NAMC Annual Report Presentation 2008/09
Presentation to the Parliament’s Portfolio Committee: Agriculture, Forestry and Fisheries
10 November 2009Mrs Ntombi Msimang - Chairperson: NAMCMr TR Ramabulana - CEO: NAMC Mrs K Mahlathi- Acting CFO: NAMC
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Documents to be tabled
Thank you for affording the NAMC the opportunity to present its 2008/09 Annual Report
The NAMC will also take this opportunity to present the Annual Food Cost Review for 2008 as well as the Status of Statutory Measures Report for 2008
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The NAMC in brief
Established in terms of an Act of Parliament (MAPA, 1996) to advise the Minister and other Directly Affected Groups on agricultural marketing policy
Four main objectives: Increasing of market access for all participants Promotion of efficiency of the marketing of agricultural
products Optimization of export earnings Enhancement of the viability of the agricultural industry
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Members of the NAMC Council
The current members are: Mrs NM Msimang (Chairperson) Dr ASM Karaan (Vice-Chairperson) Prof HD van Schalkwyk Mr AD Young Prof JF Kirsten Mrs SE Moolman Mrs C Molo Mr DB Montshwe Mrs M Mannya Mrs M Gill
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Council Committees
Human Resources
Mr A Young (Chairperson) Mrs L Moolman Mrs M Mannya
Audit Committee
Mr Victor Nondabula (Chairperson)
Ms Mathebe Moja Mr Raymond Matlou Ms Gina Mill Prof H van Schalkwyk
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Employment Equity
Senior Managers 2 Female African 3 Male African 2 Male White
Total Staff 12 Female Black 10 Female White 12 Male Black 3 Male White
NAMC Divisions
The NAMC does its work through he following Divisions: Agribusiness Development Statutory Measures Agricultural Trusts Markets and Economic Research Centre
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This programme is threefold:1. Training component, which is export oriented
Emerging farmers that are export ready are trained on the following topics Supply chain and logistics training, Contract negotiations training, Compliance (social codes, company codes, sector codes, manufacturing codes
and Generic codes) The purpose of this course is to prepare emerging farmers that are export ready for
the challenges that they have to face when entering an export market
2. AgriMatch Trips Emerging producers that are export ready will be supported to participate on
exposure AgriMatch trips to a European country The objective of the trip is to afford the emerging producers to experience the
challenges that have to meet when exporting through engagement with importers
Export Promotions
Export Promotions 3. Farmers compliance to private standards: ComMark/NAMC
Small-Grant Fund A small grants scheme to assist emerging farmers achieve private
standards certification and thereby increase their agricultural exports It provides the means to lower the transaction costs associated with
private standards certification GlobalGAP, Tesco’s Natures Choice, and/or Fair Trade
Project involves: Supply side assessment: ID export ready farmers Demand side assessment: ID potential service providers Pre-audits: Conduct pre-audits on farms to assess action necessary to
obtain certification.
Results on the programme
Training 35 agribusinesses participated
Agrimatch trip 15 agribusinesses participated visited international
markets 20 agribusinesses participated in other export
promotion activities Farmers compliance to private standards
20 agribusinesses participated
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Agricultural Schemes The main purpose of the schemes are to uplift the black producers in the
agricultural sector and to encourage their integration into the commercial mainstream
Development and implementation with industry partners
Current schemes: Grain development scheme - through Grain farmer development association Livestock scheme - Eastern Cape Red Meat Project (ECRMP)
New schemes Wine and brandy schemes
The NAMC has since established 2 new trusts in an effort to raise additional funding required to ensure meaning impact of the programme
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Making Markets Matter Training Course It’s an intensive 5 day business development training workshop for African
agribusinesses In partnership with University of Stellenbosch and Cornell University 80 agribusinesses attended the course The farmers were trained on the following issues
Cash flow management, marketing strategy, financial analysis AgriBiz Training course for Women
As a follow up to the above training course, the NAMC in partnership with University of Stellenbosch and Cornell University designed a 3 day training course specifically for women that are involved in agriculture
The course offers training in marketing, financial and strategic management 30 women entrepreneurs attended The NAMC is conducting an after care programme so that participants can
implement what they have learnt from the course into their businesses
NAMC Marketing Training Courses
Transformation Guidelines The NAMC is in the position to influence the manner in which
levy funds should be spent by industries In an attempt to influence how statutory fund (R222 million in
2008) should be spent, the following guidelines has been adopted 10 % for administration purposes 70 % for research, market information, market development, etc. 20 % for transformation purposes
The NAMC further developed transformation guidelines to guide the industries how to utilize the 20 % portion of transformation
The NAMC was guided by the transformation charter when developing those guidelines
Transformation Guidelines Through the transformation guidelines, the NAMC proposed the activities
below to industries as a means of contributing towards transformation taking place within the respective industries. Enterprise Development /Development Schemes
Industries should design and implement initiatives to assist and accelerate the development of black owned agribusinesses
Skills Development and Training Industries should design and implement initiatives that will capacitate
black entrepreneurs in their respective industries Management Control
Industries should facilitate, within their membership, incorporation of black people at management positions in enterprises and industry structures
Transformation Monitoring Industries should develop a database of black agribusiness, indicating
their business size and production
Statutory Measures
