The NAMC undertook a restructuring exercise in November 2005 and refocused its activities to better serve this ever changing agricultural sector. One of the major shifts brought about by the restructuring process is the move away from a commodity based organizational structure to a competency based structure. This shift has happened on the administrative level and not at the Council level.

We believe that this strategic planning and the realignment process that the NAMC has undergone has been rigorous and rewarding for the Council and Senior Management and now needs to permeate down to the lowest level of our staff and units. The new competency areas that define the new NAMC are Marketing/Trade Policy, Research, Statutory Measures and Enterprise Development. We have given a detailed description of each of the competency areas in Part five of this strategic plan. We have attached the new organizational chart as Annexure A.

The document is structured in seven parts. Part one serves as an introduction and provides an overview of the organizations achievements in the previous year. Part two provides an overview of the political and sectoral policies that guide the NAMC. Part three is about the NAMC itself and provides insight into the organizational structure, its legislative mandate, vision and mission. Part four is a brief summary of the NAMC programmes and budget. The NAMC programmes based on new key results areas agreed upon during the restructuring process are reflected in Part Five. Part six contains a balanced scorecard with performance indicators. Part seven is the budget.

In 2005, the NAMC implemented a range of assignments. Which include:

Competitiveness Study: The NAMC contracted a UK based Consulting Firm, Promar, to undertake a study looking at the competitiveness of key South African agricultural industries in relation to major international competitors. The main aim of the study was to improve the sector’s understanding of key issues affecting international agricultural industry competitiveness. The NAMC hosted a workshop to present results of the study on the 29^th of June 2005. The workshop was attended by over 80 industry leaders and government officials. In the coming reporting period, the NAMC will hold follow-up sub-sector meetings to address various industries on specific issues relating to international competitiveness.

Food Price Monitoring: The NAMC has continued to implement the Food Price Monitoring Committee recommendation that said "South Africa should have a permanent food price monitoring system". The NAMC formalized the process by entering into agreements with the University of Pretoria to implement both the Food Cost Review and Food Price Trends Projects. The sources of primary data for the two projects have being broadened to include both AC Neilsen and 80 Rural Provincial Department of Agriculture Food Price Monitors (Extension Officers). On the 24^th November 2005, the NAMC, with the assistance of Stats SA held a workshop to train the Rural Provincial Food Price Monitors on Data collection methods and processes.

Generic Promotion: The NAMC facilitated a workshop on generic promotion. The objective of the workshop was to develop guidelines for funding of generic promotion. Submissions were made by a panel made-up of academics, organized consumer bodies, farmer organisations and industry leaders. The NAMC has developed a draft position document on funding for Generic promotion for comments.

Outreach programme: During the 2005/06 season, the NAMC continued with its outreach programme informing farmers about the Marketing of Agricultural Products Act (MAPA), various industry structures (trusts and forums) and how farmers could benefit from these structures. The NAMC in collaboration with the Provincial Departments of Agriculture, organised over 20 marketing workshops, attended by over 1,500 farmers in Limpopo, Mpumalanga, Free State, KwaZulu-Natal and the Eastern Cape Province. This activity has been restructured to provide more targeted marketing support to farmers.

Change in Levy Funds Spending Policy: In an attempt to influence how the levy funds should be spend, the NAMC adopted the guidelines that recommended that a maximum of 10% of levies collected should be used for administrative purposes. The guidelines further entails that approximately 20% of levy income should be used for transformation purposes and the remaining 70% be used for activities such as research, information dissemination, promotion, quality control, etc.

The NAMC strategic plan is guided by the Marketing of Agricultural Products Act of 1996, Strategic Plan for South African Agriculture and the Draft Transformation Charter for Agriculture (AGRIBEE). This strategic plan also recognizes the key role that the NAMC should play in support of government programmes such as the Accelerated and Shared Growth Initiative for South Africa (ASGI-SA)

The NAMC was established in terms of section 3 and 4 of the Marketing of Agricultural Products Act of 1996 as amended by Act. No. 59 of 1997 and Act No. 52 of 2001.

