Minister Winde Tables Budget to Grow Western Cape Agriculture Sector | Western Cape Government


Minister Winde Tables Budget to Grow Western Cape Agriculture Sector

30 March 2016

I am standing before you today during an extraordinary time for our agriculture sector.

This month we learned that the Western Cape’s agriculture sector is creating jobs at the fastest pace in the country.

According to the latest figures from Statistics South Africa, the number of people employed in our agricultural sector has grown by more than 63 per cent year-on-year. This is compared to 16% nationally.

Seventy per cent of the new jobs created in South Africa’s agriculture sector over the last year were created here in this province.

And there are now 214 000 people employed in the Western Cape’s agricultural sector.

These gains are due, in part, to the decisions we have taken as the Western Cape Government, where through our Project Khulisa growth strategy, we have gone all out in those sectors with the highest potential for jobs and growth.

It’s also due to strong positive sentiment from the private sector. Many of you are here today, and I’m pleased to say that the growth we are seeing results from the hard work we have put in together.

I’d like to thank agri-business and farmers, both small-holder and commercial, for their continued support and their contribution to job creation.

While we are making phenomenal progress and it’s important to celebrate the fact that our agriculture sector here in the Western Cape is creating the highest number of new agriculture jobs, we are facing a major challenge.

Parts of the African continent are experiencing terrible drought.

In response, the Southern African Development Community has approved a “Declaration of the Regional Drought Disaster”. They estimate that the number of people affected by the drought could rise to 50 million, up from the current estimate of 28 million.

The National Government estimates that it will cost the country’s economy in the region of R16 billion.

In the Western Cape, we are estimating a R1.2 billion loss to the wine and fruit industries alone.

Analysts report that consumers will pay nearly 30 per cent more for a basket of staple foods this year. This increase will hit poorest residents the hardest.

Because we know we cannot afford to lose the precious water resources we have, we also stepped in to divert disaster when the canal feeding off the Clanwilliam dam was badly damaged, affecting supply to farms downstream.

We approved emergency funding of just under R1 million to divert the water

across the damaged section.

The drought is placing strain on agriculture in the Western Cape forcing us to work even harder at securing a growing, job creating sector.

Indeed, with this budget, we have put a plan in place to invest in the future of our agriculture sector.    

In total, R787.8 million has been allocated to the Department of Agriculture for the 2016/17 financial year.

The over-arching goal we have set ourselves is to increase sustainable agricultural production by at least ten per cent by 2025.

In line with Project Khulisa, we have set ourselves additional agri-processing targets, which are to add up to a further 100 000 jobs in this sector and to increase agri-processing sector’s Gross Value Add (GVA) from R12 billion to R26 billion in the next five years.

Despite the challenge to the fiscus, we are sticking to these goals.

Now let’s get into the detail of how we’ll get the job done. 

At the start of my term, I selected transformation as one of my top priorities.

The failure rate of land reform projects in this country is still far too high.

And the pace of transformation is far too slow.

I have visited too many projects where beneficiaries are struggling because they have not received the tools they need to establish growing and successful agricultural enterprises.

To change this, we need a dedicated effort.

In the Western Cape, we have set ourselves on the path to ensure a 70 per cent success rate of all the land reform projects we invest in.

In the 2016/17 financial year, the Farmer Support and Development Programme will receive R259.8 million to make this happen.

In the past financial year, we’ve given 1 572 emerging farmers the tools they need to grow their enterprises.

Over the next three years, we will support 4 195 new farmers to take their businesses to the next level.

One of the farmers who illustrates the kind of success we want to replicate is Carole Kirkwood-Pretorius.

Carole joins us in the house today along with other leading women in the agricultural sector who are featured in the latest edition of Abundant Harvest. I’d like to welcome you all here today.

Carole, with the support of our Farmer Support and Development Programme, bought a derelict farm in the Karoo to farm just 20 sheep. Today, her herd has grown to 147 and her product has been certified as Karoo Lamb, which gives her a marketing edge.

Abundant Harvest features the province’s top agri businesswomen, all of whom have won Female Entrepreneur Awards. You will all be receiving a copy of this publication today, which showcases how these agri entrepreneurs are creating jobs and taking our sector forward.

These are the stories we need to celebrate.

Over the past months, I’ve been criss-crossing the province meeting with many of the other farmers we are supporting.

I had the pleasure of meeting Andries van der Poll, who’s farming out at Klipdrift. Andries is one of this province’s land reform success stories.

