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Department of Agriculture, Forestry and Fisheries Strategic Plan 2011/12 – 2014/15 PowerPoint Presentation
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Department of Agriculture, Forestry and Fisheries Strategic Plan 2011/12 – 2014/15

Department of Agriculture, Forestry and Fisheries Strategic Plan 2011/12 – 2014/15

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Department of Agriculture, Forestry and Fisheries Strategic Plan 2011/12 – 2014/15

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  1. Department of Agriculture, Forestry and Fisheries Strategic Plan2011/12 – 2014/15 Director-General 28 March 2011

  2. Presentation Outline Overview Acronyms Performance of the sector & resources allocation Programme 1: Administration Programme 2: Economic Development, Trade and Marketing Programme 3: Food Security and Agrarian Reform Programme 4: Agriculture Production, Health and Food Safety Programme 5: Forestry and Resources Management Programme 6: Fisheries Management Budget summary Conclusion

  3. Acronyms ATI Agricultural Training Institute CCS Compulsory Community Service PBR Act Plant Breeders’ Rights Act WCRL West Coast Rock Lobster IFSS Integrated Food Security Strategy KIM Knowledge and Information Management PMDS Performance Management and Development System ICT Information and Communication Technology IPAP Industrial Policy Action Plan FPE Fish Processing Establishment FTE Full Time Equivalent 3

  4. Overview • I am pleased to submit the Strategic plan for the Department of Agriculture, Forestry and Fisheries 2011/12 to 2014/15 for tabling in Parliament. • Section 27(4) of Public Finance Management Act requires that the accounting officer of a department must submit measurable objectives within its department’s programmes to the National Assembly • In line with the requirements of the PFMA and Treasury Regulations, DAFF would like to table the 5 year Strategic Plan before Parliament • The Strategic plan complies with the guidelines provided by National Treasury and the Department of Public Service and Administration (DPSA). • As required also by PFMA and Treasury Regulations, we are tabling a detailed plan for year one of the multi-year period • The presentation will focus on deliverables for the MTEF cycle for six budgetary programmes for 2011/12 to 2013/14, as allocated by National Treasury • Lastly the presentation will focus on the Annual Performance Plan of the six departmental programmes as reflected in Annexture1 of the strategic plan 4

  5. Sector performance Agriculture Production Producer prices of agricultural products Gross value of agricultural production Farm sector income Cash flow of farmers Production costs Investment Farming sector debt Consumer prices Consumption expenditure on food Imports and exports of agriculture products Forestry sector Fisheries sector 5

  6. Agricultural production Estimated volume of agricultural production in 2009/10 was 4,8% higher than in 2008/09 Volume of field-crop production reflected a 3,1% increase as a result of an improvement in the production of summer grains Maize production increased with 1,4 million tons or 10,8% against the previous season, followed by sugar cane with 468 000 tons or 2,5% and Lucerne hay with 374 000 tons or 33,9% Horticultural production decreased by 1,6%, mainly because of a drop in the production of citrus and subtropical fruit Production of oranges decreased by 5,5% and that of potatoes by 3,6% Animal production increased by 8,8% as a result of increases of 41,1% in fresh milk production and 5,6% in stock slaughtered However, pastoral products (wool, mohair, karakul pelts and ostrich feathers) showed a decrease in production of 3,1% 6

  7. Volume index of agricultural production 7

  8. Producer prices of agricultural products Producer prices of agricultural products decreased on average by 2,2% from 2008/09 to 2009/10. The average price of field crops decreased by 14,4% The prices of winter grain dropped by 26,4%, Summer grain prices dropped by 23,1%, The prices of cotton dropped by 17,8%, While oilseeds and dry beans dropped by 7,0%, Producer prices of horticultural products rose by 7,0% from 2008/09 Prices of animal products rose by 1,9%. 8

  9. Producer prices of agricultural products 9

  10. Gross value of agricultural production Total gross value of agricultural production for 2009/10 is estimated at R126 433 million, compared to R127 568 million the previous year The total gross value decrease of 0,9% is attributed to decrease in the value of field crops Gross value of animal products contributed 51,3% Horticultural products contributed 25,&% Field crops contributed 23,0% Poultry meat industry made the largest contribution with 18,2% Followed by cattle and calves slaughtered with 11,2% Maize contributed with 10.9% 10

  11. Gross value of agricultural production 11

  12. Farm Sector Income The gross income of producers year ended 30 June amounted to R129,621 million, a decrease of 0.6% The gross income from horticultural products increased by 3,3% to R32 778 million compared to R31 793 million for 2008/09 Gross income from animal products was 5,1% higher than in 2008/09 and amounted to R64 855 million compared to R61 680 million for the previous year 12

  13. Farm Sector Income 13

  14. Cash flow of farmers Cash flow of farmers amounted to R38 487 million for the year ended 30 June compared to the previous R44 258 million a decrease of 13,0% This was as a result of a drop in the gross income of products 14

