Scan for Capital Harvest

August 2017This is a monthly environmental scanning document with extracts from a range of press

articles deemed to be of possible strategic importance to Capital Harvest. The articles arearranged according to a framework of topics. For each article its title, author (where

available) and source are stated.

Editorial

Agriculture

In the Netherlands 60% of farmers over the age of 55 have nobody to whom they can bequeth theirland. Many of these farmers to not wish to see their ancestral land transferred to a big corporate. Anonline service launched in 2011 called “Farmer Seeks Farmer” helps to connect these Dutch farmerswith young people seeking land. The app is designed to function like a dating site – users register andwait for their search to find a match. An initial meeting is set up to see whether the farmers arecompatible, and the newcomer then has to spend a week on the farm before they start discussingthe terms of the transfer.

Dutch farmers in the organic poultry sector have found themselves in the midst of a tainted eggscandal. The Netherlands, Belgium and Germany have traded accusations about which country ismost responsible. Organic eggs contaminated with the pesticide Fipronil were found in numerous EUcountries, with millions of eggs and egg-based products pulled from supermarket shelves. Fipronil iscommonly used to get rid of fleas, lice and ticks on animals, but is banned from use in the foodindustry in the EU. When eaten in large quantities it can harm human kidneys, liver and thyroidglands. The level of the insecticide found in the eggs was, however, too low to pose a health risk tohumans. Despite this, a major scandal ensued and losses total tens of millions of euros. Two menwho own a company that treats poultry to eradicate red lice, were arrested in August. Farmers saythe company claimed to sell a natural pesticide made of eucalyptus and menthol. The organicfarmers now have to rid their chicken pens from Fipronil, but it is a difficult task as they cannot usethe same chemical products as commercial farmers. As a result of the scandal, German chemicalmanufacturer BASF has said it will not re-apply for EU authorisation for some uses of Fipronil.

Despite the egg scare, organic farming is booming in Europe, and organic consumption is growingfaster than production. Countries in the South have the largest organic acreage and the North has

the most consumers. Germany, France, Italy and the UK buy the most organic products in valueterms, while shoppers in Denmark, Austria and Sweden have the highest percentage of organicproducts in their shopping baskets (8.4%, 8% and 7.7% respectively). Germany is Europe’s leadingorganic market and has quadrupled in 15 years reaching €8.62 billion in turnover in 2015 (5% of allfood consumed in the country). Despite this, by 2015, organic farmland still only represented 6.2%of agricultural land in Europe.

This year south eastern Europe saw one of its hottest and driest summers in years. Farmers inRomania and Hungary have suffered significant losses. Serbia was particularly hard-hit, losing 60% ofits maize. Fish stocks in the country are threatened by drastically reduced water levels. The Serbiangovernment says shortages following this year's drought will be covered from state reserves.Serbia's government says it is further protecting local farmers by limiting foreign land ownership. InAugust lawmakers voted that EU citizens who wish to purchase land in Serbia will now have to live inthe country for at least ten years, and such plots are limited to two hectares. Furthermore, EUcitizens must farm the land as a lessee for at least three years before buying it, and the seller mustfirst offer it to the state. Non-EU citizens cannot buy farmland at all, except through companies withlocal units. Land close to military facilities and in national parks cannot be sold to a foreigner fromany part of the world. The restrictions were put in place just days before an agreement came intoeffect according to which the country's markets had to be further opened. Serbia signed aStabilization and Association Agreement with the EU in 2008, accepting a time line to graduallyremove trade barriers. Serbia hopes to become an EU member by 2020.

Russian president Putin’s 2014 ban on EU cheese imports has since driven up milk prices in Russia byso much that French yogurt maker Danone has transported almost 5 000 cows to a farm in Siberia toensure its own affordable milk supply. The Holstein cows travelled 4 500 km in trucks from theNetherlands and Germany. Danone does not invest in agriculture, but made an exception in this case.

As part of an ongoing problem, more lawsuits regarding pesticide drifting are being filed in the US.This past growing season saw at least a million hectares of crops damaged. The complaint is thatdicamba – produced by Monsanto, Du Pont and BASF – has been drifting from farms with GM soyand cotton (specifically designed to resist to the pesticide), and ending up on neighbouring farms.Some states have restricted the use of dicamba. It is very difficult for farmers to prove whichneighbour's dicamba damaged their crops – there are 25 million acres of dicamba-resistant soy andcotton in the US. Monsanto's response is that drifting occurs when counterfeit dicamba is used,when spraying is done incorrectly, or when farmers spray on windy days.

The net income of US farmers is this year expected to see its first increase since 2013. This has madesome economists cautiously optimistic that the agricultural slump of recent years may havebottomed out. Signs of stability have returned to the US farm economy. Two key measures, debt-to-equity and debt-to-asset ratios, will likely remain little changed in 2017. Grain prices in 2018 will be amajor determinant as to whether US farmers can indeed look forward to better profits.

The Dutch have developed a robotic hand with a specialized gripper. The gripper mimics the humangrasp to pick up cabbage and lettuce heads and orient them so that they fit into a machine thatremoves the core. These inventions are crucial as the farm labour force shrinks around the world. Inthe US the number of full-time equivalent field and crop workers decreased by more than 20%between 2002 and 2014. Reasons for the decline include reduced immigration, declining birth rates,an unwillingness to perform agricultural work, and an ageing farm population. Agricultural robotics isexpected to grow to a $16.3 billion industry by 2020. In future, farmers will increasingly need skilledworkers who are comfortable with engineering, data analysis, product development, and agriculture.

China is widely regarded as the country with the most occurrences of corrupted, counterfeit, andcontaminated food. Solutions to auditing food include molecular markers and genetic fingerprintsthat help authenticate natural products, and digital technology that tracks and records food fromfarm to plate. Some of the biggest food companies are backing technology that grew out ofblockchain – essentially a shared, cryptographically secure ledger of transactions. Walmart has justcompleted a trial that used blockchain to track pork in China, where it has more than 400 stores. Thetime taken to track the meat’s supply chain was cut from 26 hours to just seconds using blockchain,and the scope of the project is being widened to other products. Blockchain technology has beenaround for eight years, and is also being used by China's Alibaba to track food. The online retailerwants to create a globally respected framework that protects the reputation of food merchants andgives consumers confidence to purchase food online. Blockchain improves traceability. Its databaseof records is built like a chain and can’t be broken or re-ordered without disrupting the entireconnection. But critics say blockchain can be useless for protecting against deliberate food-fraudunless every piece of data is scrutinized to be accurate. It will, however, record the identity of thosewho input data into the chain, thereby removing the anonymity that has helped food-fraud to thrive.

