Presentation to Portfolio Committee on Agriculture and Land Affairs
Monday 9^th January 2003
Public hearing on the role of Private Sector in Agricultural Development

S.A. Protea Producers and Exporters Association (SAPPEX)

What qualifies me to speak on behalf of 25,000 people dependants in the Fynbos Industry consisting of growers, exporters and workers in the Fynbos Industry? Since 1981, I have been actively involved in the Association and for the last 12 years as Chairman.
In that time I have seen the industry grow from 75 members and exports of 1700 tons of fresh produce to 300 members and export of 4700 tons of fresh products from the Fynbos.

SAPPEX
Non-profit organisation representing producers and exporters of Fynbos products.
Started as harvesting from the natural resource. Recognised by NDA to have development potential – government sponsored research commenced early 1960’s
Originally Western Cape based, but expansion now taking place in summer rainfall areas up north.
W.Cape still responsible for more than 80% of production.
28 fresh flower exporters, 5 dried flower exporters and work opportunities for many in the rural areas.
Some big operators with the latest technology dedicated to protea cultivations, some large operations do proteas as alternative income, right down to the lowest level of harvesting from the veld for fresh or dried.

Levy:
Instituted as voluntary levy in 1992 to support research when the NDA devolved research to ARC and financial input was required by industry.
Originally 10c/kg. Due to embarking , on a comprehensive promotion campaign to popularise proteas – get away from autumn, winter flower and to mix with other flowers. Cost effective compared to advertising – used up our reserves. Lkevy was therefore increased in 2002 to 16c/kg on exports.
Reason for promotion : Fynbos industry was seen as a growth industry, leading to increased production.
For fresh flower production, cultivation is now preferred and practised, with cultivar material.
Industry not in favour of a statutory levy for research – the Industry is well organised and needs to retain control over its funding to find the best position for its members.

ARC problem:
Small industry unable to fully support research to the level demanded by ARC.
Created tension between ARC and Industry. Since it is making financial input, Industry needs to be heard and listened to. Research is there to support the industry, not to support ARC structure.
Current ARC structure is inefficient, top heavy and unaffordable to Industry and has led to dissatisfaction and resignation from researchers. Many ARC staff have not seen a salary increase for 3 years, while expensive new posts were created at management level.
We are losing research capacity - this is unacceptable.

Economic Empowerment:
The Fynbos Industry started at the turn of the last century by hawkers and harvesters , mainly coloured people in Peninsula and on mission stations over the Western Cape
- Flowers for sale on the parade, and next to CT post office.
- Everlastings to Germany from mission stations.
There are currently numerous independent traditional people active in the industry in their own right, some with own ground, some on hired ground from private landowners. They have formed harvesting teams and supply for their own account
Some projects were initiated, but due to lack of interest from the beneficiaries, and in-fighting, have not been successful.
Mentorships from Industry members – difficult. Even at reduced membership rates, most do not join their Industry body and therefore have no access to knowledge.
Apart for annual ARC-Fynbos course, farmers have difficult access to proper training courses for skills development – most skills development is done on farm – increasing costs.

Government legislation:
ESTA has lead to dissatisfaction. Challenges ownership. Housing built at own cost. Farmers have opted not to house workers on the farm due to the difficulties created by ESTA.
Public transport in the rural areas is dismal. The actual cost of labour is 1/3 more than the cash wage.
Minimum wage is creating difficulties. Differential minimum wage problem – lots of letters to this effect have been aired in Agricultural publications.
In many instances fynbos farming and harvesting is a secondary enterprise. Legislation forces farmers who harvest fynbos part-time to rather cease operations and concentrate on their other core operations. This leads to loss of income for worker families, particularly in marginal farming areas and particularly for that sector of the Fynbos industry who rely on harvesting from natural resource. Most of Fynbos harvesting has traditionally been done on a piecework to improve productivity. Although piecework prices depend on season, weather and product, taken over the period of a year, this can translate to more than the daily minimum wage. International demand fluctuates, with the result that it is difficult to employ people on a permanent basis.
Result: shortage of product at harvesting level, which will have a snowball effect to the rest of the Industry.
It is not that Fynbos Farmers are unwilling. They have full appreciation for the contributions their workers make to their enterprise. But some of these farms are marginal and it is not profit but love of the land that keeps them there.

Conclusion
The Industry is operating in a global competitive market. The cost of airfreight is a major negative factor influencing the fresh cut flower industry. The global financial climate (increasing costs locally and a stagnant market with downward pressure on prices) is currently not conducive to export. Export earnings have shrunk drastically but we remain optimistic that the exchange rate will become more favourable.

We are up against giants in flower products like roses, chrysanthemums, tulips etc. Customers want continual new products and better quality standards.

To improve our position, and to develop new products from the Fynbos we need adequate research and support for the Industry to reach its full potential. The Floriculture Cluster Study commission by the DTI states that we can increase our exports 10-fold over the next 10 years, provided we are given the necessary government support in terms of research and promotion. With the necessary developmental funds, we will be able to expand and then we can, in good faith, embark on empowerment projects.

BEE in the Fynbos Industry
Cut flower production is an exact science, with little or no margin for error. For growers to benefit by producing for the most lucrative markets domestically and globally, a fine balance between business acumen, marketing experience, optimal production techniques and much determination is required. Even the above requirements do not protect the grower from the unexpected, e.g. storm or unexpected "off-load" of product at the airport.

Independent pickers/harvesters (do not own ground and are not members of the Association, but work for their own account and supply produce to packhouses and exporters.

Caledon/Stanford/Gansbaai/Ceres - 2 groups each comprising app. 15 persons

Genadendal/Grayton - 4 groups each comprising app. 5 persons

Grabouw/Botrivier - 5 people with some helpers each

Ceres - (own and hired ground) – 3 groups of about 4 each

HERBERTSDALE FYNBOS TRUST
A flower facility has been built with government assistance as a black empowerment project. They wanted to take up membership and would invite SAPPEX to a Trustees meeting. In spite of follow up this has not happened.
The Trust would coordinates harvesting of product (buy from local people) which will be delivered to the facility where it will be dried and packed.
The place is at a standstill. Farmers will not grant farm access to the Herbertsdale workers as they already harvest for their own account. None of the Herbertsdale people have the necessary permits from CNCB.

In 2000 SAPPEX sponsored upcoming farmers from Karweiderskraal and Sandvlei communities to do the Fynbos course at ARC-Fynbos, Elsenburg.

ARC-Fynbos has provided plant material to Genadendal, Sandvlei and others from USAid Funds. SAPPEX suggested to ARC Fynbos that they assist Elim to develop a nursery Individual members of our Association also liaised, lectured and talked to groups:

Submitted by Maryke Middelmann
SAPPEX
Private Bag X12
Botrivier 7185