THREE-YEAR STRATEGIC PLAN (2010-2013) BUSINESS PLAN (2010/11) HR PLAN (2010/11) BUDGET (2010/11) for the NATIONAL AGRICULTURAL MARKETING COUNCIL By N MSIMANG

THREE-YEAR STRATEGIC PLAN (2010-2013)BUSINESS PLAN (2010/11)HR PLAN (2010/11)BUDGET (2010/11)

for the

NATIONAL AGRICULTURAL MARKETING COUNCIL ByN MSIMANG (CHAIRPERSON)TR RAMABULANA (CEO)S MUVHULAWA (CFO)

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It is becoming evident that proper implementation of the Agricultural Sector Plan, AgriBEE Charter and Government Plan of Action will definitely require greater collaboration between the National Department of Agriculture, Forestry & Fisheries, the Provincial Departments of Agriculture, State Owned Entities such as the NAMC, Civil Society Organisations and the Private Sector.

The Marketing of Agricultural Products Act No. 47 of 1996, herein called MAPA, provides a platform where the NAMC and its partners, namely industries collecting levies, trusts, marketing bodies, etc. play a role in assisting the Department in implementing all agricultural programmes, thereby creating Public-Private Partnerships (PPPs) to improve and enhance service delivery to the people

STRATEGIC PLAN | INTRODUCTION

Collaboration

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This presentation will cover :

● The NAMC Strategic Plan & Budget : R32,4 million● Industries collecting statutory measures – R256 million● 13 Agricultural Trusts – R1,4 billion

STRATEGIC PLAN | INTRODUCTION

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To provide a service of excellence to the Minister, Department of Agriculture, Forestry & Fisheries and DAGs, on the strategic positioning of South African

agriculture in dynamic global markets.

The mission of the NAMC is captured by these target items:● Provide accurate and well-informed policy advice to the Minister, Department of

Agriculture, Forestry & Fisheries and DAGs● Focus efforts and initiatives on the strategic positioning of the South African

agricultural sector in dynamic global markets.● Contribute to agricultural sector growth objectives by supplying useful information

and policy positions, using globally tested and proven tools● Leverage centres of excellence and own resources to enhance the equity,

competitiveness, profitability and sustainability of the South African agricultural sector

● Contribute to building a prosperous agricultural sector by supporting emerging farmers by way of market access, knowledge acquisition, training and mentorship.

STRATEGIC PLAN | NAMC BUSINESS ETHICS

3.1 VISION

3.2 MISSION

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Strategic Objective 1: Increasing market access for all market participants

Strategic Objective 2: Promotion of efficiency in the marketing of agricultural products

Strategic Objective 3: Optimisation of export earnings from agricultural products

Strategic Objective 4: Enhancement of the viability of the agricultural sector

STRATEGIC PLAN | NAMC BUSINESS ETHICS

3.4 STRATEGIC OBJECTIVES

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•The NAMC Council is composed of ten members. •The current members were appointed on 1 July 2007. The members are:

Ms Ntombi Msimang (Chairperson)Dr ASM Karaan (Vice-Chairperson) Prof HD van SchalkwykMr AD Young Prof JF Kirsten Ms SE Moolman Ms C MoloMr DB Montshwe Ms M MannyaMs M Gill

STRATEGIC PLAN | THE NAMC COUNCIL

4.1 MEMBERS

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Members: Mr Paul Slack (Chairperson) Ms Mathebe Moja Mr Raymond Matlou Ms Mina Gill Prof Herman van Schalkwyk

This committee’s primary responsibility is to provide the Council with additional assurance regarding the integrity and effectiveness of the NAMC’s risk management framework and related internal controls, reporting and compliance systems applied within the NAMC and the operational implementation of corporate governance.


