Modern, Growing, Successful Province

Budget Speech 2016/17

Department Of Agriculture, Land Reform and Rural Development By MEC GNJ Shushu, MPL

“Every person has the truth in his heart. No matter how complicated his circumstances, no matter how others look at him from the outside, and no matter how deep or shallow the truth dwells in his heart, once his heart is pieced with a crystal needle, the truth will gush forth like a geyser”

 

Honourable Speaker and Madame Deputy Speaker
Honourable Premier, Mme Sylvia Lucas
Members of the Executive Council
Honourable Members of the Legislature
Leaders of Local Government
Traditional Leaders
Agricultural sector Partners present;
Veterans of our struggle organized under the ANC Veterans League;
Former members of our Glorious Army Umkhonto we Sizwe organized under (MKMVA);
Distinguished Guests and People of the Northern Cape;
Comrades, Ladies and gentlemen

Honourable Speaker, the above quotation is taken from an internationalist revolutionary who contributed selflessly and tirelessly to building a more humane society, Commandante Ernersto “Che” Guevara. We are presenting this budget speech as an account of the work done over the last financial year and presenting our plans for the 2016/17 financial year amidst very challenging and distressful weather conditions that are leading to continuous natural disasters and unless humanity does something drastic to save our planet, we will have nothing to bequeath the next generation. In the midst of this presentation, there are doomsayers who will disagree with us even though deep down the truth dwells and will one day gush out like water from a geyser about the performance of the ANC led government. In our quest to enhance and service the agricultural sector and rural communities in our Province, we are constantly reminded of the cruelty of colonial subjugation in our country and the devastating effect it has had on the indigenous people of Africa and the cruel system of capitalism. It is therefore imperative that when we engage with the performance of the economy we take into cognizance the fact that the capitalist economic system is characterized by booms and busts. The 2008 global capitalist economic crisis is not over and the epicenter has shifted from the developed economies to the developing economies. That is the context within which we must understand the performance of the agricultural sector within our Province.

Honourable Speaker, we present the policy statement for budget vote 12 against the backdrop of subdued economic growth; expressed impact of drought on production; increases in food prices; and the high levels of unemployment particularly amongst the youth.  The severe drought experienced across the country and in parts of the province remains the main constraint to the sector. Low rainfalls were recorded leading the South African Weather Service to declare 2015 the driest year since 1904.  In addition, the province experienced heat waves towards the end of 2015 and the beginning of 2016.

These weather conditions resulted in agricultural disasters that had an adverse impact on many aspects of the sector. Inter-alia, the heat wave coupled with very low humidity and less than average rainfall prevented large areas from planting summer crops particularly in dry land areas of our country.  For instance during the 2015/16 summer production season estimated maize production in terms of yield per hectare, decreased from an average of 13.7 tons per hectare in the previous year to 12.7 ton per hectare.  This decrease in yield can be ascribed to the severe temperatures that were experienced during the critical pollination stage of the crops.  This resulted in poor grain fill of the maize cobs.

Honourable Members, this scenario has seen South Africa move from a net surplus exporter of maize for 2014/15 (approximately 15% exported of production) to a net surplus importer of maize for 2015/16.  Given the latest crop estimates of around 7 million tons of maize for 2016, it is estimated that a minimum of 2.5 million tons of maize will have to be imported before the 2017 harvest

The impact on livestock production (mostly red meat production of natural grazing for Northern Cape) was also negative.  Apart from losses in production (lower reproduction and lower carcass mass) and increased production cost due to increased fodder purchases, producers had to decrease animal numbers to offset the negative factors as described.  This led to a short to medium term increase in supply of live animals which in turn has led to lower prices during this period.

The rain during January 2016 brought relief to producers, but also led to a drastic reduction of supply of animals. Consequently, many abattoirs have reported very low volumes and some have decreased the number of slaughtering days.

Honourable Speaker, this drought resulted in an increase of prices of almost all commodities such as grains, hay, livestock and livestock products which account for approximately 75 percent  of Northern Cape agricultural production which in turn has led to increases in food prices at a consumer level.  The consumer price index (CPI) for bread and cereals was 4.5 percent higher in January 2015 compared to January 2014, but by December 2015 it was 7.5 percent higher than December 2014.

