate application and monitor implementation.  4.   Looking “outside” the country, many countries have dedicated marketing institutions to promote their agricultural products. 5. In a sector such as agriculture you need an institution, which has the necessary capacity and experience to advise government on various policies and strategies. This is provided for in the Act in terms of categories in which members of the Council are appointed.

6. NAMC ACTIVITIES FOR 2004/05 IN LINE WITH THE STATE OF THE NATION ADDRESS BY THE PRESIDENT ON 21 MAY 2004 Encouraging the growth and development of the first economy and increasing its possibility to create jobs The NAMC investigates, advises and monitors the implementation of statutory measures in the agricultural sector. These measures relate to the registration of role-players, rendering of records and returns and collection of levies. These actions support gathering and distribution of information, and provide resources for agricultural research and development. These are fundamental to agricultural sustainability for both commercial and emerging sectors of the two economies. In addition, the NAMC ensures that over and above research and information, 10% of the funds collected from role-players is used for specific emerging sector development projects.

7. Increase support to agricultural activities The NAMC conducts investigations together with role-players in order to address problems in agricultural marketing and also to identify opportunities. The information coming out of these investigations is useful for both commercial and emerging sectors for devising strategies to take advantage of opportunities and sort out bottlenecks. In addition the NAMC is going to investigate how the different policies that have been passed in agriculture impact on agricultural development. The aim is to advise on how these policies can best be coordinated so that they complement one another. This will also ensure effective co-operative governance between the implementing bodies of government and other agencies.

8. Increase support to agricultural activities in emerging sector NAMC will provide marketing information to emerging farmers by holding 36 workshops nationally. The target is to reach 3600 farmers and distribute information booklets. In this way emerging farmers will be: -       more market oriented in their farming activities; -  connected with organized agriculture and will thus be more informed about agricultural marketing issues; -     assisted to identify potential markets and how to access them.

9. Contribution to the conclusion of the WTO negotiations NAMC is conducting a study on international agricultural Support and Competitiveness and this is to be finalized by July 2004. Information emanating from this study will be used at WTO negotiations where South African negotiators will have specific information about levels of government support to farmers in different countries. The information will also be used by commercial and emerging farmers in their interaction with government and other investors.

10. MISSION STATEMENT To provide strategic advice to the Minister of Agriculture and directly affected groups (DAGs) on all agricultural marketing issues in the agriculture and food industries, taking into account the needs of stakeholders.

11. VISION To be the most efficient and effective marketing advisor in the marketing of agricultural products in South Africa. CORE BUSINESS Provide accurate, relevant, independent and timely information. CORE VALUES To be accountable, to act with integrity, to value individual performance, to value personal respect and equal treatment, to act in partnership with directly affected groups.

12. Organisational structure of theNAMC Council Chairperson Audit Committee Secretary Chief Financial Officer Section Head Administration Section Head Horticulture Section Head Field Crops Section Head Livestock Bookkeeper (Vacant) Secretary Economists (3) Economists (2) Economists (2) Personnel Officer (Vacant) Finance Officer Finance Clerk Communication Officer (Vacant) Messenger/Driver Registry Clerk Cleaner (Vacant)

13. 2003/04 BUDGET UTILIZATION The activities of the NAMC were informed by:- The Marketing of Agricultural Products Act, No 47 of 1996.- The Agricultural Sector Strategic Plan. - State of the Nation Address - Minister’s Budget Speech Council Meetings (including Executive Committee meetings) Committee Meetings of Council

14. UTILISATION OF 2003/04 NAMC BUDGET INCOMER 10 422 411 Made up of: ·Transfer from DoA R 10 109 000 ·Interest and other R 313 411

15. ACTUAL EXPENDITURE R 9 664 203 Made up of: ·Personnel expenditure R 5 096 234 ·Administration R 2 177 529 ·Professional services R 2 424 049 ·Provision for audit fees R (33 609) ·Surplus R 758 208

16. OUTPUTS AND SERVICE DELIVERY TRENDS – COUNCIL

17. Province Total workshops Actual workshops Farmer attendance Average attendance Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape 5 5 5 5 5 5 5 5 5 5 5 1 8 5 5 - 3 7 306 425 134 562 382 358 - 216 174 61 85 134 70 76 71 - 72 24 TOTAL 45 39 2 557 65 WORKSHOPS HELD WITH BLACK FARMERS