4.4 AUDIT AND RISK COMMITTEE

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Members:1. Mr AD Young (Chairperson)2. Ms SEM Moolman3. Ms M Mannya4. Mr TR Ramabulana5. Ms V Nkobi

Members:1. Mr TR Ramabulana (Chairperson)2. Mrs S Muvhulawa (CFO)3. Ms V Nkobi (HR Manager)4. Prof A Jooste (Senior Manager : MERC)5. Mr S Burger (Senior Manager : Statutory Measures)6. Mr Happy Mohane (Senior Manager : Agribusiness Development)7. Mr Z Xalisa (Senior Manager : Agricultural Trusts)

4.5 HUMAN RESOURCES/REMUNERATIONS COMMITTEE

4.6 MANAGEMENT COMMITTEE


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Strategic Objectives

Key Performance Indicators

Budget

Increasing market access for all market participants

Implement one (1) development scheme (Vineyard development scheme)Design one (1) development scheme

R926 269,50

Focus:•Facilitate the implementation of the vineyard development schemes in collaboration with the provincial departments of agriculture Northern Cape and Free state and industries that will integrate emerging producers into the commercial mainstream•Design one development scheme with industry bodies on still to be determined commodity. Strategic goal:To increase market access for the emerging producers.

BUSINESS PLAN | DIVISION: AGRIBUSINESS DEVELOPMENTDEVELOPMENT SCHEMES

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EASTERN CAPE RED MEAT PROJECT

OVERVIEW

OBJECTIVE

To increase income earned by communal/emerging farmers from raising cattle, through greater, more beneficial participation in formal red meat markets

ACTIVITIES– building farmers’ understanding of structure, operation, requirements of formal markets – broadening, deepening and reducing distance to markets in emerging/communal farming

areas by (re-)establishing auction pens; ‘custom feeding programmes’/feedlots (farmers pay feed+veterinary costs); pre-slaughter sales agreements between farmers and retailers

– training, practical assistance to align age, health, breeding of animals more closely with market demand

STRATEGIC PLAN | RED MEAT CUSTOM FEEDING SCHEME

EASTERN CAPE RED MEAT SCHEME

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ACHIEVEMENTS

• Gaining trust and respect of livestock farmers in Amathole, Alfred Nzo, O.R. Tambo District Municipalities (since commencement in 2005)

• Active collaborative relationship with E. Cape Dept of Agriculture (Vet. Public Health, Livestock Improvement, Extension divisions) bringing about more effective public service delivery

• Establishing/renovating/bringing back into operation 7 auction pens; initial income from auctions near zero; about R4,5m earned from sale of about 1 500 animals at 50 auctions; rate of increase of selling price exceeded rate of increase of C-grade meat at East London abattoir

• Feedlots: initial income near zero; about 120 animals marketed from 3 feedlots established in past 18 months, most fetching good prices

• Enabling 3 farmers to win awards at recent national carcass competition for communal/emerging cattle-owners

• Winner of the Mail and Guardian/Southern Africa Trust ‘Drivers of Change, 2009’ Award (Business Category)


EASTERN CAPE RED MEAT SCHEME … continue

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GOING FORWARD

• Strategy drafted with partners; joint proposal for funding to be submitted shortly to Economic Cluster Employment Creation Fund

• Key components to build on existing strengths and address current limitations include:

increasing the number of districts, provinces served, renaming programme to reflect national ambit (tentative name: National Red Meat Development Programme)

adopting rolling five-year time horizon forming partnerships with national/regional organizations involved in livestock

improvement/marketing; integrating activities of programme progressively into business plans and budgets of partners to ensure sustainability on termination of programme

expanding field and administrative staff working with feedlot and other experts to improve strategy, organization, management making farmer training central component of all activities; assisting farmers’ associations to

strengthen structures, procedures, membership


EASTERN CAPE RED MEAT SCHEME … continue

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BUSINESS PLAN | DIVISION: AGRICULTURAL TRUSTSLUCERNE DEVELOPMENT SCHEME

The establishment of the Lucerne Development Scheme is as a results of the unstable and non sustainable financial position of the National Lucerne Trust