As a profitable agri-business, we are working with Andries to reach his goal of operating as an independent commercial farmer.

During our meeting Andries told me how his young son, Joshua, asked him what subjects he needed to take in school if he wanted to become a farmer.

This is where we begin to see real transformation and we want more of these stories here in this province.

While Andries is running a profitable business, like any entrepreneur he faces his share of challenges.

At the moment, the most pressing of these challenges is the drought.

We have requested R88 million from the National Government in drought relief. While national considers our request, farmers have very real obligations that cannot wait on onerous government processes.

That’s why, in the Western Cape, we have granted emerging farmers R11 million in emergency funding to ensure that they can pay their workers and that the losses they suffer because of the drought will not put them out of business.

This is another way we have invested in the future of the agriculture sector.

We are also supporting agri-businesses to strengthen their export position by growing exports from the current value add of R16.3 billion per annum.

Between 2003 and 2012, the value of South African agricultural exports increased by 261 per cent to US$6.7 billion.

We know that if new farmers are to grow, they need access to the right markets.

To deliver on this, we have put a dedicated unit in place. 

The Agricultural Economic Services programme receives R23.4 million to provide expert economic advice.

Project Khulisa, our strategy to double the size of the agri-processing sector, outlines our detailed and practical plan to increase exports in selected markets.

Over the past year we have been working with the private sector and together we’ve come up with a set of clear strategies to reach Project Khulisa’s goals.

To start, we will improve local agri-processing capacity for domestic and key export markets.

Currently South Africa has duty free, quota free market access for dairy products to the European Union, but our lack of the required residue testing facilities means we are unable to export to that market.

In response, I am pleased to announce that we will invest in a R9 million testing  facility at the Western Cape Department of Agriculture’s Helderfontein Veterinary Laboratory to provide for the testing of minimum residue levels of export products. 

To develop more product for processing, we are continuing work on the Greater Brandvlei Irrigation Project.

By increasing the height of the Brandvlei Dam’s inlet canal, we will be able to irrigate another 4 400 hectares of land in the Breede and Langeberg municipalities. This project will deliver a significant job creation boost, adding up to 8 000 jobs to our economy. 

These job opportunities will especially impact rural communities, a key priority of this department. In this financial year, the Rural Development programme receives R21.9 million.

Our Rural Development programme has particular focus on the province’s 124 000 agricultural sector employees. We will continue our province-wide household survey of the sector’s employees, so we ensure we are able to match our programmes of action with their needs.

The Greater Brandvlei Irrigation project will go a long way towards creating extra irrigation capacity for our vineyards, which is tied to our second goal, namely to increase exports of wine to China and Angola.

China is the world’s fastest growing emerging market for wine, with 57 per cent year-on-year import growth.

Angola is South Africa’s fastest growing export market for wine in Africa. It has achieved almost six million litres of import growth over the past year.

In the coming year, we will conduct dedicated marketing campaigns in both these markets to encourage the further uptake of our products.

Another part of our Project Khulisa strategy is to double our share of the global Halal market by 2025.

We know that the current value of the global Halal market is worth US$2.3 trillion and that only eleven per cent of that is being serviced.

Now you’ll recall when I stood before you last year, I stressed that national needed to lobby for smarter agreements if we were to increase the number of global markets our produce can reach.

To this end, I was pleased by the announcement that South Africa was set to gain preferential trade access to a number of key markets through the Tri-Partite Free Trade Area Agreement.

This agreement, which seeks to address issues such as non-tariff trade barriers, will give us access to the majority of the world’s Muslim population who are living in agriculturally-marginalized areas.

We are set to take advantage of this opportunity through our facilitation of yet another major infrastructure project. We are working with a range of stakeholders to guide the establishment of a sterilisation and irradiation facility in the province. This project will enable us to comply with the regulations of importing countries and will alleviate the congestion at Cape Town Harbour.

Another element of market access is linked to the export of our animals. To ensure our animal population is disease-free means we are able to export to more markets.

At the end of last year, the largest consignment of horses ever was exported from the Western Cape to the United Arab Emirates and Europe, with the assistance of this department’s Veterinary Services programme.

In this financial year Veterinary Services will survey 800 000 animals as part of its ongoing campaign to ensure the health of our animal population, which numbers 2.3 million in livestock alone.

In addition, we also note the implementation of Independent Meat Inspection (IMI) at all abattoirs in South Africa, which is likely to result in an increased workload on the regulatory role of officials in the Veterinary Public Health section. We will continue to monitor the situation.

