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AGRIPARKS – TOWARDS AN INCLUSIVE AGRICULTURE ECONOMY
DEPARTMENT OF AGRICULTURE AND RURAL DEVELOPMENT
PRESENTATION TO THE CPSI
Presenter: Mr Motlatjo Makaepea29 JUNE 2017
KEMPTON PARK
1
Contents
• An introduction to Gauteng
• Overview of Gauteng Agriculture Economy
• Focus on Agriparks as a mechanism for
inclusive participation of all farmers in the
agriculture economy
• Conclusion
An introduction to Gauteng Province: Location • Gauteng is the
smallest province in South Africa with 1.7m ha of land surface area
• It occupies only 1.4% of RSA land surface area
• Population: 12.3m (23.7% -Largest % share of RSA population –Census 2011)
• Gauteng has 3 of the 8 Metro Municipalities in the Country
Broader economic overview of Gauteng • Gauteng is the economic
powerhouse of South Africa
• The province contributes 33.9% to
national GDP
• It furthermore contributes 10% to
Africa GDP
• Major cities such as Johannesburg
and Pretoria are in Gauteng
Province.
• Built-Development pressure high
• The province has 4 largest fresh
produce markets in the country – Johannesburg Fresh Produce Market
– Tshwane Fresh Produce Market
– Springs Fresh Produce Market
– Vereeniging Fresh Produce Market
Contribution of agriculture to Gauteng economy• Contribution of primary agriculture to Gauteng GDP is 0.5%• Contribution of total agricultural value chain including secondary and tertiary agric tiers to
GDP is 2.3% • The province is 18% built-up with 17.3% of High Potential Agricultural Land• Vacant land in the province is 946 710ha (52% of the total surface area)• Vegetation: 2 biomes which are Grassland and Savanna• Agriculture households in Gauteng
Gauteng Agricultural sub-sectors gross farming income
• Livestock production is the lead
agricultural sector with 59% of
gross farming income
• Horticulture sector with specific
reference to Vegetables and
flowers is the 2nd biggest income
earner with 21% of the gross farm
income
Field crops8%
Horticulture21%
Animals/Livestock59%
Animal/Livestock products
10%
Other products2%
Agriparks: National Context• State of the Nation Address (SONA): Declared 2015 year of
Freedom Charter • Agriparks becomes a focal point for Agriculture
development• A sum of R2b was reprioritized for the program • Department of Rural Development and Land Reform
(DRDLR) becomes the National Custodian of the Program• State of Province Address (SOPA)• Township Economic Revitilization (TER) linked to Agri-Parks • Agro-Processing as a viable tools to re-industrialise Gauteng
(WRDM & Sedibeng)• Gauteng becomes a leading province for development of
Agriparks nationally by allocating its own resources R60M 7
Agri-Parks - Formulation of the problem• Low contribution of agriculture to the economy (0.4%)
• Lack of adequate land parcels for production
• Low productivity levels of smallholder farming sector
• Lack of infrastructure for value-adding and agro-processing
targeted at smallholder farmers
• Inadequate clustering of smallholder agricultural produce for
ensuring adequate volumes, access to markets and value-
added infrastructure
• Funding constraints impeding development of processing
infrastructure at individual farm level
AGRI-PARKS: CONCEPT
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• Agri-Parks which is a network comprised of clustered agricultural
infrastructure for production and value-adding developed in the peri-
urban areas
• Agri-parks based on Agriculture Policy Action Plan (APAP) and
Industrial Policy Action Plan (IPAP) with priority given to “Horticulture
Value Chain” and “Grain-Poultry Integrated Value Chain”.
AGRI-PARKS: CONCEPT
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• The Agri-parks provides for:
• Secured, intensive bulk production of a specific agricultural
commodity for economies of scale
• Agro-processing within a shared infrastructure (incubation),
• Marketing avenues of agri-infrastructure,
• Value adding and marketing within the boundaries of a single
geographical farm or an agricultural holding.
• Model different from existing farming model (Based on - One
locality)
AGRI-PARKS GOALS
• Agri-parks emphasise
competitiveness
• Production of High-value
commodity (Focus)
• Branding (Logo) & Visibility
• Localiztion
• Volumes & Quality of produce
• Retail presence
• Export capability
PRIORITY COMMODITIES FOR GAUTENG (AGRIPARKS PROGRAM)
Horticulture Value Chain (21% of Gauteng GVA)• Vegetables • Cut Flowers• Herbs & Essential oilsOpportunity: Proximity to large population and growing middle class –Bulking up, quality assurance and branding
Horticulture Value Chain Grains – Poultry Integrated Value Chain (4th largest producer of Grains)
Red Meat Value Chain
59% of Gauteng Gross farm income comes from Livestock predominantly in FeedlotsOpportunity: Processing infrastructure for smallholder farmers and their integration.- Linkage to mobile abattoirs program
Agriparks / Agrihubs – Protect Areas of High Potential Agricultural Land
• 7 Agricultural Hubs
are Agricultural
Development Zones
delineated to protect
High Potential
Agricultural Land and
focus agric
development.
