MR CHRISTO VAN DER RHEEDE

Deputy Executive Director: AGRI SA

Transformation in Action

INTRODUCTION

• 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

CONCLUSION

Transformation Imperative 1

Grow the economy

7 643 157 Individual Tax

Payersgenerating

R462 Billion

17,7 million Social Grants Beneficiaries

collecting annuallyR 278 Billion

R243 Billion to be borrowed in

2019/20

National Debt amounts to 60,2 %

of GDP

Budgeted income

forcast for 20119 is

down with R15,4 Billion

The solution

Private Sector

(Lead sector to drive investment, trade,

employment, transformation growth)

Government

(Lead sector to develop, implement

and support pro-business policies)

State-owned Enterprises and

Local Government

(Lead institutions to provide bulk services)

Justice System

(Lead institution to uphold the values and ideals encapsulated in

our National Constitution )

Transformation Imperative 2

Capacity building

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)

• Currently eleven

provincially based

Agricultural Colleges

• 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

• 21408 registered employers

• 5233 pay skills levels to

AgriSeta

• Top twenty levy players

contribute R62 million

• Six of them are from the sugar

industry

• Research reports

express serious

concerns about quality

of training at colleges

• 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

Owen Sithole Agri-College in KZN11

The solution

Agri-Colleges

(Lead farmer and farmworker practical

training institutes)

Universities and Technikons

(Lead advanced agri-specialists training

institutes)

DAFF, DTi, DRDLR, NAMC, ARC, etc

(Lead government departments

supporting the agri-sector)

AgriSeta

(Lead private and public sector training needs advisory and

linkage institute)

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

In Northwest15

16

In the Free State17

The Solution

Land Bank

(Lead agri-financing institution for emerging

farmers)

Agri-Development Fund

(Lead fund for financing of emerging farmers)

Intermediate Funding Institutions

(Lead application assessment and feasibility specialists)

Commodity Organisations, Agri Businesses, NGO's

(Lead mentoring, risks mitigating partnering

specialists assisting farmers with finances, access to

markets, etc.

Transformation Imperative 4

Industry leading the way

Eksteenskuulfontein

Goedverwacht

Ceres Pals Project

Berekisanang Plaas

Mamre

Jagersfontein

Lichtenburg

HartswaterFouriesburg

Kwanalu

Cotton SA

BATSA

Wool SA

Bathurts

Saartjie Baartman District

Grain SA

Subtrop SA

Gamtoos District

Du Toit Groep

Hortgro

Vinpro

Sugar SA

Kartstengroep

ZZ2

• Grain SA has a comprehensive farmer

development programme that aims to

develop black commercial farmers and

to contribute to household and national

food security

• Grain SA encourages farmers to

organise study groups in their areas to

serve as a platform where farmers can

access knowledge and training from

various role players in the grain sector

• In another initiative a special

programme was designed for advanced

and commercial black farmers. The

identified farmers received one year of

intensive support

Grain SA Transformation Project

Commodity Project with communal

black farmers

• Khaya and Crewelyn Katoo are land reform beneficiaries in charge of the Entabeni citrus producing farm in Patensie.

• With the help of the farm manager Louis Nel, Humansdorp Co-op, land bank and government, the group of eight beneficiaries and twenty worker families are now managing and benefitting from a profitable venture.

• It comprises of 48ha citrus and 120ha mixed crops of maize, potatoes, wheat, pumpkins and teff.

Humansdorp Co-op Transformation Project

Agri-Business Project with black land

reform beneficiaries

• The Mooketsi market is a 2200 square meter local fresh produce market where ZZ2 and 200 small scale framers sell fruit and vegetables to the informal market.

• The Mamphoku Makgoba Community Trust established a joint venture with ZZ2 in 2014.

• The objectives of this partnership to ensure that the expectation of the Makgoba Community by developing the resources of the Makgoba as an international benchmark by starting with the development of a world class avocado development.

ZZ2, Mooketsi

Market and

Makgoba Trust

Transformation

Project

Mega-farmer

Project with small scale

black farmers

BerekisanangEmpowerment Farm

Partnership Project with

farm workers

- Berekisanang is a

partnership between

- ACG Fruit Group

(Galactic Deals),

- the IDC and the

- Berekisanang Farm

workers Trus.

- Main aim is to develop the

Northern Cape economically,

create jobs and empower

their farm workers.