18. Name of Control Board Date scheme repealed 1. Canning Fruit Board 30 September 1997 2. Cotton Board 5 January 1998 3. Dried Fruit Board 31 December 1998 4. Lucerne Seed Board 30 August 1997 5. Milk Board 5 January 1998 6. Mohair Board 31 December 1997 7. Oilseeds Board 31 March 1998 8. Sorghum Board 30 September 1997 9. Citrus Board 31 October 2003 10. Deciduous Fruit Board 31 October 2003 11. Wheat Board 31 July 2003 FORMER CONTROL BOARDS AND DATES OF DISBANDMENT

19. CONTROL BOARDS STILL IN EXISTENCE AS AT 31 MARCH 2004

20. CONTROL BOARDS STILL IN EXISTENCE AS AT 31 MARCH 2004

21. CONTROL BOARDS STILL IN EXISTENCE AS AT 31 MARCH 2004

22. Sub-programmes Outputs Service delivery indicators Actual performance PFMA requirements Internal auditing The PFMA requires for internal auditing to be done. Internal auditing was done during the 2003/04 financial year. Audit Committee Committee has to convene twice in a financial year. The Committee met four times during the year under review. Obtaining 2003/04 budget approval The NAMC’s business plan and budget had to be submitted for approval by February 2003. Business plan and budget were submitted as required by the PFMA. Human resources Review of service conditions The NAMC set itself the target of finalising and adopting the reviewed service conditions. Final draft of the reviewed service conditions was available but not adopted at year end Staff evaluations The target was to evaluate staff three times during the financial year. Staff were evaluated twice in the year under review. OUTPUTS AND SERVICE DELIVERY TRENDS - ADMINISTRATION

23. Sub-programmes Outputs Service delivery indicators Actual performance Application for the implementation of new four-year period of statutory measures for Deciduous Fruit (pome and stone fruit), amendment of statutory measures on export wine, and implementation of a new four-year period of statutory measures in the Citrus Industry Investigation regarding the application for implementation of new four-year period of statutory measures for Deciduous Fruit (pome and stone fruit), was completed and report compiled. Delivery of report to the Minister. Submission sent to the Minister. Investigation regarding the application for amendment of statutory measures on export wine completed and report compiled. Delivery of report to the Minister. Submission sent to the Minister. Investigation regarding the application for implementation of a new four-year period of statutory measures in the Citrus Industry Delivery of report to the Minister. Investigation to be completed in the next financial year. OUTPUTS AND SERVICE DELIVERY TRENDS -HORTICULTURE

25. Sub-programmes Outputs Service delivery indicators Actual performance Maize Board A submission on the sale of the Maize Board building was compiled. Delivery of submission to the Minister. The Minister approved submission on 17 December 2003. Maize Trust A submission on the proposed amendments to the Maize Trust Deed was compiled. Delivery of submission to the Minister. The Minister approved the submission on 24 January 2004. Winter Cereal Trust A submission on the utilisation of unused levies at the end of the levy period was compiled. Delivery of submission to the Minister. The Minister approved the submission on 1 October 2003. Amendments to statutory measures (maize, winter cereals, sorghum and oilseeds) Investigation of the application for the amendments to statutory measures relating to registration, records and returns for maize, winter cereals, sorghum and oilseeds was carried out. Delivery of submission and Notices to the Minister. Submission approved by Minister and measures amended on 11 August 2003. OUTPUTS AND SERVICE DELIVERY TRENDS - FIELD CROPS

26. New statutory measures for whole maize and wheat Investigation of the application for new statutory measures relating to weekly records and returns for imports and exports of whole maize and wheat was carried out. Delivery of Working Group Report, submission and Notices to the Minister. Submission approved by Minister and measures implemented in March 2004. Continuation of statutory measures on grains Investigation of the application for the continuation of statutory measures relating to registration, records and returns for maize, winter cereals, sorghum and oilseeds was carried out. Delivery of Working Group Report, submission and Notices to the Minister. Submission approved by Minister and measures extended by four years in February 2004. New statutory measures on lucerne Investigation of the application for new statutory measures relating to registration, records and returns for lucerne was completed and report compiled. Delivery of Working Group report, submission and Notices to the Minister. Submission approved by the Minister and the new statutory measures were implemented in January 2004. Statutory levy on cotton Investigation of the application for new statutory levy on cotton was completed and report compiled. Delivery of Working Group report, submission and Notices to the Minister. Submission approved by the Minister and measures implemented in March 2004.

