role of the dti in supporting the development of a strong and vibrant agriculture industry
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Role of the dti in supporting the development of a strong and vibrant agriculture industry. Date : 17 September 2010 Stephen Hanival Chief Director: Agro-processing [email protected] +27 12 394 1350. Portfolio Committee on Agriculture, Forestry and Fisheries. Outline. - PowerPoint PPT PresentationTRANSCRIPT
Role of the dti in supporting the development of a strong and vibrant agriculture industry
Date : 17 September 2010Date : 17 September 2010
Stephen HanivalStephen HanivalChief Director: Agro-processingChief Director: [email protected]+27 12 394 1350 +27 12 394 1350
Portfolio Committee on Agriculture, Forestry and Fisheries
OutlineOutline
Agriculture/agro-processing value- chain
The dti’s mandate in agro-industries Draft Strategic Framework for Agro-
processing IPAP2 Priorities The dti’s incentives
Agro-Industry Value ChainAgro-Industry Value Chain
Sector map
Biotechnology
Intermediate inputsEnergy; WaterIrrigation equipmentFertilizer; ImplementsPackaging; FencingStructures; ToolsPumps & generators; Medicine
Maize
Wheat
Hay
Grain sorghum
Sugar cane
Ground nuts
Tobacco
Sunflower seed
Cotton
Viticulture
Citrus
Subtropical fruit
Vegetables
Deciduous fruit
Tea
Coffee
Flower
Game
Ostriches
Pigs
Goats
Sheep
Cattle
Poultry
Beans
Nuts
Field crops Horticulture Livestock
Agriculture
Evergreen
Fishing
Aquaculture
Fishing
Meat processing
Dairy products
Fruit & vegetableproducts
Fish products
Oils & fats
Grain mill products
Bakery products
Sugar & related
Confectionary products
Other food
Animal feed
Agro -processing
Distilleries
Malt Beverages
Soft drinks
Beverages
Wineries
Other non -food
Essential oils
Fibres
Starch
Bio -fuels
Medicinal / Biotech
HouseholdExpenditure
Fragrance
Textiles
Fuel
Pharmaceutical
Feeding into other value chains
Foodservices(hotel; restaurant; caterers)
WholesaleRetailLogisticsTourism
ExportsAgentsLogistics
Automotive
Government Expenditure
Chemicals
Other …
PRIM
ARY S
ECTO
R
SECO
NDARY S
ECTO
R
Sector map
Biotechnology
Intermediate inputsEnergy; WaterIrrigation equipmentFertilizer; ImplementsPackaging; FencingStructures; ToolsPumps & generators; Medicine
Maize
Wheat
Hay
Grain sorghum
Sugar cane
Ground nuts
Tobacco
Sunflower seed
Cotton
Viticulture
Citrus
Subtropical fruit
Vegetables
Deciduous fruit
Tea
Coffee
Flower
Game
Ostriches
Pigs
Goats
Sheep
Cattle
Poultry
Beans
Nuts
Field crops Horticulture Livestock
Agriculture
Evergreen
Fishing
Aquaculture
Fishing
Meat processing
Dairy products
Fruit & vegetableproducts
Fish products
Oils & fats
Grain mill products
Bakery products
Sugar & related
Confectionary products
Other food
Animal feed
Agro -processing
Distilleries
Malt Beverages
Soft drinks
Beverages
Wineries
Other non -food
Essential oils
Fibres
Starch
Bio -fuels
Medicinal / Biotech
HouseholdExpenditure
Fragrance
Textiles
Fuel
Pharmaceutical
Feeding into other value chains
Foodservices(hotel; restaurant; caterers)
WholesaleRetailLogisticsTourism
ExportsAgentsLogistics
Automotive
Government Expenditure
Chemicals
Other …
PRIM
ARY S
ECTO
R
SECO
NDARY S
ECTO
R
Source: R.Coetzee, IDC
The dti’s Mandate in Agro-The dti’s Mandate in Agro-ProcessingProcessing
Manufacturing – production processes that are not primarily influenced by nature
Typically off-farm, value addition, transformative
Exceptions are: – High-value agric. such as horticulture– Aquaculture– Organic produce
The dti’s Mandate in Agro-The dti’s Mandate in Agro-ProcessingProcessing
But reality is that agriculture/agro-processing are part of same value chain: Policy work therefore necessarily extends to primary
agriculture to some extent Strategy development cognisant of value-chain
imperatives Incentives broadened to include pack-houses,
aquaculture Regulatory activities include focus on primary
agriculture Trade policy and support (tariffs, export incentives)
Strategic Framework for Agro-Strategic Framework for Agro-processingprocessing
• Global trends:- World population growing rapidly- Land under agriculture relatively stable- Per capita income growth in large economies,
India and China- Consumer preferences for ‘sustainable food’ in
Developed Economies
- Important opportunities for SA Agro-industries…
Strategic Framework for Agro-Strategic Framework for Agro-processingprocessing
• SA trends:- Demographic changes as a result of decade of
