Gauteng MEC for Economic Development, Environment, Agriculture and Rural Development, Lebogang Maile’s Department of Agriculture and Rural Development’s Budget Vote.
Hon. Speaker
Hon. Premier
Deputy Speaker
Ho. Colleagues in the Executive
Chief-Whip of the majority party
Hon. Members of the Provincial Legislature
Distinguished Guests
Dumelang!
Sanibonani!
Avuxeni!
Ndi matsheloni!
Molweni!
Role/ centrality of Agriculture and Agriculture in the Modern context
Madam Speaker many of us would agree with the assertions by Karl Marx when he stated that “Men begin to distinguish themselves from animals as soon as they begin to produce their means of subsistence, a step which is conditioned by physical organisation. By producing their means of subsistence men are indirectly producing their material life.’’
Agriculture is an important part in the production of material life. It is also important in the realisation of industrialisation. Agriculture is a source of both demand and supply for industry. Agriculture supplies food and raw material for secondary industry. Agriculture also supplies raw materials such skin for leather, supplies wool from sheep to textile. In order for agriculture to function, it demands machinery and tractors, and therefore agriculture plays a very central role.
Agriculture is also engine for modernization.But farming alone is not adequate to effectively reduce poverty. It is an indispensable component for launching effective development strategies which we must aspire to achieve.
Agriculture in the 21st century and in particular in an economic hub like ours should be modern, transformed and industrialised. And we are working at doing that by investing in modern production technologies like the investment in vertical hydroponics production technology, where vegetables can be grown on vertical pillars; this is in line with addressing realities of a lack of land particularly for black communities. Vertical pillars mean that with less land surface area we could still get the same amount of harvest. Vertical pillars also speak to modernisation of agriculture that speaks to an urbanised province like ours.
We have invested in research across the agriculture value chain; one key research initiative we invested in was the development of vaccine in collaboration with the University of Pretoria which helps control cattle tiks. Through our investment it helped to unlock further funding of 10 billion from international funds.
Moreover Madam Speaker, still in line with modernization of agriculture, we are in the process of investing in development of cell phone technology that will be linked to agri-parks and small holder farmers where we will be able to feed information of produce available for the markets. This will also help famers with information on possible market demands and timeous early warning information related to weather patterns and other risks.
Madam speaker because of the role agriculture plays in development the first two Sustainable Development Goals speak to this fundamental role; these goals are “No Poverty” and “Zero hunger”.
Due to an enhanced global environment awareness reinforced by dramatic environmental events, international conferences on the environment, development and research have increasingly shifted the developmental discourse towards the concept of sustainable development, thus our efforts to development must always be those that are environmentally friendly and sustainable.
Overview of the Agricultural Sector
In terms of ownership patterns Madam Speaker,the South African Agro processing sector is oligopolistic in which a few large players that own large proportions of the market share. The skewed participation of farmers and agropreneurs in the value chain is also a consequence of long history of discriminationwhich distorted development of black farmers over the decades.
Although there is currently over 4000 food production companies in South Africa registered with Companies and Intellectual Property Commission(CIPC), the skewed nature of this sector is such that only the top 10 large enterprises are responsible for 70% of the industry’s turnover. Our Agro-processing strategy speaks to harnessing relations with these major players where possible, to get small farmers and small agroprenuers to participate in this value chain.
In line with our interventions to address this skewed value chain we have among other interventions provided with pack house infrastructure and are actively involved in agro processing.Facilities like Gugu and Daughter and Ikwezi farm have were trained and supported to get their Global Agricultural Practice(GAP) and Hazard Analysis and Critical Control Points (HACCP) accreditation. These farmers and agroproneur are currently supplying retail chains such as woolworths, pick n pay.
Economic Environment
Madam speaker this budget vote is presented in challenging times where the World Bank on the 11th of April 2016 published a report which lowered the forecast of Sub-Saharan Africa’s economic growth from 4.4% in October 2015 now to 3.3% citing plunging global economic prices and the decline in agricultural productivity.
The Global macroeconomic environment underpinning the outlook for agricultural markets has been characterised by considerable votality for several years. The impact of the financial crisis remains evident in many countries as high debt levels continue to hamper consumer spending and growth. The projected 3.3% growth remains lower than pre crisis period.
Madam Speaker, In South Africa, the rand continued to depreciate, which supports local commodity prices, particularly in sectorswhere South Africa is a net importer, but also creates pressure on input costs. While the cost of Brent Crude oil plummeted, the domestic impact was negated to some extent by the depreciation in the Rand, as well as the application of additional fuel levies.
