Department of Agriculture, Forestry and Fisheries Select committee briefing on: Strategic Plan and Budget Vote 2011

1. Department of Agriculture, Forestry and Fisheries Select committee briefing on:Strategic Plan and Budget Vote2011/12 – 2014/15 Director-General 24 May 2011

2. Presentation Outline Overview Acronyms Performance of the sector & resources allocation Programme 3: Food Security and Agrarian Reform Programme 5: Forestry and Resources Management Programme 6: Fisheries Management Budget summary Conclusion 2

3. Acronyms ATI Agricultural Training Institute CCS Compulsory Community Service PBR Act Plant Breeders’ Rights Act WCRL West Coast Rock Lobster IFSS Integrated Food Security Strategy KIM Knowlegde and Information Management PMDS Performance Management and Development System ICT Information and Communication Technology IPAP Industrial Policy Action Plan FPE Fish Processing Establishment FTE Full Time Equivalent

5. Sector performance Agriculture Production Producer prices of agricultural products Gross value of agricultural production Production costs Forestry Fisheries sector

6. Agricultural production Estimated volume of agricultural production in 2009/10 was 4,8% higher than in 2008/09 Volume of field-crop production reflected a 3,1% increase as a result of an improvement in the production of summer grains Maize production increased with 1,4 million tons or 10,8% against the previous season, followed by sugar cane with 468 000 tons or 2,5% and Lucerne hay with 374 000 tons or 33,9% Horticultural production decreased by 1,6%, mainly because of a drop in the production of citrus and subtropical fruit Production of oranges decreased by 5,5% and that of potatoes by 3,6% Animal production increased by 8,8% as a result of increases of 41,1% in fresh milk production and 5,6% in stock slaughtered However, pastoral products (wool, mohair, karakul pelts and ostrich feathers) showed a decrease in production of 3,1%

7. Volume index of agricultural production

8. Producer prices of agricultural products Producer prices of agricultural products decreased on average by 2,2% from 2008/09 to 2009/10. The average price of field crops decreased by 14,4% The prices of winter grain dropped by 26,4%, Summer grain prices dropped by 23,1%, The prices of cotton dropped by 17,8%, While oilseeds and dry beans dropped by 7,0%, Producer prices of horticultural products rose by 7,0% from 2008/09 Prices of animal products rose by 1,9%.

9. Producer prices of agricultural products

10. Production costs Expenditure on intermediate goods and services during 2009/10 is estimated at R71 955 million, a rise of 6,4% from R67 647 million in 2008/09 Expenditure on farm feeds accounted for 22,9% of the total expenditure, followed by 16, 1% for fuel, 12% for farm services and 10% for maintenance and repairs of machinery

11. Production costs

12. Forestry sector The area under forestry is about 1,28 million ha or approximately 1,0 % of the total RSA land area of 122,3 million ha. Although the area under plantations has decreased over the past few years from1 518 138 ha in 1997 to about 1 257 341 ha in 2008 The volume of production has increased from 18 641 228 m³ to 20 100 000 m³ during the same period. The forestry sector and forest products contributes about 1,3 % to GDP In terms of regional GDP, forestry contributes: KwaZulu-Natal 4,7 %, Mpumalanga 5,5 % Eastern Cape 0,7 % Limpopo about 0,7 % The export of forest products has increased from R 9,5 billion in 2001 to R14,8 billion in 2008 Imports totalled R 11,3 billion in 2008

13.  Fisheries sector

14. Fisheries sector cont…

15. 15 Contribution to GDP

16. 16 Contribution to GDP Cont...

17. 17 Export Market Growth

18. 18 Challenges in the Sector The unregulated market environment, which exposes the sector to fluctuations in world prices The decreasing share of field crops in agricultural production and South Africa’s move from being a net exporter of foods to a net importer The growing dominance of retail chains and an increasing farmer to retail price differential High input costs for, among others, fertiliser, fuel and feedstock Poorly skilled subsistence and emerging farmers, who only achieve low production volumes and productivity levels A lack of agricultural spatial planning and poor infrastructure, which makes it difficult for farmers to liaise with buyers, access markets and boost sales Poor information and knowledge management for small holder farmers, which prevents them from correctly addressing production challenges and Agricultural R&D agenda and practical implementation has little impact on the growth and development of the sector

