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Role of the dti in supporting the development of a strong and vibrant agriculture industry. Date : 17 September 2010 Stephen Hanival Chief Director: Agro-processing Shanival@thedti.gov.za +27 12 394 1350. Portfolio Committee on Agriculture, Forestry and Fisheries. Outline.
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Role of the dti in supporting the development of a strong and vibrant agriculture industry Date : 17 September 2010 Stephen Hanival Chief Director: Agro-processing Shanival@thedti.gov.za +27 12 394 1350 Portfolio Committee on Agriculture, Forestry and Fisheries
Outline • Agriculture/agro-processing value- chain • The dti’s mandate in agro-industries • Draft Strategic Framework for Agro- processing • IPAP2 Priorities • The dti’s incentives
Agro-Industry Value Chain Source: R.Coetzee, IDC
The dti’s Mandate in Agro-Processing • Manufacturing – production processes that are not primarily influenced by nature • Typically off-farm, value addition, transformative • Exceptions are: • High-value agric. such as horticulture • Aquaculture • Organic produce
The dti’s Mandate in Agro-Processing • But reality is that agriculture/agro-processing are part of same value chain: • Policy work therefore necessarily extends to primary agriculture to some extent • Strategy development cognisant of value-chain imperatives • Incentives broadened to include pack-houses, aquaculture • Regulatory activities include focus on primary agriculture • Trade policy and support (tariffs, export incentives)
Strategic Framework for Agro-processing • Global trends: • World population growing rapidly • Land under agriculture relatively stable • Per capita income growth in large economies, India and China • Consumer preferences for ‘sustainable food’ in Developed Economies • Important opportunities for SA Agro-industries…
Strategic Framework for Agro-processing • SA trends: • Demographic changes as a result of decade of growth • Mismatches in demand and supply in certain products - oilseeds, meat, processed food • Basic food prices remain stubbornly high • Rural food production lower than in comparator countries • Food security concerning in rural and urban areas
Strategic Framework for Agro-processing • SA trends: • Major portion of agriculture and agro-processing industries are mature, potential for growth limited – canning, tea, sugar, grains, industrial crops • Nascent sectors have tendency to stall before ‘take-off’ phase – ostrich, honeybush tea, proteas, olives, biofuels • Flow of new sectors, products, processes low compared to equivalent countries – Australia, Brazil • High concentration levels likely stifling competition esp. in rural areas
Strategic Framework for Agro-processing Trade Deficit
IPAP2/Business Plan Priorities • Food security – small scale milling, CompCom investigations, enforcement of bread standards • Mature sectors – fruit and veg canning, rooibos tea, food control, • Nascent sectors – biofuels, organic produce, aquaculture, • New sectors – development of Agro-processing Development Centre concept
Expected Impacts • Food security – increased affordability, value for money and rural production • Mature sectors – stabilisation of at risk sectors, improved competitiveness positioning through export market support and product development • Nascent sectors – accelerated policy and strategy development • New sectors – accelerated flow of new products and process innovations • Leading to: Demand pull from primary agriculture combined with new industry opportunities: Agro-Industrial Complex development
Support from the dti Incentives Enterprise investment Programme (EIP) • Grant accessible to local and foreign owned entities investing in SA. • Objective is to stimulate investment in manufacturing. • Qualifying investment costs: machinery, equipment, land and buildings, and commercial vehicles. Priority Sectors: Manufacture of food products, beverages and tobacco products • Production, processing and preserving of meat, fish, fruit, vegetables, oils and fats. • Manufacturing of grain mill products, starches/starch products and prepared animal feeds. • Manufacturing of dairy products, beverages and other food products.
Support from the dti Incentives Cooperative Incentive Scheme (CIS) • Promote co-ops through the provision of a matching grant. • Improve the viability/competitiveness of co-ops by lowering the cost of doing business. • Assist co-ops to acquire their start up requirements. • Build an initial asset base for emerging co-ops to enable leveraging of other support. • Priority sectors in Manufacturing, Retail, Service and Agricultural Sector. • Offering is a 90:10 matching cash grant for registered co-ops. • The maximum grant is R300 000. • Can be used for business development services.
Support from the dti Incentives Export Marketing and Investment Assistance (EMIA) • Partially compensates exporters for costs incurred in developing export markets and recruiting new FDI into SA. • Matching grants for primary export marketing research to develop new export markets. • Agro-processing.
Support from the dti Incentives Export Councils • Farmed Abalone Export Council (FAEC) • SA Flower Export Council (ASSO Flowers) • SA Ostrich Business Chamber (SAOBC) • Wines of South Africa (WOSA) • Fresh Produce Exporters’ Forum/ Fruit SA • SA Fruit & Vegetable Canners’ Export Council • Meat Exporters of South Africa • SA Dairy Foundation
Support from the dti Incentives The Sector Specific Assistance Scheme • Cost-sharing grant scheme to non-profit business organisations for collective sectoral development. • Agro-processing • Agriculture • Chemical Allied Industries • Electronic Industries • Textile and Clothing • Metals and Allied Industries • Machinery, Allied and Electrical Industries • Motor Industry Components • Creative Industries • ICT
THANK YOU The end 17