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NAMC Strategic Plan Presentation 2011/12 PowerPoint Presentation
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NAMC Strategic Plan Presentation 2011/12

NAMC Strategic Plan Presentation 2011/12

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NAMC Strategic Plan Presentation 2011/12

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  1. NAMC Strategic Plan Presentation 2011/12 Presentation to the Parliament’s Portfolio Committee: Agriculture, Forestry and Fisheries 11 March 2011 Mrs Ntombi Msimang - Chairperson: NAMC Mr TR Ramabulana- CEO: NAMC Mrs S Muvhulawa- CFO: NAMC

  2. The NAMC in brief • Established in terms of an Act of Parliament (MAPA, 1996) to advise the Minister and other Directly Affected Groups on agricultural marketing policy • Four main objectives: • Increasing of market access for all participants • Promotion of efficiency of the marketing of agricultural products • Optimization of export earnings • Enhancement of the viability of the agricultural industry

  3. Members of the NAMC Council • The current members are: • Mrs NM Msimang (Chairperson) • Dr ASM Karaan (Vice-Chairperson) • Mr AD Young • Prof JF Kirsten • Mrs SE Moolman • Mrs C Molo • Mr DB Montshwe • Mrs M Mannya • Mrs M Gill

  4. Council Committees Human Resources • Mr A Young (Chairperson) • Mrs L Moolman • Mrs M Mannya Audit Committee • Mr Paul Slack (Chairperson) • Ms Mathebe Moja • Mr Raymond Matlou • Ms Mina Gill • Prof J Kirsten

  5. Employment Equity Senior Managers • 2 Female African (5 %) • 4 Male African (10 %) • 2 Male White (5 %) Total Staff • 13 Female African (28 %) • 11 Female White (28 %) • 14 Male African (36 %) • 4 Male White (8 %)

  6. Realities in Agriculture

  7. The situation…Employment !!! Trends in employment by sector between 2001 and 2010 Trends in the agricultural sector’s share of the total employment between September 2000 and March 2010 Source: DAFF, 2010 Source: DAFF, 2010

  8. Key realities • Current market structure shaped to largely cater for existing mainstream market participants • Market structure at the processing and retail level highly concentrated • Inherited from previous regulated marketing regime and government support incentives • Provides a breeding ground for a non-optimal competitive environment • High entry barriers for smallholder farmers

  9. Key actions • Important paradigm shift (1) – Import Substitution • Industries that could benefit include grain industry, meat industry, cotton industry, fish processing, forestry • Important paradigm shift (2) – Increase the size of the cake • Review biofuel policy • Realignment of export promotion policy and tools • “Buying local is lekker” • Leverage potential of quick wins • Develop new and expand existing development/incentive schemes • Leverage contributions by private sector • Leverage potential of institutional markets

  10. Facts on Administered prices Agriculture

  11. Electricity tariff increase compared to CPI Tariff increase for 2008, 2009 and 2010 higher than the Headline CPI CPI higher than the electricity tariff increase Source: Eskom, 2011

  12. TOLL FEES - CLASS 3 VEHICLE ONE WAY R551 in 2010; 34.1% increase from 2006 to 2010 R516 in 2010; 39.1% increase from 2006 to 2010 R487 in 2010; 36.8% increase from 2006 to 2010 R366 in 2010; 37.1% increase from 2006 to 2010 Own calculations based on SANRAL, 2011

  13. Average % contribution of regulated fuel, labour and electricity cost to total production cost of animal feed Own calculations based on data from AFMA, 2011

  14. Regulated fuel, labour and electricity cost for the production of a kilogram poultry 2008 to 2009 up 28.2% 2009 to 2010 up 18.6% Up 3.6% 2008 to 2009 up 16% 2009 to 2010 up 33.9% Up 52% 2008 to 2009 up 6.2% 2009 to 2010 down 2.4% Up 55.3% Own calculations based on data from role players in the industry, 2011

  15. Job Creation (NAMC, Statutory Measure And Agricultural Trusts)

  16. Major projects to drive job creation Secret

  17. Major projects to drive job creation Secret

  18. JOB CREATION • Deciduous Fruit Trust- tree planting project, +- R5,1 million CASP funds administered in 2010 Total = R12,2 million. 1st Phase = 1,000 Ha by 2014 – 600 Ha in the Western Cape in partnership with WCDA. • Winter Cereal Trust- Commercialisation of and promotion of wheat production amongst developing farmers in the Free State, Western and Southern Cape. Total expenditure for the development project is R4 067 549. • Maize trusts- funding to the grain farmer development association to assist small holder farmers in soil preparation, input costs, harvesting and storage of grain. • Oil and protein seed trust- assist 165 emerging farmers to plant 15 100ha of sunflower. A total of 1250 temporary job opportunities will created during the season.

