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VOEDSELSEKURITEIT Agri Vooruitskou Konferensie 2 Oktober 2008

VOEDSELSEKURITEIT Agri Vooruitskou Konferensie 2 Oktober 2008. Lourie Bosman President : Agri SA. FRAMEWORK. Wat is Food Security? International arena * Producer support (subsidies) Poverty alleviation / Job creation * World Bank Report * Harvard Report

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VOEDSELSEKURITEIT Agri Vooruitskou Konferensie 2 Oktober 2008

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  1. VOEDSELSEKURITEITAgri Vooruitskou Konferensie 2 Oktober 2008 Lourie Bosman President : Agri SA

  2. FRAMEWORK • Wat is Food Security? • International arena * Producer support (subsidies) • Poverty alleviation / Job creation * World Bank Report * Harvard Report 4. Plaaslike Landbou situasie * ANC standpunte * Cosatu posisie * BUSA reaksie 5. Causes for local high food prices * Strategic Plan – nuwe benadering

  3. Food security: “When all people, at all times have physical, social, and economic access to sufficient, safe, and nutritious food to meet their dietary needs and food preferences for an active and healthy life” • “Starvation is a matter of some people not having enough food to eat, and not a matter of there not being enough to eat” (Nobel Laureate Amartya) • Most of the food insecure live in rural areas where food is produced – they are net food buyers • United Nations Hunger Task Force – “about half of the hungry are smallholders”

  4. GRONDBEGINSELS • Die omgewing moet bevorderlik wees vir landbou- en voedselproduksie • Politieke inmenging om plaasgroottes te dikteer onvanpas • Werkskepping en koopkrag bepalend

  5. Die internasionale omgewing waarbinne daar meegeding moet word

  6. The Producer Support Estimate (PSE)is an indicator of the annual monetary value of gross transfers from consumers and taxpayers to support agricultural producers, measured at farm gate level, arising from policy measures, regardless of their nature, objectives or impacts on farm production or income.

  7. OECD: PRODUCER SUPPORT ESTIMATE (USD mn) Source: OECD

  8. Estimates of support to agriculture in selected non-OECD and OECD countries (1998-2007) Iceland Korea Norway Switzerland Japan EU OECD Turkey Canada Mexico United States Australia SA New Zealand Percentage PSE Source: OECD

  9. Estimates of support to agriculture in selected non-OECD and OECD countries (2007) Percentage PSE Source: OECD

  10. Support based on commodity output as % of Producer Support Estimate (PSE) Percentage Source: OECD

  11. Elements • Market Access: Applied Rates < Bound Rates • Domestic Support: Refund on diesel fuel • Export Competition: GEIS terminated – July 1997

  12. Producer Support Estimate by commodity, South Africa, OECD Source: OECD

  13. ALGEMENE NEIGINGS IN PSE’s • Vlak daarvan het nie baie verander nie • Relatief tot produksie wel gedaal • Struktureel geskuif vanaf produksie-koppeling • Produksieverwringende subsidies – 86%  64% in OESO • Verskil tussen “grenspryse” en binnelandse pryse halveer (51%  25%)

  14. ALGEMENE NEIGINGS IN PSE’s (vervolg) • Hoë wêreldpryse lei tot minder prysondersteuning • Prysondersteuning steeds grootste deel van bystand • Rys, suiker en melk steeds groot ondersteuning (56%) • Koring en mielies: Drastiese afskaling • Ondersteuning vir algemene dienste neem toe van 13% na 18% van algehele bystand

  15. WORLD BANK • With the right policies and supportive investments at local, national and global levels, today’s agriculture offers new opportunities to hundreds of millions of rural poor to move out of poverty • In the 21st century, agriculture continues to be a fundamental instrument for sustainable development and poverty reduction • In agriculture based countries: • 29% of GDP • 65% of labor force • 30% linkage with service industry

  16. WORLD BANK (cont.) • Three types of countries: • Agriculture Based (32%) • Transforming (7%) • Urbanised (5%) • Agricultural growth has special powers: • China – agricultural growth 3,5 times more effective than growth outside agriculture • Latin America – 2,5 times • Agriculture vastly underused for development, low public spending, low investment in agriculture

  17. INFLUENCE OF AGRICULTURE IN ALLEVIATING POVERTY • Indonesia supported agriculture by depreciation of exchange rate • Nigeria: Fixed exchange rate (tax) • Indonesia: Poverty declined (47%14%) • Nigeria: Poverty increased (58% 70%)

  18. SA REALITIES: HARVARD GROUP REPORT • Sectors that grow – use foreign exchange • Sectors that stagnate – can earn foreign exchange (Agric. Mining, ) • To achieve greater levels of employment and a stronger external position the economy needs a relative expansion of the tradable sector which implies more low skilled jobs • Sustainable and shared growth involves the creation of jobs in the tradable sector – Export for jobs

