REMARKS BY EC PREMIER AT THE AGRI EC CONFERENCE IN JEFFREYS BAY

Program Director :

SB Executive Mayor : cllr De Vos

Kouga Deputy Mayor : cllr Bouman

DRDAR MEC : Hon Pieterse

MP: Hon . Dunjwa

President of Agri SA : Jaco Minnaar

President Agric EC: Peter Cloete

Leadership of Agri Eastern Cape

Members of Agri EC

Delegates to this congress

Distinguish Guests

Good Morning

Firstly, let me extend a word of gratitude to Agri EC leadership which saw it fit to invite the provincial government to come and share a few words at this important conference.

We aim to use the time you allocated us to talk mainly about issues relating to the agricultural sector in our Province. Before I do that allow me to extend our word of encouragement to farmers who at times are faced with severe drought and other challenges such as the disruptions that occurred in Sundays River Valley. All of us should learn from such disruptions and try to create a conducive environment for farmers to operate in our communities peacefully and create jobs. One of the lessons we must learn is social facilitation, we must never get tired of sitting around the table to engage each other and make compromises. Our country is facing huge challenge of unemployment, poverty, and inequality. Our people are agitated because of these three challenges. I urge the farming community to be very sensitive when hiring people for jobs and prioritise local people in the communities where they operate. Because those people will defend their livelihood against any attacks.

Programme Director, in our Provincial Development Plan, Vision 2030 we identified Agriculture as a niche sector that can contribute towards economic growth and sustainable job creation in our province. We came to this conclusion based on the natural endowment of our Province with arable fields, and the fact that we account for the largest numbers of livestock in the country, and this is our comparative advantage. But we acknowledge that the performance of the sector in terms of its contribution to economic growth and job creation is not where it should be. A conference of this nature is where we should get answers because gathered here are the people who work the land.

On the positive side, the agricultural sector has shown its resilience during COVID (2020) with positive growth of 13%. This growth was largely due to agricultural exports, mainly citrus which is produced in the Sundays River Valley of our Province. Due to the positive performance of the sector, employment in the sector increased from 98 000 in quarter 3 of 2020 to 107 000 in quarter 3 of 2021 (9% growth). This growth can be sustained if we can work together to scale up production, improve our agro-processing capabilities and increase the market share of our food products within and outside the country. I am highly disturbed by the fact that with all our arable land in this province, we get agricultural products from other provinces. I was shocked to learn in a recent report that in the top 20 suppliers for the East London Market, 17 are from other provinces. The question for this conference is what must we do to change this picture?

As the Eastern Cape government, we are committed to work with all stakeholders and drive agriculture sector transformation throughout the value chains. That is why it is important to track the transformation of our sector, identify challenges and collectively develop solutions that we can all implement.

One of the challenges we have is lack of transformation in the agricultural sector. The transformation of the agricultural sector is critical for the development of the economy of the province and our failure to transform will threaten food security and have the potential to destabilize the sector.

The 2022 Sanlam’s Gauge has rated agricultural sector at level 3, scoring 91.44 points with respect to BBBEE. At face value, this appears to be a very good progress. However, this rating is based on 216 agri-business that reported on their compliance and it’s only those that require BEE points. At its current form, the report cannot be the true reflection of the transformation of the agricultural sector in the country. This is disappointing because sector charter councils are legally required to provide a report on the status of transformation in their division. The Agri-EC must encourage all its members to comply with the Agri-BEE charter and report compliance for all of us to assess transformation and collectively develop interventions to address any short comings that may hinder progress. The improvement in that agriculture sector transformation will increase opportunities for production which would reduce cost of food and access thereby increasing food security in the province. However, this is unlikely if we don’t improve black ownership and control, skills development, enterprise development and socio-economic development of black farmers across the province.

Interestingly, the report indicates that the sector achieved 67.9% of its contribution target, however land ownership patterns have not changed significantly with Africans owning on average 4 % of the land while whites still own 72 %. In the Eastern Cape, coloureds own 17% and Africans own only 5% of land according to the Department of Agriculture Land Reform and Rural Development (DALRRD), 2017 Land Audit Report). Even those that have land they, require access to affordable financing, market access, skills transfer, infrastructure, and insurance. Commercials farmers in particular our white compatriots should play a leading role in supporting black emerging farmers as they have expertise in agriculture.

We agree with Christo van der Rheede, Executive Director of Agriculture Industry Association Agri SA that “key to growing the sector is to bring more land into production, particularly the land that is lying fallow”. It is true that it is not enough to simply provide access to land, “land itself does not produce food, it is farming expertise that produces food”. We would like to take up the challenge, to partner with Agri EC to share expertise and establish commercially viable partnership ventures and provide incubation, targeted mentorship and transfer of skills to black farmers.

