AGRICULTURAL RESEARCH COUNCIL

Annual Report for 2015/16

October 2016

ARC MANDATE, VISION & MISSION

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ARC ALIGNMENT TO NATIONAL PRIORITIES AND POLICIES

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ARC CONTRIBUTION TO GOVERNMENT PRIORITIES & OUTCOMES

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1. Supporting objectives of the National Development Plan, Vision 2030 through anARC business strategy and organization structure aligned to national priorities;

2. Employment and Job creation, particularly among the poor;

3. Food and Nutrition Security for all, particularly within households;

4. Improved productivity, production, competitiveness and sustainability of animaland crop based agriculture;

5. Contributing to bio – security;

6. Optimal technology platforms for agricultural production;

7. Strengthening the role of the bio – economy (the “Farmer to Pharma ValueChain”) to enable South Africa to become a leader in Biotechnology and relatedpharmaceuticals through our knowledge base;

8. Enabling the country to adapt and respond to climate change impacts (water,land, energy, sustainable natural resource utilization etc)

9. Contributing to South Africa’s Global and Regional positioning andintegration;and,

10. Ensuring an optimal and sustainable organization.

ARC STRATEGIC GOALS (Outcomes – Oriented)

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1. To generate knowledge and technologies that will enhance the efficiencies incrop based agriculture;

2. To generate knowledge and technologies that will enhance the efficiencies inlivestock based agriculture;

3. To generate knowledge and technologies for the conservation and utilisationof natural resources;

4. To generate knowledge, solutions and technologies for food safety, qualityand improved efficiencies in the agriculture value chain;

5. Translate research outputs in order to generate knowledge, facilitatedecision making and contribute to the transformation in the agriculturesector; and

6. Apply resource management practices, towards a high performing andvisible organisation.

SCIENCE IN ARC FOR THE AGRICULTURE ECONOMY

SCIENCE COUNCIL Innovation in science

Basic/fundamental research

Applied research (technologies)

Intellectual assets

Skilled scientists & engineers

Volume & quality publications

Scientist ratings

Number of PhDs

Number of doctoral fellows

Number of postdoc fellows

Scientific awards

AGRICULTURE DEVELOPMENTo Economic link to Innovation

o Applied research

o Technology Transfer/dissemination

o Intellectual Asset Use

o Agricultural Production & productivity

o Food Security – hunger

o Environmental Sustainability

o Import Substitution

o Export Promotion

o Agrarian Transformation

o New products (vaccines, cultivars etc)

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ARC PROGRAMMES

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1. Crop Production, Improvement and Protection

2. Animal Health, Production and Improvement

3. Natural Resources Management

4. Mechanisation and Engineering

5. Agro-processing, Food Technology and Safety

6. Smallholder Agricultural Development

7. Agricultural Economics and Commercialization

8. Training and Extension

9. Administration and Corporate Affairs

SUMMARY OF ARC SCIENTIFIC OUTPUT IN PEER REVIEWED PUBLICATIONS

REVIEW OF KEY ORGANISATIONAL PERFORMANCESCIENTIFIC SOLUTIONS THROUGH RESEARCH AND DEVELOPMENT

a) Cultivars with Plant Breeders Rights over period 2011 – 2016:

9

15

30

21

12

23

0

5

10

15

20

25

30

35

2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

No

of

IP r

egis

tere

d

Financial Year

Cultivars with Plant Breeders' Rights Registered

STRATEGIC GOAL 1 To generate knowledge and technologies that will enhance the

efficiencies in crop based agriculture

FOCUS OF GOAL

a) Broaden the food base for food andnutrition security and welfare.

b) Optimised crop production systems tomitigate agricultural risks.

c) Improved cultivars (food and non-food)through breeding, physiology andgenetics.

d) Enhanced crop protection systems.

e) Crops and mixed production systemsdeveloped for smallholder farmers.