In India the cost of fruit and vegetables has been on the increase, in contrast with the global scenariowhere food is generally becoming cheaper. Food inflation was kept well under control over thesummer in India, but now tomatoes and onions, in particular, are again becoming expensive. Up to16% of the tomato crop is wasted due to lack of proper transport and cold storage facilities. Foodmakes up an unusually large percentage of India's consumption basket – 46%. Tomatoes areconsumed in at least 75% of Indian households. Together with potatoes and onions, they form thecore of Indian cooking as the base for several curries and snacks. These vegetables hold politicalpower in India, a country where history has shown that high vegetable prices can ultimately topplethe government.

The IGA supermarket in Montreal, Canada now has a rooftop garden. Over 30 kinds of vegetablesand greens are grown and harvested on a half-acre, grown in just six inches of soil. The green roofcools the supermarket building in summer, and its water comes from the store's dehumidificationsystem. There’s a camera on the roof so shoppers can see the garden while they shop. Despite thehigh quality and low volume, vegetable prices are reasonable since there are no transportation costs.Birds and ducks nest in the garden in spring, and there are eight bee hives for pollination. The honeyfrom the hives is also sold in the store. The only downside for shoppers, is that only items that are inseason can be sold. IGA will be extending its product range by adding strawberries, ground cherriesand mushrooms soon. All the compost required for the mushrooms will be produced from the store'sown waste.

On-the-go snacking of packaged fruit and vegetables has become a billion-dollar business. In the USit has recorded a compound annual growth rate of more than 10% every year from 2012 to 2016.Fresh snacking fruit accounts for 44% of all on-the-go snacking produce in value terms, freshsmoothies for 27%, snacking vegetables for 17%, dried fruit/nut snack mixes for 7%, and fruit cupsfor 5%. Shoppers may prefer different types of fruit and vegetables as snacks, compared with whatthey would buy for regular fruit and vegetable purchases, so producers should note that the trendsdon't always co-incide.

In SA, convenience shopping is a major trend in fresh produce retailing, both in the formal and theinformal sectors. In general, SA retailers are decreasing floor space for groceries and increasing shelfspace for fresh produce. Major supermarkets in SA account for R335 billion of the country's totalfood market, with formal and hybrid wholesalers accounting for R25 billion. The big unknown is thevalue of the informal wholesale and hybrid market. Estimates of this market range from R31.8 billionto R168 billion, making it a market that food producers cannot ignore.

Zimbabwe's revenue from avocado exports has increased to $4.2 million last year, driven mainly bylarge-scale avocado producers in Manicaland. The main buyers are the Netherlands, the UK, Franceand Germany.Zimbabwe wants to increase exports to the EU, the US and Asia. Per capita consumption of avos inthe US has risen from 1.5 kg per year in 2006 to over 3 kg in 2015.

Despite the worst drought in more than a decade, SA’s agricultural sector recorded a positive tradebalance of $2.3 billion in 2016. This was boosted by growth in exports of fruits, beverages, spirits andvegetables, with the total agricultural export value amounting to $8.6 billion, up 6% from 2015. TheWestern Cape – which was not yet feeling the worst of its drought in 2016 – continued to producemore than half of SA’s agricultural exports. Africa remained SA’s largest export market, buying 44% ofagricultural exports, with the EU and Asia taking 26% and 22% respectively.

Amid the drought, irrigation farmers are required to measure water use and record monthly waterusage statistics as from 1 March this year. However, the rules are vague on the measurementinstruments that ought to be used. Some farmers have purchased meters costing from R5 000upwards in an attempt to comply with the regulations, only to discover that their meters are deemedunreliable. The Department of Water and Sanitation is testing water meters that meet its standards,but these cost around R20 000. AgriSA has advised farmers to hold off installation until there is moreclarity regarding the approved meters. Only farmers who have specifically been asked to installmeters, are presently at risk.

Hortgro has asked fruit farmers to prepare themselves for dealing with 30% less rainfall in future. TheTheewaterskloof Dam region is problematic, while the situation in the Upper Berg River, Winelandsand the EGVV region (Elgin, Grabouw, Vyeboom, Villiersdorp) is disastrous. Soil analysis isincreasingly being used to distribute the scarce water in an optimal way, and the industry is workingharder to understand precisely when to water trees – and distributing this knowledge. Unfortunately,farmers still face difficult choices – spreading too little water across all existing orchards is not aviable solution. Orchards have to be ranked according to income per unit of water (Rand/m3).Orchards that earn the most should receive 100% of their water needs; orchards that merely need tobe kept alive receive 25% of their needs; while those from which one wishes to obtain a reasonableyield, as well as young orchards, should receive 50% of their water needs.

Table grape growers, like all fruit growers in the Western Cape, are uncertain as to what the new dryseason will hold. The SA Table Grape Industry is studying the water footprint of table grapecultivation, and trying to educate producers about water usage. The Northern table grape productionregion depends on summer rainfall, as does the Orange River region with regards to its watercatchment areas. All other table grape production areas are winter rainfall areas. In the Hex RiverValley there are many boreholes, and farmers are diverting water from vegetable crops or winegrapes to maintain their table grapes.

Following the bad publicity of the Sour Grapes documentary, Wines of SA has produced its owndocumentary, Creating the Blend, about SA's wine industry. The 20-minute long video tells a positivetale of upliftment and transformation. The focus is on work by the Vinpro foundation and Wieta, aswell as interviews with Bosman Family Vineyards of Wellington (where a new apartment complex hasbeen built for workers) and Bonnievale Wines.

Citrus exports from the Sundays River Valley will this season likely be 23% lower than last season.Production is set to peak in 2025. There are 120 farmers in the valley, with the top 50 farmersproducing 80% of output. The main citrus varieties produced in the valley are lemons, valencias andnavels. There is concern that a global over-production of lemons will harm citrus farmers. The price

of lemons has already halved this season, and farmers have been asked to consider their optionscarefully before planting more. On the bright side, lemons are not susceptible to the prevailing citrusproblem of false coddling moth.

Across SA there is an oversupply of most vegetables, a product of the warm winter as well asdepressed consumer buying power. Vegetable prices throughout the country are unusually low.

The Western Cape government has announced that it supports the development of an integratedagri-park in Philippi. Philippi is earmarked to be a leading agricultural hub in the province, bringing insome R8.1 billion in revenue for the City of Cape Town, and creating 112 000 jobs. The plan is tohouse agri-processing industries, specialised agricultural academies, business incubators, and greenhuman settlement projects where the members of the surrounding previously disadvantagedcommunities can be employed. Water for farming will come from the Cape aquifer. Transport isessential to the success of an agri-park, so 6 MyCiti bus routes, a station, and new roads are beingplanned.

The chief executive of the SA Poultry association, Kevin Lovell, resigned in August. This comes at atime when the industry is gravely concerned about bird flu – FNB says the outbreak could force smallproducers out of business. These producers have already been weakened by the drought. The flu isalso presently a problem in the US, Hong Kong, China and some other parts of Europe and Africa.SA's poultry industry and the government are considering vaccinating birds against the virus.Government is weary of vaccination, as its previous vaccination campaign 15 years ago accidentallycreated an endemic illness. Very few countries vaccinate against bird flu, because it is oftenunsuccessful. However, the culling of large numbers of birds is also not sustainable. In South Korea,40 million birds have been culled and the problems has still not been solved.

