AGRICULTURAL RESEARCH COUNCIL

BUSINESS PLAN 2019/20

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ARC MANDATE, VISION AND MISSION

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ARC ALIGNMENT TO NATIONAL POLICY AND PRIORITIES

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ARC CONTRIBUTION TO GOVERNMENT PRIORITIES

1. Supporting objectives of the National Development Plan, Vision 2030 through anARC business strategy and organization structure aligned to national priorities;

2. Employment and Job creation, particularly among the poor;

3. Food and Nutrition Security for all, particularly within households;

4. Improved productivity, production, competitiveness and sustainability of animal andcrop based agriculture;

5. Contributing to bio – security;

6. Optimal technology platforms for agricultural production;

7. Strengthening the role of the bio – economy (the “Farmer to Pharma Value Chain”) toenable South Africa to become a leader in Biotechnology and relatedpharmaceuticals through our knowledge base;

8. Enabling the country to adapt and respond to climate change impacts (water, land,energy, sustainable natural resource utilization etc.)

9. Contributing to South Africa’s Global and Regional positioning and integration, and;

10. Ensuring an optimal and sustainable organization.

SCIENCE INDICATORS FOR AGRICULTURE ECONOMMY

SCIENCE COUNCIL

Innovation in science

Basic/fundamental research

Applied research (technologies)

Intellectual assets

Skilled scientists & engineers

Volume & quality publications

Scientist ratings

Number of PhDs

Number of doctoral fellows

Number of postdoc fellows

Scientific awards

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AGRICULTURE DEVELOPMENT

Economic link to Innovation

Intellectual Asset Use

Agricultural Production & productivity

Food Security – hunger

Environmental Sustainability

Import Substitution

Export Promotion

Agrarian Transformation

New products (vaccines, cultivars etc

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ARC STRATEGIC GOALS (OUTCOMES ORIENTED)

1. To generate knowledge and technologies that will enhance the efficiencies in crop basedagriculture;

2. To generate knowledge and technologies that will enhance the efficiencies in livestock,wildlife and aquaculture based agriculture;

3. To generate knowledge and technologies for the conservation and utilisation of naturalresources;

4. To generate knowledge, solutions and technologies for food safety, quality and improvedefficiencies in the agriculture value chain;

5. To generate and disseminate knowledge and technologies for decision making andtransformation of the agriculture sector; and

6. Apply best resource management practices, towards a high performing and visibleorganisation.

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Strategic Goal 1 To generate knowledge and technologies that will enhance

the efficiencies in crop based agriculture

• Research and innovation that enhances competitiveness of agricultural value chains, including wheat and other grains, fruit, vegetables, and wine

• Crop production for broadening of the food base, ensuring food and nutritional security and welfare

• Optimised crop production systems to mitigate agricultural risks in the changing environment

• Crop science research and development for improved cultivars of food and non-food crops (breeding, genetics and physiology)

• Enhanced crop protection systems

• Development and transfer of appropriate technologies to smallholder farmers for sustainable production systems

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• Characterising and evaluating crops in terms

of quality, nutritional composition, shelf life and

suitability for processing

• Improvement of agricultural production and

profitability through adaptive and innovative

crop management and production systems

such as conservation agriculture

• Lowering input costs

• Crop cultivar development through genetic

improvement and modification

• Disease and pest control by means of

enhanced genetic diversity, Bio-control and

strategies for management of alien invaders

• Training of crop growers and extension staff to

ensure sustainable production

• Provision of scientific services to farmers and

other clients of ARC

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WHEAT RESEARCH FOR COMPETITIVE INDUSTRY

• Breeding Objectives:

– (i) development of high yielding lines that are adapted to water and abiotic stressed environment

using markers and modern phenotyping technologies;

– and to (ii) respond to the national demand for wheat and reduce import substitution.

• Co – funding with The Winter Cereal Trust.

– Hartbees (2010); Selati (2010); Umlazi (2010);

– Tambotie (2011); Timbavati (2011);

– Wedzi (2014);

– Kougas (2015)

• Wheat cultivars released by ARC in the past three years are as follows:-

– Winter Wheat Breeding Programme (Free State Dryland Areas): (i) Kubeta, (ii) Kougas, and (iii)

Wetzi

– Irrigation Areas (Northern Cape, North West, Northern Province and Limpopo): (i) Koedoes, (ii)

Renoster, and (iii) Umzimbi

– Spring Dryland Programme (Southern Cape, Western Cape): (i) Steenbok

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MAIZE BREEDING RESEARCH AND CONTROL OF FAW

International Public Private Partnership -- TELA. The TELA

project was developed from the transgenic (GM) component of

the Water Efficient Maize for Africa (WEMA) project.

