AGRICULTURAL POLICY ACTION PLAN (APAP)

1. AGRICULTURAL POLICY ACTION PLAN (APAP) MARCH 2015

2. Acronyms • Agricultural Policy Action Plan (APAP) • Industrial Policy Action Plan (IPAP) • National Development Plan (NDP) • New Growth Path (NGP) • Broad Based Black Economic Empowerment (BBBEE) • Gross Domestic Product (GDP) • Small Micro Medium Enterprises (SMMEs) • Environmental Impact Assessments (EIAs) • Department of Agriculture, forestry and Fisheries (DAFF) • Department of Rural Development and Land Reform (DRDLR) • Department of Social Development (DSD) • National Agricultural Marketing Council (NAMC) • International Trade Administration Commission (ITAC) • Department of Water and Sanitation (DWS) • Department of Environmental Affairs (DEA) • Economic Development Department (EDD) • Department of Science and Technology (DST) • Department of Trade and Industry (DTI) • Agricultural Research Council (ARC) • Industrial Development Corporation (IDC) • Department of Small Business Development (DSBD)

3. Background • July 2013: Cabinet Lekgotla approved the formulation of an agricultural policy action plan to accelerate economic growth in favour of employment and food security. • Agriculture, Forestry and Fisheries Strategic Framework is the strategic response to the National Development Plan and the Cabinet directive; and the Agricultural Policy Action Plan is the programmatic response. • APAP: • Is modelled on the Industrial Policy Action Plan (IPAP) • Comprises Sectoral Key Action Programmes (commodities) and Transversal Key Action Programmes (e.g. research and innovation) • Introduces an export-led and import substitution, replacement agriculture strategy • Provides a long-term vision and focused interventions in a 5-year rolling schedule, to be updated annually. • 2014: State of the National Address identified nine priorities for economic growth one of which is the “Revitalization of the Agriculture and Agro-processing value chain.” - Agricultural Policy Action Plan forms the basis of this priority

4. NDP Argument Vision 2030 of the National Development Plan calls for an inclusive rural economy wherein: • The National Development Plan and Medium Term Strategic Framework sets out clear targets and actions. • Create 1 million jobs: 600 000 potential jobs in communal areas and 300 000 jobs through commercial agriculture; • Acquire 2 million hectares of strategically located land by 2019; • Develop 1 million hectares of under-utilised land in communal areas and land reform projects for production; • Provide support to smallholder producers in order to ensure production efficiencies – 80 000 new smallholders by 2019; • Food Security: By 2030, every household is able to say “We HAVE food on the table.”

5. Where will the jobs come from? BFAP, 2011

6. National Development Plan Winners

7. Sectoral and Transversal Key Action Programme of the Agricultural Policy Action Plan Criteria for selection: contribution to food security, job creation, growth potential, and potential contribution to trade balance (increasing production with the view of ensuring import substitution) • Red Meat • Poultry • Fruit and Vegetables • Wine • Wheat • Sugar • Forestry • Fisheries: aquaculture and small-scale fisheries schemes • Biofuels (sorghum; sugar beet and sugar cane etc.) Purpose: To begin to address growing concentration within the market which impacts job creation, transversal action programmes seeks to localise food networks, through infrastructure development, incentivising support for SMMEs and small-scale producers across agriculture, forestry and fisheries value chains. • Fetsa Tlala • Climate Smart Agriculture • Trade, Agri-business Development and Support • Biosecurity • Strategic Integrated Projects 11 • Research and Innovation

8. Summary of overall Problem Statement • Slow-to-modest growth and declining employment continues a longer-term trend evident since at least the 1970s. Key challenges we face in realizing an inclusive rural economy midst jobless growth in the sector include: • market dominance and concentration across the value chain which lends itself to job loss; • rising input costs and an increasing dependency on capital intensive models of production; • an unprotected sector in an uneven international trade environment - subsidies • ineffective developmental of infrastructure (rail, harbour, electricity). • unintended consequences of policy decision and counter productive service delivery models (abolishing agricultural commodity boards providing much needed support to farmers) • Integrity of and access to water resources in designated areas.

9. Agriculture, Forestry and Fisheries strategic Response • Agriculture during the first 15 years of our democracy was primarily seen as a sector aimed at addressing social challenges. • The National Development Plan and New Growth Path spells out a new policy directive for the Agricultural sector in that it identified Agriculture as a key contributor towards economic growth and job creation. • Gearing Agriculture to contribute to local food economies, job creation and the national Gross Domestic Product (GDP), requires a policy shift from a conventional “project based approach” to development, to one emphasising an economic solution to social challenges. • In response we have the Agriculture, Forestry and Fisheries Strategic Framework, built around four core, inter-related policy areas: • Equity and transformation • Equitable growth and competitiveness, and • Environmental sustainability. • Governance

10. Priority Value Chains and Transversal Action Programmes

11. PoultrY

12. Price indices of fertilizer, fuel & animal feed (1980-2012)

13. ACTIONS – poultry

14. ACTIONS – poultry

15. SPATIAL MAPS:GUIDE PROJECT SELECTION ANDVALUE CHAIN PLANNING National Free State at District and Local Municipalities

