ITEM 6

BOARD OF DIRECTORS’ REPORT IN RESPECT OF 2012FOR THE AGM ON 30 MAY 2013

1. Board Members during 2012

Blignaut, CS (Chairman)De Jongh, AJBDowry, JJGrobler, FAGutsche, AR* Appointed on 16 January 2012Kleynhans, JD Resigned on 8 November 2012Kraamwinkel, APLok, NJ Appointed on 19 November 2012Loubser, MJ (Vice-Chairman)Prinsloo, AWTurner, TK Appointed on 25 November 2011Rathogwa, MGSchutte, DPA* Appointed on 5 March 2012

* Alternative directors

2. Board and General meetings

The Board held five (5) meetings in the year under review, of which one was a special meeting focusing on transformation.

Two General Meetings and one Annual General meeting were held.

3. Committees and Work Group meetings:

Number of meetingsheld in 2012

AdvisoryCommittee

s

WorkGroups

& Other

Notes

Industry Information 2 7Customs & Market Access 2 3 Work Group: Export Certification: 1

Work Group: Import Monitoring: 1 Exchanged information during the year and did not find a need for additional meetings.

Work Group: Customs & Market Access: 1Dairy Regulations & Standards 1 n/aDairy Consumer Education 2 n/a

Transformation 2 5 Work Group: CommercializationProject: 3

Management Committee: Commercialization project: 2

Subcommittee: Skills development - Primary Industry

1 n/a

Subcommittee: Skills development - Secondary Industry

2 n/a

Research & Development 2 4 Work Group meeting x 1 R&D Specialist Work Groups x 3

4. Other Committees:

Number of meetingsheld in 2011

Executive Committee 4Audit & Risk Committee 5Human Resources Committee 1

6. Representation on other bodies:

Milk SA was represented on:

- The Agricultural Trade Forum by Dr Koos Coetzee (secundus: Mr AP Kraamwinkel);- The Agro Logistics Task Team by Dr Koos Coetzee;- SA National Committee of the International Dairy Federation by Mr N Fouché.- Animal Health Forum by Mr De Wet Jonker and Dr Nico Schutte.

7. Detailed summary of expenditure on functions funded by levies

Function Institution Project title Rand Subtotals

Administration Milk SA Administration 2 913 501,67 2 913 501,67Statistical and other information re. the dairy industry

MPO (NPC) Statistical information regarding the dairy industry

691 590,20

2 143 682,51SANCIDF(Voluntary Assoc)

SA National Committee of the International Dairy Federation

826 726,07

Dimension Data & Octoplus

Web-based information system: enhancement & support

625 366,24

Empowerment of previously disadvantaged individuals

MPO (NPC) Empowerment in the primary industry sector: Training, technology transfer, skills development with mentorship of previously disadvantaged individuals in the primary livestock/dairy sector.

1 805 912,38

4 568 587,53

MPO (NPC) Empowerment in the primary industry sector: Mentoring of developing dairy farmers in the primary sector. 183 996,00

MPO (NPC) Empowerment: Ubisi Mail 138 120,00SAMPRO(Voluntary Association)

Empowerment in the secondary industry sector. 2 196 350,04

Milk SA (NPC) Transformation co-ordination 244 209,11Agri Connect Milk SA Guide to Dairy Farming reprint 40 500,00

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(Pty) Ltd 40 500,00Research & Development

MBISI (NPC) National Milk Performance Testing Scheme of the RSA 61 356,95

263 191,97

HH Meissner & Milk SA (NPC)

Research co-ordination 201 835,02

Improvement of the quality of milk and other dairy products

Dairy Standard Agency (NPC)

Improvement of the quality of milk and other dairy products 3 643 359,18 3 643 359,18

Dairy consumer education

SAMPRO (NPC) Dairy Consumer Education 8 243 714,50 8 243 714,50

Communication, meeting costs, management relating to projects

Milk SA (NPC) All disciplines and projects3 176 668,69 3 176 668,69

Total levy expenditure on above functions:

24 993 206,05

8. Summary of project reports

8.1 Project title: Coordination, support and promotion of needs-driven R & D in the South African Dairy Industry

i. Responsible person: Dr Heinz H Meissner.

ii. Background and purpose of the project

The Dairy Development Initiative (DDI) of 2000 expressed concern that dairy R&D in South Africa appears uncoordinated and is not functional with respect to the strategic direction of the industry, which has the following goals:

- Broadening of the market for milk and dairy products.- Improvement of the international competitiveness of the industry.- Empowerment of previously disadvantaged individuals and

communities.

Since then Milk SA was mandated by statutory regulations to address these issues and, in addition, to promote the practical application of local and international research by the industry.

To give effect to the mandate one of the actions was to sign a MoU with the ARC to support capacity building for dairy R & D at this institution; a second was to launch the Dairy Inventory Project. The project objectives were:

a. To establish an inventory of published national and international research with relevance to the primary and secondary dairy industries.

b. To record research being done in South Africa in terms of relevance, contents, expertise and infrastructure.

c. To interpret and prioritize future R & D utilizing the knowledge obtained in Items i. and ii., and the experience of industry leaders and researchers.

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d. To summarize and popularize R & D results with relevance to the South African industry.

e. To provide guidance to the process of developing R & D structural arrangements to accommodate, fund and legalize R & D project proposals.

f. To assist with deliberations and negotiations with government organizations to obtain support and funding for the R & D strategic directives and priorities of the industry.

iii. Summary of project’s performance

Goal 1 - To accumulate existing domestic and international scientific knowledge of applicable and practical value to enhance the industry

Task 1(i) Information on the website from international scientific journals to be updated – Target 50 articles per month. The information of six journals, mostly for 2009/2010 involving 660 articles was put on the website. The journals are the International Dairy Journal, Journal of Animal Science, Journal of Dairy Research, Journal of Dairy Science, South African Journal of Animal Science and the Veterinary Journal. The 660 articles equate to 55 (660/12) per month, which means the target was met.

Task 1(ii) Research results sourced and interpreted in THE RESEARCH COLUMN – Target one per month. A total of 12 contributions (1 per month) were made to THE RESEARCH COLUMN of the website in 2012. Since August, the contributions to THE RESEARCH COLUMN are also published in the Dairy Mail. Target met.

Task 1(iii) R & D capacities in South Africa updated. Not done as it was decided that due to World Dairy Summit commitments the Forum will not be held during 2012, thereby making this activity redundant.

Task 1(iv) IDF information related to R & D identified and responded to – Target ad hoc.

The Program Manager was frequently in contact with the IDF office in Brussels which is responsible for the Global Dairy Agenda for Action (GDAA) on issues of the Green Economy, and their Scientific Committee on the Environment (SCENV) where he co-represents the SA Dairy Industry. During the course of the year he made suggestions as to how the Green Paper can be updated and improved. He also entered the Project on calculation of the Carbon Footprint of Livestock as a case study from South Africa. The Project is part of a joint study of the Livestock Industries (including the Dairy Industry) which the Program Manager manages and which is administered by the RMRD SA.

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The enteric and manure methane emissions of all livestock species have been calculated as 3226 Gg CO2 equivalent per year, the contribution of the Dairy Industry being 13%, i.e. 419 Gg. These figures have been reported in the August 2012 contribution to THE RESEARCH COLUMN and at the WDS 2012 (see Task 1(v)), and conveyed by the Program Manager to the Department of Environmental Affairs in South Africa (DEA). The DEA is responsible for the calculation of GHG for South Africa and to report the results and updated results to the International Panel for Climate Change (IPCC) of the UN. Of relevance also to Task (iv) is the document: The status, socio-economic and environmental impact, and challenges of livestock agriculture in South Africa, which the Program Manager and co-authors wrote on behalf of the Livestock Industries, where the environmental concerns are also dealt with. This document is accessible from www.rmrdsa.co.za.

Task 1(v) WDS 2012 in November 2012 in Cape Town. The Program Manager during the year was co-responsible for the compilation and administration of the program of Conference 8: Sustainability and Green Economy. At the summit in November he also chaired one of the sessions. The Program Session at the Summit was highly successful as deducted from the comparatively high attendance figure and the lively discussions. From some of the talks and follow-up discussions, it was evident that the Dairy Industries of many countries in association with the IDF have made considerable progress in quantifying their dairy carbon and water footprint and have projects to establish mitigation solutions. The same applies to other environmental concerns. It is important for the SA Dairy Industry to show commitment to this responsibility and make progress in 2013. One way of doing so is to support the joint R & D Project on Climate Change of the Livestock Industries and the Work Group on the Environment where we try to make inroads (see Goal 4). A second way is by industry support to the Program Manager to submit projects to the Green Paper of the IDF-GDAA initiatives (see Goal 5).

Goal 2 - to limit research fragmentation and encourage co-operation between R&D capacities towards achieving the strategic goals of the industry

Task 2(i) Arranging the annual R & D Forum: It was decided that the Forum should be postponed until 2013 because of the commitments of officials in staging WDS 2012 and other reasons.

Task 2(ii) Formation of Centers of Excellence encouraged: The principle has been established at the 2011 Forum Meeting and the researchers are enthusiastic. The Program Manager has built in this concept when the R & D Work groups were established.

Goal 3 - to guide the R&D initiative by means of appropriate structural arrangements, effective administration and fund sourcing

Task 3(i) Guidance of the R & D process and Administration: The structures and relevant documentation have been completed in the last quarter of 2011. These form the basis of follow-up tasks and the R & D Administration.