  15. Cash flow of farmers 15

  16. Production costs Expenditure on intermediate goods and services during 2009/10 is estimated at R71 955 million, a rise of 6,4% from R67 647 million in 2008/09 Expenditure on farm feeds accounted for 22,9% of the total expenditure, followed by 16, 1% for fuel, 12% for farm services and 10% for maintenance and repairs of machinery 16

  17. Production costs 17

  18. Investment The value of capital assets in agriculture as at 30 June 2010 was estimated at R223 343 million compared to R206 582 million at the end of June 2009 an increase of 8,2% The gross investment in respect of fixed improvements for the year ended 30 June 2010 increased by 1,0% to R3 972 million The livestock inventory rose by R38,6 million compared to the previousyear 18

  19. Investment 19

  20. Farming sector debt The total farming debt as at end June 2010 was estimated at R54 346 million (compared to R46 792 million in June 2009)- an increase of 16,1%. 20

  21. Farming sector debt 21

  22. Consumer prices Consumer price index (CPI) with base year 2005 of all items increased by 5,7% from 130,1 to 137,5 during the year ended 30 June 2010 The CPI of food increased by 2,8% from 147,3 to 151, 4 and Non food items increased by 2,1% from 124,6 to 127,3 Meat prices rose by 1,9%, from an index figure of 145,2 to 147,9, while the prices of grain products decreased by 2,1%, from 166,9 to 163,4. The consumer price index of vegetables increased by 6,2%, from 145,8 to 154,9, and that of fruit increased by 8,8%, from 130,0 to 141,4. In the case of dairy products and eggs, prices rose by 6,5 % from an index of 148,6 to 158,2, while an increase of 8,4% was recorded for sugar and related products, from 132,4 to 143,5. 22

  23. Consumption expenditure on food The consumption expenditure on food for the year ended 30 June 2010 increased slightly by 2,3% and amounted to R338 875 million as against the R331 300 million of the previous year Expenditure increased by • 4,7% to R106 887 million for meat, • 15,6% to R5 062 million for sugar • 6,5% to R48 414 million for fruit and vegetables (including potatoes) and • 5,2% to R38 698 million for milk, milk products and eggs Expenditure decreased by • 3,6% to R92 615 million for bread and grain products and • 3,2% to R7 210 million for oils and fats Meat represented 32% of the expenditure on the food component, while bread and grains represented 27%, milk, milk products and eggs11%, fruit and vegetables (including potatoes) 14%and oilsand fats only 2%. 23

  24. Consumer prices 24

  25. Imports and exports of agriculture products The estimated value of imports for 2009/10 came to R33 946 million a decrease of 11,6% compared to R38 401 million for 2008/09 The value of exports dropped by 9,8% from R49 278 million to R44 469 According to the 2009/10 export values, • wine (R5 927 million), • citrus fruit (R5 580 million), • grapes (R3 464 million), • apples, pears and quinces (R3 047 million) and • cane sugar (R2 639 million) were the most important agricultural export products • Rice (R3 410 million), oil cake (R2 358 million), wheat and meslin (R2 284 million), undenatured ethyl alcohol (R2 139 million) and palm oil (R1 776 million) accounted for the highest imports 25

  26. Imports and exports of agriculture products 26

  27. Forestry sector The area under forestry is about 1,28 million ha or approximately 1,0 % of the total RSA land area of 122,3 million ha. Although the area under plantations has decreased over the past few years from1 518 138 ha in 1997 to about 1 257 341 ha in 2008 The volume of production has increased from 18 641 228 m³ to 20 100 000 m³ during the same period. The forestry sector and forest products contributes about 1,3 % to GDP In terms of regional GDP, forestry contributes: • KwaZulu-Natal 4,7 %, • Mpumalanga 5,5 % • Eastern Cape 0,7 % • Limpopo about 0,7 % • The export of forest products has increased from R 9,5 billion in 2001 to R14,8 billion in 2008 • Imports totalled R 11,3 billion in 2008 27

  28. Fisheries sector 28

  29. Fisheries sector cont… 29

  30. Sector Growth • Growth is sensitive to seasonal changes in plantings, price movements and weather • Recent recession has taken its toll and recovery is underway (Fig. 2 illustrates better) Recession Favourable commodity prices

  31. Sector Growth Cont... • Recent figures shows the sector is following a recovery path Recovery

  32. Contribution to GDP • The sector’s relative contribution to GDP has been declining over time – an indication of an economy increasingly more dependent on secondary and tertiary sectors (economic modernisation) • Agriculture component is largest contributor and fishing is the smallest

  33. Contribution to GDP Cont... • The sector’s contribution over the past year has been hovering between just under 2% and just over 3%

  34. Export Market Growth

  35. Investment in Farms • Investment in farms has been increasing spurred on by favourable producer prices, but recession has stifled progress

  36. Food Prices • Food price inflation has come down significantly over the past two years (from late teens in 2008 to the current 2%).However, it continues to be sensitive to world price movements and exchange rate.Recent upward trends in world prices is a concern (recent FAO report), and RSA has so far escaped due to the strong Rand.DAFF continues to monitor the trends and will be releasing regular updates.The Competition Commission has also been vigilant with regards to price fixing.