The objectives of the Act are:

• The increasing of the market access for all market participants
• The promotion of the efficiency of the marketing of agricultural products
• The optimization of export earnings from agricultural products
• The enhancement of the viability of the agricultural products

The NAMC strategic plan supports the vision of a united and prosperous agricultural sector. The vision implies sustained profitable participation in the agricultural economy by all stakeholders, recognizing the need to maintain and increase commercial production, to build international competitiveness and to address the historical legacies and biases that resulted in skewed access and representation.

Black Economic Empowerment in agriculture is a key policy whose objective is the achievement of "sustainable presence, ownership or participation by previously disadvantaged South Africans within all levels of the value chain in the agricultural sector. The NAMC will continue in its commitment to the underlying principles of the AGRIBEE framework and has undertaken to work towards the creation of an enabling environment for the empowerment of the historically disadvantaged. Through programmes such as the Marketing Development Programmes and Enterprise Development, the NAMC will provide the private sector with incentives to integrate black agribusiness into the mainstream of their operations, be it in procurement, ownership, etc.

Through this Strategic Plan, the NAMC will support the Department of Agriculture in the design and implementation of strategic projects identified in ASGI-SA such as Goat Production and Biofuels and horticultural production. ASGI-SA initiative provides a platform for South Africa to deal with challenges of ensuring that we raises the trajectory of growth to average at least 4,5% in the next five years and about 6% between 2010 and 2014. Such a rate will ensure that South Africa is able to halve unemployment and poverty.

To advise the Minister of Agriculture and directly affected groups on all agricultural marketing issues in the agriculture and food industry, taking into account the needs of stakeholders.

To be an effective and efficient main advisor to the Minister, DoA and Industry on the marketing of agricultural products.

• To be accountable
• To act with integrity
• To value individual performance
• To value personal respect and equal treatment
• To act in partnership with directly affected groups

The NAMC was established in terms of sections 3 and 4 of the MAPA, No. 47 of 1996 as amended by Act No. 59 of 1997 and Act. No. 52 of 2001. The mandate as spelled out in the Act reads as follow:

The NAMC Council is composed of 10 Part-Time members. The current members were appointed on 1 March 2005 and their term expire end of March 2007. The current members are:

• Mr. M Karaan (Chairperson)
• Ms D Ndaba (Vice-Chairperson)
• Mr A Jeftha
• Ms C Maku
• Mr F Lawrence
• Mr GP Dall
• Prof J Kirsten
• Ms L Keyter
• Mr SE Moolman
• Mr Z Duze

The Secretariat of the NAMC is headed by Mr. TR Ramabulana, the Chief Executive Officer appointed on the four year contract which started in October 2005. The CEO is assisted by the Chief Financial Officer and Management Committee on the day to day running of the organization.

The NAMC will undertake its functions through four technical progammes and one cross-cutting support programme. These programmes are summarized and tabled below:

Senior Manager: Marketing & Trade

The primary functional areas of the unit are Marketing Schemes/ AgriBEE, Trade and Competitiveness. Marketing Development Programmes are a priority initiative identified by the NAMC which aims to encourage and facilitate the integration of emerging farmers into the mainstream commercial agricultural sector by amongst other things incentivising the uptake of products from black farmers into the marketing chain. The red meat and citrus industries have been identified as priority industries for this initiative in the short term. The division is also responsible for advising the Council on tariff and trade related issues and undertaking relevant research in this area. Finally, the Marketing & Trade division will play an important role in co-ordinating research and discussions around competitiveness in the agricultural sector especially in the area of agricultural marketing.

The NAMC is currently developing various Marketing Development Programmes aimed at benefiting the second agricultural economy. The primary objective of the Marketing Development Programmes is to provide incentives to the market to buy from emerging producers. The target is to develop and implement at least three of such schemes per year. This is seen as a key activity that supports the DoA Agricultural Trade and Business Development Division Strategy of establishing four Commodity Action Plans by March 2006. The Marketing Development Programmes will provide a platform for integrating black farmers into the Commodity Action Plans.