OUTCOMES WITH ASSOCIATED IMPACT

1. New cultivars that would ensure higherprofitability

2. Mitigation strategies against biotic andabiotic stresses that would improveproductivity

3. Sustainable production systems

4. Reduction in post harvest losses

5. New products and processes developedfrom primary agriculture

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African Delight was recently released and is already commanding good prices on the markets owing to its exceptional quality and is the third most exported plum

cultivar from South Africa, after two other ARC-bred cultivars. With several tens of hectares still to come into production this variety is set to determine the new

standard for plums in South Africa. It also reaffirms the ARC’s position in the South African plum industry with in excess of 7.5 million boxes of the total 11.5

million boxes of plums exported resulting from ARC bred cultivars.

Rainwater harvesting and conservation for improved dryland crop production

Cultivation of amaranth using the tied-ridge rainwater harvesting technique. Cultivation of swiss chard using the in-field rainwater harvesting technique.

STRATEGIC GOAL 2 To generate knowledge and technologies that will enhance the

efficiencies in livestock based agricultureFOCUS OF GOAL

a) Development of Animal Vaccines

b) Development of Diagnostic and AnalyticalTechnologies

c) Improvement to Veterinary Public Health

d) Development of Disease Control Strategies

e) Development and Introduction of newtraits and genetic diversity in animals

f) Enhance animal production and nutritiontechnologies

g) Animal, crop and mixed productionsystems developed and transferred tosmallholder farmers

h) Animals and mixed production systemsdeveloped for smallholder farmers

OUTCOMES WITH ASSOCIATED IMPACT

1. High quality improved meat and dairyproducts that are safe, highly nutritionalwith visual appeal;

2. Affordable meat and dairy products;3. Disease free herds (livestock & wildlife);4. Reduced degradation of rangelands;5. Improved livestock production through

adoption of improved rangelandmanagement

6. Effective animal breedingmethods/techniques

7. Increased efficiency of livestockproduction from breeding

8. Improved livelihoods among smallholderfarmers

9. Reduced number of stock theft incidents10. Disease and residue free animal

products for increased market access

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TARGETED SUPPORT TO SMALLHOLDER FARMERS

Kaonafatso ya Dikgomo

8430 farmers were serviced

Employed 55 young graduates to implement the scheme in all nine provinces

9 farmers’ days with a total attendance of 1508 farmers

Some of the topics covered included:

Drought feeding strategies (e.g. hay and silage making)

Supplementary feeding addressing the correct use of ingredients

Dairy Value chain – established in Limpopo and Eastern Cape

forage-based dairy production system that utilizes low cost feeds

climate-smart forages

least cost on-farm processing

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INTERGIS adds new functionality for data capturing using mobile technology

ARC mobile platform for INTERGIS

Establishment of smallholder dairy value chain businesses

Climate-smart forages/dryland pastures of spineless cactus pear Backyard semi-intensive forage-based dairy production system

ANIMAL HEALTH FOR SUSTAINABLE MEAT PRODUCTION

Attenuated Heartwater Vaccine

Tick – borne disease of domestic and wild ruminants

Economically important – estimated R220 million per annum losses in production

Sustainable control method is only vaccination

ARC developed a live attenuated vaccine

No antibiotic treatment following vaccination

All vaccinated animals resisted disease – 100 % protection

Field trials

Vaccine on the market within 24 months.

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STRATEGIC GOAL 3 To generate knowledge and technologies for the conservation and

utilisation of natural resourcesFOCUS OF GOAL

a) Alternative energy technologiesb) New and improved conservation

agriculture systemsc) Climate Smart agriculture to enable

mitigation and adaptation to climatechange

d) Improved water management andirrigation practices

e) Natural resources monitored andcharacterised

f) Genetic resources, databases updatedand maintained

g) Green technologies and processes tomitigate impact of agriculture on theenvironment

h) Enhanced mechanization in agriculturei) Agriculture engineering

OUTCOMES WITH ASSOCIATED IMPACT

1. Climate smart agriculture technologiesadopted & utilized that sustainablyincrease agricultural productivity andincomes;