  37. Employment in the Sector • The sector has not escaped the recent job shedding that has taken place recently due to recession • Future growth in employment is dependent on implementation of the New Growth Path premised on sectors such as agriculture

  38. Challenges in the Sector The unregulated market environment, which exposes the sector to fluctuations in world prices The decreasing share of field crops in agricultural production and South Africa’s move from being a net exporter of foods to a net importer The growing dominance of retail chains and an increasing farmer to retail price differential High input costs for, among others, fertiliser, fuel and feedstock Poorly skilled subsistence and emerging farmers, who only achieve low production volumes and productivity levels A lack of agricultural spatial planning and poor infrastructure, which makes it difficult for farmers to liaise with buyers, access markets and boost sales Poor information and knowledge management for small holder farmers, which prevents them from correctly addressing production challenges and Agricultural R&D agenda and practical implementation has little impact on the growth and development of the sector

  39. Challenges in the Sector: Commercial There has been a significant increase in the concentration of the commercial sector, as a result of smaller and less efficient business, unable to take advantage of increasing economies of scale, being forced out of the sector Profitability has increased, but at slower rates, and is attributed to a concentrated few that’s has been able to survive global market and financial challenges Transformation in the commercial sector in all three sectors (Agriculture, Forestry and Fisheries) remains a challenge • Differences in interpretation, and implementation. • Transformation is still mainly translated as the number of ‘black’ individuals in a company. • Challenge with transformation not having significant socioeconomic impact. Plans per programmes 39

  40. Challenges in the Sector: Commercial Cont… An increase in production in agriculture, has mainly been horticultural crops, with a significant decrease in field crops (source of staple food), and translates into increasing concerns around National Food Security (Household Food Security) Increasing food prices, and anti-competitive behaviour too impacts on national food security Limited innovation systems, the slow rate of opening up new markets and value adding opportunities however there are challenges on certain commodities Many of the challenges stem from a lack of compliance rather than lack of appropriate regulations i.e. poor enforcement 40

  41. Challenges in the Sector: Smallholder Inadequate support services / Extension services essential to grow and develop the smallholder and subsistent sector Technical support services currently inadequate, there is a need for an upscale and expansion of support offered Uncoordinated spatial plans to guide implementation of support programmes, access their economic impact and ensure easy monitoring and evaluation

  42. Challenges in the Sector: Smallholder Cont… Inadequate and unstructured intervention in regard to provision of on-farm infrastructure such as water sources (dams, windmills, irrigation schemes) essential for sustainable production Implementation of the mechanisation support programme very weak due to the lack of a targeted programme Lack of support for the established small-holders to establish commodity groups Inadequate access to agro-processing industries for value addition No guaranteed market for products produced by small holders Poor infrastructure to ensure equitable access to development finance through our grant system and loans programmes Uncoordinated or lack of targeted training for smallholders

  43. Challenges in the Sector: Smallholders Cont… Aquaculture – Limited investments made in terms of hatcheries, research and disease management to promote aquaculture Non-existent support (access to equipment, finance, extension and training) for the established small-holders in the fishery industry and small growers in forestry Inadequate access to agro-processing industries for value addition Insufficient access to development finance through our grant system and loans programmes i.e fisheries and forestry

  44. Policy and programme interventions Government adoption of the 12 Key Outcomes by the January 2010 Cabinet Lekgotla Signing of performance agreements and Delivery Agreements with DAFF directly contributes to following 3 Outcomes with clear targets: Outcome (4): Decent employment through inclusive economic growth Outcome (7): Vibrant, equitable, sustainable rural communities contributing towards food security for all Outcome (10): Protect and enhance our environmental assets and natural resources IPAP 2 New Growth Path Draft Integrated Growth and Development Path for the Sector Strategic Plan for smallholder farmers

  45. Programme interventions: development targets Increase the number of smallholder farmers from 200 000 to 250 000 by 2014/15 As a result of the continued success of commercial farming, the number of employees on commercial farms should rise from 780 000 to 800 000 by 2014/15 Aim to place 300000 households in smallholder schemes by 2014/15 (goat, sheep, wheat, aquaculture, forestry, etc.) 145 000 jobs in agro-processing by 2020 5520 jobs Community Works Programme Plan by 2014/15 Rehabilitation of 3.2 million ha of agriculture land by 2014/15 Recovery of targeted fish stocks (abalone, hake and West Coast Rock Lobster) by 10% by 2014/15

  46. PROGRAMMES PLANS OVER THE MTSF PERIOD 2011/12 TO 2014/15

  47. Alignment of MTSF Priorities, Key Outcomes and Strategic Goals

  48. Programme 1: Administration: Policy Planning & Monitoring, Cooperate Services, Stakeholder Relations and CFO 48

  49. Programme 1: Administration Cont… 49

  50. Programme 1: Administration Cont… 50