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Task 3(ii) Submission of projects: After some delay, mainly as a result of Work Group conveners and the Program Manager being involved with the organization of WDS 2012, eight Project Proposals were submitted in November/December 2012, one each by the Work Groups for Feed Resources and Nutrition, Markets and Techno-Economics, Genetics, Physiology and Reproduction, and Animal health and Welfare, and two each by the Work Groups for Food Safety and Quality, and Dairy Products and Nutraceuticals. These have been registered by the numbers 2012-01 through 2012-08. The Proposals will be evaluated together with others that may reach the office in January 2013 and recommendations submitted to the Research Project Evaluation Committee (RPEC) in March 2013. The Program Manager in his personal capacity also expressed his confidential opinion to the CEO which can be considered together with the overall evaluations. Of note is that two of these Project Proposals are from provinces and will largely be funded by provincial funds and therefore little resource allocation needs to be done by Milk SA.

Task 3(iii) R & D institutions will be guided into the process: This has been done at a Meeting on 17 July 2012 with the conveners of the Work Groups and will again be done after evaluation of the Project Proposals when those recommended will be discussed with the relevant institutions. In addition, the process will also be on the Agenda of the Research Forum of 2013 for re-evaluation, since some of the researchers have expressed concern about confidentiality issues.

Task 3(iv) Sourcing of Funds: This will be initiated once the Project Proposals recommended for funding have been established, hopefully in March 2013.

Goal 4 - to participate in the national R&D programme on climate change with impact on the livestock industry, and in which the dairy industry is also involved

Task 4(i) Sourcing of funds: Ongoing. Two of the sub-projects have been funded by the funds sourced from the livestock Industries, through the RMRD SA: The carbon and water footprint of the South African Livestock Industry and The impact of climate change on Rangeland Productivity. For two other sub-projects funds have also been applied for from the international START Program in March 2012, but the effort was not successful. This was followed up by an application to the Water Research Commission (WRC) in June, which was also unsuccessful. The sub-projects are: High-resolution projections of Climate Change in South Africa and Historical and future changes in rainfall and temperature over South Africa: 1961-2060. These protocols are available from Milk SA and were discussed at the Advisory Committee Meeting of 12 September 2012, also to decide on the future involvement of the Dairy Industry in this project and if so, what are specific needs of the Dairy Industry that are to be addressed. The RMRD SA in the mean time has decided to call a workshop of senior researchers in the Climate Change arena where they together with industry representatives will discuss the way forward. The workshop is scheduled for 30 January 2013. The Program Manager is of the opinion that this occasion is important for liaison, to show commitment and to feed in the future needs of the Dairy Industry.

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If the needs are defined, the Work Group on the Environment can then begin to develop Project Proposals to that effect.

Task 4(ii) Doing presentations and providing information: The contribution to THE RESEARCH COLUMN of August 2012 and the Poster Presentation at the WDS 2012 provide some information on the project. In addition, the document written by the Program Manager and co-authors, and referred to under Task 1 (iv), provides general information in this regard.

Task 4(iii) Providing guidance to the researchers on the project: Ongoing. Task 4(iv) Providing guidance to a PhD student. Mr Linde du Toit, the PhD student, amongst others is responsible for the sub-project The carbon and water footprint of the South African Livestock Industry, mentioned above. Progress is satisfactory and the figures of greenhouse gas emissions of all livestock species have been calculated. The basic figures of methane emissions by dairy cows were provided in the July/September 2012 Quarterly Report, in the August contribution to THE RESEARCH COLUMN and at WDS 2012 by poster presentation. The figures will also form part of the March 2013 Report of the Department of Environmental Affairs to the IPCC on GHG emissions. A Meeting to that effect attended by the Program Manager and Mr du Toit was staged on 30 November 2012.

Task 4(v) Writing practical guidelines as information becomes available: The information from the Climate Change project is not adequate as yet. However, the Program Manager on occasion has touched on the subject in THE RESEARCH COLUMN, and will continue to do so.

Goal 5 - Reporting to and from the idf on sustainability and the environment, including gdaa commitments

Task 5(i) Provide South African carbon footprint data according to IDF-LCA methodology: Methane emissions of dairy cows in South Africa as calculated and referred to under Task 1 (iv) have been updated in the Green Paper in October 2012.

Task 5(ii) Promote mitigation activities in the dairy supply chain:Ongoing. The activities described under Task 4(ii) are the beginning.

Task 5(iii) Report on R & D and key actions: Ongoing. The Program Manager is the co- representative of the Dairy Industry on the Global Dairy Agenda for Action (GDAA) and participates in their activities. The new person at the IDF responsible for GDAA initiatives, Dr Delanie Kellon, was one of the speakers at WDS 2012, which provided an opportunity to liaise.

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8.2 Project title: Empowerment in the primary industry sector: Training, technology transfer, skills development with mentorship of previously disadvantaged individuals in the primary livestock/dairy sector.

i. Responsible institution: Milk Producers’ Organization

ii. Objective of the project:

Skills development of previously disadvantaged individuals (farm workers and emerging milk producers) through training and technology transfer.

iii. Description of the project:

The project addresses animal health, udder health, milk production, financial management, milk harvesting, milk quality, milk recording, milk hygiene, vaccines and immunisation, nutrition, breeding, reproduction, animal husbandry, goat farming, productivity and free market system, motivation and work ethics, milk harvesting, training and technology transfer.

Training that addresses cost-effectiveness is indispensable where milk producers are battling high input costs and low margins. Effective dairy management has a direct influence on milk quality and safety.

iv. Summary of project performance:

Courses were presented on request by commercial dairy farmers and emerging farmers. The following courses were presented during 2012:

o Technical skills programmeso Dairy productiono Animal husbandry / Care for farm animalso Artificial Inseminationo Strategic skills programmeso Safety in the workplaceo Socio-economic empowerment

The presentation of courses is based on a principle of 30% theory and 70% practical demonstration. The above skills programmes are all Agriseta accredited skills programmes, except for the programme Safety in the workplace, which is an IDT course. Upon completion of the course and assessment by the IDT assessors, the students are rewarded with certificates of competence. The assessments are also according to the outcomes of the various accredited programmes based on unit standards. Courses are presented in language of preference.

Students also have the opportunity to be reassessed should they not pass their assessment. A total of 652 students were trained in five-day courses, only 16 students did not pass or complete their assessment.

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Courses were presented in all nine provinces. Thirty five five-day courses and eight one-day courses were presented.

A hundred and fourty two students more studens were trained than were budget for by Milk SA.

8.3 Project title: Empowerment in the primary industry sector: Mentoring of developing dairy farmers in the primary sector.

i. Responsible institution: Milk Producers’ Organization

ii. General information

a. The Elim dairy project started in September 2007, milking 47 cows and producing 700 litres of milk per day. By the end of 2008 there were 80 cows in milk producing 17.5 litres per cow per day (±1 400 litres of milk per day). Milk SA has been funding the mentorship since 2007.

b. Mr Dèan Kleynhans (project mentor) was chairman of an advisory committee which met on a monthly basis to discuss the entire operation. The first cows were milked in September 2007.

c. The project enjoyed generous support from the Provincial Department of Agriculture, Western Cape in the form of financial and technical assistance.

d. The project is managed by an advisory committee under the chairmanship of the mentor.

e. In addition to its supply of milk to the industry, the dairy provides milk for 450 households in the Elim Missionary settlement.

iii. The main objectives of the project are to become a profitable unit and to supply milk to the settlement at a reduced price. In order to achieve this, the following goals were set:

a. Expand the herd to at least 150 cows in milk.b. Establish more pastures to support the cows.c. Facilitate ownership of the cows to members of the community through a

cow sharing scheme.d. Maintain good herd health programmes.e. Implement effective financial controls.f. Empower members of the community to take full control of the dairy.g. Nurture effective communication and trust with the community.

iv. Summary of project achievements:

a. There are 23ha of pasture under irrigation.b. More cows have calved and more cows have been added to the herd.

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c. There were 115 cows in milk at the end of December 2012 which is 23 more than in the previous year.

d. Milk production is 11,3 litres per day on average.e. Herd health has remained good.f. Mastitis control is much better.g. Sound financial control is in place.

8.4 Project title: Empowerment: Ubisi Mail

i. Responsible institution: Milk Producers’ Organization

ii. Objective of the project:

The main objective is to equip previously disadvantaged individuals in the primary industry sector with basic knowledge in respect of all aspects to run or manage a successful dairy farm.

iii. Performance against the objectives:

During 2012, Ubisi Mail achieved all of its goals, as set per its project outline to Milk SA. The magazine was produced in its normal A5 format, consisting of 52 pages, with various sections covering different aspects of mainly dairy farming.

The following are some of the topics of articles published in the four editions:

Good fences Caring for pregnant animals Biosecurity of dairy herds Brucellosis Clean milk production Maintenance of the milking machine Executing the correct milking routine Foot and mouth disease Clean parlour equipment

The main features of the four issues were:

March 2012: Fencing, Herbicides, Caring for pregnant animals, Biosecurity of dairy herds, Infectious bovine rhinotracheitis and vibrosis.

June 2012: Fire management, ARV denial to HIV/Aids patients, First-aid treatment, Handling chemicals, Ringworm and brucellosis.