28. Food Price Monitoring Committee • Six monitoring points in each Province • Monitors work in collaboration with Provincial Departments of Agriculture • Collect food price data and forward to NAMC for processing and analysis

29. Sub-programmes Outputs Service delivery indicators Actual performance Meat Board Submissions to the Minister. Consultation with the industry regarding outstanding issue. Submission of the Board’s budget and the extension of the Meat Scheme to the Minister. Industry consultation. Budget submission received from the Meat Board on 2 February 2004. Submission was receiving attention by the end of March 2004. Wool Board Submissions to the Minister. Engaging the industry regarding outstanding issues. Submission of the Board’s budget and the extension of the Wool Scheme to the Minister. Meetings with industry. Budget submission received from the Wool Board on 13 January 2004. Submission was receiving attention by the end of March 2004. Applica-tion for new statutory measures (milk industry) Working group investigated the proposed statutory measures (registration of milk producers and the furnishing of records and returns by milk producers). Investigation completed and report submitted to Minister. Completion of the NAMC investigation within 60 days of the date on which the Minister referred the application to the NAMC. Investigation was completed and forwarded to Minister. The Minister granted approval on 27 July 2003. Notices promulgating the statutory measures were published in the GovernmentGazette on 15 August 2003. OUTPUTS AND SERVICE DELIVERY TRENDS - LIVESTOCK

30. Applica-tion for new statutory measures (dairy industry) Working group investigated the proposed statutory measures (levies, registration of secondary role-players and the submission of records and returns). Investigation completed and report submitted to Minister. Completion of NAMC investigation and extension of the date (60 days) by which the NAMC had to report back to Minister was requested. Investigation was completed and forwarded to Minister. The Minister granted approval on 26 November 2003. Notices promulgating the statutory measures were published in the GovernmentGazette on 19 December 2003. Applica-tion for new statutory measures (red meat industry) Working group was appointed to investigate the proposed statutory measures (levies, registration of secondary role-players and the submission of records and returns) in the red meat industry. NAMC to investigate the application for statutory measures within 60 days (or longer period as may be approved by the Minister) after the Minister referred it to the Council. The investigation was not completed within 60 days after it was referred to the Council. The Council requested and was granted extension. The investigation was still pending by the end of March 2004.

31. Project Focus Impact/ Results  Ostrich To study the impact of deregulation on the ostrich industry and to Investigate the industry as there was little information on the industry. Challenges affecting market access to foreign countries became more apparent to Government and the industry became more accessible.  Poultry Study production and marketing arrangements by black farmers. Fourth Chamber at the South African Poultry Association has been established to look at the interest of small farmers. Section 7 Committee on transformation To investigate the current status of the participation of black role players in the agricultural marketing chain. Gaps in the transformation have been identified. Maize Section 7 Study Report was referred to other important role players for their comments on recommendations that affect them. Report distributed to all role players. Being used to address problems in the industry.  Consumer issues Food Price Monitoring Committee Report finalised by December 2003. food Price Monitoring Programme established. Recommendations accepted by Parliament. There is more awareness of food prices and food price monitoring points are to be expanded. OTHER PROJECTS AND INVESTIGATIONS

32. Grain trading study A study on the trading of grain by black role-players were completed during the year under review. Government intervention is necessary to establish accurate and reliable market information with regard to the emerging sector. More black emerging producers and traders should collaborate with the Crop Estimates Committee to be able to include small-scale grain production in national crop figures projects towards developing black farming and trading. Crop Estimates Liaison Committee The monitoring of the performance of the NCEC is an ongoing function and is undertaken by the ‘market’ using the crop estimates. A completely independent and objective National Crop Estimates Committee (NCEC), free of commercial bias, was established. Progress was made on the understanding and acceptance of the NCEC by the industry. The committee met twice during the year under review.