16. RED MEAT

17. ACTIONS – RED MEAT

18. WHEAT

19. ACTIONS – WHEAT

20. SPATIAL MAPS:GUIDE PROJECT SELECTION ANDVALUE CHAIN PLANNING National Western Cape, at DM level

21. FRUIT and vegetables

22. ACTIONS – FRUIT and vegetables

23. WINE

24. ACTIONS – WINE

25. BIOFUELS

26. ACTIONS – biofuels

27. FORESTRY

28. ACTIONS – FORESTRY

29. FISHERIES & AQUACULTURE

30. ACTIONS – FISHERIES & AQUACULTURE

31. UPDATE ON AGRICULTURAL POLICY ACTION PLAN (APAP) • Finalised APAP and Agriculture, Forestry and Fisheries Strategic Framework was approved by Cabinet; • DAFF and DRDLR as the co-drivers of the technical team is devoting the last quarter (January-March 2015) to fast tract readiness to implement on the 1st April . Focus areas: • Spatial Planning –mapped out each commodity at a district and local municipal level, including available state land and land acquired for redistribution. The purpose is to guide provinces and all relevant stakeholders with project planning. • Robust stakeholder and communications strategy: The success of APAP is in advocating a paradigm shift in agriculture. New entrants and a long term perspective must be advocated for. • Institutional Arrangements – design and finalise an integrated planning, M&E approach between DAFF and DRDLR, through which District Land and Agricultural Committees (DLACs)will form the basis for project planning. Further publishing quarterly and annual reports, and to test the assumptions and unintended consequences of APAP decisions.

32. UPDATE ON AGRICULTURAL POLICY ACTION PLAN (APAP) • Production – to ensure production and job creation targets per commodity are met. • Land Acquisition – ensuring that the land acquired speaks to the spaces and commodities identified in APAP. • SIP11 - Infrastructure development (off-farm infrastructure) toward the development of localised value chains for rural economic development. • Training – orientating extension support to become specialists in specific commodities, and designing training programmes towards priority commodities in APAP. Further developing creative models for attracting new entrants into the sector. • Research and Development (R&D) – gearing our R&D programmes and projects towards meeting APAP objectives.

33. UPDATE ON AGRICULTURAL POLICY ACTION PLAN (APAP) • Funding Model • More effective application of annual available budget ±R 34 billion (DAFF, DRDLR and LandBank). • Integrated Funding Model being development • Create a common database to reduce duplications and ensure synergy in the implementation of our various programmes and projects • Secondary funding • Establish the available budget extent and influence targeting of agriculture investments by other departments (DST, DWS, EDD, DTI and DSD) and public entities. • External funding: Massmart Supplier Development Fund; AFGRI Development Fund; funds to be mobilised through the Comprehensive Africa Agriculture Development Programme (CAADP) Investment Plan • Partnerships: Off take agreements e.g., Tiger Brands • Public Sector Procurement: 75% Local Procurement

34. UPDATE ON AGRICULTURAL POLICY ACTION PLAN (APAP) • Discussion with DTI and EDD (MINMEC) : • Spatial Planning must form the basis for integrating provincial strategies between Provincial Departments of Economic Development and Agriculture; further informing projects at provincial levels e.g. Wheat in Western Cape, Poultry in Limpopo. • Resourcing an aggressive Export Strategy for Agriculture • Expanding the number of agriculture attachés in strategic locations. • Establish new markets for strategic commodities e.g. Citrus • Establishing a National Agriculture Export Council to facilitate trade • Resourcing an aggressive Import Substitution Strategy: • Review the tariff regimes for strategic commodities and other industries, including wheat, animal feed (soy bean), fertilizer and mechanisation. • Amending the Agro-processing incentive schemes to promote the transformation of the sector, inclusion of and procurement from SMMEs and Smallholders. • Review the re-establishment of Commodity Boards and the viability of SA becoming self-reliant in fertiliser production • Dealing with dominance • Preferential procurement (Department of Small Business Development) • To designate Agriculture with preference for smallholders and SMMEs in the sector.

35. Aspiration: By 2019 APAP will With all conditions favourable, APAP could potentially: • Increase in number of smallholders from 164 000 in 2012 to 400 500; • Increase value add of Agriculture, Forestry and Fisheries (AFF) from R42,5 billion in 2012 to R48,9 billion in 2019 (or 2% real growth per year); • Real increase in value of AFF net exports from an annual average of R5,1 billion in 2012 to R5,8 billion in 2019 (or 2% real growth per year); • Decrease in value of diesel, fertiliser and machinery imports at an annual average of R9,6 billion in 2012 to R7,4 billion (or 3% real decline per year); • Reduction in the share of households experiencing hunger ‘sometimes’, ‘often’ or ‘always’ from 10,8% of households in 2012 to 8,0% of households in 2019; • Increase in number of jobs in Agriculture, Forestry and Fisheries from 660 000 average for 2012 to 822 500 (an additional 162 500 jobs) and a potential 1millon jobs by 2030.