nurturing, understanding, partnering effectively and ... · airbus satellite imaging. • improved...

Nurturing, understanding, partnering

effectively and building wealth for all

19 June 2019

Transformation

• What do we mean by transformation

• The South African definition

• Land redistribution as a tool for restorative justice.

• The literal meaning - The four R’s

• Reframe – Take a fresh look at the challenge.

• Restructure – Adapt to improve competitiveness

• Revitalise - Grow by investing new opportunities

• Renew – Empower people by making part of an ongoing process of growth

Transformation: Challenges at a global level

• Climate change and threating ecological collapse• Droughts and famine in developing world

• Irregular and weather phenomena

• Sustainable- Regenerative practice - CA

• Increasing distrust in the social order.• Increasing wealth gap especially in the west.

• Increasing xenophobia and religious intolerance word wide.

• A rise in political and religious extremism e.g. The alt right and Trump. And Islamic fundamentalism.

• Increasing social division and political instability.

• Disruptive technology – Artificial intelligence, merger between info tech and biotech as well as automation

• Massive unemployment, increasing poverty and extreme inequality

• Low economic growth

• Heightened social and racial tensions

• Political uncertainly

• Policy uncertainty about land reform

• Weak SOE’s

• Rural decline and urbanisation

• Institutional decline and corruption

• Weak water infrastructure and droughts

• Impeding legislation

The South African Transformation Environment: Challenges

Core Assumptions

• Political social and economic ambiguity and uncertainty is unlikely to stop in the foreseeable future.

• Fundamental change is a reality.

• Core values of democracy, liberty and equality are under threat.

• There is a move to the extremes and positions are hardening.

• Protecting extremes is isolating and does not provide us with answers on the shared challenges we face going into the future.

A vision for transformation?

• Transformation Imperative 1: Grow the economy

• Transformation Imperative 2: Provide quality training

• Transformation Imperative 3: Access to finance

• Transformation Imperative 4: Industry leading the way

• Transformation Imperative 5: Embracing the 4th Industrial Revolution

• Transformation Imperative 6: Deliver on Existing Plans through Private and Public Sector Agricultural Targeted Development Partnerships

Transformation Imperative 1: Grow the economy

Transformation Imperative 2: Provide quality training

Transformation Imperative 2: Provide quality training

CURRENT POLICY FRAMEWORK

WHAT DOES THIS TELL

US CHALLENGES

PROPOSED

SOLUTIONS

• National Skills Development

Strategy III (2013)

• Agricultural Education and

Training Strategy (2005)

• Skills Development Act (Act

No. 97 of 1998)

• Skills Development Levies

Act (Act No. 9 of 1999)

• Continued skills

shortages in the

artisanal, technical

and professional

fields

• Training needs and

targets not met by

AgriSeta

• Skills levies for

18/19 amounts to

R398 million and

projected income

for 19/20 amounts

to R415 million

• Research reports

express concerns

about quality of

training

• AgriSeta income

too little to fund

all applications

• Limited number of

skills levy players

• No assessment of

impact of training

initiatives funded

by AgriSeta

• Restructure and

position

Agricultural

Colleges and

AgriSeta as

world class

farmer and farm

worker training

institutions

• Establish

industry-

academia

linkages

• Develop an

integrated,

impact driven

and targeted

system based on

agri-training best

practices

Transformation Imperative 3: Access to finance

CURRENT POLICY FRAMEWORK WHAT DOES THIS TELL US CHALLENGES PROPOSED SOLUTIONS

• National Credit Act• Land and Agricultural

Development Bank Act, 2002• The National Policy on

Comprehensive Producer Development Support (NPCPDS)

• Blended Financing Model to respond to Black Producers Commercialisation program (BPCP)

• According to the Land Bank’s 2018 Financial Year Report:

• R5.4 billion of gross loan book is classified as transformational projects (2015: R2.3 billion)

• R1.55 billion disbursed to Transformational projects

• R74 million in interest rate subsidies provided

• Approx. 1500 Black farmers supported through direct channels

• Commercial bank’s loan margins are based on the borrower’s overall risk grade

• Commercial bank’s struggle to finance emerging farmers due to:

― Lack of mandate

― Type of loan required (term)