September 2012: Guidelines to greener pastures, Clean milk production, Implement hygienic measures, Maintenance and cleaning of milking equipment, executing correct milking routine, Leptospirosis and foot-and-mouth disease.

December 2012: Land reform, Clean parlour equipment, Cow handling, Record keeping, Farm animal branding, Moving livestock on public roads and endometritis.

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Some 10 200 dairy farm workers and emerging farmers received this quarterly publication.

8.5 Project title: Empowerment in the secondary industry sector.

i. Responsible institution: SA Milk Processors’ Organisation

ii. Objective of the project:

Skills development of previously disadvantaged individuals in the secondary dairy industry sector through training.

iii. Outcomes of the project:

Goal 1: Curriculum pilot study for dairyman qualification to be registered with quality council for trades and occupations (QCTO)

Outcomes:

Conducted four remaining theory workshops. Guided all theory, practical and workplace experience assessments and recording

for internal Statements of Results by moderation and on-site visits. Developed learner administration system in alignment with QCTO guidelines,

with Portfolios of Evidence. Developed written policies and procedures for implementation. Designedand developed final Theory Finishing manuals. Developed final theory knowledge questionnaires and model answer sets for final

assessment. Developed final integrated assessment guidelines and tools for practical

assessment. Prepared final report for QCTO on pilot study. Obtained certificates for all successful participants.

Goal 2: Promotion of workplace training participation in industry

Outcomes:

Continued with QCTO involvement through Dairyman curriculum. Marketing of skills development through newsletter, reports to meetings,

participation in SASDT symposium, etc. 36 recruited (by industry participants) black matriculants supported with training

fee (partial) and learning materials. Attended primary and secondary industry advisory sub-committees as

invited/tasked, as well as SAMPRO Technical committee. Conducted on average 40 enquiries directly related to skills development per

month by e-mail or telephonic discussion.

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Goal 3: Promotion of tertiary education in dairy-related disciplines

4x under-graduate plus 4x post-graduate bursaries administrated as planned.

8.6 Project title: Empowerment / Transformation: Co-ordination

i. Responsible person: Mr M Godfrey Rathogwa (Transformation Manager: Milk SA)

ii. Mandate given by the Minister of Agriculture to Milk SA:

Regulations R55, 56 and 57 of 30 January 2009 were approved subject to certain conditions, of which one is to appoint a Transformation Manager to drive the empowerment programmes in the dairy industry which are funded by statutory levies. In August 2009, the Board of Directors appointed Mr M. Godfrey Rathogwa in this position.

iii. Project outcomes:

TRANSFORMATON STRATEGIC PLAN (Develop a strategic plan that is shared by all stakeholders)

Western Cape:

Due to a lack of progress since the Workshop in 2010, a follow-up meeting was held with the HOD: Ms. Joyene Isaacs on the 24th May 2012. Milk SA was represented by Messrs. K. Dowry, M. Loubser and MG Rathogwa to discuss the mechanism to promote dairy development in the Western Cape.

It was learnt that Western Cape had adopted the commodity approach through which a committee to allocate resources is established to consider, consult, and make recommendations related to the project’s needs for expert input and fund allocation and re-allocation with the commodity.

The current Dairy Committee (CPAC) consists of:

Two (2) x Representatives of the MPO. Two (2) x Representatives of a BEE partner USAAA. Two (2) x Representatives of the PDA: Western Cape. Two (2) x Representatives of Agri Mega, who will also supply the secretariat

services. One (1) x Representative of Casidra- implementing company owned by

Eslenburg. One (1) x Representative of Milk SA.

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KZN:

KZN smallholder dairy development process initiated by Milk SA has been taken over by the department of Economics Development, and was in the process of appointing a consultant to facilitate the process of developing a strategy.A stakeholder meeting was held on the 12th April 2012 at which KZN Dairy Development Committee was established. The Committee will develop a strategy that eventually will be handed over to Business Forum for implementation. A consultant to facilitate strategy development was appointed in December 2012.

Limpopo:

Two meetings were held with representatives of Limpopo Agriculture to develop a framework to develop a strategy for dairy development in Limpopo. Milk SA was informed that it would be invited to a further meeting but nothing happened.

Eastern Cape:

Since the 2010/11 provincial workshops which agreed to establish local dairy development committees to drive dairy development in a coordinated manner in the respective provinces, not much progress has been made in all the provinces except that some small dairy farmers in the Eastern Cape Province were participating in the East London dairy study group.

During the period under review one workshop was conducted in the Eastern Cape during December 2013. The workshop was attended by small dairy farmers and some government officials. It was revealed during the workshop that dairy did not get attention in terms of allocating financial resources to its development. Nonetheless, efforts were being made to secure funding for dairy and relationship with Milk SA has contributed to improved attention to dairy.

Since very little progress has been made to develop provincial smallholder dairy development strategy in the absence of Milk SA, it has been decided to centralise the workshops in order manage time and improve common understanding among provinces. The first combined workshop has been scheduled for the 23-24 January 2013 in Pretoria.

A final document could not be delivered since the process is consultative process some meetings could not materialize due to a lack of funding or indifference do dairy development.

EMERGING DAIRY ENTREPRENEUR DATABASE (Ensure availability of reliable data on aspirant dairy entrepreneurs)

Data on about 74 emerging dairy farmers is available and will be updated as and when new participants/entrants are identified and agreed to provide information. Two new farmers have been added to the database. More work will be done during the third and last quarter of the year as currently much focus is on sustainable commercialization of black dairy entrepreneurs.

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The situation did not change from the previous report. However, it should be mentioned that high turnover of officials in the provinces affect the supply of data as new incumbents have to familiarize themselves with the environment.

A request will be sent to all provinces to supply Milk SA with the latest data of small holder dairy entrepreneurs early in 2013.

COMPETENCY DEVELOPMENT (Develop business competency of aspirant dairy entrepreneurs)

KZN have been consulted and their needs identified. It has been agreed that the workshop will take place during the second quarter and the matter was also referred to KZN Agriculture to assist with the development of business plans. Two workshops have been conducted at KZN focusing on business development. Record keeping variables are being developed for implementation during the third and fourth quarters of the year.

The work could not be carried on as planned because during mid year in 2012 there was a miscommunication regarding the availability of Transformation Coordination budget. As a result provincial work regarding competency development was curtailed as it was indicated that budget was almost exhausted until in November when it was learnt again that it was still available.

FUTURE FARM MANAGERS (Put young farm managers on farms)

Locally 15 youth have been placed on farms while five have been sent overseas. The demand is huge but financially it is not possible to meet the demand. A name of a youth from NW has also been given to Future Farmer Project Manager and they are still looking for placement on a farm in South Africa. The Project Manager tends to focus on KZN for cost and cultural reasons. It should however be noted that MilkSA only assisted by identifying potential participants in the programme as we did not contribute financially.

TRANSFORMATION ANNUAL FORUM (Establish a shared approach to transformation)

The planned Annual Transformation Forum was cancelled, due to the fact that too little progress has been achieved since the previous Forum.

The whole idea of a shared approach was based on the consolidation of provincial strategies which were supposed to have been discussed last year and this year at annual forum meetings. Although provinces agreed to develop provincial dairy development strategies during provincial workshops, none of them delivered any document. Against this background, provinces are being revisited to ensure that strategy is developed if dairy is regarded as critical in each province. In other provinces dairy development strategy is developed by other departments instead of agriculture.

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PROMOTING SUSTAINABLE COMMERCIALIZATION OF EXISTING BLACK DAIRY FARMERS

Many existing emerging farmers find it difficult to achieve production levels required to be sustainable commercial farmers. A certain economy of scale is therefore required to bridge the barrier to enter the commercial environment which amongst others requires a sufficient package of support and a secured market.

The overall objective of the proposed project is to promote the development of existing black milk producers to become sustainable, commercial milk producers. This is a project funded from surplus levy funds that accrued during 2006 to 2009 and entrusted to Milk SA by the Minister of Agriculture.

Progress is summarized as follows:

i. Criteria for the selection of farmers have been developed.ii. A total number of about twenty farmers have been identified and some

have informed that they were potential beneficiaries of the surplus funds, provided they can prove their commitment in terms fodder flow, compliance with legislation.

iii. Free State is used as a pilot project and the Provincial Department of Agriculture has been informed of the names of potential beneficiaries. The Province’s commitment to the project was sought and secured, but no formal service level agreement has been received as yet.

iv. CEO of Eskom was engaged regarding electricity reticulation to some farms and quotations have been but implementation was delayed pending outcome of application to DBSA’s Jobs Fund Programme.

v. Some current buyers of the milk of potential beneficiaries have been informed accordingly and their contribution to sustainable commercialization of dairy enterprises has been requested but no response as yet.

vi. Fodder flow has been assessed on each farm in Free State and the report will be delivered before the end of July 2013.

vii. Farmers have signed for the acknowledgement of the conditions on which supply of cows will be based.

viii. Quotation for electricity for Qwaqwa farmers have been obtained from Eskom and negotiations with buyers, municipality, milk buyer and Free State Department of Agriculture regarding sharing the cost of electricity are in progress.

ix. Some cow quotations have been received and some are being made and the first delivery payment for cows was done in February 2013.

x. Service Level Agreement has been drafted and sent to provinces and we are waiting for the response from role-players.

xi. Memoranda of understanding (MOU) and Service level agreements (SLA) not yet finalized because the HODs and staff have been changed and planned meeting was could no longer take place. We have to establish new relations and take the matter further.