Trait Pipeline and Testing for hybrid release includes six (6)

advanced trials planted at Cedara (under sprayed and

unsprayed for fungal diseases, and no-till conditions) and

Potchefstroom (under optimum, random drought and low N).

One or two elite hybrids will be recommended for release and

registration in 2019.

Commercially released TELA Maize hybrids, registered by the

ARC are WE6206B, WE6207B, WE6208B, WE6209B and

WE6210B. TELA hybrids with Bt 2 (MON89034) show control of

the fall armyworm insect pest.

The ARC will continue to implement a programme on “insect-

pest resistance management (IRM):” ARC scientists conduct

training-of-trainers on Insect Resistance Management, and

trainees include representatives seed companies and extension

agents from Provincial Departments of Agriculture. The trainees

are expected to train farmers who buy or receive TELA hybrid

seed.

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ARC’S SCIENTIFIC SOLUTIONS ENHANCE FRUIT EXPORT

• The ARC-Tropical and Sub-tropical

Crops registered a new passion fruit

variety, called selection TS-PAS-050.

• This variety is resistant to leaf

diseases and tolerant to viruses. It is

aromatically flavoured and pleasant

tasting.

• Cultivar development and other ARC

integrated scientific solutions enhance

performance of agriculture enterprises,

and farmers are pleased with these

services.

Figure 1: ARC’S new passion fruit variety (cultivar) TS-PAS-050

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Strategic Goal 2To generate knowledge and technologies that will enhance the

efficiencies in livestock, wildlife and aquaculture based agriculture Livestock plays an important role in the

economy and livelihood of rural communities

Indigenous cattle are valuable animal genetic

resource in the era of climate change

ARC is using biotechnology to understand the

DNA of our indigenous cattle

Nguni, Afrikaner and Drakensberger cattle were

recently sequenced

A total 17.6 million genetic variants were

discovered – some of these variants may be

linked with resistance to diseases and tolerance

to external parasites

These genetic variants offer potential for further

application in genetic improvement of our

indigenous cattle

Economic Impact of Beef Recording Improvement Scheme

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Lags in Years

Effects of investment reachmaximum at year 11.

Returns to initial investment startto decline in year 12.

Long term investment in theprogramme is essential

Study over period 1970-2014 shows: Rate of Return = 31,2% >>> for every

R100 increase in investment on beef cattle improvement research, the

marginal returns to the beef industry is about R31.

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ANIMAL HEALTH FOR SUSTAINABLE AGRICULTURE

FOOT AND MOUTH DISEASE (FMD)

• Completed development of new production process and have produced and tested vaccine which has been shown to confer strong protection against the disease

• Now in the process of compiling dossier for product registration

• Conducting vaccine efficacy trials for regulatory registration

• Process Development towards:

• Architectural Design Phase

• Construction Phase

• Vaccine Manufacturing & Validation Phase

• New Vaccine Facility for FMD including a Diagnostic Laboratory within 4 years

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ANIMAL HEALTH FOR SUSTAINABLE AGRICULTURE

NEW HEARTWATER VACCINE

Developed a new vaccine for Heartwater

Provides 100% protection to animals in clinical trials

Now in process of producing Master seed to give to OBP in September 2019

OBP will then produce at industrial scale a pilot batch followed by 3 experimental

batches at industrial scale for data generation towards dossier production

Data generated will be compiled for registration

Vaccine expected on the market in 36 months all going well

Strategic Goal 3To generate knowledge and technologies for the conservation and utilisation of natural resources

FOCUS OF GOAL

a) Alternative energy technologies

b) New and improved conservationagriculture systems

c) Climate Smart agriculture to enablemitigation and adaptation to climatechange

d) Improved water management andirrigation practices

e) Natural resources monitored andcharacterised

f) Genetic resources, databasesupdated and maintained

g) Green technologies and processes tomitigate impact of agriculture on theenvironment

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SCIENTIFIC ADVISORY FOR CLIMATE BASED DECISIONS

Climate data grid for maize growing

regions from ARC-ISCW & SAWS & NASA

& ECMWF.

Define start of planting window by long-

term ‘last frost date’.

Use 25 mm rainfall received within 20 days

as criteria for good planting conditions:

Previous 10d from measured rainfall

Future 10d from ECMWF rainfall

forecast

Indicate good time to start planting maize

Goal 4To generate knowledge, solutions & technologies for food safety, quality and improved efficiencies in the agriculture value chain

FOCUS OF GOAL

New food and non-food processesand products developed.

Food science and technologydeveloped for improved productquality and yield.