The following selection criteria for Marketing Development Programmes have been identified:

• Marketing Development Programmes in industries with levies/ trust funds;
• Traditional industries with relatively high black farmer participation;
• Industries with scope for transformation
• Established market willing to procure from black farmers
• Existence of wealth of industry experience to learn from
• Developmental impact

Tariff Policy refers to deliberate imposition or withdrawal of tax or changing the existing rate of tax on international trade in pursuit of the government’s developmental objectives. The major objective of tariff policy amongst others is the protection of domestic industries, improvement of the balance of payment position and rationalization of tariffs on imports which compete with similar domestic goods. The NAMC through its Marketing & Trade Division will aim to forge a much closer working relationship with ITAC and begin to make a meaningful contribution in tariff policy discussions relating to agriculture. The starting point will be to build our internal capacity which we will achieve by recruiting a trade economist within this reporting period.

The NAMC will on an annual basis publish for public consumption a series of industry specific agricultural growth perspectives for increasing competitiveness, export and investments as well as employment and equity. The perspectives will be offered as a basis for continuing to forge constructive engagement with stakeholders. The perspectives will provide amongst others an overview of the agricultural sector; a review of those subsectors that are competitive, export orientated and provide opportunities for investment; macro economic analysis and market analysis.

As a follow up to a very successful Agriculture Executive forum and the Presidential Working Group on commercial Agriculture, the NAMC will dedicate personnel to address some of the key issues requiring further analysis. Some of the issues that the team will start to work on in collaboration with the Research Division are:

• International Competitiveness of South African Agriculture
• Issues relating to Competition Legislation
• Research on international markets
• AgriBEE
• Electronic price information system
• Cost of doing business
• Marketing of South African Agriculture
• Market concentration and producer retail relationships

Senior Manager: Enterprise Development

The aim of the division is to develop and document, through case studies, best practices for farmer support. The division will develop and pilot models that will foster commercially linkages which will integrate black agribusiness in the second economy into commercial agricultural sector (first economy). The division will bring together qualified business partners and suppliers for:

• Procurement contracts and tenders
• Trade and marketing partnerships
• Training
• Equity Investments
• Joint Ventures

Some of the key models that the division will develop, implement and write case studies on are:

• Business Linkages as an empowerment model
• Co-operatives/agribusiness as key points of leverage
• Preferential AgriBEE procurement through commodities currently receiving levies
• Increased participation of blacks in the entire Fresh Produce Markets operation

The following section gives an example of a business linkages model.

Develop a supplier database of the black owned agribusiness in South Africa. The database will have the following information:

• Farmer Demographic Information
• Business Ownership Model
• Production Information
• Human resource information
• Infrastructure
• Rural Development

The objective of this activity is:

• Link those in the database to reliable markets.
• Facilitate that the DoA provide targeted support to farmers in the database.

The NAMC will create a fund that is aimed to assist those farmers in the supplier data base improve their access to markets and thereby grow and strengthen their businesses. This assistance will focus on issues such as training, business plan development, mentorship’s etc. This assistance will be provided through accredited service providers. A detailed policy on the use and management of the fund will be developed.

Objectives of this activity are to:

• Increase black agribusiness access to reliable and lucrative markets
• Build the capacity of farmers who will benefit from market linkages initiatives;
• Train those farmers who will be included in the database;

The NAMC will support the accredited service providers to organize a series of meetings with some of the major buyers of agricultural products in South Africa. The purpose of these meetings will be to present the profiles of the farmers in the supplier database and facilitate linkages between buyers and producers. Those buyers interested in developing business linkages with farmers will further be assisted in developing business support programmes that will strengthen the capacity farmers who have signed supplier contracts.

An important indicator for the Enterprise Development Unit will be to organize one successful exposure visit to a trade show for a group of farmers who are in the supplier database. The visit will be used to assist those black farmers who have come-up with the supplier database and have proved to be competitive in the South African markets to find lucrative export markets.

Senior Manager: Statutory Measures                        

This Division handles all issues relating to statutory measures. The Marketing of Agricultural Products Act, 1996, makes provision for five statutory measures, namely statutory levies, records and returns, registration, control of exports of agricultural products and conducting of pools. Currently there are ten industries that make use of statutory levies, while 14 industries make use of records & returns and registration.