The aim of the scheme is to recapitalize the trust, thereby will focus on the inclusion of the emerging farmers into the Board of trustees as to speed up the transformation process in the Lucerne industry

Government is convinced that the growth of the Lucerne Industry will contribute significantly in broadening participation of black farmers and entrepreneurs in this industry [Transformation]

Transformation, strategic and business plans have been developed to guide the scheme

The scheme requires the total amount of R5,9 MILLION over 5 year period

Year 1 - R2,500 000,00 Year 2 - R1,700 000,00 Year 3 - R1000 000,00 Year 4 - R500 000,00 Year 5 - R200 000,00

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• NAMC and role players within the wine industry are currently establishing a vineyard

development scheme• The specific objectives of the Vineyard Development Scheme are the following:

– To increase emerging agribusinesses’ access to grapes for distilling wine and juice market– To increase the quantity of grapes suited for distilling wine and grape juice production by

the emerging agribusinesses– To help the new entrants to grow their operations to commercial levels through training

and better planning.• Beneficiary of this scheme – emerging producers along the orange river in

– Northern Cape and– Free State provinces

• Emerging producers can produce grapes that are suited – grape juice concentration and– distilling wine

• Wine cellars around the area have additional processing capacity for 27 3000 tons of grapes have agreed to buy this quantity from the emerging producers

• At full potential the scheme is expected to create 200 fulltime and 800 part time jobs

BUSINESS PLAN | DIVISION: AGRIBUSINESS DEVELOPMENTVINEYARD DEVELOPMENT SCHEME

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• The NAMC and the role players within the grain sub sector have designed a development scheme within the grain sub sector

• The specific objectives of the Grain Crops Development Scheme are the following:– To increase black farmer’s access to maize and oilseeds market by providing cost reduction

incentives to co-operatives financing black farmers and buying grain from black farmers – Help existing black emerging maize and oilseeds farmers through training and better

planning to grow their operations to commercial levels • The industry role players have established the Grain Farmer Development Association (GFADA). • The GFADA was formed to act as a vehicle to support the emerging producers in the Grain

industry to be integrated into the commercial mainstream and to achieve the objectives of the scheme.

• The private sector institutions in various provinces are implementing the scheme were emerging farmers are being supported to grow grain crops.

BUSINESS PLAN | DIVISION: AGRIBUSINESS DEVELOPMENTGRAIN CROPS DEVELOPMENT SCHEME

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Budget


100 Emerging agribusinesses to attend training courses

R1 111 523,40

Focus:•Facilitation of an Agribiz Training Course for Women Entrepreneurs on marketing and a financial managerial issue•Facilitation of an Export oriented course for agribusiness that are already exporting their products through marketing agents.•Marketing matters training – a five day business development course for agribusinesses from various African countries•All the courses will be offered in partnership with Stellenbosch University & Cornell University Strategic goal:To capacitate black agribusiness through marketing and management training.

BUSINESS PLAN | DIVISION: AGRIBUSINESS DEVELOPMENTTRAINING

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Budget


Establishment of 2 commodity clusters25 emerging farmers accredited and issued with food safety standards certifications.

R1 667 285,10

Focus:•Facilitate the formation of clusters of a particular commodity to allow the emerging producers to export. •Assist the emerging producers to comply with the importing countries’ procurement requirements, mainly through accreditation with regard to different food safety standards and regulations. Strategic goal:To identify export-ready agribusinesses and support them with exporting their produce.

BUSINESS PLAN | DIVISION: AGRIBUSINESS DEVELOPMENTEXPORT PROMOTIONS

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Strategic goals

Indicator at NAMC Level

Budget2010/11


Linking farmers to markets

3 Reports on issues pertaining to market access to emerging farmers

R1 006 009

Focus:•To produce research that focuses on cases where emerging farmers have been successfully integrated into the mainstream economy and to draw from such studies lessons that can be practically implemented elsewhere.