2. Increased resilience of Agriculture toclimate change;

3. Reduced greenhouse gas emissions;4. Optimal agricultural production from

increased biodiversity5. Water efficient agriculture6. Energy efficient agriculture7. Optimal utilization of land for

sustainable agriculture8. Appropriate infrastructure for increased,

efficient and sustainable agriculture

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To generate knowledge and technologies for the conservation and utilisation of natural resources

Climate Suitability

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Surface and sub-surface drainage research

Irrigation training for government officials and smallholder farmers

STRATEGIC GOAL 4To generate knowledge, solutions and technologies for food safety,

quality and improved efficiencies in the agriculture value chain

FOCUS OF GOAL• New food and non-food processes and products

developed. • Food science and technology developed for

improved product quality and yield. • Post-harvest losses reduced.• New animal products developed.• Agroprocessing, biotechnology and informatics

each cross-cutting across different areas of the agricultural value chain and intended to be applied to the full value chain of crops, animals and agricultural system research.

OUTCOMES WITH ASSOCIATED IMPACT• Develop process to create products from

indigenous crops• Product yield, product quality and safety.• Product development and value adding

(storage, processing and packaging).• Additional research focus areas include

indigenous and high value products(indigenous herbal teas, medicinal andaromatic plants, fruits vegetables) to accessniche product value chains.

• Provision of scientific services to farmers andclients of the ARC.

• Animal agriculture research groups conductresearch primarily investigating the variousfactors involved in producing good qualitymeat, meat products and milk and milkproducts (safe, appealing, nutritious,affordable and tasteful).

• Research into the processes involved inmaximising yield without forfeiting qualityand adding value to a basic product toincrease quality and/or yield.

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Development of a plant containment facility with state-of-the-art environmental control and

recording features

STRATEGIC GOAL 5Translate research outputs in order to generate knowledge,

facilitate decision making and contribute to the transformation in the agriculture sector

FOCUS OF GOAL

a) ARC technologies packaged and exploited

b) Established and functional agri – incubators

c) Animal, crop and mixed production systemstransferred to smallholder farmers

d) Agriculture Development Centres that aredelivering services. ARC footprint and visibilityenhanced

e) Smallholder farmer enterprises support

f) Agricultural skills and capacity developed

g) Agriculture research for developmentoutcomes communicated and disseminated

h) Marketing and stakeholder management

OUTCOMES WITH ASSOCIATED IMPACT

1. Increased adoption and use of ARCtechnologies among smallholder farmers

2. Increased number of functioning andsustainable agriculture enterprises fromagri – incubators

3. Increased number of animal, crop andmixed production systems transferred tosmallholder farmers

4. Agriculture Development Centresestablished in all provinces

5. Competitive and sustainable Smallholderenterprises

6. Increased skills base and capacity inagriculture sector

7. Increased use of and application ofagriculture science and technology indecision making

8. Improved image and relations of ARC withstakeholders

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STRATEGIC GOAL 6

Apply resource management practices, towards a high

performing and visible organisation

a) Human Resources

ARC EMPLOYMENT EQUITY PER RACE AND GENDER

PERFORMANCE IN FINANCIAL YEAR 2015/16

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76

9%

15%

ARC Capacity per race: 31/03/2016

African Coloured Indian White

EMPLOYMENT EQUITY (SCIENTISTS) BY RACE AND GENDER

50%

4%

2%

40%

ARC EE Scientific Capacity per race: 31/03/2016

African Coloured Indian White

50%

46%

ARC EE Scientific Capacity per gender: 31/03/2016

Male Female

P H D M S C D T E C H M T E C H

53 26 15

62 28 16

PERMANENT EMPLOYEES FORMAL STUDIESMALE FEMALE

b) Information Communication Technology and Infrastructure Management

INFORMATION COMMUNICATION TECHNOLOGY

Creating an enabling environment for optimal use of informationcommunication resources to support of ARC business initiatives:

a) innovations to support information dissemination initiatives

b) increased mobility and use of mobile applications

c) improved access to information resources for all employees

d) improved connectivity to enable virtual presence andcollaboration

e) improved ICT resources to enable research and developmentthrough informatics tools

f) providing a Knowledge Management Platform to enhance ARCresearch and development initiatives and service delivery

