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Commercialization of Black Producers

This presentation outlines the government's efforts to commercialize black producers in South Africa, including skills building, funding support, and partnerships with industry stakeholders. Progress updates and the need for increased grant funding are also discussed.

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Commercialization of Black Producers

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  1. COMMERCIALIZATION OF BLACK PRODUCERS 25 MAY 2018

  2. PRESENTATION OUTLINE Acronyms Commercialisation of Black Producers 2

  3. ACRONYMS • AgBiz : Agri Business Chamber • BASA : Banking Association of South Africa • CASP : Comprehensive Agricultural Support Programme • DAFF : Department of Agriculture, Forestry and Fisheries • DTI : Department of Trade and Industry • ERP : Extension Recovery Plan • IDC : Industrial Development Corporation • MINTECH : Ministerial Technical Committee • NAP : National Assessment Panel • NEF : National Empowerment Fund • NFNSCC : National Food and Nutrition Security Coordinating Committee • OIE : World Organization for animal health • SA GAP : South African Good Agricultural Practice • SEFA : Small Enterprise Finance Agency 3

  4. COMMERCIALIZATION OF BLACK PRODUCERS On 9 Feb 2017: The former President in the 2017 SONA pronounced that “Government will implement a commercialisation support programme for 450 black smallholder farmers” “Commercialisation of agriculture is a phenomenon where agriculture is governed by commercial consideration i.e. certain specialised crops are grown not for consumption in village but for sale in national and even in international market”. 4

  5. COMMERCIALIZATION OF BLACK PRODUCERS • The approach to commercialize black producers is two fold: • The development phase for potential producers to operate at commercial level entails; • Farm and farmer needs assessments of 50 farmers per province; • Skills and capacity building including record keeping; • Farm planning i.e. primary and secondary commodities; • Assistance with business plan development; • SA GAP certification; and • Infrastructural and input support to enable achievement of turnover per annum of R500 000. 5

  6. COMMERCIALIZATION OF BLACK PRODUCERS (2) • The commercialization through blended funding • (as outlined through Operation Phakisa initiative: Re-engineering of Agriculture Development Finance). • This will happen through blended funding (loan and grant); the grant will be accessed through a central grant funding facility in partnership with the Land Bank. The partners in the programme include Banking Association of South Africa (ABSA, FNB, Standard Bank, Nedbank), AgBiz, Jobs Fund, Development Funding Institutions, DTI and IDC; • The target is 450 black producers commercialized over 5 year period; and • The programme to develop black producers was developed in partnership with the DTI, Land Bank, IDC and NEF and approved. 6

  7. Commercialisation OF BLACK FARMERS – PROGRESS UPDATE • The 450 commercial producers have been identified from all provinces. • DAFF has received R370 million over MTEF 2017/18 to 2019/20 for transfer to the Land Bank for the blended funding model. • Additional resources have been secured through CASP to augment the blended funding over the 2018/19 to 2020/21 period. • However, for the programme to have a significant impact in transforming the sectors and ensure a critical mass of commercial black producers owning and controlling the value chains, a minimum of R1 billion is required in the grant funding facility at the Land Bank. • The Memorandum of Agreement (MOA) between Land Bank and DAFF has been concluded and signed by both parties. 7

  8. Commercialisation OF BLACK FARMERS – PROGRESS UPDATE (2) • The DAFF has consulted with the Banking Association of South Africa and Agbiz and agreed to sign a standard MOU for partnering in commercializing black producers over a ten year period. • Consultations with stakeholder took place during the Phakisa process as well as separate consultations with provincial departments of agriculture through MinTech meetings. • The Joint MinMEC of DAFF and DRDLR was briefed on progress in March 2018. 8

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