Department of Agriculture 2015 Budget Speech

Mr Speaker,
Premier Zille,
Cabinet colleagues and Members of the Provincial Legislature,
Director-General and Heads of Departments,
Our partners in business, civil society and labour,
Residents of the Western Cape,
The media.

And finally, my very special guests to today’s sitting – the residents of our province who work in and drive our agricultural sector, I am delivering today’s budget speech during an exciting time for our sector.

We are in the midst of a successful harvest season, where it has been reported to me that the quality of our produce is higher than ever before. It has also been a productive harvest, where employers and employees have worked together to get the job done.

All of these positives, amongst others, point to a sector which is fast becoming serious business for our region and our country I think, in this sector, it is time to start dreaming BIG.

My vision is for a future in which agricultural produce from the Western Cape plays a major role in feeding the world.

In this budget, we are putting forward a set of practical action plans, linked to measurable targets, through which we aim to achieve just that.

In total, R742 million has been allocated to Vote 11 to create an enabling environment in which our farming and agri-processing operations can grow the agricultural economy and create employment in the sector. Creating jobs for the people of our rural areas is the only way in which we can sustainably address our biggest challenge: poverty.

Our over-arching goal is to increase sustainable agricultural production by at least 10 per cent over the next 10 years, through a set of innovative interventions, the most important of which is to radically increase the pace of transformation in the sector.

Enhancing diversity in our agricultural sector is the platform upon which we can build a stable, more productive and growing sector.

That is why over the next five years we will work to ensure a 70 per cent success rate of all land reform projects. The Farmer Support and Development Programme will receive R256.9 million in 2015/16 to help new farmers build successful agri-businesses.

This funding will amongst others be used to deliver a full suite of post-settlement support services to land reform beneficiaries, equipping them with the skills they need to run successful operations.

 We also aim to support 4 600 farmers with advice to take their enterprises to the next level. Successful land reform can only happen through collaboration, and growing meaningful partnerships will be critical in delivering the targets we have set.

To this end, we will participate in all of the National Department of Rural Development and Land Reform’s District Land Committees.

I am particularly excited to announce that as from next month, we will begin to welcome clients at our newly established Land Reform Advisory Desk. This service, which is situated at the Casidra head office, will provide support to emerging and existing farmers in the industry on the different ways on how to structure land reform deals.

To illustrate the power of partnerships, I’d like to tell you more about Chamomile Farming Enterprises in Philippi. Wadea Jappie started this operation in 2001. By 2003, she was farming with 100 chickens.

Through a small amount of assistance from the Comprehensive Agricultural Support Programme (CASP), and a lot of hard work and dedication, Chamomile’s current production stands at 4 500 eggs per day from 5000 chickens. Today, Wadea’s Chamomile eggs can be found on the shelves of our local Pick n Pay stores. This is what partnerships can do.

During my first year as Minister of Agriculture, I have visited a number of national government land reform projects, and have witnessed firsthand how many of these operations were set up for failure. We need to turn this around. Government, in collaboration with the private sector, must ensure we give beneficiaries the best chance of success.

Funding gives young and black farmers the boost they need to be a part of the growth story of this sector. I’d like to share another story with you. This story is about one of the Western Cape’s successful young tea farmers.

Andries Slinger had a passion for agriculture and wanted to pursue an agricultural course after he matriculated in 2002, but he didn’t have enough money to afford the fees. Instead, his dad – with a huge amount of faith in his son - took out a land bank loan and bought a small farm in Clanwilliam to help him get started. With support from the department, Andries has been able to grow the farm into a successful enterprise, and today, he has a contract with Rooibos Limited to deliver 25 tonnes of tea over the next five years. 

We want to see Andries’ success duplicated across the province. In this coming financial year, we will engage with banks to encourage them to become a little less risk averse when it comes to granting agricultural loans.

New farmers are often challenged by a lack of business networks and links to domestic and export markets. It is our goal to improve market access for all agri-businesses in the Western Cape.

The Western Cape produces over 50 per cent of South Africa’s agricultural exports. We will support agri-business to strengthen their export position by growing exports from their current value added of R16.3 billion.

Agricultural Economic Services receives R22.8 million to deliver support to both commercial and smallholder farmers to help them move into the next market category.

Research has found only a five percent increase in the value of deciduous fruit and table grapes exports will create 4 261 and 2 073 new jobs respectively.

The same research showed that a five percent increase in wine exports will lead to 986 new jobs, and two thirds of these jobs will be off farm.

To make this a reality, we need to radically ease market access to both our new and our traditional markets. The national Department of Trade and Industry must be a key partner if we are to achieve this.

We are operating in a competitive global environment. In the BRICS group, we are facing fierce competition from countries such as the United States of America, Europe and Australia.

Recently, China signed agreements to start cutting tariffs on Australian and Chilean wine. Currently, we are paying tariffs of between 14 and 30 per cent when we export wine to China.

Simply put, we have to start leveraging our position in BRICS to put smart agreements in place which give Western Cape exporters an edge in the market.

In addition to better trade agreements, we must also address non-tariff barriers. Environmentally friendly and socially responsible practices are becoming increasingly important for markets such as the European Union. We also know that farming this way is

The right thing to do for our planet and our people. In this respect, we aim to ensure that 1 200 farmers and farmworkers in the sector receive ethical trade training.