The MAP Act provides for the following statutory measures: Levies Records and returns Conducting of pools Control of exports Registrations Appointment of inspectors
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Statutory Measures applicable during the 2008/09 financial year
Industry Administrating body Statutory Measures
Levy Registration Records & Returns
Citrus (export only) Citrus Growers Association
Cotton Cotton SA
Dairy Milk SA
Deciduous fruit • Pome fruit• Stone fruit•Plum export promotion•Sterile Insect Technique
Deciduous Fruit Producers Trust
Dried fruit Deciduous Fruit Producers Trust
Grains (Maize, Oilseeds, Sorghum, and Winter Cereals)
The South African Grains and Information Services (SAGIS)
Lucerne Lucerne Seed Organisation
Milk Milk Producers’ Organisation
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Statutory Measures Applicable During the 2008/09 Financial Year... Continued
Industry Administrating body Statutory Measures
Levy Registration Records & Returns
Potato Potatoes SA
Red meat Red Meat Levy Admin
Sorghum Sorghum Trust
Table Grapes SA Table Grape Industry
Wine SAWIS (information)Winetech (research)Wosa (export promotion)WIDA (transformation)
Winter Cereals Winter Cereal Trust
Wool Cape Wools SA
Mohair Mohair SA
Pork SA Pork Producers’ Organisation
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Functions financed through Statutory Levies 2007/2008 financial year
Functions Amount spentR
Percentage of total levy expenditure %
Administration 15 727 636 7
Transformation 51 224 661 23
Export Promotion 25 777 992 12
Research 70 680 630 32
Information 36 861 025 17
Production development 2 154 024 1
Plant improvement 2 526 287 1
Quality control 5 299 026 2
Consumer education 12 008 719 5
TOTAL 222 260 000 100
New Applications
Poultry industry R 20 794 523 Wine industry R 50 million Sorghum industry R 2 million Red meat industry R 30 million Pork industry R 10 million Winter cereal industry R 30 million Market development (Apples, pears, apricots, nectarines, peaches) R20 million Market Development (Grape fruit Japan) R12 million
Trusts available fundsTRUST NAME FUNDS AVAILABLE(R) Oil and Protein Seeds Trust 178 057 076 Winter Cereal Trust 42 000 000 Meat Industry Trust 27 992 849 Deciduous Fruit Ind.Dev. Trust 13 000 000 Maize Trust 670 175 940 Wool Trust 247 595 220 Sorghum Trust 9 278 562 Mohair Trust 188 792 761 Citrus Industry Trust 16 462 196Cotton Trust 7 452 016Wine Trust 79 840 839Lucerne Trust 77 559
____________ TOTAL 1 480 725 018
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Food and input cost monitoring
In 2004 the Cabinet approved establishment of a national food price monitoring system
Two publications, namely: Quarterly Food Price Monitor (Urban &
Rural) Annual Food Cost Review
Done in collaboration with DAFF and Stats SA
Monitor and review trends in food prices
NAMC was mandated to coordinate input cost monitoring on behalf of the whole agricultural industry (DoA and DAG workshop in 2006)
Several Input Cost Monitor reports since 2007
Monitor and review trends in input costs in agro-value chains
Trade related research
The NAMC in collaboration with the Directorate International Trade of the DoA published 11 TradeProbes. The aim of the TradeProbe is to create knowledge of trade-related topics Topics covered include trade profiles, trade relations and trade gap analysis
Collaborative research on selected topics For example: “South Africa’s way ahead: looking east” together with Tralac
Trade related workshops (Trade Reference Group activity) Workshop on “Dispute settlement mechanism of the WTO” at the 2008 AEASA
conference. Workshop on “Non-tariff measures”
Currently Funded Projects SA Fruit and Wine Export Sector to deal with Climate Change: Carbon
Footprint Study of the Indian marketing for a range of SA produced fruit products SA’s trading relationship with Brazil and Argentina Investigation into Farmer Controlled Businesses in South Africa: Options and
lessons learnt Mapping, Understanding and Quantifying the SA Ostrich Value Chain The role of transport in logistics cost for agriculture Agribenchmark: Beef and grain sub-sectors Assessment of contractual agreements for agricultural market access in South
Africa: A smallholders' perspective Exploring the impact of local alternative food quality dynamics on small scale
farmers' access to markets Marketing strategy development for Sharon Fruit in the informal sector Emerging Farmers to comply with private standards: ComMark/NAMC Small-
Grant Pilot Fund Fruit trade flow
Study of the Indian marketing for a range of SA produced fruit products
Aim: Understand the Indian fruit
market from a consumer and supplier perspective in order to evaluate the potential of establishing a sustainable and profitable export market to India
Project intends to : Understanding the attitude of
Indian importers and traders on doing business with South African suppliers;
An analysis of the market structures and promotional culture in India and;
The development of the market SWOT analysis
Recommendations on market entry strategies for South African exporters will be formulated
• Marketing strategy development for Sharon Fruit in the informal sector
• Aim:– Develop a strategy to address the
smaller trade and informal Sharon fruit sectors
• Project intends to:– Developing a good understanding
of the perceptions towards Sharon Fruit in these sectors visa vie competing products and implementing strategies to address them.
– Developing a good understanding of the supply needs of traders in these sectors.
– Developing supply structures that will give optimum service to these sectors.
– Developing merchandizing and marketing supports systems for these sectors.
Market development activities
Plum Promotions in the UK and Germany
4 years project Year 1 increased volumes of
sales by 41%
Other fruit kinds promotions in UK and Germany
Grape fruit promotion in Japan
Local market for Sharon fruit
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Statement of Financial PerformanceYear Ended 31 March 2009
2008/09R’000
2007/08R’000
Revenue 24,361 17,138
Grants and transfersOther Income
22,459 1,902
17,020 118
Expenses 24,695 17,451
Administrative expensesStaff costsOther Operating expensesDepreciation and amortisationLoss on disposal of fixed assets
2,92411,610 9,743 388 30
2,066 9,069 6,049 254 13
Deficit from operating activities
(334) (313)
Net interest received 1,614 336
Net Surplus for the year 1,280 23
Irregular Expenditure
Incident Action Taken R’000
Failure to follow the tender process
Measures have been put in place to ensure that SCM Policy is followed and understood by all
R1,051