The African Farmers' Association of SA (Afasa) Youth is led by a young farmer and former banker,Nono Sekhoto. Nono says black people do not feature in the top 35 000 commercial SA farmers, dueto the way the system was built. White commercial farmers were created through accessing land,knowledge and resources that were transferred from generation to generation. A farmer's fatherusually mentors him until the farm is handed over. With land now obtained through governmentprogrammes, black farmers are first-generation farmers who have inadequate support, little or nofarming skills and poor access to finance and markets. Most of all, they lack a mentor. Meanwhile,many white commercial farmers are ageing with little succession planning. Often their children donot wish to farm. Nono wants to find ways to connect the new entrants with these experiencedfarmers.

Banking & Capital Markets

Nedbank says agricultural finance has changed significantly over the last three decades, particularlyregarding the size of loans and the focus of financiers. In the mid-1980s, 22% of farm debt was heldby the Land Bank, 26% by commercial banks and 30% by co-ops. By the end of 2016, the Land Bank'sportion had not changed significantly (28%), but banks now hold 60% of loans and agriculturalbusinesses only 7%. This is primarily due to a change in ownership of the former co-ops, which arenow mostly owned by institutional investors. While the Land Bank remains an important financier, itis increasingly focussed on transformation rather than established commercial farmers. At the sametime, the high value of agricultural land has made it viable for banks to get more involved withagriculture. Banks also increasingly focus on secondary agricultural businesses, where significantvalue is added.

Mohammad Karaan resigned from the board of the Land Bank with effect 31 August, before hissecond term would have ended in December. Dumo Motau has taken over as chair of the credit andinvestment committee. She started her second term as board member in March. She has worked atthe Development Bank of SA, the Reserve Bank and the Treasury.

The Land Bank received a clean audit report and posted solid results for the year ended March. Grossloans increased by 11% (to R43.3 billion) and profit by 13%. Non-performing loans decreased from8.8% to 7.1%. The development finance book increased from R2.5 billion in 2016 to R4.9 billion in2017. Land Bank would like to finance value chains that support emerging farmers, as they often donot have land to offer as collateral. It would like to see more joint ventures to support emergingfarmers, and has met with Agri SA and Afasa in this regard. The Land Bank's insurance arm cameunder some pressure in the financial year due to the drought, with a high claims-to-premiums ratio.It is working with government to find a way to subsidise emerging farmers' insurance premiums, asthey are particularly vulnerable to natural disasters. By March next year, the bank should obtain itstarget of having 50% of the finance in its own capital structure in medium term rather than shortterm loans. The bank sees the three main environmental uncertainties as SA's credit rating, and thesustainability of land reform programmes, and the lack of seamless co-operation between differentarms of government when it comes to supporting emerging farmers.

The Land Bank has extended the availability of drought loans in order to help farmers in theNorthern, Eastern and Western Cape provinces. The R400 million in drought relief funds, which wasobtained by the Land Bank from the IDC last year, will now be available until March 2018. If needed,the bank will apply for the funds to be made available for a further year. Farmers in areas where adrought disaster has been declared, qualify for the loans which are granted for 10 years at 3% underprime. R190 million is available for new applications.

Emerging grain farmers in the Eastern Cape could benefit from an empowerment project launchedby the Black Business Council (BBC) in partnership with Ikhephu Agricultural Secondary Cooperative.The project is set to support emerging farmers by involving them in an integrated value chain. Theproject also includes the involvement of the BBC’s partners BHBW (a Barloworld and BayWaCompany), Land Bank, Unigrain, Tongaat Hullet, DuPont, Kynoch and VBS Mutual Bank.

Futuregrowth is monitoring developments at the IDC after it failed to disclose details relating toloans to politically exposed persons in its annual report. It was not a legally binding condition ofFuturegrowth's continued funding that the disclosure should be made, but the IDC had committed toit. As late as July this year, the IDC indicated that it would disclose the details. The Land Bank alsofailed to report on loans to the politically connected in its annual report released earlier in August.

Business Report wrote in August that it had trouble getting Treasury to respond to its questionsabout government’s R9 billion Jobs Fund. Business Report had a series of questions about the statusof the fund. These included questions related to the amount paid out to date to enterprises, howmany permanent jobs had been created since 2011 and who managed and implemented themandate of the Jobs Fund. Treasury was also requested to provide a full list of all the companies,NGOs and other organisations that had received funding from the Jobs Fund since 2011. On 23August Business Report published a reply from the Jobs Fund addressing some of the questions, butpointed out that a list of those who received funding had still not been provided. Business Reportrecently launched the 'BR Corruption Buster Series', and its team says it is investigating the fund.

In August the Competition Tribunal approved the sale of the SA Bank of Athens, owned by Greece'sNational Bank (GNB), to GroCapital, a subsidiary of Afgri Holdings and Fairfax Africa. The approval

was without conditions. GNB's entire shareholding of 99.8% was sold. SA's finance ministry indicatedthat it will not oppose the merger.

Contents

AgricultureOnline matchmaker aims to save Dutch farms with no heirsEU to call contaminated eggs crisis meetingDamage from infected-egg scare costs Netherlands at least €150mDutch organic farmers feel duped in tainted eggs scandalBASF to stop use of pesticide after tainted egg scandalOrganic agriculture booming in EuropeExtreme heat in Europe decimating cropsSerbia passes bill cementing limits of land sales to foreignersDanone sends 5,000 cows to Siberia in quest for cheaper milkPesticide ‘drifting’ wreaks havoc across U.S. CropsFirst U.S. farm-income gain in four years signals hope of bottomHow robots will feed the world – Part 1Beating China’s fake-food scourgeThe new enemy in India's fight against inflation? TomatoesCanadian retailer first of its kind to install rooftop gardenOn-the-go produce industry growing by 10% each yearConvenience shopping a growing trend in fresh produceZimbabwe avocado exports reach $4.2mFarming exports up 6% despite severe droughtWatermeters: Verwarring oor nuwe reëlsWestern Cape drought: A natural and man-made disasterTable grapes in Western Cape: drought causes uncertaintyNuwe wyndokkie wys bedryf se goeie kantSitrusuitvoer uit Sondagsrivier tuimelSuurlemoenmark se bodem kan uitvalSouth Africa: Warm winter and low demand lead to vegetable oversupplyWestern Cape government backs Philippi's farming potentialKevin Lovell bedank skielikSouth Africa's poultry industry is hurting as avian flu worsensInenting van pluimvee in SA teen H5N8?New black 'boers' need a helping hand to till the land