This situation is expected to remain and increase for 2016.  The CPI for meat was 8.7 percent higher in January 2015 compared to January 2014, but the increase in supply because of the drought eased the pressure and in January 2016 it was 4.3 percent higher than in January 2015.  It should be kept in mind that other production factors such as transport, packaging, salaries and wages and energy play a large role in the price of food on a consumer level (especially processed foods) and price changes in these production factors may play a more important role as the changes in the commodity.

The price changes at a producer (commodity) level were much more drastic with the Produce Price Index (PPI) for cereals and other grain crops  was 17,5 percent lower in January 2015 than in January 2014  but changed drastically to 79,2 percent higher in January 2016 in comparison to January 2015. This is expected to increase in 2016 with PPI almost 100 percent higher than in 2015 for this category. On a producer level, live animal prices were 13, 7 percent higher in January 2015 compared to January 2014. The decreased supply of live animals during 2016 will lead to an increase in animal prices but the tough economic climate will limit this increase.

Honourable Members, the increases in grain related prices will benefit producers on the short to medium term, but the depreciation of the Rand also means increased input prices that tend to remain after the spike in commodity prices returns to normal levels.  The drought has left the major dams in the Vaal- and Orange River systems at low levels and if the coming rain season in the catchment areas is not above average, water restrictions might impact irrigation production in the Northern Cape.  Livestock producers had to reduce stock numbers in 2015.  With the rain of 2016 and the reduced stock, producers should be able to make it through the winter period.  Even if the following season is above average, producers will be faced with rebuilding of stock numbers which would limit the supply of animals and their ability to earn income.

Despite these constraints on the service delivery environment, it is not all doom and gloom. We are encouraged by other key economic indicators that include the Statistics South Africa First Quarter 2016 Labour Force Survey which found that although employment levels declined quarter-to-quarter in all industries,  in Agriculture it grew by 16 000.  Furthermore, the high temperatures and dry conditions leading up to March 2016 did not adversely affect the table grape industry. Accordingly, the province experienced a very good season and a record high of 18.5 million cartons of grapes were exported; this is an increase of 900 thousand cartons compared to the previous marketing season.

In contrast with this, dry grape production which consists mainly of Sultana and Merbein varieties, reacted negatively to the rain that occurred during the January 2016 period.  It was primarily the sultana grapes that were most affected by the rain in January which caused excessive drop and rot of grape berries.

The raisin production of 35 thousand tons was realized, compared to the expected production of 50 thousand tons.  On the other hand, the January rain event with accompanying lower temperatures, benefited wine grapes and the production increased from the 132 thousand tons of the previous season to approximately 140 thousand tons for this season.

We have also noted that, in the irrigation areas of the Northern Cape Province, there is rapid expansion of Pecan nut orchards.  In an area such as the Vaalharts Irrigation Scheme which is known for its maize, wheat and groundnut production, almost half of the entire area has been planted under Pecan orchards.  This trend of change towards this crop is also noticeable in the traditional wine grape producing areas of the Lower Orange.  This change towards nut production and its potential impact on food crops will be carefully monitored in the 2016/17 season to ensure that food security is not compromised.

Honourable Speaker, despite these constraints on the service delivery front, we present a good report on the commitments made in the previous financial year and further commit ourselves to be innovative about service delivery in the current context.

Let me therefore take this opportunity to reflect briefly on commitments made in the previous financial year.  We do this bearing in mind that most of our major projects are multi-year guided by our 5-year strategic plan which derives its mandate from the commitments of the National Development Plan (NDP) (vision 2030) and further elucidated in the Medium-Term Strategic Framework (MTSF) commitments and actions.

Drought Relief Scheme

Honourable Speaker, given its impact on the sector and the economy of our country, it is appropriate to begin with our interventions on the drought. In this respect, we have assisted 257 farmers with R7.7 million worth of fodder in the Loeriesfontein / Calvinia / Brandvlei areas in November and December 2015. Furthermore, when the drought was becoming severe in the Frances Baard, ZF Mgcawu and parts of Pixley Ka Seme Districts, the department played a pivotal role in getting the province declared a disaster area. A further R14.6m was redirected from the Comprehensive Agricultural Support Programme (CASP) to assist 1 851 farmers who were in dire need. These funds provided over 5 400 tons of fodder where it was needed the most. The Department of Rural Development and Land Reform also provided a further R19 million for drought relief.