•To assist with the facilitation and coordination of public–private sector initiatives. Strategic goal:•To produce research on best practices on linking emerging farmers to markets and to facilitate the integration of black producers into the mainstream of commercial agriculture.

BUSINESS PLAN | DIVISION: MARKETS AND ECONOMIC RESEARCH CENTRE

LINKING FARMERS TO MARKETS & MARKET DEVELOPMENT

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Key Performance Indicator:

Budget2010/11


To undertake 30 statutory measures investigations and submissions to Minister for approval;To have 20 statutory measures gazetted; We plan to raise R256m

R1 448 946

Focus:- The primary objective of the Statutory Measures Division is to handle all issues relating to statutory measures. -The Marketing of Agricultural Products Act, 1996, (MAP Act) makes provision for five statutory measures, namely statutory levies, records and returns, registration, control of exports of agricultural products and conducting of pools.

Strategic goal:•To provide the Minister with well analyzed recommendations regarding the approval or disapproval of a statutory measure. •To promulgate statutory measures in the Government Gazette after the Minister approved it•To ensure that the statutory measures promote the objectives of the MAP Act.•To ensure that statutory measures comply with MAP Act requirements and NAMC policies and guidelines. •To monitor the administration and utilization of statutory levies.

BUSINESS PLAN | DIVISION: STATUTORY MEASURESSTATUTORY MEASURE INVESTIGATIONS

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Approximately R256 million on industry functions,

• 32 % is spent on research,

• 23 % on transformation projects,

• 17 % on information and

• 12 % on export promotion

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Research

• Approximately 32 % (R70,7 million) of total levy expenditure was spent on research projects in the eleven industries that collected levies

• A breakdown of the funding of the ARC’s services is given below

RandCotton 165 000 Deciduous fruit 4 724 303Dried fruit 971 780Potatoes 1 579 903Red meat 307 156Sorghum 376 340Wine 5 217 220Winter cereal 13 164 510 Total 26 506 212

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Information

• Approximately 17 % (R36,9 million) of total levy expenditure was allocated to the information function. The biggest transfers of statutory levy funds to organisations performing the information functions are the following:

RandCotton SA – cotton industry 2 662 330DFPT – deciduous fruit industry 2 319 097Potato SA – potato industry 5 825 150SAMIC – red meat industry 8 101 182SAWIS – wine industry 9 894 063SAGIS – Wheat and sorghum contribution 1 283 680Milk SA – dairy 1 045 695

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PROMOTION FUNCTIONS

Export promotion

A total amount of approximately R25.8 million was spent on export promotion.

Wines of South Africa (WOSA) is promoting South African wine on the overseas markets. WOSA has offices in Canada, Germany, Denmark, Sweden, The Netherlands, the United States (US) and the United Kingdom (UK), and participated in international wine shows. Other industries, such as citrus, deciduous fruit and the potato industries are also promoting their commodities in the overseas market.

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Local promotion

• The dairy and the red meat industries spent 45 % and 5 % respectively

of total expenditure on promotion in the local market. On 16 August 2005

the NAMC held a workshop with levy administrators to discuss the

desirability of generic promotions. The outcome was a decision that

generic promotions should continue provided there was sufficient support

within a specific industry. It was also agreed that these promotions

should, in future, be referred to as the promotion of “consumer

awareness”.

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Export promotions Rand % of expenditure

Citrus 2 186 036 9

Pome fruit 1 861 406 9

Stone fruit 518 443 7

Table grapes 1 235 872 12

Potato 6 619 387 27

WOSA 13 356 848 69

Total 25 777 992

Local promotions

Cotton 405 791 8

Dairy 10 315 840 45

Red meat 1 287 088 5

Total 12 008 719

Mainly horticultural commodity organisations did export promotion and it was mainly livestock commodity organisations that did local promotions:

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Budget2010/11

Promotion of efficiency in the marketing of agricultural products

Hold two CELC meetings per annum, in May and November to ensure that a independent and objective Crop Estimates Committee exists, free of commercial bias and that the percentage deviation between crop estimates and final calculated crop figures are within predetermined parameters.

