30 September 2016
Policy and legislation
Increased risk for agro-food system

The developments in the political economy of South Africa that are yet again taking the country to the brink of the abyss. Despite efforts from the business sector, through the so-called CEO Initiative and others, to stimulate economic growth and stave off down-grades by the rating agencies, political infighting in government threatens the integrity of our economy and, above all, our constitutional democracy. The scourges of corruption, patronage and poor/non-service delivery threaten to derail the progress that South Africans have made towards establishing a far more inclusive and equitable society. Please click on increased risk to read full article by  Agbiz CEO, Dr John Purchase.
Study reveals that Agbiz is the oldest and the largest agribusiness chamber in Africa

In a study done by the Africa Business Group (ABG), it was revealed that Agbiz - in its 70th anniversary this year -  is the largest and oldest apex body representing agribusiness. The study, which surveyed all African countries to identify associations representing agribusinesses, showed that agribusiness apex bodies across Africa are a relatively recent phenomenon, with most being formed between 2001 and 2014. 

The study by ABG leveraged on work undertaken in 2014 by the African Union's (AU) New Partnership for Africa's Development (NEPAD) in a study entitled "Taking Stock of Agribusiness Chambers in Africa: Lessons Learned, Success Factors, Good Practices". The work by ABG and AU-NEPAD is part of a broader initiative to form a Continental Agribusiness Chamber that will represent private sector stakeholders across the continent. 

Tinashe Kapuya, Head International Trade and Investment at Agbiz, this week attended a meeting with stakeholders from across Africa in an effort to draw up a framework that can be used to establish national chambers, that will form part of structured regional chambers, which in turn will constitute the continental apex body.  What is evident is that the continent will be looking to Agbiz for leadership to craft this framework, and provide mentorship for the new and emerging chambers across the continent, in promoting organised agriculture and strengthening agribusiness lobbying in Africa. This will be helpful in also improving policy conditions across the continent, in the long run.    The linked presentation outlines the discussion»
WEF releases 2016-2017 Global Competitiveness Report

The World Economic Forum released its Global Competitiveness Report for 2016-2017 this past week. South Africa has improved its relative position from 49th to 47th out of 138 countries evaluated. This is encouraging, but may also reflect some regression from other countries in the same competitiveness bracket as South Africa, for example Bahrain and Latvia. Of major concern remains that South Africa lies 123rd out of 138 countries in the Health and Primary Education Pillar, while 97th in the Labour Market Efficiency Pillar. Positives are that South Africa lies 11th out of 138 in the Financial Market Development, and that its Business Sophistication and Goods Market Efficiency Pillars are relatively well above average. Please click on Global Competitiveness Report to peruse this interesting report.
Economic and agribusiness intelligence
South Africa's food producer price inflation rises again

Recent producer price index data indicates that in August 2016, producer inflation for final manufactured goods decelerated to 7.2% from 7.4% year-on-year (y/y) in the previous month. However, food products (producer) inflation edged up to 13.4% y/y from 12.6% y/y in July 2016. This suggests that consumer inflation (food) is likely to increase further over the coming months. Wandile Sihlobo, Agbiz Head Economic and Agribusiness Intelligence, provides more information in the linked update»
South Africa's 2016 final summer crop production estimates paint a mixed picture

Summer crops South Africa's 2015/16 final summer crop production estimates data showed an upward revision in maize and sunflower seed estimates from the previous ones. More specifically, yellow and white maize production estimates were revised up by 5% and 2% from the previous estimates to 4.28 million tons and 3.25 million tons, respectively. At the same time, sunflower seed production estimate was revised up by 2% to 755 000 tons. Meanwhile, other crop estimates saw downward revisions, with the exception of dry-beans which remained unchanged from the previous estimate, at 35 445 tons.  Wandile Sihlobo provides more insight in the  linked document»
South Africa's bread and maize meal production 

Recent data from South African Grain and Information Services (SAGIS) indicates that over the past 12 months (August 2015 - July 2016), South Africa produced, on average, 171 million units (loaves) of bread per month. Of this total, 50% was white bread, 49% brown bread and the balance was whole wheat bread. Over the observed period, brown bread production increased by 5%, from 87 million loaves in August 2015 to 91 million loaves in July 2016. At the same time, white bread production increased by 3%, from 85 million loaves to 93 million loaves. Total bread production increased by 4%, from 180 million loaves in August 2015 to 187 million loaves in July 2016.  Wandile Sihlobo provides more information in the  linked update»
Daily insight into agri-commodities 

Daily commentaries on agricultural commodity markets and macro-economic trends are available on the Agbiz website  www.agbiz.co.za
International trade intelligence
Agbiz participates in seminar on future of Polish meat industry

