NAMC Annual Report Presentation to the Portfolio Committee on Agriculture and Land Affairs by

1. NAMC Annual Report Presentation to the Portfolio Committee on Agriculture and Land Affairs by TR Ramabulana Strategic Positioning of SA Agriculture in Changing Global Markets

2. Content of Presentation • Business Plan 2005/06 • Annual Report 2005/06 • New developments 2006/07 • Markets and Economic Research Centre • Enterprise Development Strategic Positioning of SA Agriculture in Changing Global Markets

3. NAMC Strategic Programmes • Council Activities • Outreach/ Marketing Schemes • Statutory Measures • Research (Section 7 Investigation) • Food Price Monitoring • Budget Strategic Positioning of SA Agriculture in Changing Global Markets

4. Output & Service Delivery Trends of Council Strategic Positioning of SA Agriculture in Changing Global Markets

5. Corporate Governance Structures • Audit Committee • Human resources Committee • Risk Management Committee • Executive Committee • Management Committee Strategic Positioning of SA Agriculture in Changing Global Markets

6. Outreach/Marketing Schemes • Target: 38 workshops reaching 2500 farmers • Achieved: 21 workshop reaching 1736 farmers • Reasons: Changed strategy since outreach didn’t provide key support such as markets access, capacity building, finance, etc • New strategy focused on business linkages using Agribusiness and Technical Assistance Fund • Example of farmers assisted on database attached Strategic Positioning of SA Agriculture in Changing Global Markets

7. Enterprise Development • Main ED deliverables are development of a database of black owned enterprises, the implementation of a business linkages model & use of Agribusiness Technical Assistance Fund . • The assistance provided to emerging enterprises could be group into the following categories: • Training courses: Making Markets Matters, International Negotiation Skills and Business Management skills • Production of Promotional material: Business Cards, Information Booklets and Pull-ups stands • Business plans and Feasibility studies • Attendance of Major Conferences: All Fresh Conference, Market Access Conference & Southern Hemisphere Fresh Produce Conference • International Marketing Visits: Major supermarkets in Netherlands and United Kingdom Royal Agricultural Show Strategic Positioning of SA Agriculture in Changing Global Markets

8. Enterprise Development • Marketing Schemes- Government Supported Industry Driven. • Detailed black farmers consultation • Farmers business support models • Business linkages model • Franchise model • Co-operative model • Management and growth of Database of emerging enterprises • Agribusiness Technical Assistance Fund • Linkages with major buyers • Export promotion • Distribution of Market information to emerging enterprises • Re-alignment of trusts to empowerment objectives Strategic Positioning of SA Agriculture in Changing Global Markets

9. Statutory Measures • 11 industries collected statutory levies • R130 million was collected – this represents only 0.7% of production value at first point of sale • Approximately 43% of levies were collected to finance research, 15% for information, 14% for transformation and 13% for export promotion • In August 2005, the NAMC’s guideline of levies for transformation purposes changed from 10% to 20% of levies collected • In the past 5 years, the market share of emerging farmers in the 10 industries (production) increased from 1.2% to 4.1% • Cotton industry the highest – approximately 20% of production is coming from emerging farmers Strategic Positioning of SA Agriculture in Changing Global Markets

10. Statutory Measures Strategic Positioning of SA Agriculture in Changing Global Markets

11. Estimated funding for Research in Autralia(2003) Strategic Positioning of SA Agriculture in Changing Global Markets

12. Statutory Measures Introduced Strategic Positioning of SA Agriculture in Changing Global Markets

13. CONTROL BOARDS STILL IN EXISTENCE AS AT 31 MARCH 2006 Strategic Positioning of SA Agriculture in Changing Global Markets

14. Section Seven Investigations • Fresh Produce section 7 investigation • Game (wildlife ranching) section 7 investigation • Solutions for sustainable export in the citrus industry • Sorghum industry study • Purpose: • Advise the Minister on any statutory intervention need • Provide industry with intelligence necessary to increase competitiveness of the sector Strategic Positioning of SA Agriculture in Changing Global Markets