The main activities of this Division are:

• To investigate new applications for the introduction of statutory measures and to make recommendations to the Minister regarding proposed statutory measures.
• Consultation with directly affected groups to determine the level of support for the proposed statutory measures.
• To monitor that the relevant industries adhere to the conditions of approval for the statutory measures.
• To develop policies relating to statutory measures.

The NAMC will:

• Investigating statutory measure requests that industries require to improve their operations;
• Monitoring and reviewing the application statutory measures to ensure that they comply with MAP Act requirements and NAMC policies and guidelines; and
• Providing the Minister on an annual basis with a report regarding the status of statutory levies and how the levy administrators had utilized the levies

According to NAMC policy on statutory levies, approximately 20% of the levy income should be used to benefit black role-players in the specific agricultural industry where the levies are collected.  In the process of monitoring statutory levies, the Council makes sure that levy administrators adhere to this provision.

The NAMC will continue to oversee the working of the CELC, which is responsible for the formal monitoring of the crop estimating process. The CELC has four main functions 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.

The fourth function, that of monitoring the performance of the CEC, is an ongoing function and is undertaken by the "market" using the crop estimates. The Committee meets twice a year.

In terms of section 20 of the MAPA, the NAMC is required to maintain and annually update a registrar of groups, which are directly or potentially directly affected by the Act. These can be groups of producers, processors, labour, 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.

Senior Manager: Research

The NAMC aims to create a premiere agricultural market research organizations. Through the research and outreach focus areas highlighted in this section, the NAMC will focus amongst others on the following research themes:

• Price Analysis
• Markets
• Policy
• Competitiveness
• Supply Chains

The NAMC will use the provision in section 7 of the Marketing Act to undertake section Section 7 committee investigations. One of the benefits of a Section 7 Committee is that in such a Committee, representatives of all the directly affected groups in the value chain could discuss relevant issues and thereafter compile an advisory report with recommendations and submit it to the Council. After deliberating the report, Council would then forward the report to the Minister.

The NAMC will also review and monitor the implementation of all the recommendation from previous Section 7 committee reports. A document with all previous recommendations has been compiled.

MF Viljioen, in his Presidential Address at the Agricultural Economics Association of Southern Africa in 2004 pointed to the fact that general consensus exists that good policies presently serve the South African agricultural sector. However, strategies to give effect to these policies, of which a number already exist, need further attention to overcome implementation problems. He argued that Agricultural Economists should play an even greater role in addressing some of the implementation challenges the country is facing.

It is against this background that the NAMC will focus on implementing two activities aimed at engaging the Agricultural Economics Society in South Africa in addressing some of the market development challenges the country currently faces. The activities will be the Research Fund and Support of the Agricultural Economics Association of South Africa (AEASA).

The NAMC research committee will outline key priority research themes each year. The themes will focus on priority programmes that the DoA is implementing. Once the research themes have been agreed, a meeting will be held with all universities with agricultural economics department and other reputable research institutions. In this meeting call for proposals will be outlined and the invited institutions will be requested to submit bids on outlined research projects.

The NAMC will create a Research Fund of R3.4 million capitalized in part by the roll-over funds in the 2005/06 financial year, 2006/07 budget and funding from international research organizations. The fund will be ring-fenced to avoid use on administrative activities. Through this Fund, the NAMC will request all Universities and other Research Institutions involved in marketing development research to submit proposals to undertake research work.

The research results to be used to:

• Stimulate debate in the sector
• Advise the Minister, DoA and Industry
• Forge a culture of cooperation between researchers in South Africa

As a strategy to raise additional funding, the NAMC will use the R3.5 million to leverage additional funds from institutions such as Industry Trusts, Forums, Donor Agency.

Bursaries: Part of the Economic Research Fund will be used to build the skills of agricultural graduates through training in various South African Universities. The fund will offer bursaries to graduates undertaking M.Sc and PhD in Agricultural Economics. The graduates will be expected to undertake their thesis on those topics that will address issues identified in the research themes. The objective will be to create a pool of qualified professional who could serve the NAMC and its partners in various capacities.