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xii. Cows have been inspected by State Veterinarian and an independent experienced dairy farmer during the period under review to ensure value for money. Written reports have been received from the State Vet with regard to clinical conditions, age, udder condition, pregnancy, TB and CA status of cows on the farms.

xiii. Milking parlours were being constructed by Free State Agriculture albeit at a slow progress. Installation of milking equipment still outstanding due to budgetary constraints. It has been reported that they will be finalized by March 2013.

xiv. Ten farmers were sponsored to attend World Dairy Summit and were grateful for the opportunity given by Milk SA.

xv. DBSA has approved our application for infrastructure on farms, especially reticulation of electricity under Jobs Fund Programme. The emphasis of Jobs Fund Grant is to create job opportunities on farms. When the application was made it was estimated that about 350 jobs could be created on 20 farms over a period of three years.

xvi. Involvement of the provinces in the project in terms of contribution to the success of the project has been secured in Free State and Eastern Cape.

8.7 Project title: Dairy Consumer Education

i. Responsible Institution: SA Milk Procesors’ Organization

ii. Nature of the Project

The communication campaign consists of two elements, and the elements are executed on an integrated basis. The elements are:

General communication

General communication namely messages of a general nature regarding the health and nutritional advantages of dairy products, conveyed to consumers; and

Specialised communication

Specialised communication, namely pro-active and reactive messages regarding the health and nutritional advantages of dairy products conveyed to selected target groups that are opinion formers in the South African society.

iii. Summary of the project performance:

GENERAL COMMUNICATION, NAMELY MESSAGES OF A GENERAL NATURE REGARDING THE HEALTH AND NUTRITIONAL ADVANTAGES OF DAIRY PRODUCTS, CONVEYED TO CONSUMERS

With due regard to the target groups, messages, products, media / communication channels and performance assessments as stated in the project proposal for 2012.

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The new Regulation 146 on advertising and food labeling was implemented in March 2012 by the Department of Health. The project continuously updates existing promotional material to be in line with the regulations. All newly developed promotional articles and activities conform to the regulation.

TELEVISION

No television was broadcast in 2012 due to extensive research and development required for the development of the new TV ads for 2013.

Development of new television adverts in 2012 Two television advertisements were developed in 2012. Strategic and creative planning for 2012 of the new television advertisements took into consideration the requirements of Regulation 146 and important aspects of the communication approach were identified as opportunities for the new television advertisements.

A considerable amount of time and effort was given to the formulation of the TV briefs for 2012, by the Extended Management Committee. The briefs for the television advertisements were considered in an in-depth process which included workshops and various meetings. The essence of the outcome of the deliberations of the Extended Management Committee was that television should focus on teenagers (13-19yrs) with the main considerations being:

Teenagers have a strongly growing purchasing power in terms of own “income” and influence on parents’ purchasing decisions.

Teenagers are more open to advertising messages than older target groups if we communicate with them in the right way – relevance is key.

The teenagers of today are the parents of tomorrow. Although TV will be aimed at teenagers, it should not be deduced that other

targets will not be reached. A meaningful spill over will reach targets such as mothers of teenagers.

The slogan for the television campaign is: ’Dairy gives you go’. The slogan will be carried through to television, the microsite (mini website) and the mobisite (designed for cell phones) in conjunction with the overarching slogan ‘rediscover dairy’. Just as with the ‘rediscover dairy’ slogan, the dairy gives you go slogan has been trademarked.

Assessment of storyboards for television advertisements

The UNISA Bureau of Marketing conducted research in order to assess the storyboards for the new television adverts for 2012/13. The aim of the study was to provide strategic insight into consumer reaction to the two concept television advertising messages proposed for 2012.

The first concept i.e. the ‘Dusty’ ad was well received and achieved good results. Dusty was approved for production. The assessment of the second concept showed that it is acceptable but certain elements were identified which require improvement.

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Two new TV ads were developed in December 2012/Jan 2013. Broadcast will start in Feb 2013. Preproduction started in November. A number of meetings were held with the Agency and the Director of the TV ads to finalise the script and the cast for the advertisements. The full cast i.e. actors, wardrobe and locations for the adverts were determined during the meetings.

Microsite (mini website): www.dairygivesyougo.co.za

A microsite (mini website) was developed for the project which will enhance the impact of the TV advertisements and also create an area on the internet dedicated to the product i.e. the role of dairy in the diet / lifestyle of the teenager. The microsite will be appropriately linked to the ‘rediscoverdairy’ website.

The purpose of the microsite is to convey the health benefits of dairy to the target market in the format of an infographic, which is a graphic presentation of the information.

The microsite consists of four themes i.e. Sport, Everyday, Strength and Beach body.

Each theme consists of five infographics relevant to each with an option for the viewer to find out more about a certain topic.

The microsite is also adapted for viewing on a cellphone i.e. mobi-site The website address is : www.dairgivesyougo.co.za and

www.dairygivesyougo.mobi

The Microsite was launched in December 2012.

PRINT ADVERTISEMENTS

The impact of Regulation 146 on the existing print advertisements resulted in the project not publishing these ads again in 2012. As the focus of the new television ads is aimed at teenagers, a digital campaign that creates awareness among teens was launched in the fourth quarter of 2012. Digital advertisement campaign

A digital advertising campaign was developed to carry the messages of the campaign and to support the microsite. Advertising banners were developed that covey the health benefits of dairy while also directing viewers to the microsite and the mobi-site. The banners appeared on social media sites visited by teenagers such as You Tube, Face Book, MXIT, 24.com from 15 December 2012. The burst completed in February 2013.

The messages conveyed by the banners are:

- Dairy gives you go- Fuel up with flavoured milk- Dairy: your muscle building partner- Dairy: The secret ingredients for that beach ready body- Rediscover the benefits of dairy

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The digital banner advertisements also direct the viewer to YouTube, where the new TV ads will be available for download.

CONSUMER PROMOTIONAL ARTICLES

Promotional articles: The content of these articles expand on the six key messages and inform consumers why it is important to include dairy in their daily diet and the rational for the consumption of three portions per day. Fifteen insertions were placed in 2012.

Health 24 website – promotional articles and messages

Health 24 is a website that communicates health and nutritional messages. In the place of the cost of one consumer promotional article, the project communicated health nutritional messages on this website. Daily, 472 611 people, who are obviously interested in health and nutritional issues, visit the Health24 website, in contrast with the typical reader of a general printed publication. Two advertorials and various banners (as listed below) appeared on the Health 24 website on six pages within the website. When the viewer clicked on the banner, he/she was redirected to the rediscover dairy website. The awareness campaign ran for four weeks from 3 September – 1 October.

Trade publications

Three articles were published in The Dairy Mail and Farm Link.

SCHOOL CURRICULUM

The two posters that were developed in 2011/12 for primary schools were printed in April. The posters are based on the requirement of the new CAPS (Curriculum and Assessment Policy Statement) for primary school learners.

The two posters are: Guidelines for healthy eating AND From milking to milkshakes.

The first poster ‘Guidelines for health eating’ is based on the new Food Based Dietary guidelines.

The support documents were developed, which are aimed at the teacher. It includes general nutritional information, worksheets and lesson plans. The support documents were finalised and designed to be posted on the web.

Each support document is accompanied by a ‘fact sheet’ which summarises the information, presented in the poster. The fact sheets will be posted on the ‘rediscoverdairy’ website and will be useful for processors to print as hand-outs for learners visiting the dairy farms in 2013.

In order to assess the usefulness of the posters in schools, the 4th year dietetic students were given the posters in schools during their internship / community activity. Ten posters were provided to the 4th year students at the University of Pretoria (UP). The internship started in May and ran for the rest of 2012 in different underprivileged schools in the Tshwane region.

The feedback from the UP 4th year dietitians research showed that the teacher’s guide provides adequate information for nutrition education. Other suggestions to change the poster were captured in the fact sheet.

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One of the school posters is in line with the National Nutrition Week messages for 2012, which strengthens the message for healthy eating.

MEDIA LIAISON ACTIVITY

The media liaison activity that was implemented in 2011 was expanded on in 2012. The essence of the activity is to make information on the nutrition and health benefits of dairy available to journalists who then communicate the information to the target markets as it serves the own interest of the reporter and media.

Media coverage

Approximately 221 articles on dairy in the media have been observed in 2012. All these articles carried positive messages. In monetary value, this gives a value of approximately R5 712 062 media coverage achieved at no additional cost to the project.

In summary, the following table lists the coverage obtained that was relevant to promote the health and nutritional benefits of dairy.

Press releases developed and distributed by the projectThe following press releases were distributed to selected media

MilkSplat

The MilkSplat was created for the www.rediscoverdairy.co.za website. The purpose for the menu item is to summarise recent research on a dairy nutrition related topic and place a summary on the web. The summary is also mailed to health professionals and they are encouraged to read the summary and contact the project for the peer reviewed article. This further creates an opportunity for the project to build a database of health professionals and monitor the success.

NATIONAL NUTRITION WEEK (NNW)

The Department of Health launched the revised Food Base Dietary Guidelines (FBDG) and the new Food Guide in October 2012 during the National Nutrition Week (more detail under 7.4)

To build on this activity in 2012, the CEP participated in the NNW with the Department of Health (DOH) in shaping the messages for the activity. The DOH communicates directly with the schools and creates an awareness of healthy eating among the learners. The NNW ran from 9-13 October 2012.