15. Markets & Economic Research Centre (MERC) • The NAMC has established the MERC • Research Areas: • Trade intelligence • Competitiveness • Supply chains analysis • Statistics • Rural Livelihoods • Products: • Markets and Economic Research Fund • Section 7 Committees • Academic support programmes • Research library Strategic Positioning of SA Agriculture in Changing Global Markets

16. Examples of Research Projects • Possibilities for fruit exports to Russia • Study to assess the impact of RSA class 1 fruit exports to African and Indian Ocean Island countries • ASGI-SA Sub-sector studies (Regulatory constraints & challenges, possible government intervention to remove bottlenecks) • SA-New Zealand comparative study on effects of deregulation • Study on taxes on the agricultural sector • Supply and demand models for potato industry • Rural and Urban Food price monitoring • Input cost monitoring • Input of deregulation on agricultural efficiency and productivity Strategic Positioning of SA Agriculture in Changing Global Markets

17. Marketing and Trade • Trade Intelligence • 3rd Generation issues • Tariffs • Industry growth perspective • Marketing of Brand SA Agriculture Strategic Positioning of SA Agriculture in Changing Global Markets

18. Trade Intelligence • Monitor traditional markets and inform export industry • Provide intelligence about new markets • Use Agriculture Trade Attaches • Lobby for increase in number of Agric. Trade Attaches • Improve relations between SA agric export industries and Trade Attaches • Generate intelligence on: • Products • Markets and Constraints • Competitors • Price Strategic Positioning of SA Agriculture in Changing Global Markets

19. Trade Attaches • South Africa has Agricultural Trade Attaches in the following countries: • Brussels- Mr. Winston Makabanyane • China- Mr. Mono Mashaba • USA- Dr. Simphiwe Mkhize • Italy- Ms. Margaret Mogapi • Switzerland- Ms. Gerda van Dyk Strategic Positioning of SA Agriculture in Changing Global Markets

20. Trade Intelligence • The NAMC undertook numerous studies aimed at assisting the fresh produce export industry to monitor developments in traditional markets as well as explore emerging markets. Studies undertaken include amongst other the following: • Possibilities for fruit exports to Russia • A study to assess the impact of RSA Class 1 exports to African and Indian Ocean island countries. • Foreign market development for potato industry Strategic Positioning of SA Agriculture in Changing Global Markets

21. Tariff • Forge close working relationship with International Trade Administration Commission (ITAC) • Objective: • Assist industries with the necessary research that will help build a good case for any tariff application • Undertake research that will also help incorporate development issues (rural development, employment, AgriBEE, job creation) into any tariff investigation process. Strategic Positioning of SA Agriculture in Changing Global Markets

22. Food Price Monitoring Targets achieved: • Produced an annual publication known as Food Cost Review • Distributed as widely as possible • Produced quarterly food price trends press release • Monitor 75 different products • Monitor both urban and rural food prices (2006) Strategic Positioning of SA Agriculture in Changing Global Markets

23. UTILIZATION OF 2005/06 NAMC BUDGET INCOME R14,042,000 Made up of: • Transfer from DoA R12,163,000 • Other income (Interest earned and roll-over) R 1,879,000 Strategic Positioning of SA Agriculture in Changing Global Markets

24. ACTUAL EXPENDITURE R14,109,000 Made up of: • Personnel expenditure R 7,393,000 • Administration R 3,203,000 • Professional services R 1,542,000 • Surplus R 1,971,000 Strategic Positioning of SA Agriculture in Changing Global Markets

25. Emphasis of Matter • Without qualifying the audit opinion, the AG drew attention to the following: • Implementation of supply chain management • Performance information • Value added tax • Irregular expenditure Strategic Positioning of SA Agriculture in Changing Global Markets

26. Staff Representation as at 31 March 2006 Strategic Positioning of SA Agriculture in Changing Global Markets

27. Limitations and Future • Limited execution powers: to be addressed through the review of the MAPA • Limited funding: R16 million/ year. • Other countries, e.g. AbareEconomis in Australia A$125 million/ year; ERS in USA US$65/year. • Future focus areas: • Economic and market research • Trade intelligence • Export promotion • Marketing schemes • Statutory measures Strategic Positioning of SA Agriculture in Changing Global Markets