Banking & Capital MarketsVeranderinge in landboufinansieringKaraan lê tuig neer by Land BankLand Bank lewer stewige resultateLand Bank on track to fulfilling developmental mandateLenings vir álle boere in rampgebiedeMore opportunities for emerging grain farmersFuturegrowth keeps an eye on developments at the IDCTreasury vague over R9bn jobs fund and R28bn IFMS ‘tender’Sale of Greece’s National Bank’s SA unit gets green lightTribunal approves SA Bank of Athens merger

Agriculture

Online matchmaker aims to save Dutch farms with no heirs

Standing in his rubber boots in his fields surrounded by his beloved Red Holstein cows, Dutch farmerGerard Hartveld has an air of resignation as he contemplates the future.Hartveld says he is a dairy farmer in "his heart" and soul. Yet, his heart is heavy knowing that, likemany who work the land today in The Netherlands, he has no-one to inherit his family farm.The figures are staggering. Some 60% of those aged over 55 have no-one to whom they canbequeath their land, according to the Dutch central statistics office (CBS).That means some 15 000 farms could disappear in the next decade, with more than eight out of 10sheep farmers, who are reaching retirement, having no successors. Although pig and cow farmers are faring slightly better, most family farms have witnessed an exodusof the younger generation as they desert the fields and barns in their droves lured by the promise offortunes to be made in the city.Hartveld's farm in central Nieuwveen has been in his family for more than a century - since 1913. Heknows every inch of the land as well as his cows, including the doyens of the 20-strong dairy herd,Miranda and Greta.But with no children, the time will come "in 15 years or so, not before", when this reserved 52-year-old man of few words will see the land and his herd "pass out of the family" to be taken over bystrangers.This is where an innovative Dutch scheme seeks to step in, aiming to rescue such farms which makeup an integral part of the landscape in the lowlands country.Thomas Legrand is a 27-year-old Frenchman, who, with his Dutch girlfriend, is looking for a farm torun. But with no contacts in the farming world, the couple are turning to an online service called"Farmer Seeks Farmer.""It's like a dating site," said Legrand, who "dreams of taking over a small sheep farm on a polder."It is the small holdings which have been most affected by the breakdown of the family chain: fertilelands in this agriculture-rich nation which used to be passed down from generation to generation,and ancestral courtyards which once echoed with the cries of playing children.Backed by the Young Farmers' Association, pig farmer Sander Thus has been working with the onlinescheme putting those close to retirement in contact with young would-be farmers seeking their ownpatch of agricultural land.Like an internet dating website, users register on the site and wait for their search to throw up amatch.Thus, 28, arranges an initial meeting between the two to see if they click. The young newcomer then spends a week on the farm so the two sides get to know each otherbetter, before eventually sitting down to business to discuss the terms of any transfer -- which canrange from a straightforward sale to a tenancy agreement.Soon, a new announcement will be posted on the "Farmer Seeks Farmer" site by a cereal producer inthe southern Limburg province whose three children all moved to the city.The 61-year-old farmer, who declined to be named and admitted to AFP that he was "tired", alreadyknows what he's going to write on his profile. "Cereal producer in the Limburg province is looking for a serious youngster to take over one hundredhectares of ancestral land, which I don't want to see fall into corporate hands."Today's young farmers are often those embracing the profession out of passion, a desire to get theirhands dirty or simply to escape the hectic pace of life in the city."Today, most of those looking to take over a farm are self-employed between the ages of 20 and 40,who don't come from the farming world at all but have this desire to roll their sleeves up," said Thus.

Since the scheme was launched in 2011, several dozen farms have moved outside of the originalfamily owners to be taken over by a new generation of farmers.And Thus hopes the numbers will grow, with 135 people searching for land registered on the site,and some 35 existing farmers looking for new blood to farm their lands.For dairy farmer Hartveld however, he says with a mixture of pride and sorrow that when the timecomes he won't need the services of "Farmer Seeks Farmer". There are already several people from neighbouring villages interested in taking over his farm, andpreserving a small piece of Dutch history.

Fin24, 14 August 2017

EU to call contaminated eggs crisis meeting

The EU will call an emergency meeting of ministers over insecticide-tainted eggs, European HealthCommissioner Vytenis Andriukaitis said on Friday, appealing for an end to "blaming and shaming"over the scandal.Andriukaitis told AFP he wanted the Netherlands, Belgium and Germany to stop trading accusationsabout who is responsible for the scare, which involves fipronil, a chemical that can be harmful tohumans."Blaming and shaming will bring us nowhere and I want to stop this," the Lithuanian commissioner,who also deals with food safety issues, said in response to emailed questions."But first things first. Our common job and our priority now is to manage the situation, gatherinformation, focus on the analysis and lessons to be learned in view to improve our system andprevent criminal activity," Andriukaitis said.He added: "That is exactly what I have discussed with the German, Belgian and Dutch ministers thisweek. I proposed to hold a high-level meeting gathering the ministers concerned as well as therepresentatives of the food safety agencies in all member states involved as soon as we have all thefacts available."Contaminated eggs have been found in at least 11 countries since the scare went public on August 1,with millions of eggs and egg-based products being pulled from supermarket shelves.Denmark was the latest to say it had been affected, announcing that 20 contaminated tonnes of eggsimported from Belgian suppliers had been sold there.But there have been rows among Belgium, the Netherlands and Germany - the three countrieswhere the contaminated eggs were first discovered - about who is responsible.Germany has called for action over "criminal" activity.Belgium earlier this week accused the Netherlands of knowing about the fipronil eggs sinceNovember 2016 and failing to notify other countries, a charge the Dutch have denied.However, Belgium itself has been forced to admit that it knew about fipronil in eggs back in June butkept it secret for nearly two months because of a criminal investigation.Dutch and Belgian investigators carried out coordinated raids on several premises on Thursday,arresting two people at a Dutch firm believed to be at the centre of the crisis.Belgian Agriculture Minister Denis Ducarme said in a statement he was "very interested" in having ameeting of ministers from countries affected by the fipronil scandal.Fipronil is commonly used to get rid of fleas, lice and ticks from animals but is banned by theEuropean Union from use in the food industry. When eaten in large quantities it can harm people'skidneys, liver and thyroid glands.The food scare is one of the biggest to hit Europe since the 2013 horsemeat scandal when equinemeat was falsely labelled and sold as other kinds of meat.

The eggs scandal spread to new countries on Thursday, including into eastern Europe for the firsttime as a tonne of contaminated egg yolk was found in Romania, and 21 boxes of the tainted eggswere discovered in Slovakia.It also reached Luxembourg, while Britain said it had imported 700 000 eggs from Dutch farms linkedto the scandal - far more than the 21 000 first thought.But the Danish find of 20 tonnes of tainted eggs was one of the biggest.Danish food authorities said contaminated boiled and peeled eggs were mostly sold to cafes andcaterers, stressing that the level of the insecticide in the eggs was too low to pose a health risk tohumans.

