MR CHRISTO VAN DER RHEEDE Deputy Executive Director: AGRI SA Transformation in Action
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