To continue its efforts to manage animal diseases, export control and ensure the safety of meat products in the province, Veterinary Services receives R86 million in the 2016/17 financial year.

While all of the above efforts are set to grow our agri sectors, we know that we can only achieve real growth if we focus on building a resilient environment. To this end, we have allocated R97.7 million to our Sustainable Resource Management programme in this financial year.

We’re currently seeing first-hand the effects of extreme weather events. 

Climate change modelling shows that annual temperatures are rising and the number of colder days will decrease.

Droughts, floods and heat waves will become more regular.

These trends highlight the need for a co-ordinated response from government and the private sector to mitigate the impact of climate change.

This is why the Western Cape Government has partnered with the University of Cape Town’s African Climate and Development Initiative to develop a climate change response plan, Smart Agriculture for Climate Resilience (SmartAgri).

SmartAgri is a two-year project by the Western Cape Department of Agriculture and the Western Cape Department of Environmental Affairs & Development Planning.

This initiative was launched in 2014, and we will have a complete plan in place by the end of this month.

SmartAgri responds to the need for a practical and relevant climate change response plan specifically for the agriculture sector of the Western Cape.

The University of Cape Town’s African Climate and Development Initiative (ACDI) and a consortium delivered a Framework and Implementation Plan which will guide and support the creation of greater resilience to climate change for farmers, agri-businesses and other stakeholders across the province.

Residents living in rural areas, for whom agriculture is a key employer, will bear the brunt of the effects of climate change. That's why the plan will also include strategies to ensure that the workforce on farms is able to adapt to the changing environment.

This project is also a sterling example of Better Together, not only between the two departments, but also with our stakeholders in the sector.

In addition, a Green Agri Portal has also been developed in collaboration with Green Cape.  The aim of the portal, which forms part of the department’s Climate Change plan, is to increase access to relevant information to support our clients in their green initiatives. 

The focus on soil health will be intensified; “soil reform” is crucial in ensuring a sustainable agricultural sector. We know that we need soil to support crop production and subsequently animal production.We appeal to farmers to continue to partner with us in our sustainability drives.

We’ve already had excellent achievements through the conservation agriculture approach we are driving with the Agriculture Research Council. These outcomes have been especially good in the small grain, potato and rooibos industries. We will continue to support this initiative with focused research and technology transfers.

Through the above measures, we are putting practical and innovative plans in place to respond to climate change.

By being responsive to our changing environment, we are making a significant contribution to creating a robust and competitive agricultural sector.

The Western Cape is well-positioned to lead the way.

We are harnessing the power of innovation to come up with solutions to protect the future of our agriculture sector.

To ensure that we make technology work for us, the Research and Technology Services programme receives R109.6 million in the 2016/17 financial year.

It gives me pleasure to announce that in this coming financial year, this programme will launch 85 new research and technology development projects to increase agricultural production and we will share these updates as they happen.

As with investing in innovation, one of the ways we can secure our future is by investing in our young people.

For our students, the Mxokozeli siblings, agriculture is a family business.

Thamsanqa, Simthembile, Phosiza and Thandiwe Mxokozeli were last year selected to be part of the 2015 AgriSETA accredited Learnership programme at the Elsenburg Agricultural Training Institute.

Thamsanqa and Simthembile chose Animal Production; Phosiza opted for Vegetable Production and Thandiwe elected Viticulture.The Mxokozeli siblings are committed to their studies and will use the skills they have learned to further grow the family’s agri-business, which is currently run by their father and mentor, Michael.

It is young people like the Mxokozeli siblings who will lead our sector.

To expand opportunities for young people in the agricultural sector, the Structured Agricultural Education and Training programme receives R58.7 million the 2016/17 financial year.

In our plan to boost the number of graduates available to the agriculture sphere, we have set the target of ensuring that 1 500 young people will benefit from our Higher Education and Training programmes over the next three years.

In addition to the training offered by the Agricultural Institute, the department delivers skills development through internship programmes and bursaries. Our Young Professionals Programme, which supports black post-graduate students to develop their careers, now includes a focus on agricultural leadership.

This is how the Western Cape continues to invest in the future.

It is going to take a momentous effort to put our vision into action.

It’s going to take an innovative team, who are committed to reaching these goals.

I’d like to thank Joyene Isaacs, the Head of the Department of Agriculture, for leading the right team for the job.

Their leadership and guidance is taking us closer to delivering the economy we want to build; the economy that every resident of the Western Cape deserves