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ARC INFRASTRUCTURE MANAGEMENT

Research and Development Databases Modernisation of R & D databases, integrating through ICT platforms

Multi – Purpose Training Centre – capacity more than 400

Quarantine Facility for pest and disease management

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New ARC Quarantine Facility, RoodeplaatNew ARC Multipurpose Training Centre, Roodeplaat

ARC FINANCIAL PERFORMANCE

SUMMARY OF FINANCIAL PERFORMANCE

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PARLIAMENTARY GRANTS

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Agricultural Research Council

Statement of Financial Performance 31 March 2016

2015

Actuals

R'm

Change

R'm

Change

%

2016

Actuals

R'm

Transfer revenue

Government grants 919 (137) (15%) 782

PG - Operational 705 (43) (6%) 662

Economic Competitiveness and Support

Package (ECSP) 135 (97) (72%) 38

Roll over from prior periods 44 36 81% 80

Received during the year 171 (171) (100%) -

Roll over to the next year (80) 38 (47%) (43)

PG - Capex 79 4 5% 83

COMPARISON OF EXTERNAL INCOME 2015 VS 2016

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FINANCIAL PERFORMANCE

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Agricultural Research Council

Statement of Financial Performance 31 March 2016

2016

Business Plan

R'm

Change

R'm

Change

%

2016

Actuals

R'm

Change

R'm

Change

%

2015

Actuals

R'm

Sale of goods and services 47 13 27% 59 9 18% 51

Rendering of services 340 13 4% 352 16 5% 336

Royalty Income - 12 0% 12 2 25% 9

Rental of facilities and equipment 7 4 59% 11 0 3% 11

Interest received 20 7 34% 27 (5) (17%) 32

Dividends Received - 0 0% 0 (0) (5%) 0 ,

Total Revenue from exchange transactions 414 48 12% 461 22 5% 439

Revenue from non-exchange transactions

Transfer revenue

Government grants 757 25 3% 782 (137) (15%) 919

PG - Operational 675 13- (2%) 662 (43) (6%) 705

ECSP - 38 0% 38 (97) (72%) 135

Roll over from prior periods - 80 0% 80 36 81% 44

Received during the year - - 0% - (171) (100%) 171

Roll over to the next year - (43) 0% (43) 38 (47%) (80)

PG - Capex 83 - 0% 83 4 5% 79

Total revenue 1 171 73 6% 1 244 (115) (8%) 1 358

Expenditure

Employee costs (720) (48) (7%) (768) (8) (1%) (760)

Depreciation and amortisation (35) (7) (21%) (42) 5 10% (47)

Impairment - 2 0% 2 3 485% (1)

Finance costs - (0) 0% (0) (0) (661%) (0)

Lease rentals on operating lease (13) 1 11% (11) 4 26% (15)

Bad debts - (0) 0% (0) (1) 115% 1

Operating and administrative expenses (322) (175) (54%) (497) 6 1% (503)

Total Expenditure (1 090) (227) (21%) (1 317) 8 1% (1 325)

Operating (deficit)surplus 81 (154) (191%) (73) (107) (321%) 33

CHALLENGE: PARLIAMENTARY GRANT vs OPERATING COSTS

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CASH SURPLUS/(CASH SHORTAGE)

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ARC EXTERNAL AUDIT OUTCOME

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Unqualified Audit not yet clean audit

Reason Material adjustments to AFS

Action items Audit improvement plan already in place Audit findings to be addressed by end of October

2016 All vacancies in Finance department filled

Comments or Questions?

Re a Leboha!Siyabonga!

Ria Livhuwa!Ha Khensa!

Siyathokoza!Re a lebogaSiyabulela!

Baie Dankie!Thank You

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