Tinashe Kapuya, Agbiz Head International Trade and Intelligence, attended a seminar in Warsaw themed "The taste of quality and tradition directly from Europe" campaign that explored areas of cooperation between Polish and South African agribusiness companies.  Kapuya says: "Currently, South Africa does not have a Health protocol with Poland for beef and pork, and therefore bilateral trade for the two meats is virtually non-existent. However, the key focus for Agbiz was to identify scope for partnerships and collaborative networks that could be exploited to capitalise on opportunities in third country markets. Poland has been aggressively pursuing market access in South Africa, having identified the continent's largest economy as one of its priority markets. In June this year, South Africa and Poland signed a Health Protocol for poultry which paved way for Polish poultry market access into the South Africa - much to the concern of the domestic industry players. Agbiz shares the concerns of the wider industry, and participation in the meat campaign was a way of ensuring that Polish efforts to build a trade relationship with South Africa complements, rather than threaten the domestic industry." Find more information  linked»
Agbiz Grain
Approval of wheat levies

The Minister of Agriculture, Forestry  and Fisheries (DAFF) this week approved the industry levy of R10 per ton on local and imported wheat.    He also approved the introduction and promulgation of a new statutory levy for breeding and technology (VAT excluded). 

The levy for breeding and technology will be on locally produced winter cereals only, to be collected and administered by the South African Cultivar and Technology Agency (SACTA), for a period of two years, starting 1 October 2016: Wheat and barley: R25 per metric ton (Excluding VAT).

These levies will, as in the past, be payable on all winter cereal sold, processed or converted, exported, and in respect of which a SAFEX silo receipt has been issued if the levy in respect of such a winter cereal has not been paid before.  

The approval will be subject to the following conditions:
  • That 70% of levy income be spent on breeding and technology, at least 20% on transformation, in line with the NAMC's new guidelines, and less than 10% on administration;
  • That levies be accounted for, in a manner and to the extent acceptable to the Auditor General, separately from any other funds or assets under the control of SACTA, and be audited by the Auditor General;
  • That after the lapsing of the levy, any surplus funds only be utilised after the approval of the Minister was obtained;
  • That in future, at least 40% of SACTA's senior management will be BBEEE appointments; and
  • That the NAMC has observer status on the meetings of SACTA to ensure compliance with the original intent of the application.
Mariana Purnell, General Manager at Agbiz Grain, provides more information in the linked article»
Skills development in agribusiness
Technological innovations for the water sector

The National Science and Technology Forum (NSTF) facilitated exchanges and solution driven deliberations around the issue of the critical skills shortage in the water sector.  While some speakers mapped the landscape, others described the kinds of skills that will be required in future.
Mariana Purnell of Agbiz Grain attended the Forum and found three exceptional presentations that highlighted some of the latest research and development for the water sector. Read more»
Water sector skills and gap analysis

The National Science and Technology Forum (NSTF) facilitated solution driven deliberations around the water crisis in South Africa.  The focus of the Discussion Forum was the shortage of critical skills in the water sector.  The Forum was attended by Mariana Purnell of Agbiz Grain as well as stakeholders across the public and private sectors and those in sectors that are major water users.  The aim is to influence policy-makers in Government regarding water management and the necessary skills required.
The Department of Water and Sanitation (DWS) recently conducted surveys on skills requirements and gaps in the sector.  An integrated water sector skills intervention map was drawn up based on the skills gap analysis. Catchment management level and Water Boards were also scrutinised. DWS Staff compliment at a national is a total of 3 976 employees. However, there are only 277 Scientist and 218 Engineers, while the other 3 481 employees fulfil other tasks in the department. Local Government also underwent a Skills Audit and provided some interesting information on available skills as well as vacancies in crucial occupations. The audit led DWS to make a list of Priority Occupations for water infrastructure.  Read more about the current situation regarding water sector skills and the gap analysis at   http://www.nstf.org.za/wp-content/uploads/2016/09/State-of-Water-and-Skills-DWS-Lesego-Lekubu.pdf  
Agribusiness Centenary Bursary - Apply now

Agbiz is making available an annual bursary to a South African student registered for a Masters or PhD degree in either agricultural economics or agribusiness management related fields. The application deadline is 9 December 2016.  More information»
Members' news
Futuregrowth expresses confidence and confirms its continued funding of Land Bank

This week the Land Bank announced Futuregrowth has lifted the suspension of lending activities to the Bank with immediate effect.  Land Bank says in the linked media statement that Futuregrowth is a key development partner of the Bank and their support remains critical to achieving the Bank's mandate and objective of supporting the growth of both the agricultural sector and the South African economy. 

Futuregrowth says in their media statement that the decision comes after the recent announcement that Futuregrowth had suspended lending to certain State-Owned Enterprises (SOEs) pending a review of their governance structures and independence. The extensive review included interaction with Land Bank's executive management team and its Board, as well as an assessment of Land Bank's policies, and practical evidence of the appropriate application of these policies.
BEE Commissioner acts against practitioner

The recent media release by the BEE Commissioner  criticising practitioners that promote fronting practices has brought ownership schemes under scrutiny. Read more in the Signa Newsletter.
Industry news
Tutwa Consulting Group Newsletter
Digital trade: changing the landscape in the information age
BRICS countries are finally going steady
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