• The Agric Hubs
encompass the Maize
growing belt of
Gauteng also known
as Maize Traingle
Major Crop Commodities – Spatial Distribution • A total of 314 992ha is
under cultivation with the following crops– Grains (Maize &
Sunflower) covers a large area of 107 259ha
– Vegetables – Orchards (Peaches &
Citrus)– Flowers– Essential oils and herbs
• Gauteng is the Number 1 producer of cut flowers with the exception of Proteas
• 4th Maize producer in South Africa
AGRIPARKS OPERATING MODEL• Each Agripark will be a critical link
between the formal markets and the smallholder farmers.
• The Agripark will serve as an intermediary and a distribution facility whereby the smallholder farmers `s produce will be aggregated and graded in accordance with formal markets requirements
• Management of each Agripark is to be undertaken on a private-public partnership to ensure a balance between with economic and development goals.
FORMAL MARKETS
AGRIPARK• Shared packaging & coldroom facilities• Out-grower Model & On-site production
Smallholder farmer
Smallholder farmer
Community gardens
Smallholder farmer
Off-take Agreements
Generic Project Plan for all Agripark Sites
KEY ACTIVITIES TIME
2014/15 2015/16 2016/17 2017/18
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1. Planning Agri-parks
2. Infrastructure Development 3. Entrepreneur Selection
4. Contract Markets Negotiations
5. Production (Scaled and Synchronised per commodity)
6. Logistic (Aligned to Contract Markets)
7. Maintenance
7.1. Servicing markets
7.2. Infrastructure
7.3. Relationships
RANDWEST AGRI-PARK FACILITIES
Westonaria Agripark: Hydroponics, Packhouse and Administration Block and Training room
Westonaria Agripark: Lettuce production Training room
Investment in New Technology onsite• As part of Re-industrialization the department has introduced
the latest farming technology in the form of Vertical Growth Chamber farming system.
• The facility is also established at Rand West Agri-park facility. This is also in line with adaptation mitigation of climate change.
• The chamber is an intensive growth chamber for vegetable production; high yield is attained within short period of time.
• This technology has the potential to solve many problems associated with access to land and attain economic viability within a small space
MERAFONG AGRIPARK (EXPANSION)
• The Project includes:
• Construction of 16 x 300m2 hydroponics tunnels(100% complete)
• Construction of a 5000m2 shade net (100%Complete)
• Repairing of pumpstation (96% complete)
MERAFONG AGRIPARK (EXPANSION)
• The Project includes:
• Construction of 16 x 300m2 hydroponics tunnels(100% complete)
• Construction of a 5000m2 shade net (100%Complete)
• Repairing of pumpstation (96% complete)
ONVERWACHT AGRIPARK FARMER PRODUCTION SUPPORT UNIT (FPSU)
32
Commodities to be produced:Vegetables, Flowers and Herbs
CONSTRUCTION STATUSGreenhouse construction• 90 % completed
– Entrance cabins, electricalinstallations tested and functional(extractor & circulation fans)
– wettable wall installed– Water reticulation layered (Main
line, drainage pipe, internal gutterdown pipes, underground pipes andirrigation pipes)
– Thermal screens installed
CONSTRUCTION STATUS …. continue• 10 % remaining (plastic covering)
– Side walls to be covered uponcompletion of automated system tobe housed in the pack house
– Complete covering withoutautomated climate control willaccelerate destruction of the plastic
Risks and challenges RISKS AND CHALLENGES MITIGATION
Acts of vandalism and theft Full-time on site security
Disruption by non-project participants Legal binding agreements for all the project participants
Group dynamics affecting operational capabilities
Continuous Cooperative capacitation
Water and electricity costs and interruptions On-site back-up generators
Poor market uptake or inability to service off-take agreements (Need at least guarantee off-take from state institutions)
Support of agri-entrepreneurswith inputs and logistics support
Poor commitment from agro-entrepreneursoperating in the Agripark
Legal binding agreements for all the project participants
Success factors
• Crowding of agricultural and rural development investment in the Agri-Park model including land reform programmes
• Management Institution of the Agri-parks (Subject to land tenure system)
• Availability of state land to develop the identified agri-parks (DRDLR to list its properties)
• Funding availability and project management support (DRDLR is working on the financing model)
• Committed beneficiaries (Agri-entrepreneurs)
• Dedicated technical and management support
• Formidable partnerships with industry and DRDLR, DAFF and Municipalities (Site Approval)
Spin offs
• Each Agri-park is expected to contribute a minimum of 30 jobs onsite with emphasis on youth, it is anticipated that 150 jobs per agri-park when each Agri-park is operating at full capacity.
• Agri-parks will contribute to increased productivity, competitiveness and agro-industrialisation.
• Consolidation and aggregation of interventions is critical.
• Critical skills - Farmer Entrepreneurial capacity to be enhanced. Local and international partnerships to be undertaken.
GDARD strategies supporting Agriparks
• Gauteng Agricultural Development Strategy (GADS)
• Extension Services • Agri-input support program
(Letsema)• West Rand Agriculture Training
Institute*• Biotechnology Strategy• Agro-processing Strategy• Household Food Security
Program • Floriculture program