Cognizant of the fact that the problem is much bigger than what the funds could handle, the department was key in the application for more funds and this resulted in the National Disaster Management Centre (NDMC) carrying out the verification and classification visits to the province. The Province has now been classified and the application for extra funds, a minimum of R65 million per month for 3 months, is receiving attention.

Honourable Members, recognizing that drought in the Northern Cape is a recurrent issue, the department successfully hosted the International Day for Disaster Risk Reduction (IDDR) in Upington. Farmers, government departments and municipalities were invited and mitigation measures received attention. Indigenous knowledge was highlighted as one way of increasing awareness amongst our communities.  Thirty-five (35) Extension Officers were re-trained on disaster risks and mitigations with further training planned during this financial year. The duty of these trained officials would be to increase disaster risk and mitigation awareness in our communities in order to increase resilience and adaptability of our farmers.

Rooibos Tea Factory

Honourable Speaker, our Rooibos Tea factory continues to reach new milestones and we are happy to announce that the renewable energy project that we reported on last year is bearing fruit. The plant’s energy consumption at peak periods has seen a saving in our electricity consumption of up to 50% per annum. No storage of the generated electricity is done, during down times, electricity is pumped directly into the grid benefitting the people of Niewoudtville.  The municipality also compensates the factory to the value of 50 percent for the electricity generated and surplus electricity supplied to the grid.

Given the drought conditions of last year, a business decision was made to look at value-addition of tea and the idea of constructing an extract and concentrate plant was born.  The project has diversified to supply the needs of the market.  Very little is wasted as the tea dust and twigs are processed for either the instant tea or cosmetic market, while teabags and bulk tea is also processed and marketed.

We are happy to announce that the infrastructure for this project is complete, all the necessary equipment has been procured and are currently being delivered.  This project will be completed in the 2nd quarter of this current financial year. This means our factory will supply cosmetics, dairy and other markets with good quality rooibos concentrate.  This project fits perfectly into the definition of an Agri-Park that the department is busy implementing.

Expansion of Irrigated Agriculture

Honourable Members, the Vaalharts Revitalization Scheme remains a priority for this department. Discussions were held with the Department of Agriculture, Forestry and Fisheries on how the funding model for this scheme can be reviewed. The revitalization of the Vaalharts Irrigation scheme is ongoing, subsurface drainage systems for lands that are likely to have water logging are installed and a Lidar survey covering the whole of the Vaalharts area has been completed.

Honourable Members, whilst we had to suspend around R64 million due to outstanding Environmental Impact Assessments for the Flood Disaster Scheme, we are happy to report that the work has advanced at such speed that R19m of work has been done and payments will be done before the end of the first quarter.

Agriculture Infrastructure Development

The main focus of infrastructural support was for the improvement of livestock production by providing stock handling facilities, livestock water and fencing. In this respect, 30 boreholes were drilled, 6 stock water reticulation systems were built and 22 livestock handling facilities were built to support smallholder farmers in livestock production. A total of 299 kilometers of fencing was erected for improved management of rangeland. This infrastructure was provided through the Comprehensive Agriculture Support Programme (CASP) to the tune of R121 168 000.  These infrastructure projects created 683 jobs while support was provided to 465 farmers comprising of 37 subsistence, 349 smallholder and 79 black commercial farmers.

Honourable Speaker, the Vineyard Development Scheme supported seven projects to prepare 218ha of land in various stages of vineyard establishment from soil preparation, construction of trellises and irrigation systems to planting of the vine cuttings for wine grapes, raisin grapes and table grapes.  Included in the scheme are the initial projects that have been identified in the Namakwa Irrigation Development Scheme like the development of the 118 ha in Onseepkans.

Scientific Research

Honourable Speaker, agricultural research is key in advancing land and agrarian transformation as well as promote and facilitate increased production.  The results of this research, is reflected through two scientific publications, five articles in popular media and five presentations at technology transfer events.

