Furthermore approximately 70 % of South Africa’s total areas of 1.2 million square kilometers is only suitable for livestock / game production.

Hence, the livestock industry in South Africa is crucial for creating livelihood and increased levels of welfare for the total population.

This sector could play a vital important role in alleviating poverty in South Africa by means of income creation and a source of protein and fibre.

In addition this sector could greatly contribute towards job creation, directly and indirectly on primary and secondary levels through its backward and forward linkages in the economy.

This sector also stands to gain from the globalised environment by means of export opportunities.

It is a fact that more than 40 % of all livestock belongs to emergent producers. The RPO realised this and was instrumental in the establishment of the National Emergent Red Meat Producers’ Organisation.

The emergent producers on a democratic basis decided to at this stage establish NERPO as an autonomous organisation. I personally am of the opinion that the time is now ripe for the two organizations to merge in order for all primary producers to speak from one mouth.

The red meat industry can therefore play a major role in ensuring food security to the chronic poor.

If you allow me I would like to on behalf of the RPO make a few comments and recommendations on factors that could play a role in ensuring that the red meat industry fulfills its potential in order to ensure that its contribution towards food security is optimized:

Traditionally the emerging sector only keeps cattle as a so-called "bank" and did not use it for income generation purposes. The average annual off-take rate of the commercial sector in South Africa is approximately

25 – 30 % while it is only approximately 2 – 5 % in the communal sector.

The emergent sector therefore has huge potential. It was calculated that a fully commercialized off-take would yield in excess of R2 Billion to the emerging producers in South Africa.

A survey done on emergent red meat producers indicated that 40 % of respondents did not have access to technical services, while 78 % never used credit facilities. Only 50 % of respondents studied to primary level.

• A strategy should be implemented to commercialise the emerging sector by increasing the off-take rate and cattle calving percentage.
• A strategy should be implemented to provide technical services and credit services to emergent red meat producers.

The RPO would like to thank the Standing Committee for their inputs in changing to import levy red meat to a combination of ad valorum and minimum tariff.

Red meat producers, especially the emergent red meat producers need to be protected against subsidized import because it is a fact that imports have a direct negative influence on producer prices.

Irregularities in terms of paying the correct import levy is still carrying on and it is a fact that the cheap imports are not given through to consumers.

• Protects local producers from unscrupulous importers.
• Moral support towards Agri-Inspec.

Over the last three months producers experienced a drastic reduction in producers prices. The same cannot be said about consumer prices.

The RPO would like to congratulate the standing committee on the implementation of this committee. It will play a major role to sensitize consumers on producer price reductions. It could also play a role to ensure that the benefit of cheap imports could be given through to consumers.

The RPO regards VAT on red meat as unfair because gross tax evasions in the informal sector undermine the ability of the formal structures in the red meat industry.

If red meat was zero-rated; the cost of red meat to consumers could be

14 % cheaper.

• Zero rate VAT on red meat

The red meat industry stands to gain from the globalised environment by means of export opportunities. The RPO has a perception that in South Africa there is an over production of high quality red meat that can be exported at a premium.

The RPO would like to thank Government and specifically the Department of Trade and Industry for its assistance to promote export programmes.

• Ensuring that export protocols are negotiated.
• Ensure that the Department of Agriculture has the capacity to certify red meat destined for exports.

The RPO is of the opinion that the South African classification system is out of line when it comes to international standards. Beef carcasses can only be classified in the A class if it has no permanent teeth.

This system is out of line with international standards where carcasses having up to four permanent teeth qualify for the best classification class.

The current systems only benefit the feedlot industry and prevent especially emergent producers to produce beef of the highest class. A change in the classification system could benefit extensive producers with an immediate affect without costing Government anything.

• Change the South African classification system in order to allow cattle with one and two permanent teeth to qualify for the A-grade.

Stock theft is currently the single biggest problem of livestock producers in South Africa. This makes the South African producers uncompetitive.

A recent survey in the Eastern Cape estimates that the losses due to stock theft amounts to nearly twenty times the amount calculated from cases reported by the SAPS. The annual loss due to stock theft as calculated from cases reported by SAPS amounts to R300 Million.

The survey done in the Eastern Cape showed that 90 % of the burden was born by stockowners in the traditional communal farming areas.

• Finalise regulations of the Animal Identification Act as soon as possible.
• Finalise the Pounds Act as soon as possible.

The RPO would like to congratulate the Department of Agriculture on the excellent way in which the Foot and Mouth Disease problem in our neighbouring states are being handled. The inputs with regard to upgrading veterinary fences are greatly appreciated.

The potential impact of Malignant Catarrhal Fever in the beef industry could be devastating. It is a fact that in Tanzania the annual loss to the cattle population is, in certain years as high as 10 %. There are no vaccine for this disease and the relocation of wildebeest is still continuing in areas where there were previously no wildebeest.

• Malignant Catarrhal Fever should be declared as a controlled disease and the relocation of wildebeest should be regulated.
• Every effort should be made to develop a vaccine.

A free trade agreement with MERCOSUR will have a devastating effect on the red meat industry due to the MERCOSUR countries input costs that are much lower than in South Africa.

The following table gives an indication of the current price differentials:

• Implement a special protocol for beef under the MERCOSUR agreement in order to apply the normal import tariffs.

The RPO would like to congratulate and thank this committee and other role-players for this initiative.

• The RPO would like to request that a livestock factor, which is currently absent in the Draft Bill, be built in from the start.

It is vitally important that meat quality and standards are guaranteed to the consumer.

• A single assignee be appointed to deliver an independent meat inspection service in the red meat industry.

The red meat as the single largest agri industry will continue playing a major role in the economy and food security in South Africa as well as in the SADC region.

Thank you for giving the Red Meat Producers Organisation the opportunity to give inputs at this special occasion !!