The theme for 2012 was Healthy eating. The target group for the National Nutrition Week 2012 ‘A Food Guide to Healthy Eating’ campaign, was the general public, reached via interpersonal communication and the commercial media. Messages for health workers were communicated via the Department of Health, and through specific publications.

Overall message: Healthy eating is a key component of a healthy lifestyle. Use the Food Guide with the Healthy Eating guidelines to learn more about the best food choices for your healthy eating plan.

Associated messages.

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The food guide reminds you to make food choices that build healthy eating plans. The food groups are illustrated in different sized circles to remind you that plenty of foods should be used from some groups, while others are eaten sparingly. The amount of food a person needs from each of the food groups varies depending on age, gender and level of activity. The food guide documents provide this information.

The aim of the Guidelines for Healthy Eating and the Food Guide are to encourage people to:

eat a variety of foods, from each of the food groups, in the correct amounts, according to their needs.

o To strengthen the ‘healthy eating message’ and to capitalise on the awareness that is already created by the DOH, a media campaign was linked to the event during this time.

o Prior to the launch of the Food Guide, the project managed, on behalf of the Department of Health, a nationwide competition to all dietetic students to name the new Food Guide.

o The project further provided an extensive selection of the photos to the Department of Health for the launch of the new Food Guide.

REGIONAL VISIT

A regional visit was undertaken on 13 and 14 June to KZN. The project was introduced to the dairy marketing people, certain health professionals and teachers and from that region. The project coordinator and the dietitian of the project presented various presentations over two days. The information presented was:

The scope of the project; Markinor research Impact of R 146 on dairy labelling and advertising

SPECIALISED COMMUNICATION, NAMELY PRO-ACTIVE AND REACTIVE MESSAGES REGARDING THE HEALTH AND NUTRITIONAL ADVANTAGES OF DAIRY PRODUCTS CONVEYED TO SELECTED TARGET GROUPS THAT ARE OPINION FORMERS IN THE SOUTH AFRICAN SOCIETY

SCIENTIFIC PRINT ADVERTORIAL PLACEMENTS

Scientific advertorials are written by experts in their field. All advertorials are evaluated by the CEP Technical Advisory committee. New research in the field of dairy nutrition and health are monitored through various sources such as the IDF, Global Dairy Platform and by monitoring other international dairy and health websites.

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These are published in various health journals in order to inform health professionals and to promote the awareness of the role of dairy products in respect of health and nutrition. For each advertorial, a full review article is written (nutrition reviews*), which elaborated more on the topic. This is loaded on the website at the same time as when the advertorial is published. Ten placements were placed for 2012.

Nutrition review articles: A nutrition review explores a new topic in dairy health and nutrition that warrants further investigation. The nutrition review allows for extensive and detailed information without a limitation to the number of words used. The nutrition reviews are posted on the rediscoverdairy website, under nutrition review menu item. Health professionals are informed via email when a new review has been placed on the web. For 2012, three nutrition reviews were completed.

CLINICS

Continuing Professional Development (CPD)

The CPD activity provides the project with an opportunity to communicate directly with one of the health professional target markets i.e. dietitians / nutritionists, who, in turn, gain from the activity as Continuous Education Units are earned by participating in the activity.

In 2012, a Nutrition Workshop was held by ADSA (Association for Dietetics in South Africa). Sylvia Escott-Stump, an internationally renowned dietitian and author of the Diet Therapy textbook used by all the universities in SA, visited South Africa and presented at the workshop held in three different cities in South Africa.The topic of her presentation was: Better Bones.

The workshops were held in and the dietitian of the project presented at all three events.

19 June: Discovery Building Sandton 20 June: University of FreeState, Bloemfontein 21 June: Discovery Building, Centurion City, Cape Town At each event the CEP project was presented in terms of the messages and

products. The project logo and an advertisement of the project appeared in the workshop program booklet. A copy of the CEP sports document was placed in the congress bags.

A CPD article was distributed as part of the comprehensive workshop booklet and dietitians attending the event received 3 CEU (Continuous Education Units) points for completion of the questionnaire.

Rizzoli R, Bianchi ML, Garabedian M, McKay A, Moreno LA. 2010. Maximizing bone mineral mass gain during growth for the prevention of fracture in the adolescents and the elderly. J Bone

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Wellness TV

Wellness TV is one of the communication channels used for Specialised Communication. The target market is Primarily LSM 3 – 7. The concept entails education TV in the waiting rooms of provincial clinics.

The project developed the Wellness TV ad (30”) and the broadcast started on 3 September 2012 in 50 clinics in Gauteng and ran for 3 months1. This ad can also be viewed on the rediscover website. A survey was launched in November 2012 to establish the effectiveness of the project in order to motivate budget spend on this activity. The survey entailed evaluating 10 clinics where each clinic was observed over a four hour period (on one day). This entailed comprehensive observations which included monitoring the TV and the consumers/patients. A hundred and fifty consumers / patients were interviewed in order to determine what information was retained after viewing the Wellness TV Ads and fifty seven in-depth interviews were conducted successfully. Result indicated that this activity was successful in reaching the objectives set out.

Food Based Dietary Guideline (FBDG) workgroup

Background

The eleven South African Food Based Dietary Guidelines (FBDG), launched in 2003, were initially driven by the Nutrition Society of South Africa in conjunction with stakeholders such as ADSA, representatives from the food industry, UNICEF and Department of Health. These FBDGs have been promoted and utilised nationwide within the nutrition and dietetic environment in South Africa. During the course of 2011, a workgroup was appointed to revise the current FBDG and develop a food guide. Now, for the first time in South Africa, the revised FBDG will be supported by a visual Food Guide to enhance nutrition education using the FBDG. The visual food guide represents the seven food groups which are essential for healthy eating.

New food based dietary guideline introduced in 2012

‘Have milk, maas or yoghurt every day’ was included and is now a FBDG on its own. In view of the low calcium and potassium intakes of the South African population, and the high prevalence of hypertension, the expert working group who revised the guidelines, recommended that a milk guideline for South Africans, that will promote consumption of milk to improve dietary adequacy, is needed.

1 The broadcast period is for 3 consecutive months during which the infomercial is flighted 15 570 times/month across all the clinics (i.e. package includes 14 spots per clinic per day x 22.5 days per month = 315 spots per clinic per month; 315 spots x 50 screens (clinics) = 15 750 flightings per month). Through this medium, up to 6 million people are potentially reached in a year. Currently Wellness TV only runs in Gauteng and will be extended to KZN and Western Cape in 2013.

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The high potassium and relatively low sodium of milk and maas, leading to a low sodium: potassium ratio, may be important for the prevention of hypertension and cardiovascular disease.

The project was a member of the workgroup that revised the FBDG during 2012. The project also provided the scientific material needed for the development of the National Scientific Paper, in specific, information of the health and nutrition benefits of dairy. The National Scientific Paper will be published in peer reviewed journals and the dietitian of the project will be a co-author of this paper.

SANCU booklet (South African National Consumers Union)

Editorial on the role of dairy in obesity was developed for inclusion in the SANCU fighting Obesity booklet of which 50 000 were printed in June 2012.

This booklet is distributed free of charge to a wide range of consumer organisations around the country including, Women’s Agricultural Union – working in outlying areas, individual consumers, government's Consumer Protection offices, schools, clinics, corporations, banks, retailers.

Teaching aid file

This file was developed as a tool for 4th year dietetic students with the aim that they will use the file throughout their career. It includes 11 inserts which unpack different topics on nutrition and dairy. 173 were distributed to Universities in 2012.

The dietitian on the project presented the Teaching aid file to 2nd and 4th year students at various universities nationwide.

The University of Limpopo was visited on 27 August. There are 54 dietetic students at this university and Teaching aid files will be presented to them in 2013 (project currently out of stock).

The Teaching aid files are being updated to meet the R146 requirements and include the new FBDG.

Educational tool for dietitians at Provincial Training Hospitals

An educational tool was developed and produced in 2010/2011, for clinics at Provincial Training Hospitals. It was designed for use by a dietitian or health educator in communities where patients visit the clinic attached to the Provincial Hospital.

Sports nutrition and the role of dairy

The booklet was developed in 2011 and printed in 2012. It has been promoted extensively by the project through a media campaign.

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As part of the awareness campaign for the Role of Dairy in Sports Nutrition, the sports document was presented to different schools during 2012. To date, 52 schools have each received five copies of the booklet. Fifteen schools were visited by the dietitian and Nicki de Villiers where the sports document was presented to the head of the sports department of each school.