Government is engaging financial institutions to provide access to finance on the land reform beneficiaries that have been granted 30-year lease agreement. This will enable black farmers to secure much needed funding for their production. We wish to encourage Agri EC members to provide their farming communities an equity share of the businesses by putting 51% of the share into developmental trusts. In this instance, it is farm workers that will gradually assume more equity and can use the farms profit to pay off the debt as well as to fund the farms pension scheme and pay for medical aid for their families. I believe that some of your members have already heeded this call and I would like to appeal that all members follow suite.

Fellow delegates there can be no farming without land and there can be no wealth without land. Land is a contentious issue in our country, and we all know the reasons for that. It should be our collective interest to resolve the land issue and share in the country’s wealth. As farmers you must embrace government policies on land redistribution. As government, we have started distributing state land, in the EC a total of 59 695 ha made up of 122 properties have been advertised for release to communities and smallholder farmers. To date, a total of 15 021 ha of state land has been allocated to the following districts (Amathole 5 111, Alfred Nzo 938, Chris Hani 7 496, Joe Gqabi 694, OR Tambo 782). We urge Agri-EC to partner with government to share expertise to bring these acres of land into production.

Programme Director, the 2022 BBBEE sector score card demonstrates low levels of transformation where in skills development scored 68.3, enterprise development 60.1 and socio-economic development 86.7. These scores are fairly low to make a significant impact that will transform the sector. It is important to acknowledge that there are a number of training and skills transfer which are driven by agri-businesses and commodity organisation. As government we are proposing mass-based skills development program targeting unemployed youth in the key commodities.

The sector is moving towards automation which is driven by efficiency gains. There is a need to continuously train farm workers to keep them abreast with latest development tools and skills to ensure that they remain relevant. The commercial sector must address the unskilled and semiskilled farm workers with meaningful developmental programs.

We wish to request Agri-EC to participate in the Agricultural Graduate Programme placement, where we can increase the number of graduates that could be placed in the agri-business to improve management and control, which at this point 65.7. This will create a pool of competent and skilled workforce and entrepreneurs that could be recruited by the commercial sector. Our two colleges Fort Cox and TARDI will be key partners in driving this partnership. The sector must have deliberate effort to open space for small and medium enterprises to participate in the value chains thereby increasing transformation and growth of the economy.

The slow pace of transformation in the agricultural sector also affects the growth and expansion of the sector. This is due to the fact that largely its only commercial farmers that are at the forefront of growth and employment in the sector. If this trend is not altered, it will lead to the missed opportunities for development of agriculture in our province. Untapped Agriculture Potential in the eastern parts of the province (former homelands) present an opportunity for sector transformation. This necessitates greater need for partnership between government industry and black farmers to drive sector development and transformation.

There is no shortage of motivation for us to work together to grow the agricultural sector in our province as we have abundant opportunities in key commodities such as:

• Citrus:

• Dairy:

• Red meat:

• Wool & Mohair and Cannabis

I must hasten to inform the conference that government and social partners signed Agriculture and Agro-processing Master Plan on 12 May 2022 that serves as a collective social compacting attempt to both rebuild and restructure the South African economy. The vision of the AAMP is to build a growing, equitable, inclusive, competitive, job-creating, low-carbon and sustainable agriculture and agro-processing sectors. The success of this Plan relies on the full commitment and active participation of every industry stakeholder.

As the Eastern Cape government, we are fully aligned with the AAMP through our Agriculture Economic Transformation Strategy which promotes partnerships between smallholder/communal, industry, commodity organisation and commercial sector to improve productivity and competitiveness for growth and employment. We have adopted the aggregation model to aggregate communal land parcels or smallholder land parcels to increase scale of production for partnership with interested parties.

This has manifested in the following programs:

• Grain Partnership Model: Amathole, OR Tambo, Alfred Nzo, Chris Hani

• Red Meat value chain corridor – All Districts

• Wool and mohair value chain corridor – All Districts

• Citrus value chain – Amathole and Sarah Baartman

• Deciduous fruit value chain corridor – Sarah Baartman

• Pineapple value chain corridor – Amathole & Sarah Baartman

• Dairy value chain corridor – Sara Baartman, Chris Hani, OR Tambo, Amathole & Alfred Nzo

• Poultry value chain corridor – All Districts

• Vegetable value chain Corridor – All districts

We understand that for the agricultural sector to thrive and grow there must be investment support from government. We have initiated the Eastern Cape Agriculture and Agro-Processing Blended Finance Scheme, which will be implemented in partnership with Land Bank and ECRDA. The targeted commodities are export orientated (for growth), labour intensive (for employment) and catalysts for unlocking other commodities (broader participation) such as grain, fruit, livestock, poultry, piggery, vegetables, and nuts.