  19. HIPOTESE OOR LANDBOU • Produktiwiteitstoename is stadig • Makro-ekonomiese beleid diskrimineer teen landbou • Openbare investering op stede gefokus • Ontwikkelingsbystand aan die landbou het afgeneem

  20. AREA PLANTED, 1990/91 TO 2007/08 Source: DoA

  21. AREA PLANTED, 1990/91 TO 2007/08 Source: DoA

  22. INVOERTARIEWE OP LANDBOUPRODUKTE

  23. Fixed capital stock in agriculture as % of the total Source: SA Reserve Bank

  24. ANC 52ND NATIONAL CONFERENCE • State and mandated entities must exercise their legal rights to expropriate property; • Discard market-driven land reform – Review principle of willing-seller, willing-buyer • Land audit needed • Find ways to stabilize food prices • Build capacity of rural local governments to lead the processes of land reform, etc. • Introduce a special land tax and other progressive tax measures – deconcentration of land ownership • Combat monopolistic practices in markets for land, inputs, finance and outputs

  25. COSATU’S VIEW • End super profits and super salaries • Reduction and freeze in future food prices • Dismissal of CEO’s – collusive practices • SOE’s in value chains • National Food Price Regulator • Nationalization of maize meal, bread and milk value chains • Income transfers • Stakeholders to engage on price regulations

  26. BUSINESS UNITY SOUTH AFRICA’S (BUSA) RESPONSE • National Food Price Team • School feeding scheme • Immediate Trade and Tariff Implementation • Review VAT system • Transport Strategy • SOE’s pricing models • Investigation into the fuel levy for agric production • Electricity Pricing Policy • Support to land reform beneficiaries • Investing in infrastructure • Implementation of the Strategic Plan for Agriculture

  27. General & Food Inflation Trends(Oct 2006 to Jun 2008) Source: Stats SA

  28. South African Agricultural exports and imports, 1990-2007 Source: DoA

  29. Causes of high food prices High agricultural commodity prices Global macro-economic factors - Strong economic growth, stimulating demand - Depreciation of the US dollar - Increased speculative transactions in markets Supply and demand dynamics of the specific agricultural commodities Changes in government policies

  30. End stocks and the Price of Wheat the past 10 years 70 350 60 300 50 250 Million tons $/ton FOB 40 200 30 150 100 20 10 50 0 0 87/88 91/92 95/96 99/00 03/04 07/08 End Stocks U.S. HRW Price Courtesy: Dr Dirk Esterhuizen

  31. Terms of trade in agriculture, 2002/03 to 2007/08 (2000 = base year = 1) Source: DoA

  32. Besteding aan Intermediêre goedere en dienste, arbeid, rente en investering in voertuie, masjinerie en implemente Johan Pienaar Bron: DoA

  33. Cash flow of farmers: Gross income, net farm income and interest paid Source: DoA Johan Pienaar * Deflator = CPI, 2002/03 prices

  34. International fertilizer prices 7000 6000 5000 Rand per ton 4000 3000 2000 1000 Feb Apr Jun Aug Okt Dec Feb Apr Jun Aug Okt Des Feb 2006 2007 2008 Ammonium DAP Potasium Urea Courtesy: Dr Dirk Esterhuizen

  35. Cost of Production: Dryland Maize case study Production cost of maize in 2007/08 season: ~R4300/ha Farmer price of maize 07/08: ~R1800/ton Production costs on average up ~60% for 2008/09 season, thus ~R6880/ha July 2009 farmer price ~R2100/ton (SAFEX) Production costs will impact hugely on coming season’s production – alternatives?

  36. STRATEGIESE PLAN:NUWE BENADERING • Aspekte soos voedselsekuriteit en klimaatsverandering moet verder bespreek word • Prinsipale moet doelgerig implementeer • Implementeringsliggaam en – plan • Elke pilaar moet eie bestuur en befondsing kry • Ondersteuning aan swart boere • Voorligting moet verbeter

  37. STRATEGIESE PLAN:NUWE BENADERING (vervolg) • Grondoudit • LARP • Doelgerigte investering in infrastruktuur, navorsing, ens • Handels- en tariefbeleid implementeer • Stelsel om die toestand van natuurlike hulpbronne te monitor • Deelname gerig op misdaad • Voedselkrisis vereis streeksdeelname

  38. BENADERING TOT LANDBOU Gegewe die kommersiële produksiestruktuur van landbou is dit vanuit ‘n vermenigvuldigings en produksie-oogpunt in landsbelang om selfs marginale geleenthede in landbou te benut.

  39. Dankie / Thank you

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