AFP, 11 August 2017

Damage from infected-egg scare costs Netherlands at least €150m

On Monday, Dutch farmers and retailers were counting the costs stemming from the tainted eggscandal that swept Europe, saying the total ran into tens of millions of euros, as two men at thescandal’s centre were due to appear in court."The damage is at least around €150m so far," said Mark de Jong, spokesperson for the ZLTOfederation of southern Dutch farmers and gardeners."It depends how quickly we can get through this crisis, but it may still go up," said De Jong, whoseorganisation represents about 15,000 farmers and gardeners, many of them in the poultry sector."Damage for supermarket chains have run into tens of millions of euros," added Rene Roorda,director of the CBL federation of retailers, whose members include giant supermarket groups such asAlbert Heijn, Aldi, Lidl and Jumbo."We had to pull eggs from the shelves in 4,000 supermarkets. Millions of eggs had to be destroyed,"Roorda said.While untainted eggs were back on the shelves in many shops across the country, Dutch farmers saidthey were still dealing with the fallout over eggs that were found to contain the insecticide fipronil.Iris Odink-Schrijver, treasurer of the Dutch Poultry Farmers’ Union, said it had not yet estimated thedamages."At this point we’re still cleaning our chicken pens, hoping to finally rid it of fipronil," she said.Meanwhile, two men were to make an initial appearance before a judge in the Zwolle district courton Tuesday, in connection with the case, a spokesperson for the public prosecutor’s office said.The men are said to be the owners of Chickfriend, a Dutch company based in central Netherlands,which was hired by farmers to treat chicken pens to eradicate parasitic red lice."The men are to appear in a closed hearing before a judge who will have to decide if they will remainin custody for longer," the spokesperson Marieke van der Molen said.Eggs tainted with fipronil have been discovered in 16 European countries since the scandal came tolight, and have even been found as far afield as Hong Kong.Commonly used to get rid of fleas, lice and ticks from animals, fipronil is banned by the EU from usein the food industry. The issue has sparked a row between Belgium, the Netherlands and Germany,the three countries at the centre of the crisis, about how long officials knew about the problem.

AFP, 14 August 2017

Dutch organic farmers feel duped in tainted eggs scandal

Dutch farmers producing organic eggs, supposedly free from insecticides, joined a chorus of outrageon Friday over the growing tainted-egg scandal, claiming they were duped by the suppliers of areputedly natural pesticide."Organic breeders are very depressed and feel they were fooled by the Chickfriend company, whichsupposedly sold them a clean and natural product," said Miriam van Bree, spokesperson for theBionext organisation for organic farming.At least 20 organic egg farmers have been affected by the scandal in which millions of eggs havebeen contaminated with fipronil - a chemical which can be harmful to humans. They believed theywere using a product which was based on eucalyptus and menthol."Organic breeders always are doing everything they can to have the cleanest, healthiest and longest-lasting eggs that they can be proud of," Van Bree told AFP."Today their eggs are contaminated with an insecticide... it's a huge disappointment," she said.The presence of a mildly toxic substance like fipronil in organic eggs also had "repercussions forconsumer confidence" which has been given "a huge knock", she added.Organic farmers now too have to rid their chicken pens from fipronil and were hamstrung becausethey could not use the same chemical products as commercial farmers."They will have to think hard about how they can clean their farms - it's a unique situation for them,"said Van Bree.The best way was to "put the contaminated chickens on a diet, as fipronil is concentrated in thebird's fat," said Van Bree, who excluded the possibility of slaughter because of animal welfareconcerns.

AFP, 13 August 2017

BASF to stop use of pesticide after tainted egg scandal

German chemical giant BASF said on Thursday that it would not re-apply for EU authorisation forsome uses of pesticide Fipronil, which is at the heart of a tainted egg scandal that has set memberstates at odds."For business reasons, BASF has decided not to pursue re-registration for treatment of seeds inEurope," a spokesperson told AFP, adding that the authorisation would expire on September 30.The pesticide was only authorised for a small number of applications in treating seeds, it added,making the "high costs" of the registration process uneconomical. BASF added that its decision didnot affect the chemical’s use as a "biocide" against ants, cockroaches and termites, which is allowedin the EU until 2023.On Wednesday, Belgium accused the Netherlands food safety authority, NVWA, of failing to inform itthat eggs were tainted with Fipronil, despite knowing about it since last November.NVWA denied it had known definitively about the contamination so soon, but admitted it hadreceived an anonymous tip about the pesticide being used to clean chicken pens in order to combatred lice in that month.The insecticide scandal only became public on August 1, when authorities in the Netherlandsordered eggs pulled from supermarket shelves and urged shoppers to throw any they had away.Contaminated eggs have since been discovered in Germany, Belgium, Sweden, Switzerland, Britainand France, with several supermarkets pulling millions of eggs off the shelves.Fipronil is commonly used in veterinary products to get rid of fleas, lice and ticks, but is banned bythe EU for use to treat animals destined for human consumption, such as chickens. In largequantities, the insecticide is considered by the World Health Organisation to be "moderatelyhazardous" and can have dangerous effects on people’s kidneys, liver and thyroid glands.

AFP, 10 August 2017

Organic agriculture booming in Europe

Between countries in the South that have the largest organic acreage, the North that has the mostconsumers, and pressure from large retailers, European organic agriculture is booming at themoment. According to recent European statistics from 2015, European organic consumption is estimated toreach €28.3 billion. 70% of this figure is in four countries alone (Germany, France, Italy and the UK)However, Denmark, Austria and Sweden have the most organic products in their shopping baskets(8.4%, 8% and 7.7% respectively). Germany is Europe’s leading organic market and has quadrupled in15 years reaching €8.62 billion in turnover in 2015, i.e. 5% of all food consumed in the country.However, organic consumption is growing faster than production. German organic acreage wasovertaken by France in 2015 and they are having to import more and more. 80% of Germany’sorganic tomatoes and 90% of their peppers come from Spain and Italy. Sweden has the most activeorganic market in Europe, with a 38% increase in 2014 and 39% increase in 2015 reaching €2.3billion. According to Eurostat, over five years, organic agricultural acreage in Europe has increased by 21% to11.1 million hectares in 2015 compared to 9 million in 2010. All of the 28 countries in the EU havehave seen an increase, apart from the UK (495,929 hectares of organic, -29% compared to 2010) andHolland (44,402 hectares of organic, -4%). In 2015 just four countries represented over half (53%) ofEuropean organic acreage : Spain was the largest with 1.96 million hectares (+21.9% compared to2010), Italy (1.5 million hectares, +34%), France (1.36 million hectares, +61%) and Germany (1.06million hectares, +7%). Poland came in fifth place with just under 600,000 hectares in 2015 (+11%)but is seen as having a big potential in the organic sector. In 2015, organic acreage only represented 6.2% of agricultural land in Europe. According to Eurostat,Northern countries such as Austria, Sweden and Estonia are proportionally the greenest with over15% of their agricultural land dedicated to organic farming in 2015, or converting to organic. Thesewere followed by the Czech Republic, Latvia and Italy with over 10% of their agricultural land beingorganic (5.7% for France in 2015, 5.8% in 2016). Poland is in the lead in terms of organic vegetable acreage with 41,819 hectares, Italy follows with29.487 hectares and France with 16,832 hectares. Poland is notably Europe’s leading organicstrawberry producer with 2,900 hectares in 2015. Italy is in the lead in the Mediterranean for organic citrus fruits (oranges and lemons) with 31,869hectares in 2015 out of the 42,000 hectares farmed in the EU. Spain follows with 8,245 hectareswhilst Greece is in crisis and has seen acreage plummet from 1,909 hectares in 2010 to 1,295hectares 2015. Greece has also seen their organic olive production decrease, from 56,970 hectares in 2010 to47,605 hectares in 2015. However, Spain comes in first place with acreage increasing from 126,000hectares in 2010 to 197,000. Italy follows with acreage reaching 180,000 hectares compared to140,700 in 2010.