19. Challenges in the Sector: Commercial There has been a significant increase in the concentration of the commercial sector, as a result of smaller and less efficient business, unable to take advantage of increasing economies of scale, being forced out of the sector Profitability has increased, but at slower rates, and is attributed to a concentrated few that’s has been able to survive global market and financial challenges Transformation in the commercial sector in all three sectors (Agriculture, Forestry and Fisheries) remains a challenge Differences in interpretation, and implementation. Transformation is still mainly translated as the number of ‘black’ individuals in a company. Challenge with transformation not having significant socioeconomic impact. Plans per programmes

20. Challenges in the Sector: Commercial Cont… An increase in production in agriculture, has mainly been horticultural crops, with a significant decrease in field crops (source of staple food), and translates into increasing concerns around National Food Security (Household Food Security) Increasing food prices, and anti-competitive behaviour too impacts on national food security Limited innovation systems, the slow rate of opening up new markets and value adding opportunities however there are challenges on certain commodities Many of the challenges stem from a lack of compliance rather than lack of appropriate regulations i.e. poor enforcement

21. 21 Challenges in the Sector: Smallholder Inadequate support services / Extension services essential to grow and develop the smallholder and subsistent sector Technical support services currently inadequate, there is a need for an upscale and expansion of support offered Uncoordinated spatial plans to guide implementation of support programmes, access their economic impact and ensure easy monitoring and evaluation

22. 22 Challenges in the Sector: Smallholder Cont… Inadequate and unstructured intervention in regard to provision of on-farm infrastructure such as water sources (dams, windmills, irrigation schemes) essential for sustainable production Implementation of the mechanisation support programme very weak due to the lack of a targeted programme Lack of support for the established small-holders to establish commodity groups No guaranteed market for products produced by small holders Poor infrastructure to ensure equitable access to development finance through our grant system and loans programmes Uncoordinated or lack of targeted training for smallholders

23. 23 Challenges in the Sector: Smallholders Cont… Aquaculture – Limited investments made in terms of hatcheries, research and disease management to promote aquaculture Non-existent support (access to equipment, finance, extension and training) for the established small-holders in the fishery industry and small growers in forestry Inadequate access to agro-processing industries for value addition Insufficient access to development finance through our grant system and loans programmes i.e fisheries and forestry

24. 24 Policy and programme interventions Government adoption of the 12 Key Outcomes by the January 2010 Cabinet Lekgotla Signing of performance agreements and Delivery Agreements with DAFF directly contributes to following 3 Outcomes with clear targets: Outcome (4): Decent employment through inclusive economic growth Outcome (7): Vibrant, equitable, sustainable rural communities contributing towards food security for all Outcome (10): Protect and enhance our environmental assets and natural resources IPAP 2 New Growth Path Draft Integrated Growth and Development Path for the Sector Strategic Plan for smallholder farmers

25. 25 Programme interventions: development targets Increase the number of smallholder farmers from 200 000 to 250 000 by 2014/15 As a result of the continued success of commercial farming, the number of employees on commercial farms should rise from 780 000 to 800 000 by 2014/15 Aim to place 300000 households in smallholder schemes by 2014/15 (goat, sheep, wheat, aquaculture, forestry, etc.) 145 000 jobs in agro-processing by 2020 5520 jobs Community Works Programme Plan by 2014/15 Rehabilitation of 3.2 million ha of agriculture land by 2014/15 Recovery of targeted fish stocks (abalone, hake and West Coast Rock Lobster) by 10% by 2014/15

26. 26 PROGRAMME’S PLANS OVER THE MTSF PERIOD 2011/12 TO 2014/15

27. 27

28. Programme 3: Food Security & Agrarian Reform

29. Programme 3: Food Security & Agrarian Reform Cont…

30. 30

32. 32 Programme 5: Forestry & Natural Resources Management

33. 33 Programme 5: Forestry & Natural Resources Management Cont…

34. 34

36. 36 Programme 6: Fisheries Management

37. 37 Programme 6: Fisheries Management Cont…

38. 38

43. Conclusion The strategy will be cascaded down to operations for implementation Operational plans will be developed from strategic outputs, broken down into clear milestones with implementable activities Operational plans will highlight various action steps to be undertaken in order to address the respective Unit’s priorities, the various deliverables and its associated performance indicators, responsible persons, target dates etc Individual work plans aligned to the operational plans will be developed to reflect on the aspects of day to day service delivery activities of DAFF to ensure that the DAFF business community is well informed Service standards and turnaround times will be developed for each service which needs to be reported against on a monthly basis Monitoring and evaluation will be conducted monthly on planned outputs in the strategic plan and analyses of progress towards achieving strategic plan outputs The reports will be aligned to the status reported against strategic outputs. Reports will be produced quarterly and annually.

44. 44 THANK YOU !!!