Agri-Phakisa Smart Village Initiative for Farm Workers

Farmer Project with

farm workers

The Solution

Agricultural Transformation Special Purpose Vehicle in

Presidency

(Lead institution to set, oversee, monitor and report on transformation projects)

Agri-Development Fund

(Lead fund for financing of emerging farmers)

Intermediate Funding Institutions

(Lead application assessment and feasibility specialists)

Commodity Organisations, Agri Businesses, NGO's

(Lead mentoring, risks mitigating partnering

specialists assisting farmers with finances, access to

markets, etc.

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

4th Industrial Revolution: Big Data 4th Industrial Revolution’s Game-Changers for Agriculture

• Velocity: This revolution is evolving at an exponential rather

than a linear pace

• Breath and depth: It leads to unprecedented paradigm shifts in

economy, business, society and individually

• It is changing the “what”, the “how” of doing things but also

“who” we are

• System impact: It involves the transformation of entire systems

across (and within) countries, companies and society as a

whole

• The use of big data is becoming a key basis of competition

and growth for professional agriculture, and it is already

affecting every area of agricultural value chain activity including

production, processing and the retail environment

• Rerouting value chains: Numerous players are attempting to leapfrog

value chain steps via direct-to-consumer delivery, meal kits, food e-

commerce and the like to reduce supply chain inefficiency. Urban food

networks will replace the traditional agricultural networks.

• Crop efficiency technology: Examples are start-ups and cross-

industry innovators that offer drones, robots, big data and sharing

platforms as well as irrigation, soil, and crop technologies to increase

effective yield.

• Bio-chemicals and bio-energy: Pursuing the reduction of the

ecological footprint, innovators are developing biologically-produced

agrochemicals, bio-materials and bio-energy.

• Food technology and artificial meat: Companies are developing

plant-based meat and eggs to harness “sustainable protein,” to counter

the notion of eight kilograms of grain to produce one kilogram of meat.

• Contained and vertical farming: Newcomer innovations showing

potential are smart greenhouses and contained farming.

The Solution

DAFF National Extension Support Services

(Lead institution to implement national extension policies and

norms and standards on the transfer of technology)

Agricultural Research Council

(Lead organisation co-ordinating extension

practitioner training in collaboration with training

institutions)

Agricultural Extension Practitioner Accreditation

Body

(Lead institution to accredit extension practitioners)

The South African Society for Agricultural Extension

(SASAE)

(Lead institution for the promotion of the Science and

Vocation of Agricultural Extension).

Transformation Imperative 6

Deliver on Plans through Private and Public

Sector Agricultural Targeted Development

Partnerships

South Africa’s water source areas can be grouped into 21 areas.

The Solution

Land Redistribution Special Purpose Vehicle and Land Depository in Presidency

(Lead institution to set, oversee, monitor and report on

land redistribution targets)

Parliament

(Lead body to enact legislation referred to in provisions 2,5

and 6 of Section25)

DRDLR, Deeds Office, State departments

(Lead institutions to implement targets set by Presidency Land Redistribution SPV)

District Land Reform Committees and Land Reform Ombudsman

(Lead institutions to advise on and monitor local redistribution processes, partnerships and to

investigate problems)

• A pineapple farm I recently visited in the Eastern Cape.

• This is another great example of a win-win partnership between theHumansdorp Co-op, Workers Trust, the Landbank and DAFF.

• Twenty eight workers are beneficiaries of the Worker’s Co-op, but are all working the land and are represented on the board of directors.

• This project is a long term project and will only generate dividends once it becomes profitable.

• Of critical importance is managing the transition from being a worker to being a co-owner.

• Trust and transparency are key drivers for successful transition!

IN CONCLUSION

• Training, capacity building and skills development is integral to developing an integrated and impact driven sector

• The integration of agricultural training institutions will strengthen the agricultural training landscape and the entire value-chain

• The adoption of a blended finance model (Grant funding and private sector funding) is critical for developing farmers and ensuring the long term sustainability of agriculture

• Transformation in the agricultural sector is intertwined with commodity-specific and business management training and skills - this practice be replicated throughout the industry

• Commodity organisations involved in transformation projects should be approached and assisted in their existing developmental endeavours

• We must analyse the impact of the 4IR on our agricultural ecosystem

• It is necessary to analyse the impacts on all fronts of agriculture, the effects on rural and agricultural life, and the effects on agricultural structure and work

• We must consider data management and its effects because in the future, data will be a resource, and data quality will be competitive

• Data should be standardized so that quality agricultural data can be continuously produced and managed.

• We must facilitate the construction of infrastructure and re-engineering of our institutions that support technology-based agriculture

• We are responsible for maintaining the support for the technologies that come with the 4th Industrial Revolution

• The integration of these technologies into the agricultural industry will not only ensure food security but will build professional agriculture and the professional farmer

THANK YOU