The small stock research is centred mainly at Carnarvon, Karakul and Koopmansfontein research stations.  At Carnarvon, the programme, with our partners has successfully established a viable population of the feral goats of the Tankwa Karoo National Park.  The research on these animals has yielded success in terms of the successful cryopreservation of semen.

In the case of crop production, a number of field crops were evaluated for optimal cultivars and these included, cotton, maize, wheat, barley, ground nuts, canola soybeans and lucerne.  Lucerne research also included quality and management components. Research continued on the effect of fruit flies and margarodes on the wine and vine industry in the lower Orange River.

We continue to carry out drought monitoring as part of Risk and Disaster Management efforts.  Remote sensing and GIS technologies have been employed to develop a drought monitoring tool.  This has been achieved by developing a database, containing historical vegetation activity and climatological data.  We have also procured a fully autonomous eBee agricultural drone last year.

Honourable Speaker, part of our strategy to grow and transform the sector is to create and link smallholder farmers with the market. In this respect five established projects were assisted to enhance their visibility in the market space by developing websites for them. These are Tshwaraganang Hydroponics in Windsorton, Frances Baard, Manyeding Hydroponics in John Taolo Gaetsewe, Warrenton Superchicken in Frances Baard, Chikaina Piggeries and Emthanjeni Hydroponics in Pixley Ka Seme. The existence of the projects in electronic media space propels their operations into markets that they would otherwise not access or even to communicate with operators of similar ilk to exchange ideas.

Land Care Support

In terms of Landcare, we are pleased to report that a total of 2 574 hectares of rangeland was rehabilitated through the chemical control of Acacia mellifera (Mongana/Swarthaak/Black Thorn). The programme was carried out in Frances Baard, John Taolo Gaetsewe and in Pixley Ka Seme.

Creation of decent jobs remains a priority of the ANC led government and agriculture and rural development is expected to make significant contribution to the achievement of this priority. Through the implementation of the projects funded by CASP and ILIMA grants, 1 019 job opportunities were created. This has gone a long way to provide an income for people in rural communities across the province.

Food Security

Honourable Speaker, the increases in food prices due to the drought has the potential to worsen the food security situation in our country. This means that our food security interventions have to be expanded and accelerated. Key amongst these is the Fetsa Tlala Food Production Programme. Through this initiative, 4974 tons of wheat were harvested and generated an income of R20 million 282 thousand for small holder farmers, maize to the value of R16 million 776 thousand and dry beans to the value of R816 thousand were harvested and sold to GWK and SENWES respectively.

Compulsory Community Service for Veterinarians (CCS)

Honourable Speaker, in relation to the Compulsory Community Service (CCS) for veterinarians, we can report that the first cohorts of CCS Vets were received by the province in January 2016. The Northern Cape welcomes these 4 young Vets and wish them a pleasant stay and work in the province. This programme will assist us to increase access to Veterinary Services to the far-flung areas of our province.

Administrative Support

Honourable Speaker, through our skills development interventions 11 employees graduated and 11 youth graduated in various fields that include scarce skills.  Furthermore the department hosts 5 Interns; 5 Work Experiential Learners; 1Learnership; and 3 HR Interns.

ALLOCATIONS FOR 2016

Honourable Speaker, I would like to take this opportunity to present our budget proposal and the service delivery plans. It must be noted that the 2016/17 budget was prepared in a constrained fiscal environment. Government has committed itself to explicit limits on aggregate expenditure over the next two years. There have also been significant cuts to the conditional grant allocations to provinces.

Furthermore, the 2015 wage agreement came in higher than budgeted for. In 2015/16, the CASP grant was reprioritized to address the drought. Goods & Services budget will be lower in the 2016/17 MTEF than 2015/16.

Programme 1:  Administration

For the year 2016/2017 the programme has been allocated an amount of R111 million 486 thousand.  The key deliverables for this programme is to ensure that the department improves audit outcomes; develop and implement effective service delivery plans; and evaluate departmental programmes. It is through this programme that our skills development programme will see 69 internal and external candidates provided with assistance to acquire skills that include scarce skills.