In addition to BRICS, we will place huge focus on growing our African market. African countries are already our top importers for food and beverages, with exports to Angola growing by 30 per cent over the past year.

We are also major exporters of meat. To ensure that our animal population remains healthy, and that in the event of an animal disease outbreak, we can respond speedily, the Veterinary Services programme receives R76.2 million.

Going forward, consumption on the continent is set to increase dramatically, driven by rising GDP, growing middle classes and urbanisation.

Linked to our African expansion, we have a vision of hosting Africa’s biggest agricultural congress, where we want to discuss the future of food security, and food opportunity, on the continent. Africa has the world’s most unfarmed and arable land and we need to make sure Africans lead the way forward.

As we increase our global market share, agri-processing presents a significant opportunity to stimulate further growth and job creation in our region. As it stands, we have not explored the full potential of adding value to our goods, often exporting the raw product.

Project Khulisa – our project to reduce poverty in the Western Cape - identified agri-processing as a high-potential sector, which, if it receives dedicated attention and support from all sectors, could add up to 100 000 jobs and generate R26 billion for the economy under a high-growth scenario.

Agri-processing holds particular potential to increase employment in rural areas. Offering support to residents living in rural areas is a key priority and our Rural Development programme receives R21 million in the 2015/16 financial year. 

This month, the Western Cape Government, in partnership with the private sector, hosted a design laboratory, with industry, to workshop a set of proposed levers to dramatically accelerate growth and jobs in this sector. 

These include, amongst others:

• Addressing the availability of water and energy resources required by the sector for growth;
• Developing specialised agri-processing parks;
• Driving campaigns to promote Western Cape products on international and domestic markets;
• Improving the regulatory and enabling legislative environment in agriculture and agri-processing

Agri-processing’s dependence on water means that we will also collaborate with Provincial Strategic Goal 4, which is focused on building a resilient, sustainable and inclusive living environment.

We understand that growing our agriculture sector starts with looking after our land. 2015 is the United Nations International Year of Soil, which raises awareness about the importance of soil for food security.

To look after this vital resource, the Sustainable Resource Management programme receives R75.2 million. As with resource management, innovation is also a priority for economic growth across all sectors.

To ensure that we are able to lead the technological revolution in the sector, Research and Technology Development Services programme receive R108.8 million in the 2015/16 financial year. In May, the department will host a Media Wow Day, where we will showcase the cutting-edge innovation being produced by public sector innovators in this province’s agriculture department.

As we embark on these initiatives to speed up growth, we have to make sure the people of this province are appropriately skilled to enter into and take the agricultural sector forward. The average age of a farmer is now 60 years old. We are also facing skills shortages in the agri-processing sector.

If we want to become a region which feeds the world, we have to develop the talents of our young people, and develop their interest in the sector.

It is my pleasure to welcome Samantha Smiles here today. At 24 years old, Samantha is one of the shining stars of agriculture in the Western Cape. With her family, she runs a successful agri-business focused on farming sheep and cattle.

With funding from CASP, Samantha was able to purchase infrastructure and animals and receive training from the department.

I commended Samantha for her efforts last year when she won the Ministerial Achievement at the annual Female Entrepreneur Awards. She joins another group of my special guests here today, the Student Representative Council chair, Sabelo Ngcobo and the rest of the SRC team of the Elsenburg Training College. 

These are the young people that in the very near future will lead our agricultural sector.

One of the best investments we can make is in our young people. That is why we have allocated R56.9 million to the Structured Agricultural Education and Training programme in the 2015/16 financial year
 
Finally, to play a role in feeding the world, we need to create an investor friendly environment.

Some of our agricultural and agri-processing businesses have started to lose faith in the system, and particularly in government.

Farmers lose courage and trust to invest when politicians take policies such as the 50/50 proposal off the table, only to start the debate again a few months later.

They lose courage and trust to invest when government regulations stop making economic sense.

In Saron, a factory employing over 1 000 local residents, wants to expand its operations. They’ve been told if they extend their premises by one more meter, they will have to relocate to Epping. That means 1 000 residents in Saron will be unemployed.

They lose courage and trust to invest when BEE codes constantly change. We need to transform the sector so it is inclusive and reflective of a modern and diverse society. But the only way we can create an investor-friendly environment is through consistency, clarity and certainty.

Farmers say if you give them the rules, they’ll stick to them. At the same time, we need to make the laws work for our economy. We have to bring honour back to agriculture.

In an honourable agricultural sector, we all respect and want to help one another. This includes employers and employees, and government.

Today you will receive the latest issue of Abundant Harvest: Better Together, which features 20 stories of how farmers and farm workers are working together.

There are more stories to tell and we’ll keep sharing them as we build a truly honourable agricultural sector.
For my part, I will work to bring honour back to agriculture by reducing the burdensome red tape which prevents you from growing, and by encouraging my colleagues at a national level to set good rules and stick to them.

Some farmers have a Plan B in place. Today I am asking you to make the Western Cape your Plan A and Plan B.

With a bit of a hope, and a commitment to honour, we can build a sector which feeds the world, better together.
 
I thank you.