  19. Trade • TradeProbes (6 annually) • Product and country profiles • Trade related topics • Publication on Fruit Trade Flows (weekly’s) and Fruit Flow reports • Collaborative trade studies, e.g. • Determining the scope and nature of Non-tariff Measures prevalent in selected international markets • South Africa’s way ahead: Cape to Cairo? • Comparative analysis…: European markets for SA emerging table grape growers • Export promotion activities • Hong Kong, Singapore, Malaysia • Users and uses • Users: Government Departments, NGO’s, Industry Associations, Companies, Press • Uses: Export promotion, lowering transactions costs, policy guidelines, better informed exporters, increased exports

  20. Trade - Export promotion activities • Background • Promotional activities in three countries, namely Hong Kong, Singapore, Malaysia • Several Hyper- and Supermarkets participated, e.g. Giant , Shop N Save, Cold Storage • In total 499 Hyper- and Supermarkets participated • Objectives • Increase sales and awareness of the total range of South African fruit and vegetables available at the time of the World Cup in particular during the last 2 weeks of the World Cup. • Grow sales and the range of South African product from after the World Cup till end of October. • Actions • In store displays • In store competitions • Press advertising • Point of sale material • Aggressive bulk displays • Hard and soft copies of newspaper adverts, copies of pictures of displays and point of sale materials and some of the winning displays

  21. Trade - Export promotion activities • Results • The total U$ purchases for the group from South Africa, for 2010 vs the purchases for 2009, grew from ± U$14 million to ± U$18 million in 2010 • A 28.5% sales growth in U$ terms • Total Container Volume for 2010: +108 Containers Vs 2009 Volume • A 48% increase in volume

  22. Export promotion through statutory levy funding.. (Wine) • WOSA (Wines of South Africa) promotes South African wines, mainly in EU, but also in USA, Canada, key African countries such as Angola and Nigeria, as well as India, China, Japan and South Korea • In 2008, SA exported over 400 mil litres, • Export strategy – • Enhancing SA’s image • Developing new markets • Assisting in building capacity • Improved infrastructure for exports via Wine-on-line • Current budget app R37 mill / annum

  23. Export promotion through statutory levy funding .. (Deciduous Fruit) • Deciduous fruit • Apples, pears, plums, apricots, peaches and nectarines • A Market Development Campaign in the UK and Germany • Producer funded (R20 mil / annum) as well as grant from DTI (R10 mil / annum) • Volume growth target of 10-15 % over 5 years has been set

  24. Export promotion through statutory levy funding .. (Grapefruit) • Citrus Growers Association • Consumer campaign in UK and Japan “South African Grapefruit’ Beautiful country, beautiful fruit” • Funded by statutory levies – app R9 mil / annum

  25. MERC focus areas Information Exchange • Background • Several companies found guilty for non-compliance Competition Act • Thereafter some of these companies pulled out of industry associations • This amongst others mean they are not willing so share information • Problem: This information necessary to, for example, calculate GDP, Consumer Spending, Logistics Planning,, Employment Numbers, etc • This is a complex issue due to the structure of the primary and secondary agricultural sector • No case law in South Africa to provide guidance • The road ahead • Compile document for the Competition Commission spelling out detailed needs at the industry and country level • Workshop the document with Competition Commission • Set guidelines for industry on information exchange • Work on proper public agricultural information system

  26. Training • Making Markets Matter Training Course • Its an intensive 5 day business development training workshop for African agribusinesses, • In partnership with University of Stellenbosch and Cornell University • 80 agribusinesses attended the Course • The farmers were trained on the following issues • Cash flow management, Marketing strategy, financial analysis • AgriBiz Training course for Women • As a follow up to the above training course, the NAMC designed a 3 day training course specifically for women that are involved in agriculture • The course offers training in marketing, financial and strategic management . • 30 women entrepreneurs attended • The NAMC is conducting an after care programme so that participants can implement what they have learnt from the course into their businesses

  27. Statutory Measures • The MAPA act provides for the following statutory Measures: • Levies • Records and returns • Conducting of pools • Control of exports • Registrations • Appointment of inspectors

  28. Existing statutory measures

  29. Existing statutory measures (cont...)

  30. FUNCTIONS FINANCED THROUGH STATUTORY LEVIES

  31. New applications • Bee / honey industry • Proteas • Pecan nuts • Olives • Rooibos tea • Maize

  32. Budget Allocation: 2011/12 – 2013/14 • The NAMC has received an MTEF budget allocation letter for the period from DAFF. • The budget allocations are as follows: • 2011/12: R 35 899 000 • 2012/13: R 30 115 000 • 2013/14: R 32 220 000

  33. Budget Allocation Cont’ • This resulted in the following percentage fluctuation for the period: • From 2010/11 – 2011/12: 15% increase • From 2011/12 – 2012/13: 16% decrease • From 2012/13 – 2013/14: 7% increase. • The decrease of R5 million in 2012/13 is due to the following: • The NAMC has in the previous financial year received additional funding to expand the export promotion programme that will afford 100 emerging agribusinesses the opportunity to participate in international trade. • This funding was for the MTEF period 2009/10 – 2011/12 only.

  34. Budget Allocation Cont’ • Other source of Income • The NAMC is anticipating to generate income from the investment of the grants to be received from DAFF at the beginning of the financial year 2011/12. The following are the projected interest to be generated: • 2011/12: R 1 350 000 • 2012/13: R 1 200 000 • 2013/14: R 1 400 000 • Total Income for the MTEF period then results in: • 2011/12: R 37 249 000 • 2012/13: R 31 315 000 • 2013/14: R 33 620 000