Honourable Speaker, as part of our efforts to improve the skills profile of rural communities, the Department entered into an agreement with Construction Education & Training Authority (CETA) as part of our intervention to skill youth and make them self-reliant. The training started in August 2015 and is estimated to end in 2018.

A total of 1400 youth will receive a certificate that will provide the learners with the opportunity of seeking employment in the construction industry either as a bricklayer, plumber or carpenter or starting their own enterprises as skilled entrepreneurs. These learners are paid a monthly stipend of R1500.

Programme 2: Sustainable Resource Management

This programme is key to most of our multi-year infrastructure projects especially supporting the NDP and MTSF targets of expansion of irrigated lands and is allocated an amount of R96 832 million. Key deliverables for the programme include provision of engineering support  of CASP, Ilima/Letsema, Mega Agri Parks, LandCare projects and soil conservation works;  Finalization of  the Disaster Contingency plans; and the implementation of the LandCare Programme.

Honourable Speaker, we are also proud to announce that later this year the Province will host the 7th National Biennial Land Care Conference which will contribute to the knowledge economy of our province. This programme is tasked with organizing this important event.

Programme 3:  Farmer Support and Development

We will continue to support small holder farmers to increase production and to farm profitably with all commodities produced in the Province. Farmer Support and Development has been allocated R225 million 477 thousand, of which R184 million 414 thousand is the Conditional Grant allocation for the Comprehensive Agricultural Support Programme and ILIMA/LETSEMA.

Activities for CASP & Ilima-Letsema Grants for 2016/17

An amount of R126 million has been allocated for the CASP conditional grant of which R 97 million will go towards the funding of 26 projects in the five District Municipalities; and R29,1 million will go towards the Extension Recovery Plan.

In Frances Baard, provision is made for livestock infrastructure, irrigation infrastructure, mechanization, the drilling and equipping of boreholes as well as the installation of solar pumps. In John Taolo Gaetsewe, we will continue to support livestock producers with stock handling facilities, water reticulation infrastructure and fencing for animal and veld management.

In Namakwa, the implementation of the broader Namakwa Irrigation Development Programme will continue with the installation and construction of irrigation infrastructure in Onseepkans, the soil preparation and infrastructure construction in Coboop and Henkries. Producers in Nama-Khoi will be supported with livestock water infrastructure and drilling, testing and equipping of boreholes whereas in Richtersveld 10 windmills will be upgraded and stock water systems as well as livestock handling facilities will be constructed.

In Pixley Ka Seme, provision for the benefit of smallholder producers is made for stock handling facilities, fencing, boreholes and production inputs. In ZF Mgcawu, fencing, boreholes, livestock handling facilities and water systems will be provided to support production. Targeted farmers are 3 232 in total with subsistence farmers being 703, smallholder farmers making up 2 350 and 179 black commercial farmers. In terms of gender 2 533 of the beneficiaries are male and 699 are women and 269 are youth.

The Ilima/Letsema grant for 2016/17 is R56 million to fund 14 projects in the five District Municipalities. The main programmes that are funded through this grant are the Fetsa Tlala Programme, Vineyard Development Scheme and Vaalharts Irrigation Revitalisation Scheme.

In Frances Baard, an amount of R18 million is allocated for crop production inputs as well as the construction of concrete, subsurface drainage systems and a communal discharge line. In John Taolo Gaetsewe, an amount of R6, 5 million is provided for production inputs for the vegetable production of the Manyeding Cooperative.

In Namakwa, the Rooibos tea smallholder producers will be supported with production inputs to the amount of R2 million. In Pixley Ka Seme, production inputs for wheat production, the installation of solar pumps and the establishment of the Van der Kloof inland fisheries with a processing facility and equipment will be funded with R9.1 million. In ZF Mgcawu, the Vineyard Development Scheme will use R 20.45 million towards the incremental phases of vineyard development on the lands farmed by smallholder farmers.

The total targeted beneficiaries for the 2016/17 financial year are 3 291 with 1 680 men and 1 611 women and 712 of this are youth.

Programme 4: Veterinary Services

This programme will continue to increase access of Veterinary Services through programmes such as Primary Animal Health Care, Compulsory Community Service for Veterinarians, food safety campaigns, abattoir monitoring, export readiness of Small Holder Producers and is allocated an amount of R46, 5 million.