Similarly, the declining trend in the international fertilizer market since 2011 has been evident in domestic markets, which moved largely sideways and at times even upwards over the same period.
Within this turbulent macroeconomic environment, which impacts on commodity prices and the cost of key inputs, severe weather conditions, as well as political and policy influences in agricultural markets have added a great degree of uncertainty going forward.
Globally, record harvests continue to materialize in key production regions and world maize production was set to reach record levels for the 2nd consecutive year in 2014/15 despite a reduction in area planted. Having already plummeted by more than 30% from 2013 highs, maize prices are projected marginally lower again in 2015, inducing a further consolidation of maize area in 2016.
Global Markets remain well stocked and while indications are that yields may not be as far above trend levels as originally expected, the extent to which current weather conditions will reduce the final US crop remains somewhat uncertain at this early stage of the growing season. Global wheat prices also continue to slide in response to bumper crops in South America, the EU and the Black Sea region resulting in a global surplus.
Madam Speaker, the hiked prices in fertilizers have very fundamental effects to us as a department especially with the declining Rand, because what this means is that we have to pay more for fertilizers that we use to support our famers. With a strained fiscus this means we have to do more with little. Most of the fertilizers are internationally produced and therefore we have to pay a lot of money to access these fertilizers.
In 2015, agriculture constituted 2.5% of South Africa’s total GDP. In terms of Gauteng Province we were at 0.5% of the total activity to the agricultural sector nationally. In terms of sector contribution to Gauteng,agricultureaccounted 2.5%.
The effects of the drought are now clearly visible on most retail prices for food. In the case of super maize meal, prices for January were approximately 22% higher as compared to January 2015. This is not felt by the rich but by the struggling masses of our people whose staple food is the maize meal.
Madam Speaker, we must take seriously the increase in food prices, the cost of food in South Africa increased by 11% in April 2016, this is in contrast with the world food prices which declined by 18.5% last year (2015), following marginal declines in the previous years. This means that many people will not afford to purchase food.
The picture is not all bleak Madam Speaker, because Gauteng is not an agricultural province we saw potential in the Agro-processing sector. We have been implementing our Agro-processing strategy.
The Agro-processing sector in Gauteng has potential to provide industrial impetus that can create jobs and address some of the provinces macro-economic challenges. The agro- processing sector has significant potential and has already been picking up in the city region. The province makes the largest contribution to Agro-processing GVA in South Africa which was at 29% in 2013, and provided employment for an estimated 124 thousand people.
A Promise Made is a Promise Kept
The honourable Premier of Gauteng David Makhura asserted in his State of the Province Address (SOPA) in February 2016 that it has been over a year that the ANC led fifth administration in Gauteng started with the implementation of the bold programme of action- Transformation, Modernisation and Re-Industrialisation (TMR)
As a department we have heightened this programme of action and we have made sure that the Gauteng City Region feels our presence.
Speaker in this August House on the 23rd of June 2015 we made our vows to the citizenry of Gauteng City Region and like a good partners we must tell you how wehave kept my vows.
The citizenry of GCR have entrusted us with leading them as the ANC government and thus equally we must commit to the promises we made to them. A promise made must indeed be one that is kept.
The Honourable Premier in his SOPA re-affirmed that as the ANC leadership in government are neither superstars nor celebrities. “We are simple and humble servants of the people” he correctly said.
We Madam Speaker are guided by the words of Frantz Fanon where he says:
“No leader, however valuable he may be, can substitute himself for the popular will, and the national government, before concerning itself about international prestige, ought first to give back their dignity to all citizens, fill their mind and feast their eyes with human things, and create a prospect that is human because conscious and sovereign men dwell therein.”
The Ntirhisano outreach programme has played a crucial check point for us to evaluate the appropriateness and relevance of the work we do and if we are still performing as per our mandate. We have had to rethink our interventions and our overall strategy, to position the department in a way that yields better results. We have been able to respond to 90% of the issues raised at the Ntirhisano outreach programmes.
The department looked at all its agricultural strategies, reviewed and consolidated them to form one consolidated strategy that speaks to synergized agricultural interventions in the GCR. The Gauteng City Region Food and Transformation Strategy has therefore been developed with focus to develop the provinces agricultural economy to attain its maximum potential, maximise agricultural contribution towards job creation and poverty reduction, provide a framework for investments purposes, and align the sector.
Madam speaker we in this August house promised that we would conduct a feasibility study to inform the development of the aquaculture strategy to potentially diversify and modernise Gauteng’s agricultural activities, the strategy been completed and we have just concluded engaging our stakeholder on the strategy. This promise was indeed kept.