This initiative has been allocated a seed funding of R50 million to leverage private and public sector resources to increase investments in the sector. To drive this initiative, we will establish partnerships with agriculture commodity enterprises, intermediaries, industry, and Development Finance Institution’s (DFI’s) in order to broaden the pool of affordable development finance. Government investment portion will support farmers and agro entrepreneurs with grant funds for production and catalytic commercial infrastructure while commercial partners will bring loan funding. The scheme is estimated to add up to R110 million of new investment in the sector in its first year.

We have realised that there is hive of agriculture activity taking place in agriculture some not focused towards any markets. The commercial sector production is also limited in market access by other issues that require government interventions. To ensure that the Province maximise its benefits from the sector production should be market led.

The Province is holding strategic economic position in the marketing of agriculture products especially the export. TNPA

move to Gqeberha is critical to the growth of export in the province, the agriculture sector must take advantage of this and provincial government is engaging Transnet National Port Authority to revamp East London Port and optimal utilisation of Gqeberha and Ngqurha Ports.

One of the challenges facing the sector is biosecurity issues when it comes to export of agriculture products to lucrative markets. The example of Foot and Mouth Disease, with China which is the largest buyer of our wool and mohair closing off SA products thus affecting price in the auctions. The question we must ask is What is it that the farmers require to ensure that these two commodities don’t lose their value? Has the industry considered to invest in wool and mohair processing as the strategy to mitigate negative impact FMD?

Currently, government with redmeat industry are rolling out Livestock Identification and Traceability System (LITS). This is being piloted in the FMD areas. We are calling into the members of Agri-EC to participate in this pilot as DRDAR will be rolling this pilot. The system would ensure that we keep FMD free status as the province.

The newly introduced chilling requirement by EU on SA fruit is noted and requires that government and farmers work together to ensure that production areas are free of diseases. Government is again calling upon Agri-EC to engage to partner with DADAR in ensuring that province remain free of these disease that are a threat to export markets.

Another major issue that has been a thorn on the farming community of our province is the issue of roads which they use to transport their produce. We are a province that is largely rural and most of our roads are unsurfaced. Those that are surfaced are not in a good state because of poor various factors. Having said that since the 2018/19 financial year we have been committing not less that R15 milllion on a yearly basis to maintain roads in farming communities. We are committed to engage Agri-EC on certain intervals to monitor progress on maintenance and prioritization thereof.

I must add that on major roads projects in the citrus belt in Sarah Baartman we are experiencing some challenges caused by delays in the procurement. SANRAL has committed to expediate processes so that awards are done within this financial year as the roads especially around Gqeberha create ease of transportation for export markets

As I descend the stage, I would like to talk about crime which affects all our people including farmers. Crime is a is a deterrent to investments and anti-thesis for development and social cohesion.

Incidents of violence on farms and small holdings are not limited to the commercial farmers, however, are also affecting the communal farmers where their livestock is stolen from the kraals at the homesteads or from the grazing lands. At times the livestock will be removed by force where the livestock owners are threatened and shot at by the perpetrators. Incidents of this nature have been reported from the OR Tambo District at stations such as Bity, Qumbu, and Sulenakma to mention a few.

In the 2021/22 financial year there were 69 reported incidents of crime in farms and small holdings. Unfortunately, 9 people were murdered in some of those incidents.

Although the number of reported stock theft cases have shown a decrease, the theft of livestock remains a priority fight for the province.

A total of thirty-five (35) cases of Stock Theft have successfully been prosecuted in the courts for the period, April to June 2022 where the accused were convicted and sentenced to imprisonment ranging from six (6) months to five (5) years.

This success has been achieved through endeavours by Joint Operations teams including Cross-Border and Bi-Lateral operations conducted between RSA and Lesotho aimed at addressing cross-border stock theft and other serious crimes.

With those few words we are saying to Agri EC, come let us work together on practical programmes to transform the lives of our people. Let us partner not with words but actions to grow our economy by supporting emerging farmers to be part of the mainstream agricultural economy. We are saying let us unlock the full agricultural potential of our province. Together we can achieve more and build the Eastern Cape we want.

Thank you.

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