Programme 5: Technology Research and Development

Research and development has an important role to play in developing animals and crops which are resilient to the effects of climate change and which will support the country’s food security.  For 2016 /17 the programme has been allocated a budget of R48 million, of which one third is available for goods and services and assisting with the maintenance and management of the 7 research stations in the custody of the province.

With this budget the programme has the following as its key deliverables:

Technology development and transfer in the field of sustainable crossbreeding with beef cattle in semi-arid areas of South Africa

Optimization of the fodder bank, the department will continue to procure the necessary mechanization to put 120 Ha of land on our research stations under production during this financial year. When fully operational, the fodder bank can provide immediate intervention in times of disasters.

Programme 6: Agricultural Economics

This programme is allocated an amount of R10, 7 million. It provides economic advice to clients of the department and conducts economic studies of the sector continuously to enable the department to be efficient, conversant, responsive and adaptable to economic trends, changes and shocks.  Market linkages for agro-industries and smallholder farmers will be sought as well as training and information sharing on the requirements of the South African Good Agricultural Practices (SA GAP) to enable them to meet the requirements to trade within South Africa and other trading partners.

Programme 7: Rural Development Coordination

An amount of R13, 1 million has been allocated to the programme for the strengthening of coordination, institutional and governance structures in the rural space will be our key priority. Rural economic transformation will also be pursued with the establishment of Agri-Parks as a vehicle in all 5 Districts of the province to enhance agro-processing, production, logistics, marketing and training. The creation of cooperatives and land use plans for Communal Property Associations will be attended to. The focus for farm workers and dwellers will be on social determinants relating to health, training and security of tenure.

Honourable Speaker, government as part of land reform and rural economic transformation embarked on a deliberate program to empower emerging farmers and farmworkers in the Province. The process of rolling out the program was buying equity and also using the 4000 hectors of water rights as leverage to buy equity. The intendant Government empowerment program for farmworkers and emerging farmers was abused by some commercial farmers. Farmworkers and emerging farmers were short changed. Their position is more desperate now than when they entered the program. It is against this background that we have commissioned a report to assess the impact and effect of the fraudulent activities by some commercial farmers in these Equity Schemes.

Honourable Speaker, in explaining the context of writing his book Petals of Blood, famous African writer Ngugi wa Thiongo’ said and I quote “I came to realize that Kenya was poor, not because of anything internal, but because the wealth produced by Kenyans ended in developing the western world...Their aid, loans, and investment capital that they gloat about are simply a chemical catalyst that sets in motion the whole process of expropriation of Kenya's wealth, with, of course, a few leftovers for the 'lucky' few” This should propel us to ensure that our land and wealth must seek to create a better South Africa for all.

I would like to take this opportunity to give special thanks to the following people:

  • Madame Premier Mme Sylvia Elizabeth Lucas for her leadership and wise counsel
  • Members of the Executive Council for their collegial support
  • Chairperson and Members of the Portfolio Committee on Agriculture, Land Reform and Rural Development for their oversight role including the Chairperson Mme Fufe Makatong
  • The Leadership collective of the Alliance in the Province for their political guidance
  • Women in Agriculture and Rural Development (WARD) for their unwavering commitment to rural development and women empowerment
  • Youth in Agriculture and Rural Development (YARD), for championing the interests of youth in agriculture
  • Members and the leadership of the National African Farmers Union (NAFU), the Griekwaland Wes Kooperasie (GWK), Agri-Noordkaap, the Northern Cape Red Meat Producers Organisation and other stakeholders for their engagements
  • The Department of Rural Development and Land Reform Provincial Shared Service Centre for their support
  • The Regional Land Claims Office, Northern Cape staff for their unwavering support
  • The Head of Department, Rre Viljoen Mothibi, Executive and Senior Managers and the entire Staff of the Department for their dedication
  • The staff in the Ministry, under the able leadership of the Head of Ministry Comrade Pele Modise for their dedication and support
  • Lastly but not least, I would like to thank my wife Mandisa, my children Katlego, Boichoko and Nthabiseng and my whole family for their support

I thank you

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