CONFERENCES AND PRESENTATIONS

o SASDT: 16-18 April 2012; Gateway Hotel, Umhlanga Rocks: Two presentations were presented: Shaping the market for the dairy industry in the future: Mrs C Leighton Emerging importance of dairy nutrients, going beyond calcium: Mrs M

Vermaako CNE (Continuing Nutrition Education) workshop; 31 May and 1 June 2012;

Stellenbosch University, Tygerberg Campus. The dietitian of the project attended the CNE.

o Nutrition profiling workshop; Northwest University; 25 April 2012. The dietitian of the project attended workshop held by the Department of health on nutrient profiling;

o Salt reduction symposium; SAAFoST; 22 May 2012; Woodmead. The project coordinator attended the workshop.

o Lecture on Bone health by Prof Marlena Kruger held at the University of Pretoria on 23 May 2012. Marlena Kruger is the Deputy Head of the Institute of Food Nutrition and Human Health at Massey University in New Zealand; and does research for Fonterra.

o Sylvia Escott-Stump workshop, Better bones, presented by Nutrition Solutions, 19 June 2012, Discovery Building, Sandston.

o MPO milk school day: The project coordinator and the dietitian of the project participated in the MPO school milk day that was held in Delareyville on 11 October 2012. Five schools were visited on this day and each school was presented with a poster and teachers guide developed by the CEP.

o The project coordinator presented the CEP project to the SA Poultry Association in Stellenbosch on 18 October 2012.

o WORLD DAIRY SUMMIT – INTERNATIONAL DAIRY FEDERATION 2012 The IDF World Dairy Summit 2012 was held at the Cape Town

International Convention Centre (CTICC). The three staff members of CEP attended the summit.

The project coordinator presented the following paper in Emerging Farmers Sector conference. Title: The affordability of dairy nutrients for low-income consumers in South Africa.

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Poster presentation: Strategic communication insights into the Consumer Education Project of Milk SA: JPR Joubert, Professor: Bureau of Market Research, University of South Africa, South Africa, joubejpr@unisa.ac.za & CS Leighton, Co-ordinator of the Consumer Education Project of Milk SA.

Promotional material was developed for the Milk SA stand at WDS-IDF. This entailed developing a comprehensive CD that captured the CEP project from inception to the present. A leaflet was developed as a hand-out at the WDS-IDF.

SCIENTIFIC ARTICLE FOR IDF BULLETIN: A full scientific article was written for the IDF Bulletin which was based on the presentation delivered by the project coordinator at the WDS- IDF 2012. The coordinator of the project and Dr Friede Wenhold developed the article "Dairy: nutritional value for money for South African consumers".o Friede Wenhold (PhD (RD, SA)), Department Human Nutrition,

Faculty of Health Sciences, University of Pretoria, P/Bag 667, Arcadia 0007, Pretoria, South Africa (e-mail: friede.wenhold@up.ac.za).

o Christine Leighton (MSc), Consumer Education Project of Milk SA, PO Box 36332, Menlo Park 0102, South Africa (e-mail: christine@dairycep.co.za).

REDISCOVER WEBSITE

The www.rediscoverdairy.co.za website is constantly upgraded and monitored. The website forms an integral part of the media liaison activity in that relevant information for editors of different publications can be obtained on the web. It serves as an important communication channel for the project with consumers, health professionals, members of Milk SA, MPO and SAMPRO

GLOBAL DAIRY PLATFORM (GDP)

SAMPRO became members of the GDP in February 2011 and as a result, the Consumer Education Project will have access to current research. The project is in contact with the GDP on a continuous basis. The IMP (Marketing division of the GDP) collated research conducted by various dairy companies and organisations world-wide on consumer behaviour and dairy in 2012. The project submitted the results of the Markinor (2007) research and the research conducted by UNISA BMR (2011) to test the seven key messages and four products by UNISA BMR, to the IMP. The IMP presented results in November 2011 at the GDP annual meeting.

The coordinator of the project, Mrs C Leighton and the chair of the Management Committee, Mr Alwyn Kraamwinkel, attended the GDP/IMP workshop held on 2 November at the Westin Hotel, Cape Town as well as the IDF Marketing Standing Committee meetings on 3 November 2012 in Cape Town.

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8.8 Project title: Improvement of Dairy Quality

i. Institution responsible for the project: Dairy Standard Agency

ii. Purpose of the project:

The main objective is the promotion of compliance of milk and other dairy products with product composition, food safety and metrology standards.

iii. Project outcomes:

National milk monitoring program in collaboration with Health Authorities

The quarterly sample runs for 2012 were successfully completed as per predetermined schedule. A total of 1756 milk samples in the predetermined categories (packed pasteurised and unpasteurised and pasteurised and unpasteurised retail bulk milk), 83 cultured milk, 31 cream, 35 UHT milk, 79 yoghurt, 58 cottage, cream and feta cheese and 74 hard and semi hard cheese samples were analysed in order to determine compliance to regulatory specifications.

Seven Metropolitan Municipalities, 19 District Municipalities and 63 Local Municipalities participated in the sampling runs representing all provinces. As per procedure results of all milk and other dairy products were benchmarked against food safety, compositional and trade metrology standards as respectively gazetted under the Foodstuffs, Cosmetics and Disinfectants Act, 1972 (Act 54 of 1972), Agricultural Product Standards Act, 1990 (Act 119 of 1990) and where applicable the Trade Metrology Act, 1973, (Act 77 of 1973).

Sample results were e-mailed and faxed respectively to participating authorities and contact details were updated. The collection of contact information of processing facilities is an on-going process. Letters and requests for the purpose of updating contact details have been communicated to all processors.

Non-conforming results obtained were assessed and communicated via post to all the applicable processors. Non-conformance reports of continues substandard results were generated and forwarded to the project manager of Project 2.1 to deal with as official complaints. These included separate reports reflecting the following non-conformances:

• >2% Added Water, • Inhibitory substance positive,• Phosphatase positive, • E.coli positive.

A 7.9 % increase in compliance was noted (based on a year on year comparison made) for packed pasteurised milk. An increase in compliance was also noted for bulk pasteurised milk. The positive contribution of facility visits to promote product compliance through project 1.5 and food safety management system audits are valued. >2% Added Water, Inhibitory Substance Positive, Phosphatase and E.coli positive were forwarded to the project manager of project 2.1 for further actions.

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Investigation regarding complaints received in respect of product compliance with legal requirements

Investigations regarding complaints were initiated on:

• Sale of substandard quality and unsafe milk to the public. • Packing and distribution of milk without the necessary health authorisation. • Quality defects in UHT milk * 3• Recombined milk sold as fresh milk• Substandard quality milk in the North-West province• Quality defects of butter bought in the Northern Cape. • Incorrect class designation of full cream milk *2 • Taste and texture of Feta Cheese All complaints received were investigated and where necessary subjected to further scientific testing to establish possible nature and proof of non-conformities. All complaints received were attended to according to protocol which included submission thereof to the Department of Agriculture, Forestry and Fisheries (DAFF) and municipal health authorities.

Special Investigations

The following investigations were initiated:

Testing of fermented milk samples on a national level to determine possible adulteration in terms of product composition.

Retail milk samples to determine the status of aflatoxin M1 contaminations. Cheese samples for fatty acid analyses in order to determine possible

adulteration with vegetable fat. Collaboration with the Cape Metro Health and Food Control Committee of

the Western Cape to submit official samples to the State Chemistry laboratory for law enforcement purposes. Verification of method of analysis and availability of chemical standards could not be finalized by state laboratory by end 2012.

Testing milk of the categories pasteurised milk, ultra pasteurised milk, UHT milk and sterilized milk to determine the values for ß-lactoglobulin, lactulose and peroxidase values in milk sold in SA was initiated and can only be finalised in 2013 due to problems experiences with the importation of control standards.

Adulteration of cheese in collaboration with DAFF. 16 Cheese samples for fatty acid analyses were tested in order to determine possible adulteration with vegetable fat. 4 Complaints have been registered at DAFF: Directorate Inspection Services.

Establishment of a test method, to be used for screening purposes only, for the detection of recombined milk sold as fresh milk with Lactolab. This test method will improve the DSA frequency of testing to detect misleading labelling in terms of recombined milk.

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Risk identification through statistical analysis

Quarterly reports were submitted to Milk SA after each cycle. All cycle results indicating non-conformances were forwarded to the respective health authorities. Processors with non-complying results and whose contact details were verified as well as individuals who applied to receive results were submitted with company brand reports.

International food risk monitoring - The following websites and electronic media were monitored on a weekly basis for possible food scares that may affect the local dairy industry.

- www.foodproductiondaily.com- www.dairyreporter.com- FSA newsletters and alerts- Dairy Markets monthly newsletter- www.fda.gov/Safety/Recalls/ - www.foodqualitynews.com/... Alerts / - www.foodqualitynews.com/Food-Alerts/New-evidence-calms - www. dairysafe .vic.gov.au/ - www.foodsafety.gov - www.thefoodsafetynetwork - International Food Safety Authorities Network (INFOSAN) - European Union Rapid Alert System for Food and Feed (RASFF) -

newsletters

National food safety risk monitoring - Quarterly analysis and trending of results obtained from project 1.1 – National milk and other dairy product monitoring program in collaboration with health authorities were conducted.

The presence of high E. coli positive results identified during quarterly cycle runs remained a persistent problem. The main contributors to this risk are the uncontrolled sale of unpasteurised packed and bulk milk as well as pasteurised retail bulk milk. These were followed up in terms of project 2.1 with the Directorate Food Control and municipal health authorities. Facilitation of remedial action plans is on-going and will continue during 2013. Remedial action programs with the authorities

118 Facility visits to producer-distributors (PD’s) and processors whose results indicated non-conformances within the past 4 cycle runs were conducted in 2012. 9% of the visits were paid to upcoming processors and distributors of fresh milk. Potential problem areas such as lack of or non-compliance with pre requisite programs that contribute to poor results were identified and corrective actions were discussed with the managers and responsible persons of these facilities. DSA guideline documentations were distributed during visits and a follow-up report of visit discussions together with new results were sent via post to all facilities visited.