FreshPlaza, 9 August 2017

Extreme heat in Europe decimating crops

Evidence is piling up that this year's sizzling summer in central and southeastern Europe hasdecimated crops, drained rivers and hurt the animal world.

As the drought's costs become clearer, temperatures in Serbia, Romania, Hungary and Croatia wereexpected to reach 39°C again on Thursday following a few days of less oppressive heat.The region is enduring one of the hottest and driest summers in years, during which several peoplehave died and dozens of wildfires have flared. The drought has also ratcheted up demand for waterand electricity.Serbia has been one of the hardest hit countries, with experts saying an estimated 60 percent of corncrops destroyed. The ministry of ecology also says water levels across the country have droppeddrastically, threatening fish stocks."This is really sad!" said farmer Pavel Tordaj from the northern Serbian village of Padina, whileshowing withered corn and scorched sunflower on his land.Tordaj said nearly all his corn, and half of his sunflowers have been destroyed by the drought, addingthat it will be very hard for the farmers to make up for the loss."Who will pay for that?" he asked. "We took loans from the bank."Maize accounts for around one million hectares of Serbia's farmland, which is widely perceived ashaving a poor watering system.Overall, around 60% of maize crops have been destroyed, according to Zeljko Kaitovic from the state-run Maize Research Institute."Unfortunately, extreme drought conditions caught the maize in the most sensitive phase ofdevelopment," he said. "Not even heavy, longer rains could help now."Serbian government officials have said any shortages following this year's drought will be coveredfrom state reserves to avoid further damage. The government has also urged consumers to becautious with water usage and factories to refrain from depositing waste into drained rivers wherethe fish are already suffering.In neighbouring Hungary, the drought has reduced the number of birds hatching in a national park asmany of the breeding areas have dried out.Preliminary state statistics have shown a predicted decline in Hungary's grain harvest of aroundseven percent. Rising temperatures have also prompted Hungary to set a stricter legal definition ofwhat constitutes a drought, which will make it more difficult for farmers to get compensation frominsurance companies.In the country's Koros-Maros National Park, the majority of stork nests observed this year had onlythree young birds instead of the usual four and none had more than five. Many of the nests had onlya single nestling.Meanwhile, in Romania, experts from the country's Academy of Agricultural and Forest Science wereholding a conference Thursday on how the weather changes are affecting the crops. The academysaid earlier this year that hot temperatures in recent years had killed off fruit trees and vines,including apple, pear, plum, cherry, apricot, peach and walnut trees.

Associated Press, 11 August 2017

Serbia passes bill cementing limits of land sales to foreigners

Lawmakers adopted restrictions against European Union citizens buying arable land in the Balkancountry just days before Serbia was to open the market under a 2008 agreement.In a 131-13 vote, lawmakers passed a bill requiring any EU citizen to live in Serbia for at least 10 yearsbefore purchasing land, with plots limited to two hectares. The government said it wants to protectlocal farmers and prevent foreigners from taking over natural resources. Other foreigners can’t buyany farmland, though foreign companies can through local units.“Without the restrictions, we would be the only country to open land sales before becoming amember’’ of the EU, Agriculture Minister Nedimovic said when he presented the draft in parliament

last week. He said it was in the “national interest’’ to keep agricultural land locally owned, citingmeasures by other states that are already members or seeking to join.Serbia signed a Stabilization and Association Agreement with the EU in 2008, accepting a time line togradually remove trade barriers. Under the deal, made when Serbs thought they would join the blocwithin several years, the land market opens on Sept. 1. President Aleskandar Vucic has said he hopesto prepare the country for EU entry by 2020.Conditions also include that EU citizens must farm land as a lessee for at least three years beforebuying it, and a seller must first offer it to the state. Land close to military facilities and in nationalparks can’t be sold at all.

Misha Savic, Bloomberg, 28 August 2017

Danone sends 5,000 cows to Siberia in quest for cheaper milk

President Vladimir Putin’s ban on European Union cheese imports has driven up milk prices in Russiaby so much that French yogurt maker Danone is transporting almost 5,000 cows to a farm in Siberiato ensure it has an affordable supply.The Holstein cows are traveling as many as 2,800 miles (4,500 kilometers) in trucks from theNetherlands and Germany, boosting the herd on a farm near the city of Tyumen, according to CharlieCappetti, head of Danone’s Russian unit. That should protect the company from the increase in rawmilk prices, which are up 14 percent this year, he said.“Milk prices have been going up steadily,” Cappetti said in an interview in Moscow. “That putsproducts such as yogurt under pressure.”While the French dairy company doesn’t normally invest in agriculture, it made an exception forRussia. After Putin’s ban on dairy imports took hold in 2014, demand for milk surged as localcheesemakers rushed to replace French camembert and Italian pecorino. That has exacerbated theinflationary effects of the ruble’s weakness.Danone invested in the 60-hectare (150-acre) farm with local producer Damate, Cappetti said. Thefirst cows started to provide milk for Danone in May, and a final shipment of cattle is due to arrive inSeptember.“We hope that Russian milk inflation will slow down next year,” the executive said. The differencebetween supply and demand is narrowing as new milk is coming to the market, including from theSiberian farm.While easing milk inflation may help the Russian dairy market rebound in volume terms, Danoneisn’t expecting a fast economic recovery in the country, according to Cappetti. Sales in Russia havebeen growing in line with inflation in the first half and should rise in 2018, he said.

Ilya Khrennikov, Bloomberg, 28 August 2017

Pesticide ‘drifting’ wreaks havoc across U.S. crops

Larry Martin in Illinois says he’s never seen anything like it in his 35 years of farming. Arkansassoybean grower Joe McLemore says he faces the loss of his life savings.They’re among farmers across the U.S. suffering from a pesticide "drifting" across from neighboringfields onto their crops, leaving behind a trail of damage. Although not a new problem, it’s re-emerged with a vengeance this year. At least 2.5 million acres (1 million hectares) have beendamaged in this growing season through mid-July, according to estimates from Kevin Bradley, aprofessor of plant sciences at the University of Missouri.