R40 000

Focus:The NAMC was mandated to establish a Crop Estimates Liaison Committee (CELC). The CELC is responsible for the formal monitoring of the crop estimating process in South Africa. The CELC has four main focus areas which are: •Establishment of a completely independent and objective Crop Estimates Committee (CEC), free of commercial bias; •Understanding and acceptance of the requirements of the CEC; •Delivering an accurate, timely and credible crop estimate.•Monitoring the performance of the CEC. Strategic goal:Provide leadership required to improve the acceptance of crop estimates within industry in general.

BUSINESS PLAN | DIVISION: STATUTORY MEASURESCROP ESTIMATES LIASON COMMITTEE

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Budget2010/11

Promotion of efficiency in the marketing of agricultural products

Publish a notice in the Government Gazette and other media once a year to invite Directly Affected groups to register with the NAMC once a year.

R60 000

Focus:In terms of section 20 of the MAP Act, the NAMC is required to maintain and annually update a register of groups, which are directly or potentially directly affected by the Act. These can be groups of producers, processors, labor, marketers and consumers of a particular product. The registration is necessary for the following reasons:• The registered groups are contacted for inputs when government intervention in the market is considered; and•Effective communication between the NAMC and the directly affected groups if and when necessary. Strategic goal:To develop and maintain a Register of DAG’s

REGISTER WITH NAMC AS DIRECTLY AFFECTED GROUPS

BUSINESS PLAN | DIVISION: STATUTORY MEASURES

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Focus area Indicator Budget

2010/2011Coordinate the communication process between the Minister and Ministerial Trustees.

Reports to the Minister on the functioning of trusts - 1 every six months R564 000

Support the Ministerial trustees serving in trusts

Ministerial trustees provided with technical capacity to prepare for their trust meetings R282 000

For the NAMC to arrange on an annual basis a meeting between the Minister and ministerial trustees

R120 000

Solicit funding for AMS Trust to support emerging farmers

Develop a business case and approach at least two organisations for funding.

R100 000

Coordinate the Trusts Chairpersons forum meetings to discuss the common challenges amongst the trusts.

The forum to convene at least twice a year. R80 000

BUSINESS PLAN | DIVISION: STATUTORY MEASURESAGRICULTURAL TRUSTS

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Strategic goals


Budget 2010/11

Enhancement of the viability of the agricultural sector

Food price monitoring

4 Quarterly food price trends released - May, August, December and February

R4 870 060

Food price monitoring

1 Food cost review released

Input cost monitoring

4 Input cost monitoring reports

Focus:•To produce reports that cover trends and other developments regarding food prices, input costs and other variables across sub-sectors and along the agricultural agro-food chains and, among other things, provide policy input.• To provide public access to agricultural marketing information for DAGs and government that is relevant and timely.•To liaise with relevant stakeholders that is involved in agricultural data gathering, interpretation and dissemination to avoid duplication of actions. Strategic goal: •To produce a series of reports containing marketing data and information for all stakeholders in the agricultural sector and to develop and/or maintain sufficient database capacity to provide easy access to relevant marketing information.


INFORMATION MANAGEMENT

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Focus:To map, describe and quantify the agro-food chain for each sub-sector in terms of, among others, the following factors:–structure–conduct (behaviour)–performance–export orientation–market situation–macro-economic issues–SWOT analysis

Strategic goal: To produce a series of agro-food chain reports and in addition, when required, to produce Section 7 investigation reports.