― Lack of security (title over property)

― Lack of water rights

― Lack of operational track record

• Position and restructure the Land Bank as the conduit for financing developing farmers

• Establish an Agri-Development Fund (ADF)

• Blended finance model (Grant funding and private sector funding)

• Establish partnerships with Commodity Organisations, Agri Businesses, NGO's etc to assist with mentoring, risks mitigation and implementation of development programmes

Transformation Imperative 3: Access to finance

Transformation Imperative 4: Industry leading the way

Transformation Imperative 4: Industry leading the way

Cotton SA

National Wool Growers Association (NWGA) Case Study

Grain SA Case Study

Sernick Group

660

emerging cattle

farmers

1433

jobs

R165 Mil

Jobs Fund

R138 million

Sernick

Macthfunding

R100 million

in kind

infrastructure and

equipment

R100 mil

Loan

Sernick Group

• How does it work?

• Emerging farmers apply to become members.

• Tier 1 consists of 360 farmers with no land or less than 25 cattle with low level intervention.

• Tier 2 consist of 300 farmers with Land or lease of more than 5 years and more than 25 cattle with more intervention which include working capital from the profits of the custom feeding program.

• Tier 3 consists of 50 carefully selected farmers out of Tier 2 that will be brought up to full commercial farming status. Most of the interventions are in Tier 3.

• Two important Enhancers

• Project makes full use of the complete value chain existing within the Sernick Group. We supply and take off.

• An Integrated database will collect relevant information and track the progress of each beneficiary as information is collected by the monitors every three months.

Transformation Imperative 5: Embracing the 4th

Industrial Revolution

• 4th Industrial Revolution: Information Technology

• 4th Industrial Revolution’s Game-Changers for Agriculture

• Data: Improved data and accessibility is assisting

in understanding and predicting climatic,

ecological market related risks and opportunities.

• Examples are:

• Improved farm specific data collection

• Affordable GIS information systems such as

airbus satellite imaging.

• Improved climate and yield prediction

• Electronic data based management systems

• Know your market – Big data and consumer

behaviour.

• Crop efficiency technology. Improved and targeted

genetics. More efficient irrigation, plant nutrition and

pest control farm specific data collection and analysis .

• New farming techniques: No till, regenerative farming

techniques, contained and vertical farming.

• New markets such as converting by product to Bio-

chemicals and bio-energy:

• Food technology: Development of plant based high

conversion protein as a substitute for traditional meat

based protein.

Transformation Imperative 5: Embracing the 4th

Industrial Revolution

Transformation Imperative 6: Deliver on Existing Plans through Private and Public Sector Agricultural Targeted Development Partnerships

Transformation Imperative 6: Deliver on Existing Plans through Private and Public Sector Agricultural Targeted Development Partnerships

Transformation Imperative 6: Deliver on Existing Plans through Private and Public Sector Agricultural Targeted Development Partnerships

Response to create opportunities in agriculture

• Tools that can be used

• Partnerships

• Collaborative digital platforms

• Think tanks

• Value chain inclusivity

• Reform rural education

• Decentralised food systems

• Blockchain and financing

• Biotech and infotech

• Support organised structures

Conclusion

• If organised agriculture is weak, our sector will be weak.

• Our competitiveness and ability to transform is undermined by our inability to harness the resources in our institutions and to strengthen cooperation in the private sector.

• We do not have the luxury of expecting that the failing state institutions will recover in the short term.

• Our skills on all levels are tested in discomfort.

• We need to own our destiny and swiftly coordinate work in our commodities and strengthen partnerships.

• The idea is to collaborate, not duplicate.

Transformation Imperative 5: Embracing the 4th

Industrial Revolution

• Professional agriculture must feed agrowing population

• For that we need a professional farmer

• In 1950 the world population was 2.5 billionand only 746 million people lived in cities

• By 2014 the world population had reached7.2 billion with 3.9 billion living in cities

• The world population is projected to reach9.6 billion by 2050 and urban population6.4 billion

Transformation Imperative 6: Deliver on Existing Plans through Private and Public Sector Agricultural Targeted Development Partnerships

Transformation Imperative 6: Deliver on Existing Plans through Private and Public Sector Agricultural Targeted Development Partnerships