In our promise to unlock agricultural potential in the Southern Corridor and in our intentions to make the Sedibeng District the food basket of the GCR and position the region as an Agrotropolis we have developed a frame work for the Agrotropolis Master plan.
The plan identifies interventions in the primary production, agro-processing as well as Agri-tourism sectors. The framework further recommends development of an Agri-city as the anchor of the Agrotropolis. The Agrotropolis is well positioned to resuscitate the economy in the Southern corridor through the identified interventions.
As part of radicalising the economy of GCR we entered into a partnership with Home Grown, where they will assist on barley cultivar trials, the establishment of the incubation farms and training of barley producers. They will further support the establishment of the malting facility partnership with Heineken Breweries and facilitate off take agreements and development of 32 commercial markets for Barley producers in GCR.
These thirty two (32) famers across the city region have been profiled for this barley production and are now ready for planting the barley in the forthcoming season. Twelve (12) of these farmers have already been supported with production inputs in the 2015/16 production season and the other twenty (20) will be supported in the 2016/17 production season.
Five farmers will be assisted with centre pivot irrigation. A total of 25millon will be spent over the two years to implement this project. We indeed keep our promises Speaker.
Madam Speaker, driven by the Agro-processing strategy of the province and a drive towards the creation of an Agrotropolis, a number of agro-processing infrastructures were initiated to support Small Medium and Micro Enterprises (SMME’s).
Such infrastructure include the milling plant in Randfontein which is underway, the completed Sunflower crushing plant in Cullinan, and the completed renovation of the Vereeniging Fresh Produce Market. These projects were supported with around the amount of 35million with more than 75 jobs created during the construction.
Part of implementing the Agro-processing Strategy we have also provided a number of farmers with pack house facilities to process vegetables, like the De Deur Pack house. We also trained most of these farmers onHACCP, to make sure that they are equipped with the necessary and relevant skills.
Madam Speaker,Agriparks were established this year, the department spent close to 46million in their establishment.
We have concluded the following Agri-Parks; Westonaria Agripark which is near Bekkersdal, Eikenhof Agri Park in the City of Johannesburg, Sebokeng Agripark, we expanded the Marafong Agripark and the Innovation Hub Agripark which is to serve as a training facility. These Agriparks will be launched in due time.
The Tarlton Agri Park infrastructure was concluded with new irrigation infrastructure; the project beneficiaries were then trained and are now in the process of harvesting their crop.
This Madam speaker a step in transforming the economy of the City Region, this also speaks to revitalising the economy by increasing the economic activity in townships and also exposing unemployed youth to farming.
The Gauteng city region was expected to grow to 14 million inhabitantsby 2015, putting it in the top 15 urban areas in the world by population, this puts a demand on the state in terms of making sure that citizens get provided with food. As many come to Gauteng in seek for jobs and better living conditions.
The Department supported 75 small farmers with infrastructure mainly with the primary focus of enhancing production on various agricultural commodities; this was aimed at making strides to deal with food security in the region.
Nine (9) smallholder farmers were supported with 21 and 50 sow carrying capacity piggery structures. Ten (10) smallholder farmers were supported with 5000 carrying capacity poultry structures, fourteen (14) farmers each supported with three (3) by,30 hydroponics structures all totaling forty two (42) hydroponics infrastructures, Forty two (42) smallholder farmers were also assisted with drilling and equipment of boreholes.
A further 159 smallholder farmers were assisted with production inputs and a total of 10569 Food gardens were supported to make sure that people can access food in the City Region.
Madam Speaker ownership patterns in the cattle industry still remain tilted along race lines. We took it upon ourselves to transform these ownership patterns by launching the Nguni beef cattle development project in May 2015.
The initial three (3) farmers have each not only just received their animals (30 pregnant heifers and a bull) but have also been placed under structured vetinary and livestock program. They should, before the end of the five (5)years be in a position to return the 30 heifers and a bull, which would then be handed to the next qualifying batch of prospective farmers. Another promise kept honourable Speaker.
Madam Speaker the racist remarks that raged our country in late 2015 were by and large premised around the perception that blacks always dwell in unhygienic places.
To deal with this historic unhygienic settlement areas which were a result of the apartheid system which gave no services to black people, the department re-launched the “Botho ke Bontle” (BkB) campaign in January 2016.The BkB Clean-up relay was used as a process to intensifying awareness on waste management and greening at local level.
Key activities included clean-ups and tree planting.Working closely with municipalities, GDARD has rehabilitated ten (10) illegal dumping sites into mini-recreational parks. This project involves the clearing of illegal dumping sites in townships and turning them into mini recreational parks that incorporate outdoor gyms.