growth- Mismatches in demand and supply in certain
products - oilseeds, meat, processed food- Basic food prices remain stubbornly high- Rural food production lower than in comparator
countries- Food security concerning in rural and urban areas
Strategic Framework for Agro-Strategic Framework for Agro-processingprocessing
• SA trends:- Major portion of agriculture and agro-processing
industries are mature, potential for growth limited – canning, tea, sugar, grains, industrial crops
- Nascent sectors have tendency to stall before ‘take-off’ phase – ostrich, honeybush tea, proteas, olives, biofuels
- Flow of new sectors, products, processes low compared to equivalent countries – Australia, Brazil
- High concentration levels likely stifling competition esp. in rural areas
Strategic Framework for Agro-Strategic Framework for Agro-processingprocessing
Trade BalanceFood Processing
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Rm Co
nstan
t Pric
es
Exports of goods and service Imports of goods and servicesLinear (Imports of goods and services) Linear (Exports of goods and service)
Trad
e Deficit
IPAP2/Business Plan PrioritiesIPAP2/Business Plan Priorities
• Food security – small scale milling, CompCom investigations, enforcement of bread standards
• Mature sectors – fruit and veg canning, rooibos tea, food control,
• Nascent sectors – biofuels, organic produce, aquaculture,
• New sectors – development of Agro-processing Development Centre concept
Expected ImpactsExpected Impacts• Food security – increased affordability, value for money
and rural production• Mature sectors – stabilisation of at risk sectors, improved
competitiveness positioning through export market support and product development
• Nascent sectors – accelerated policy and strategy development
• New sectors – accelerated flow of new products and process innovations
• Leading to: Demand pull from primary agriculture combined with new industry opportunities: Agro-Industrial Complex development
Support from the dti IncentivesSupport from the dti Incentives
Enterprise investment Programme (EIP)• Grant accessible to local and foreign owned entities investing
in SA.• Objective is to stimulate investment in manufacturing.• Qualifying investment costs: machinery, equipment, land and
buildings, and commercial vehicles.
Priority Sectors: Manufacture of food products, beverages and tobacco products
• Production, processing and preserving of meat, fish, fruit, vegetables, oils and fats.
• Manufacturing of grain mill products, starches/starch products and prepared animal feeds.
• Manufacturing of dairy products, beverages and other food products.
Support from the dti IncentivesSupport from the dti Incentives
Cooperative Incentive Scheme (CIS)
• Promote co-ops through the provision of a matching grant. • Improve the viability/competitiveness of co-ops by lowering
the cost of doing business. • Assist co-ops to acquire their start up requirements. • Build an initial asset base for emerging co-ops to enable
leveraging of other support. • Priority sectors in Manufacturing, Retail, Service and
Agricultural Sector.• Offering is a 90:10 matching cash grant for registered co-ops. • The maximum grant is R300 000. • Can be used for business development services.
Support from the dti IncentivesSupport from the dti Incentives
Export Marketing and Investment Assistance (EMIA)
• Partially compensates exporters for costs incurred in developing export markets and recruiting new FDI into SA.
• Matching grants for primary export marketing research to develop new export markets.
• Agro-processing.
Support from the dti IncentivesSupport from the dti Incentives
Export Councils • Farmed Abalone Export Council (FAEC) • SA Flower Export Council (ASSO Flowers)• SA Ostrich Business Chamber (SAOBC) • Wines of South Africa (WOSA) • Fresh Produce Exporters’ Forum/ Fruit SA• SA Fruit & Vegetable Canners’ Export Council • Meat Exporters of South Africa• SA Dairy Foundation
Support from the dti IncentivesSupport from the dti IncentivesThe Sector Specific Assistance Scheme
• Cost-sharing grant scheme to non-profit business organisations for collective sectoral development.
• Agro-processing• Agriculture• Chemical Allied Industries • Electronic Industries • Textile and Clothing • Metals and Allied Industries • Machinery, Allied and Electrical Industries • Motor Industry Components • Creative Industries • ICT
THANK YOU
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