Dicamba, the offending herbicide, is produced by seed and crop-chemical giants Monsanto Co.,DuPont Co. and BASF SE. It’s been around for decades, but in recent years it gained a new lease oflife after the companies developed new dicamba-resistant soybean and cotton seeds, allowingfarmers to spray crops later in the growing process.Dicamba is fine if you’re growing those genetically modified varieties, but not if you’re cultivatingothers and the chemical wafts over from another farm. The situation is so bad that states includingMissouri, Arkansas, and Tennessee have placed restrictions on dicamba use at various times duringthe summer.Martin, a third-generation farmer, says an 80-acre soybean field of his has been damaged bydicamba. McLemore, who started out on his own eight years ago, after two decades working onsomeone else’s farm, says 800 of his 1,026 acres of soybeans have suffered damage.“I’m not really trying to whine or anything, but it’s my life savings on the line every year,” he said byphone.McLemore is among a group of growers that have filed a lawsuit in a federal court in Missouri againstBASF, Dupont and Monsanto for compensation. Monsanto spokeswoman Christi Dixon said the suit iswithout merit, while BASF spokeswoman Odessa Hines said it’s reviewing the claim. Dupontspokeswoman Laura Svec said the company hasn’t seen the lawsuit and so can’t comment on it.Non-resistant crops are left stunted with wrinkled leaves after coming into contact with dicamba.Frustratingly, there’s no way to gauge the impact of yield until the fall harvest, farmers andresearchers say. And it’s not always clear where the chemical might have come from -- McLemoresays that, in his case, he can’t be sure. That leaves farmers angry but also unsure whether to blameneighbors or herbicide manufacturers, said Aaron Hager, a weed scientist at the University of Illinois.Farmers planted 20 million acres of dicamba-resistant soybeans and 5 million acres for cotton thisyear, executives at St. Louis-based Monsanto said in a telephone interview Monday. The companyattributes the drifting problem to farmers using illegal, off-label products that are more volatile --and thus more prone to drift -- than the latest versions of dicamba. They may also be cleaning orusing their spraying equipment incorrectly, or applying dicamba when it’s windy, said Robb Fraley,executive vice president and chief technology officer.Monsanto, which is being acquired by Germany’s Bayer AG, says employees are out in the fieldstalking to farmers about the problem. Fraley said farmers want better weed-control tools, such asdicamba product, and that the company will learn lessons from what’s happened this season.“There’s always a few challenges in launching new technology,” he said.Germany’s BASF referred questions on dicamba to a recording of a July 19 media briefing that citedpossible explanations for drifting similar to those outlined by Monsanto.“This year thousands of growers have used these products properly and successfully meeting theirchallenges with resistant weeds and productivity,” said Svec at DuPont, which has a supplyagreement with Monsanto for the herbicide.The Environmental Protection Agency says it’s reviewing the situation.“EPA is very concerned about the recent reports of crop damage related to the use of dicamba inMissouri, Arkansas and other states,” an EPA spokesperson said in an emailed statement. “We areworking with the states and the registrants to better understand the issue. We are reviewing thecurrent use restrictions on the labels for these dicamba formulations in light of the incidents thathave been reported this year.”While farmers typically look to federal crop insurance for a myriad of issues, problems with dicambaaren’t covered, according to the Risk Management Agency. Country Financial, a farm insurer, basedin Bloomington, Illinois, has seen an increase in the number of dicamba-related inquiries, saidcompany spokeswoman Alexandrea Williams. Martin, the Illinois farmer, says he’s not confident hisinsurance coverage will pay out.“This is the craziest thing I’ve ever seen,” he said in a telephone interview. “You know you’re going tohave a loss of income.”

Mario Parker, Bloomberg, 2 August 2017

First U.S. farm-income gain in four years signals hope of bottom

U.S. farmer net income is forecast to rise this year for the first time since 2013, suggesting a bottomto an agriculture slump that left profit at half of the peak.Producers of crops, livestock and dairy products may net $63.4 billion in 2017, up 3.1 percent from arevised $61.51 billion in 2016, the U.S. Department of Agriculture said Wednesday in a report on itswebsite. Much of the increase came from sales of inventory in grain bins and higher revenue fromlivestock and milk.“We’re sitting in this spot where we’ve seen things leveled out,” Chad Hart, an agricultural economistat Iowa State University in Ames, said in a telephone interview. “We’re treading water. Things aren’tgetting worse, but they’re not getting better. The question is: Is this just a pause before we work ourway back up, or are we waiting for the next step down?”Signs of stability have returned to the farm economy. Farmland values may rise 2.3 percent followingthe 0.3 percent decline in 2016, USDA data showed. Cash receipts from chicken broilers and hogswere forecast to increase 15 percent with cattle up 5.7 percent, the agency said.Two key measures of farm health, debt-to-equity and debt-to-asset ratios, will be little changed in2017. That reflects the strong balance sheets of many farms that have had the same owner fordecades, Hart said.Younger and more highly leveraged farmers who have been waiting for better times to improve theirbalance sheets may need to wait longer, he said.“If you’ve been holding on hoping for a turnaround, you’re just stuck,” he said. “But speaking morehopefully, we’ve touched the bottom.”Hurricane Harvey, which continues to pummel the Gulf Coast, has damaged cotton and isthreatening livestock production in that region. This year’s projected farm income compares with therecord $123.8 billion in 2013.A Bloomberg index of returns on eight agriculture markets has dropped 11 percent this year.An agriculture index on industry sentiment published by Purdue University and CME Group Inc.climbed in July to the highest since the survey started in October 2015.The increase in farm income projected by the USDA reflects sentiment in the Purdue survey, DavidWidmar, an agricultural economist at the university in West Layfayette, Indiana, said in a telephoneinterview.Income closer to $72 billion would be a sign of improving farm economy, he said.The USDA report suggests “we are not losing ground and hit a spot to catch our breath,” Widmarsaid. “The big wild card is where grain prices go in 2018 to service rising debt levels. ”

