The DTI disbursed more than R700 million to the food-processing sector
Monday, 26 Mar 2012
‘Over the years the dti has supported the Food-processing sector through our investment initiatives and cooperative scheme. Our Enterprise Investment Programme (EIP) incentive has disbursed funds of R636m and thereby facilitated investments of R3,7bn in the Food-processing sector, and contributed to the retention of 14-thousand jobs while creating 7-thousand news jobs. The Cooperative Incentive Scheme has disbursed more than R100m in support of Agro-processing projects,’ said Davies.
Davies also mentioned that two major projects in Food-processing to the value of R1.1bn have recently been approved for the 12i Tax incentive.
Minister Davies said that the recently pronounced Special Economic Zones (SEZ) programme offers important opportunities for farmers to assist the government to undertake long-term planning. He added that this will assist to reduce infrastructure and logistics costs and locate Food-processing investments in regions, including rural areas, where economic sustainability can be developed.
He told the gathering that South Africa is paying particular attention to the issue of food standards for purposes of compliance in export markets as well as using standards to curb the influx of inferior imports. ‘the dti is currently working with the relevant industry and SABS to develop voluntary standards and later compulsory specifications to protect SA consumers from low quality and fraudulent imports, for example, in the organic and olive oil sectors. Standards will also be used as an instrument towards promoting healthier lifestyles, he said.
Minister Davies also noted that the traditional export markets for South Africa Food-processors, namely the EU and the US were expected to register relatively low growth for the next 2 to 3 years. However, significant opportunities for SA produce exist in BRICS countries, the African continent and the Middle-East region. Minister Davies appealed to SA food-processors to actively investigate these opportunities and to develop new products and packaging to fully exploit the market opportunities that these countries and regions represented.
The purpose of the gathering was for the dti and industry to discuss and seek solutions to impediments to accelerated growth in the Food-processing sector. Davies also launched the first phase of the Organic Farmer/Retailer Programme (OFRP), at Pick n Pay. The programme is a joint venture amongst the dti, Pick n Pay, Shoprite and Spar. Pick n Pay is the first retailer to agree to provide dedicated Organic produce shelf-space in 50 stores countrywide as its contribution to facilitating the development of the Organic produce sector and emerging farmers
The objectives of the OFRP are two-fold. Firstly, the programme seeks to address supply-side failures by assisting smallholder farmers to meet the requirements of formal retailers. the dti and Department of Agriculture , Forestry and Fisheries seek to do this by providing technical assistance to smallholder farmers to ensure improved understanding of retailers procurement processes, product specifications, and product demand to smooth the supply of organic produce.
The second objective is to encourage retailers and consumers to demand Organic produce in larger quantities and varieties. This is necessary as many consumers see Organic produce as an expensive alternative to conventional farm produce. However the environmental and job creation benefits of Organic produce are significant and the dti is pleased to announce that the retailers in OFRP have committed to pricing their Organic produce at similar prices to their conventionally farmed produce. This means that in some cases retailers will accept lower margins on Organic produce so as to assist the industry to develop as rapidly as possible. In addition, consumers are often unable to distinguish Organic produce from conventional produce as - up to now - very few retailers provided dedicated space for Organic produce.