Post-harvest losses reduced.

New animal products developed.

Agro-processing, biotechnologyand informatics each cross-cuttingacross different areas of theagricultural value chain andintended to be applied to the fullvalue chain of crops, animals andagricultural system research.

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AGRO – PROCESSING OF GRAPES INTO WINE AND OTHER PRODUCTS

The ARC Cellar for sustainable

wine production, on renewable

energy

Efficient winery waste water

management strategy in place

and agro-tourism.

Platform for emerging

winemakers, industry

stakeholders and consumers.

Sharing of knowledge,

Evaluate the performance of the

wine industry across the board

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C D

B

Figure 2:

A: Solar panels on roof of research and commercial wine cellar

B: View of the research and commercial wine production facility

C: renewable energy pasteurizer suitable for SMME processors in rural areas

D: Participants at the symposium showcasing the wines thy have produced

Goal 5: To generate and disseminate knowledge and technologies for decision making

and transformation of the agriculture sector

FOCUS OF GOAL

a) ARC technologies packaged and exploited

b) Established and functional agri – incubators

c) Animal, crop and mixed production systemstransferred to smallholder farmers

d) Agriculture Development Centres that aredelivering services. ARC footprint andvisibility enhanced

e) Smallholder farmer enterprises support

f) Agricultural skills and capacity developed

g) Agriculture research for developmentoutcomes communicated and disseminated

h) Marketing and stakeholder management

OUTCOMES WITH ASSOCIATED IMPACT

1. Increased adoption and use of ARCtechnologies among smallholder farmers

2. Increased number of functioning andsustainable agriculture enterprises fromagri – incubators

3. Increased number of animal, crop andmixed production systems transferred tosmallholder farmers

4. Agriculture Development Centresestablished in all provinces

5. Competitive and sustainable Smallholderenterprises

6. Increased skills base and capacity inagriculture sector

7. Increased use of and application ofagriculture science and technology indecision making

8. Improved image and relations of ARC withstakeholders

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Generating Knowledge and Technologies to Support Transformation of the Agriculture Sector

• The ARC will continue to provide scientific solutions to support Rural Development and Agrarian

Reform as priority programmes of Government.

• The ARC has technologies that can provide targeted producer support to achieve the vision of

agrarian transformation and vibrant, equitable and sustainable rural communities.

• Partnership for assessment of PLAS farms – 1100 entities – Recommendations for interventions to

rehabilitate the farms for Sustainable Agriculture

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ARC -- 4 IR Support For Transformation of the Agriculture Sector

Agriculture Industry reinvention

Farmer-centric solutions - combining digital technologies such as mobile, blockchain, robotics, analytics, data visualization, IoT and cloud - deliver higher productivity and more growth opportunities

Digital Transformation

STRATEGIC GOAL 6:

MANAGING OUR RESOURCES FOR A HIGH PERFORMING ORGANIZATION

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CAPACITY DEVELOPMENT

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67 34

2

5

8

116

81 40

1

9

2

133

EMPLOYEES

Male Female

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ARC DEMOGRAPHICS

72,57%

8,15%

0,55%17,04%

1,44%

ARC Capacity per Race

African Coloured Indian White Foreigners

57,30%

42,70%

: ARC Capacity per Gender

Male Female

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ARC CHALLENGES TO DATE

1. ARC … operating in a declining funding environment from PG

2. Sluggish growth on External Income experienced over the years

3. Over Expenditure incurred since FY2016 to date

4. Liquidity challenges / cash constraints experienced to date….. Inability to pay invoices as and when

due

5. Current Liabilities exceeds Current Assets

6. Going Concern assumption questionable…. Preparation of AFS

7. High fixed costs …… ito “High ratio of personnel costs vs Operational PG”

8. Break-even (aka Balanced) budget submitted ….. Not realistic / not achieved; over the years

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ARC STATEMENT OF FINANCIAL PERFORMANCE

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ARC Funding over the MTEF (FY 2019/20 to 2021/22)

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ARC OPERATING COSTS (EXPENDITURE)

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ARC Financial Plan submitted: FY2019/2020 to FY2021/2022

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ARC SOLVENCY ASSESSMENT FOR MTEF

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ARC CASH CONSTRAINTS OVER MTEF PERIOD

The ARC needs to rebuild its cash resources / reserves to ensure: The FMD funding (+/- R120 million) is made available…. The WIP projects liability (+/- R115 million) are executed…. Average Cash shortage per month (+/- R28.4 million) …..

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ARC GOAL: REDUCE PERSONNEL COST TO 60% OF PG

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COMMENTS OR QUESTIONS

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