Strategic Goal Indicator at NAMC level

Budget 2010/11


Mapping, understanding and quantifying agro-food chains (including section 7 reports)

2 Agri-benchmark reports released annually

R2 168 537

2 Section 7 committee reports released

1 Agro-food chain reports


MAPPING, UNDERSTANDING AND QUANTIFYING AGRO-FOOD CHAINS (INCLUDING SECTION 7 REPORTS

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Budget 2010/11


1 Report on risk management

R506 847

Focus:•To produce research that applies tools for risk management in agro-food chains.•To produce research that quantifies agricultural risk and provides guidance on disaster management.•Improved decision-making by DAGs and government.

Strategic goal: •To produce a series of research reports on agricultural risk management.


RISK MANAGEMENT

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Strategic goals


Budget2010/11

Optimisation of export earnings from agricultural products

Trade analysis

6 Trade Probe publications released

R1 782 042

6 Trade profiles that are commodity and product specific

Focus:To produce research dealing with thefollowing broad trade areas:–agricultural tariffs–tariff rate quotas–non-tariff measures–trade agreements–inter and intra-trade flows Strategic goal: To produce a series of research reports relevant to trade policy on current trade issues and challenges.


TRADE ANALYSIS

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HUMAN RESOURCES PLAN

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A comprehensive Human Resource plan plays a vital role in the achievement of an organization’s overall strategic objectives and visibly illustrates that the human resources function fully understands and supports the direction in which the organization is moving.

In essence, an HR plan should aim to capture "the people element" of what an organization is hoping to achieve in that:-

● it has the right people in place ● it has the right mix of skills ● employees display the right attitudes and behaviours; and ● employees are developed accordingly

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To give effect to its mission, HR endeavour to:

Continuously align the HR Strategy with the Organizational Strategy

Empower employees towards maximizing their personal potential

Commit to professional conduct, promote professional HR management practices

Develop and adopt appropriate systems and procedures to ensure fair, efficient, effective and transparent personnel administration.

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● Talent Acquisition● Learning & Development● Performance Management● Invest in Human Capital to improve effectiveness of the work force● HR Administration● Exit Interviews

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INCOME 2009/10 2010/11 2011/12 2012/13 R’000 R’000 R’000 R’000Grant & transfers (MTEF) 25 972 31 194 36 261 38 508Interest Earned 1 100 1 300 1 350 1 400Sponsorships 777TOTAL INCOME

27 849 32 494 37 611 39 908

MTEF BUDGET FOR THE PERIOD 2010/11 – 2012/13 PER PROGRAMMES

Name of programme 2009/10 2010/11 2011/12 2012/13R’000 R’000 R’000 R’000

Finance & Administration 8 193 7 561 9 952 10 230Human Resources 2 659 3 164 3 297 3 731Agribusiness Development 2 875 3 635 3 755 3,871Agricultural Trusts 1 259 1 321 1 421 1 515Statutory Measures 1 232 1 884 2 036 2 172MERC 6 765 10 865 12 643 13 579Audit 134 150 175 185Council 1 182 1 098 1 291 1 359CEO 3 573 2 816 3 041 3 266TOTAL 27 849 32 494 37 611 39 908

STRATEGIC PLAN | SUMMARY OF NAMC PROGRAMMES

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PROJECTIONS PER STANDARD ITEMS

Standard 2009/10 2010/11 2011/12 2012/13

items R’000 R’000 R’000 R’000Personnel 14 174 18 830 20 822 21 701Administrative 6 756 6 930 9 032 9 974Capital expenditure 326 285 308 339Professional services 6 593 6 449 7 449 7 894Total baseline allocation 27 849 32 494 37 611 39 908

The total budget for the NAMC starts at R 32 494 in the 2010/11 financial year and accumulates to R R39 908 million in the 2012/13 financial year including interests.

STRATEGIC PLAN | KEY PERFORMANCE INDICATORS

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Documents

THREE-YEAR STRATEGIC PLAN (2010-2013) BUSINESS PLAN (2010/11) HR PLAN (2010/11) BUDGET (2010/11) for the NATIONAL AGRICULTURAL MARKETING COUNCIL By N MSIMANG