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An effective channel of communication with regards to food safety issues was maintained and regular telephone calls were received relating to food safety and product compositional issues.

Communication with authorities and other organisations

Department of Health: Directorate Food Control

Communication with the directorate included a report on the quality of unpasteurised milk sales in the various metropolitan, district municipalities and local health authorities. The report also focussed on the sale of unpasteurised milk within the jurisdiction areas of health authorities authorised as well as not authorised to permit the sale thereof. The DSA as member of the Food Legislative Advisory Group (FLAG) of the Directorate regularly communicated with the department regarding draft legislation under the Health Act as well as the Foodstuffs Cosmetics and Disinfectants Act. The DSA through its Technical Advisory Committee compiled comments regarding UV treatment of fresh milk. Comments were also forwarded regarding the review of R1555 of 1999, Regulations relating to milk and dairy products and the Regulations governing microbiological standards for foodstuffs and related matters, R692 of 16 May 1997 as amended.

Municipal Health Authorities

Filing of complaints with the municipal health authorities based on information obtained from project 1.1, relating to category A. Infringements namely inhibitory substances, E.coli, phosphatase positive results were dealth with as priority. Facilitation of remedial action regarding the sale of sub-standard milk, are followed up with strategic meetings at district municipality level. Priority has been given to the Ethekwini Municipaliy (metro), Fezile Dabi (Welkom area) and Gert Sibande district municipalities with follow up facilitation work scheduled during July and August 2012.

A successful workshop was held in conjunction with Lejweljeputswa District Municipality on 16 August 2012. DSA also presented at a two day workshop in Queenstown on 26 and 27 October 2012 together with Nelson Mandela Metro health officials regarding enforcement of health legislation at primary and secondary level. A scheduled workshop on 8 October 2012 with all health officials in the Ekurhuleni Metropolitan Metro was held during which the SA to presented on projects 1.1 and 1.5 as well 2.1 related matters.

A scheduled workshop was held 8 October 2012 with health officials in the Ekurhuleni Metropolitan Metro, focussing on collaboration of DSA projects 1.1 and 1.5 as well 2.1 related matters.

The facilitation of remedial action steps regarding the sale of sub-standard packed unpasteurised milk, bulk unpasteurised and bulk pasteurised retail milk on a national level following an official report to the Directorate Food Control is to continue with the municipal and provincial health authorities in 2013.

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KZN Provincial and Port Health Communication between DSA and KZN Port Health regarding import and local manufacturing of imitation dairy products is ongoing and the Directorate Inspection Services of the Department of Agriculture, Forestry and Fisheries was also involved. DAFF Directorate: Inspection Services (IS) Three scheduled meetings to discuss effective implementation of remedial action plans relating to sub-standard quality milk, misleading claims on fermented products (amasi, yoghurt and cheese) took place. Combined reports with non-conforming results from quarterly cycles were handed over as complaints.

The fourth scheduled meeting to discuss implementation of corrective measures on imitation and fermented dairy products took place in Pretoria. Actions regarding infringements in terms of the Regulations relating to dairy and imitation dairy products with specific reference to misleading claims and incorrect composition and labelling on fermented products (amasi, yoghurt and cheese) served as priority.

A request for further investigation into the incorrect labelling of retail branded drinking yoghurt was finalised and dispensations were granted to the affected parties to allow sufficient time rectify matters respectively end April and May 2012. Scheduled meeting and joint sampling action with DAFF inspectorate regarding adulterated cheese took place on 23 August 2012.

Actions regarding infringements in terms of the Regulations relating to dairy and imitation dairy products, with specific reference to misleading claims and incorrect composition and labelling of fermented products (amasi, yoghurt and cheese) served as priority during the last quarter of 2012. The establishment of a workgroup consisting of officials of DAFF, DOH, NRCS and DSA has been initiated of which the first meeting will take place in March 2013. The purpose of the workgroup is to address labelling non-conformances in terms of the respective regulations and to facilitate remedial action through official complaints to the relevant authorities.

DAFF Directorate Food Safety and Quality Assurance – FSQA (policy making)

Communication with FSQA included compositional standards relating to butter spreads, fermented milk, the use of a quality certification mark on dairy products, proposed regulations relating to dairy and imitation dairy products and dispensations relating to cultured milk and cream cheese. A scheduled meeting at the offices of DSA was held to discuss the harmonisation of DAFF and Health legislation was followed up and proposed amendments were included in the draft regulations relating to dairy and imitation dairy products.

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DAFF Directorate Animal Health (State Veterinarians)

Communication with the department officals regarding the availability of bovine tuberculin stock and interim procedures to control the problem by state veterinarians were followed up and communicated following previous shortages. The problems experienced regarding certification of export dairy facilities in terms of Veterinary Procedural Notices served as priority. The above issues were subsequently also minuted at the Milk SA export certification workgroup.

NRCS (National Regulator for Compulsory Specifications): Legal Metrology

The DSA regularly liaised with the Senior manager, inspections: Legal Metrology. A final report regarding metrology infringements was forwarded to the NRCS as per standard agreement end October 2012.

SABS (South African Bureau of Standards)

DSA serves on the Technical Committee 1038: Dairy Standards, Sub-Committee 70D: Legal Metrology - sale of goods as well as the Technical Committee 1025: Hygiene practises in the food industry. All relevant information regarding standards as per (SOP) was communicated to the dairy industry. .

Milk South Africa

DSA attended the scheduled Milk SA and Milk SA Advisory Committee meetings on which it serves and also interacted on a regular basis with the project managers of the Milk SA Consumer Education Project and SAMPRO Training. Regular assistance to SAMPRO and MPO members regarding health and agricultural legislation is continuous.

CGCSA

Food Safety Initiative: Weekly contact with Consumer Goods Council of South Africa (CGCSA): Food Safety Initiative regarding monitoring of any food safety and quality related aspects that may have an impact on the organised dairy industry was maintained. Meetings were held with the manager of the Food Safety Initiative regarding the proposed retail food safety audit (Global Market System) and the position and role of the DSA in the context of the proposed system were held and followed up with a letter to DSA Board. Finalization of a service level agreement is earmarked during the first quarter of 2013.

SASDT

DSA as elected member of the management of SASDT Northern division attended scheduled meetings and participated in the planning and programme of the 2012 SASDT symposium that took place in KZN, April 2012.

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SANCU

DSA communicated with the SA National Consumer Union regularly regarding food safety and quality related issues. SAAFoST

DSA attended the general meeting held on 28 August 2012.

Liaison on legislation with authorities

The DSA as member of the Food Legislative Advisory Group (FLAG) of the Directorate Food Control regularly communicated with the department regarding draft legislation under the Health Act as well as the Foodstuffs Cosmetics and Disinfectants Act. The DSA through its Technical Advisory Committee compiled comments regarding UV treatment of fresh milk. The following regulations, standards and guidelines were communicated to the organised dairy industry and /or commented on during 2012:

• Amendments to the Regulations relating to the labeling and advertising of foodstuffs R45 of 19 January 2012.

• SANS 241-1: 2011 Ed. 1 Drinking water Part 1: Microbiological, physical, aesthetic and chemical determinants and SANS 241-2:2011 Ed. 1 Drinking water Part 2: Application of SANS 241-1.

• ISO 22002-3/2011 Prerequisite programmes on food safety -- Part 3: Farming.

• Regulations relating to the classification, packing and marking of fat spreads intended for sale in the Republic of SA.

• Draft regulations relating to the reduction of sodium in certain foodstuffs.• New draft infant food regulations.• Good manufacturing practise guideline for plastic packaging in the food

industry.• Review of R918 of 1997 - Regulations governing general hygiene

requirements for food premises and the transport of food. The new regulation R962 was published on 23 November 2012;

• Review of R1256 of 1986 - Regulations relating to milk sheds, transport of milk and related matters. The new regulation R961 was published on 23 November 2012

• Regulations relating to sweeteners;• Regulations relating to dairy products and imitation dairy products. A follow

up meeting between DAFF and organized dairy industry is scheduled early 2013;

• Regulations pertaining to dairy ice cream, ice cream, frozen dessert, frozen yoghurt, fruit sorbet, fruit ice and flavoured ice cream. Publication of the final regulations is expected early 2012.

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• Draft SANS 289: Labelling requirements for pre-packaged products and general requirements for the sale of goods subject to legal metrology control.

EHP Information and education project

This project supports the transformation goals of Milk SA as more than 90% of attendees were from previous disadvantaged individuals.

DSA participated in / presented:

DSA Code of practice at two successful training workshops of KZN Ethekwini Metro with 80 EHP’s attending 1 and 8 March 2012 respectively.

Milk supply stakeholder forum meeting of Lejweleputswa Municipality (Welkom) on 16 August 2012.

National Environmental Health Practitioners Day in Queenstown and presented on the food safety risks involved in the uncontrolled sale of milk and other dairy products – 26 October 2012

Ekurhuleni Environmental Health Practitioners forum meeting and presented on correct sampling procedures as well as corrective action on non-conforming dairy product in the retail - 8 October 2012.

Tshwane Environmental Health regarding correct sampling procedures as well as corrective action on non-conforming dairy product in the retail - 30 October 2012.