The NAMC will sponsor the workshop at the AEASA conference where a Section 7 Committee Report and additional consultancy papers will be presented. The theme for the workshop at the 2006 AEASA conference will be the "FRESH PRODUCE MARKETING IN SOUTH AFRICA-NAMC SECTION 7 INVESTIGATION".

The workshop will be used to:

• Test report findings and recommendations,
• Identify future research items; and
• Provide a platform where the agricultural economics fraternity could advise on implementation strategies.

Recommendation No. 9 of the NAMC committee on Food Price Monitoring states that South Africa should have "an annual publication, to be known as the South Africa Food Cost Review be published by the Department of Agriculture to disseminate information on food costs and trends in retail prices and farm-retail price spreads, and distributed as widely as possible. Such a publication can also be used to inform the public about food safety issues, food regulations and minimum specifications for food items". The committee further recommended that South Africa should have a permanent Food Price Monitoring system, to be known as the Food Price Trends, that will monitor trends in food prices, food processing costs and farm to retail price spreads. This system could be used as a watchdog for extraordinary trends on food products and industries.

In 2005, the NAMC concluded an agreement with experts linked to the University of Pretoria to produce both the Food Cost Review as well as the Food Price Trends Reports using data from AC Neilsen. In an attempt to broaden the data sources and remove the urban bias that was evident in the initial reports, the NAMC in collaboration with the Department of Agriculture, Marketing Division identified and trained 80 Rural Provincial Food Price Monitors on Data collection methods and processes.

In the 2006 financial year the NAMC will:

• Review the two projects and benchmark them against the international best practices;
• Work with Statistics SA to development an infrastructure to analyze the data from rural areas;
• Employ and trained a full-time specialist who will manage the two projects. This is part of a bigger plan to build international capacity within the NAMC;
• Undertake a series of training programme for the Rural Provincial Food Price monitors; and
• Host quarterly business breakfast meetings to present findings.

The NAMC library will continue to provide references services and produce and maintain value-added information products. In the coming year, the NAMC will seek to produce documents on CD ROMs and full text bibliographic databases of policy research by the NAMC and its partners. The NAMC will also continue to update the internet based research library with a database of all research reports.

Objective:

• Ensure that all reports are easily accessible to the Government Officials and the general public;
• To encourage the sector to debate recommendation from reports and assist in the implementation of the reports.

Communications Specialist

The NAMC communications Unit will focus on the following issues in order to provide a better Service to the Technical Divisions.

• Secure Corporate sponsors for the four workshop
• Secure Corporate sponsors for the four business Breakfasts
• Organize functions
• Media relations functions

The unit will perform the following corporate functions:

• Workshops (4),
• Business Breakfast Meeting (4),
• Organize a workshop at the AEASA conference (1),
• Continuously update the internet based research library
• CD Room with all NAMC publications
• Update NAMC brochure and reprint in all official languages
• Manage the NAMC marketing activities in strategic Industry Conferences such as Mango Symposium, NAMPO.

Chief Finance Officer

The purpose of this Unit is to provide strategic leadership and direction on matters of financial performance. This division provides the Council with Corporate Governance Structures, namely,

• Audit Committee
• Risk Management Committee
• Governance Charter
• Materiality and Significance Framework
• Council emoluments

Office Administrator

The NAMC undertook a restructuring excessive in November 2005 and refocused its activities to better serve this ever changing agricultural sector. One of the major shifts brought about by the restructuring process is the move away from a commodity based organizational structure to a competency based structure. This shift has happened on the administrative level and not at the Council level.

The restructuring process has increased the NAMC position from the current 19 to 29. Of the additional positions the critical positions that need to be filled with immediate effect are for the Senior Managers responsible for Research and Enterprise Development. The new organogram is provided as attachment number 1.

The NAMC will develop a human capital management plan that is in line with government goal of attracting, developing and retaining human capital in the public sector. The plan will focus on strategic workforce planning and maximizing employee performance, while meeting the challenges of developing a workforce with the leadership, technical and customer service skills needed to carry out the mission of the NAMC. The NAMC will also improve its training programme to develop a future workforce in occupations facing a critical shortage of available candidates.