More than half of DAFF R6bn budget allocated to grants

14th May 2015 By: Tracy Hancock - Creamer Media Senior Deputy Editor Contract Publishing and Sales

More than half of DAFF R6bn budget allocated to grants

Agriculture, Forestry and Fisheries Minister Senzeni Zokwana
Photo by: Duane Daws

The Department of Agriculture, Forestry and Fisheries (DAFF) has proposed a budget of R6.383-billion for the 2015/16 financial year, of which R3.7-billion is ring-fenced for transfers of conditional grants and parliamentary grants.

Speaking at the second Budget on Agriculture, Forestry and Fisheries in the fifth democratic Parliament, Agriculture, Forestry and Fisheries Minister Senzeni Zokwana on Wednesday explained that in terms of conditional grants, R1.6-billion had been allocated to the Comprehensive Agricultural Support Programme (CASP), R471-million to Ilima/Letsema and R66.4-million to the LandCare Programme.

CASP, Ilima/Letsema and LandCare were geared toward assisting smallholder producers in the technical, infrastructural and financial areas.

“The department has been implementing CASP since 2004/5. Last year CASP was subjected to an impact evaluation study. We appreciate the findings and recommendations of the report. We have introduced improvements mindful that the impact of these new measures will only be evident after some time. Therefore, we will also be improving on our monitoring systems,” Zokwana added.

LandCare, a community-based and led programme underpinnned by the goal of improving productivity and sustainable use of natural resources, created 2 836 employment opportunities in 2014/15. During the period 33 000 ha of range and cultivated land were rehabilitated to ensure production. 
In 2015/16, LandCare was expected to protect 16 000 ha through various measures such as fencing of arable land, and clearing of weeds and invader plants.

Through the conditional grants, R678-million would also be directed to the Fetsa Tlala programme to bring 128 000 ha of land under production, 511 projects from both conditional grants would be supported – reaching about 27 000 smallholder farmers – and 160 000 vulnerable households would be assisted to produce their own food through household food gardens.

About 31 000 decent jobs were expected to be created in 2015/16 from these interventions.

In terms of parliamentary grants, R258-million had been allocated to the Marine Living Resources Fund, R803.9-million to the Agricultural Research Council, R34.6-million to the National Agricultural Marketing Council and R268.4-million to Onderstepoort Biological Products.

Further, R729.9-million of the budget had been allocated to administration, which Zokwana said reflected the alignment of DAFF’s budget to strategic priorities.

The department had also set aside R51-million to procure additional mobile clinics and buy medical equipment and pharmaceuticals. “We plan to deliver these veterinary services to the red meat and poultry hubs, which are being developed through the Agricultural Policy Action Plan (APAP).”

In the 2014/15 financial year, the department delivered 30 mobile clinics worth R22.5-million to rural areas in six provinces and 15 prefabricated clinics worth R7.5-million would be delivered within this financial year.

Zokwana explained that during the current financial year, the department would lead the implementation of the revitalisation of the agriculture and the agroprocessing value chain through an integrated response from sister departments in the economic cluster.

“Our focus is on production, the productivity of and support to smallholders and new entrants, expanding market access through focusing on the diversification of export destinations, supporting access to increased processing opportunities and providing market infrastructure and compliance training,” he outlined.

Agriculture currently contributed 2.5% to gross domestic product (GDP), which the Minister said was far below the capacity of the sector. However, 12% is contributed to the GDP through value added from related manufacturing and processing of agriculture produce.

“To support our mandate of job creation and increased contribution to GDP, we will facilitate and support increased exports into Africa and worldwide,” he noted, highlighting that South Africa’s trade with the continent had increased by 44.8% year-on-year.

The main products driving the increase were fruits such as apples, fresh grapes and pears, while wine, sugar, maize and fish remained major contributors to exports.

“We have established new markets in 2014/15,” Zokwana highlighted. The agricultural trade protocols for the export of South African maize and apples to China were concluded in December 2014 after five years of technical work to resolve phytosanitary issues. Apple farmers in South Africa were now gearing up to plant an additional 10 000 ha, with the export of apples projected to generate R500-million in foreign exchange and create 13 000 new jobs over the next three to five years.

From January 2013 to September 2014, there was a 43.6% year-on-year increase in the value of agriculture, forestry and fisheries products exported from R71.4-billion to R102.5-billion.

In 2014, fruit and nuts was the largest subsector in the agriculture, forestry and fisheries’ export basket, while the highest growth in the export of specific product within the sectors was achieved by wood, increasing 72%.

While South Africa continued to be a net exporter of agriculture, forestry and fisheries products, exports were still concentrated in primary agriculture products and the country remained a net importer of processed agriculture products. However, from January 2013 to September 2014, agriculture, forestry and fisheries products increased their share of total South African trade from 9.9% to 12.8%.

“In recognition of this, government has, through the APAP, set out to introduce an export-led and import replacement sector strategy,” Zokwana noted.

Despite the gains achieved by the agriculture industry, existing growth models had not equitably distributed benefits and this was true even during periods of sustained economic growth prior to the 2008 global crisis.

“We need to reverse this trend.

“Inclusive growth has an important role to play in responding to South Africa’s pressing social needs and addressing the underlying trends that pushed our economic and social systems into disequilibrium. Growing inequality and job loss persists under current economic growth models,” he stressed.

Through APAP, DAFF intended to bring more smallholders into the mainstream, as envisaged in the National Development Plan (NDP).

“However, the effective participation of the previously excluded black majority in agriculture and food production will only occur, meaningfully, when they have access to land and the means to work it,” Zokwana emphasised.

To inform land acquisition and allocation for different categories of producers across South Africa, an inclusive and scientific process had been applied to assess land capability for different commodities in different localities.

However, Zokwana advised that the growth of the sector was cognisant of several challenges and opportunities. “For example, the sector is challenged by high input costs, climate change, natural disasters such as droughts and fires, skewed and inadequate infrastructure and an energy shortage.”

The NDP estimated that agriculture could create one-million jobs by 2030 based on the job creation potential of the ‘winners’, the high-value commodities and the accelerated productivity of smallholders, who largely engaged in labour absorptive production practices.

Zokwana pointed out that, according to the Quarterly Labour Force Survey released in February, agriculture contributed the greatest number of jobs in South Africa at 56 000 quarter-on-quarter and sustained increases in job creation year-on-year of 28 000.

“The strategic logic for identifying agriculture as a growth sector is because agriculture delivers more jobs per Rand invested than any other productive sector,” he commented.

Cabinet approved the Plant Breeders' Rights Bill, Plant Improvement Bill, and the Performing Animals Protection Amendment Bill in December 2014, on which Parliament was currently deliberating. Public hearings on these Bills were scheduled to be concluded on May 15.

“It is envisaged that three more Bills will be submitted for consideration and approval by Cabinet in 2015,” said Zokwana. These were the Plant Health Bill, Liquor Products Amendment Bill and the Agriculture Research Amendment Bill.

DAFF was also in the process of consultation on the Preservation and Development of Agricultural Land Act.