Student EHP information sessions held: Durban University of Technology 19 April 2012 Nelson Mandela Metropolitan University 26 April 2012 Cape Peninsula University of Technology 3 and 4 May 2012 Central University of the Free State 7 May 2012 Mangosuthu University of Technology - 22 August 2012 Tshwane University of Technology - 11 September 2012

Media communication

The DSA focused on food safety and compositional standard related articles and advertorials in industry magazines which included amongst others Dairy Mail, Farmlink and Veeplaas. Scheduled talks on regional and national radio stations regarding dairy quality and safety were conducted. The DSA also exhibited in conjunction with its Dairy Quality Club members (non-statutory) at the World Dairy Summit (SANCIDF) in Cape Town during November 2012.

Development of guideline documentation

Review of the Dairy Standard Agency Code of Practise and extension document (Farmers Code of practice in draft format) was postponed until 2013 as a result of legislation amendments (milk shed regulations) scheduled for publication November/December 2012.

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As stated under item 3 the DSA acknowledges the existence and contribution of developing black farmers to the SA dairy industry as well as the need for the development and implementation of appropriate supportive services required to create a sustainable environment for food safety and quality raw milk production. During 2012 the DSA in terms of its statutory and non-statutory projects continued to examine its activities for possible areas of improvement and expansion.

8.9 Project title: Industry Information (Project leader: MPO)

i. Responsible institution: Milk Producers’ Organization.

ii. Purpose of the project:

The main goal of the industry information project is to ensure that role players in the dairy industry receive timely, unbiased information on important tends in the dairy industry. This was achieved by regular publication of the three MILK SA publications, namely Dairy Digits, Lacto Data and Dairy Industry Review.

iii. Summary of project performance:

Dairy Digits is published monthly in The Dairy Mail and provides latest information on milk production, imports and exports as well as local and international prices trends. It is also published on the Milk SA and The Dairy Mail websites and disseminated electronically to amongst others, all persons registered with Milk South Africa.

Lacto Data is a comprehensive survey of the dairy industry and is published twice a year in April and November in The Dairy Mail and disseminated to amongst others, all persons registered with Milk South Africa.

The Dairy Industry Review is published three times per year in The Dairy Mail and the above-mentioned websites. It is also disseminated to at least everyone registered as a role-player with Milk South Africa.

Regular meetings of the Industry Information Workgroup and the Advisory Committee ensure that the information is correct, unbiased and that methodologies are constantly evaluated and updated.

International information as analyzed and disseminated to role-players via the above-mentioned and other publications.

A report on dairy farming in South Africa was compiled on request of the International Dairy Federation and included in the IDF World Dairy Situation 2012.

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Milk SA collated statutory industry information of which non-confidential information was provided to the project leader for publication in the above-mentioned products.

Milk SA financed the administration of statutory regulations for which the Milk Producers' Organization (MPO) was responsible. The MPO completed a data analysis and a report i.r.o. 2011 was issued in 2012. A report i.r.o. 2012 would be forthcoming in 2013.

The variables in terms of which Milk SA reported in its three different publications are summarized in the following table:

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Lacto Data(2x / annum)

Dairy IndustryReview(3x / annum)

DairyDigits(Monthly)

Source

1 Structure: primary industry: No. of milk producers per province, Four selected years + current yr (Table)

MPO Statutory information

2 Structure: primary industry: Milk production + cows p/producer (selected yrs) (Table) MPO3 Structure: primary industry: Milk production density (litre / km2) per district (Figure) MPO Statutory

information4 Structure: primary industry: Size distribution of dairy herds, previous or most recent yr

(Graph)MPO Statutory information

5 Structure: primary industry: Cow density per district (cows / km2), latest year (Figure) MPO Statutory information

6 Structure: primary industry: Distribution of herds based on daily production per cow in herd, Previous year (Graph)

MPO Statutory information

7 Structure: secondary industry: No. of PD’s + milk buyers/province registered with Milk SA (Table)

Milk SA

8 Raw milk production per month + annum: Past 4 years and current (Graph) Milk SA9 Raw milk production per annum: Past 7 years and current year (Graph) Milk SA10 Raw milk production: Previous year litres + percentage change of previous year vs prior year Milk SA11 Raw milk production: Current year litres + percentage change vs same period in previous year Milk SA12 Raw milk production trends - monthly: Past 3 yrs and current month (Graph) Milk SA13 Utilization of milk in concentrated and other products - Since 2006 (Graph) Milk SA14 Market: composition of the SA liquid products market - previous year (Pie Graph) Milk SA - Industry

estimate15 Market: composition of the SA concentrated products market - previous year (Pie graph) Milk SA - Industry

estimate16 Farm requisite price index of latest available month + percentage change: same period in

previous yearDAFF

17 Price: Price index of RSA raw milk on farm level, monthly - since 2008 + current year (Table - DIR) (Graph - LD)

Stats SA

18 Price: International milk producer prices (Rand), Past 3 years + current year (Table) LTO Netherlands, SARB

19 Price: Monthly international FOB Oceanic product prices - since 2008 + current year: $US/ton and R/ton (Table)

US Price: USDACurrency: SARB

20 Price: International dairy product prices (USA $/ton FOB) - Since 2000 + current year (Graph) USDA21 Price: International dairy product prices (R/ton FOB) - Past four years + current year (Graph) USDA22 Price: Producer milk, manuf dairy products and retail milk & egg price indexes since 2000 to

curr year (Graph)DAFF, Stats SA

23 Price: Price indices of farm requisites, Past 5 years + current year (Table) DAFF24 Price: Raw milk price index (SA) of latest month available + percentage change: same period

in previous yearStats SA

25 Price: Production price index of Manufactured dairy products Stats SA26 Price: International dairy product prices R/ton (f.o.b.): latest four years and current year

(Graph)USDA + Reserve bank

27 Price: Average import and export prices for the main (6 figure) dairy products for the past five years and those of the current year to date, per tariff heading.

Compiled by SAMPRO from SARS Statistics

28 Imports and Exports y-t-d + percentage change: same period previous year Compiled by SAMPRO from SARS Statistics

29 Imports and Exports: previous year + percentage change vs prior year Compiled by SAMPRO from SARS Statistics

30 Imports: Annual imports, previous five years and year-to-date in tonnes (Table) Compiled by SAMPRO from SARS Statistics

31 Imports: Annual imports of dairy products, last 15 years: Kg’s and milk equivalent (Graph) Compiled by SAMPRO from SARS Statistics

32 Imports: Monthly cumulative net imports, milk equivalent basis, last four years and current year (Graph)

Compiled by SAMPRO from SARS Statistics

33 Imports: Monthly cumulative imports, milk equivalent basis, last fifteen years and current year (Graph)

Compiled by SAMPRO from SARS Statistics

34 Imports: Percentage composition of imports (mass base) - Since 2006 (Graph) Compiled by SAMPRO from SARS Statistics

35 Exports: previous five years and year-to-date in kilogrammes (Table) Compiled by SAMPRO from SARS Statistics

36 Exports: Composition of annual exports, since 2002 + current year (Graph) Compiled by SAMPRO from SARS Statistics

37 Exports: Annual net exports, milk equivalent basis, since 2002 + current year (Graph) Compiled by SAMPRO from SARS Statistics

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38 Exports: Percentage composition of Exports (mass base), Previous year (Pie Graph) Calculated by MPO based on SAMPRO report i.r.o. SARS statistics

39 Imports: Percentage composition of Imports (mass base), Previous year (Pie Graph) Calculated by MPO based on SAMPRO report i.r.o. SARS statistics

40 Imports + Exports: Total, Past 8 years, Ton (Graph) Compiled by SAMPRO from SARS Statistics

41 Imports + Exports: Total, Past 8 years, Milk Equivalent base (Graph) Compiled by SAMPRO from SARS Statistics

42 Imports as a percentage of exports. Compiled by SAMPRO from SARS Statistics

43 Retail sales: Quantity and price Compiled by SAMPRO based on Nielsen information

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8.10 Project title: Milk SA’s participation in the SA National Committee of the International Dairy Federation (SANCIDF)

i. Responsible Institution: SA National Committee of the International Dairy Federation (SANCIDF).

ii. Purpose of the project:

To promote and enhance the production, trade, consumption, and image of milk and milk products in South Africa by contributing scientific, technical and economic information to IDF and after dissemination and compilation by the IDF Standing Committees, provide useable information to the local industry.

iii. Summary of project performance:

As far as Inputs to IDF are concerned, 7 Questionnaires were completed and forwarded to IDF, Brussels.

5 New questionnaires and 7 New Work Item proposals were received and returned.

Information made available to local industry stake holders, consisted of 9 Bulletins, 5 Standards and 19 News Briefs/Leaders Briefs.

14 Articles on IDF matters also appeared in 12 issues of The Dairy Mail.

All Bulletins, Standards and News Briefs/Leaders Briefs were forwarded to members of SANCIDF and also to the Milk SA CEO during the year for inclusion in the Milk SA website.

Other than regular communication with IDF Head Office regarding the planning of WDS 2012, there were no issues that had to be brought to the attention of IDF. The 2012 World Dairy Summit was promoted amongst local dairy industry leaders by way of 8 relevant news briefs that were circulated to representatives of member organizations, associate members and rapporteurs.

Daily newsletters produced at the summit is also available on the WDS website and articles in the December and January editions of The Dairy Mail reported on the major issues dealt with at the WDS.

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