Alan Bjerga & Jeff Wilson, Bloomberg, 31 August 2017

How robots will feed the world – Part 1

From environmental to economic, produce and floral growers continue to navigate a wave ofchallenges. One in particular — the shortage of labor — has emerged as the most concerning issuefacing the industry today. To effectively tackle the crisis, small and large farms alike have begun toreshape their operations through automation and robotics in hopes of boosting productivity andmaximizing resources. But how does such cutting-edge technology fit into the agriculture world? Andwhat does it mean for the future of labor?Lacquey, a Dutch company specializing in robotic food handling technology, collaborated withFTNON, an equipment manufacturer, to develop a robotic hand with a specialized gripper. The

gripper mimics the human grasp to pick up cabbage and lettuce heads and orient them so that theyfit into a machine that removes the core.“You have to view technology as a potential solution for pain points in the industry,” Dr. BobWhitaker, Chief Science and Technology Officer at Produce Marketing Association, said. “Agriculturehas always been dependent on a ready supply of manual labor. In today’s climate, we have ashrinking labor pool. People don’t want these jobs.”The agricultural tech revolution began with automation. Robotics as we know it today wouldn't evenexist if it wasn't for automation's transformation of data into actionable tasks. But automation hasalways been limited when it comes creating knowledge from data, reacting to changes in theenvironment, and multi-tasking. That's when the robots began to take over. Robots have the abilityto learn from their mistakes and follow complex instructions, making them an invaluable asset togrowers looking to fill holes in their labor force.And that hole is growing. According to the U.S. Department of Agriculture, the average number offarm workers has declined steadily over the last century from roughly 3.4 million to just over 1million. Between 2002 and 2014, the number of full-time equivalent field and crop workersdecreased by more than 20 percent, resulting in a loss of $3.1 billion in farm revenue each year. Thereason for this decline ranges from reduced immigration to declining birth rates to an unwillingnessto perform agricultural work to an aging farm population.As a result, the use of high-tech solutions at farms across the U.S. has begun to surge. According toRobotics.org and IDTechEx, robots and drones now represent a $3 billion market in agriculture, andthat number is expected to climb to $6 billion by 2022. Some estimates are even higher. Wintergreenresearchers project agricultural robots will be a $16.3 billion industry by 2020 — a rate of growth 20times its 2013 size. Taylor Farms has collaborated with Soft Robotics on the development of a robotic arm with“grippers” that can handle fresh fruits or vegetables with dexterity.While implementing automation and robotics can be a drastic shift for some growers, this innovationis both beneficial and necessary as the world population continues to expand. The United Nationsexpects the global count to reach 8.5 billion by 2030, and 9.7 billion by 2050. Those numbers requirea doubling of our food production by 2045. Automation and robotics present the most likely methodof meeting that demand, but growers will still need that personal touch in order for it to all cometogether.“We’re moving toward a more skilled, expert workforce,” Whitaker said. “If this is really going tobecome an integrated system, it’s going to take people who are comfortable with engineering, dataanalysis, product development, and agriculture. It’s going to take high-end specialties to make this allwork.”

FreshPlaza, 8 August 2017

Beating China’s fake-food scourge

A bowl of ice cream on a hot day in Shanghai gave American Mitchell Weinberg the worst bout offood poisoning he can recall. It also inspired the then-trade consultant to set up Inscatech — a globalnetwork of food spies.In demand by multinational retailers and food producers, Inscatech and its agents scour supplychains around the world hunting for evidence of food industry fraud and malpractice. In the eightyears since he founded the New York-based firm, Weinberg, 52, says China continues to be a keygrowth area for fraudsters as well as those developing technologies trying to counter them.“Statistically we’re uncovering fraud about 70% of the time, but in China it’s very close to 100%,” hesaid. “It’s pervasive, it’s across food groups, and it’s anything you can possibly imagine.”

While adulteration has been a bugbear of consumers since prehistoric wine was first diluted withsaltwater, scandals in China over the past decade — from melamine-laced baby formula, to rat-meatdressed as lamb — have seen the planet’s largest food-producing and consuming nation become ahotbed of corrupted, counterfeit, and contaminated food.Weinberg’s company is developing molecular markers and genetic fingerprints to help authenticatenatural products and sort genuine foodstuffs from the fakes. Another approach companies arepursuing uses digital technology to track and record the provenance of food from farm to plate.“Consumers want to know where products are from,” said Shaun Rein, managing director of ChinaMarket Research Group, citing surveys the Shanghai-based consultancy conducted with consumersand supermarket operators.Services that help companies mitigate the reputational risk that food-fraud poses is a “big growtharea,” according to Rein. “It’s a great business opportunity,” he said. “It’s going to be important notjust as a China play, but as a global play, because Chinese food companies are becoming part of thewhole global supply chain.”Some of the biggest food companies are backing technology that grew out of the anarchic world ofcrypto-currencies. It’s called blockchain, essentially a shared, cryptographically secure ledger oftransactions.Wal-Mart Stores Inc., the world’s largest retailer, was one of the first to get on board, just completinga trial using blockchain technology to track pork in China, where it has more than 400 stores. Thetime taken to track the meat’s supply chain was cut from 26 hours to just seconds using blockchain,and the scope of the project is being widened to other products, said Frank Yiannas, Wal-Mart’s vicepresident for food safety, in an interview Thursday.Shanghai-based Zhong An Information and Technology Services Co. said in June it will use thetechnology to track chickens from the coop to the processing facility and on to the market or store.Alibaba Group Holding Ltd., too, sees the potential for the eight-year-old technology to providegreater product integrity across its platforms, which accounted for more then 75% of China’s onlineretail sales in 2015. The planned blockchain project will involve the Chinese e-commerce behemothworking with food suppliers in Australia and New Zealand, as well as Australia Post and auditorsPricewaterhouseCoopers.“Food fraud is a serious global issue,” said Maggie Zhou, managing director for Alibaba in Australiaand New Zealand. “This project is the first step in creating a globally respected framework thatprotects the reputation of food merchants and gives consumers further confidence to purchase foodonline.”Fraud costs the global food industry as much as $40 billion annually, according to John Spink, directorof Michigan State University’s Food Fraud Initiative. In China, where the 2008 melamine milk crisisresulted in the death of at least six babies, it’s a hot-button issue compounded by the country’sgrowing appetite for higher quality food and swelling middle class. A Pew Research Center study lastyear found 40% of Chinese view food safety as a “very big problem,” up from 12% in 2008.“This is not a Chinese issue — it’s a global issue,” said Yongguan Zhu, director general of the Instituteof Urban Environment, part of the state-funded Chinese Academy of Sciences. “What we have to dois reinforce our regulations to improve the transparency of the administration, for exampleinformation-sharing.”Zhu says blockchain could play an important role in improving traceability. Its database of records canbe built like a chain and can’t be broken or re-ordered without disrupting the entire connection.China strengthened its food safety law in 2015 in response to the spate of scandals. Counterfeitersand food tamperers face tougher penalties, including jail time in some cases, and more than $800million has been spent hiring more food safety personnel and bolstering monitoring facilities,according to an April report from the Paulson Institute, a Washington-based think tank. Last month,Beijing emphasized to authorities the need to be upfront in disclosing food safety issues.

“Food-fraud will always exist,” said Yongning Wu, chief scientist at the government-run ChinaNational Center For Food Safety Risk Assessment. While authorities in China have joined the globalfight against the scourge, Wu doesn’t see the problem disappearing.“We can only develop technology to detect it,” he said. “However, fake-food producers will alwaysupdate their technology to dodge inspections.”The wiliness of fraudsters is what makes Inscatech’s Weinberg less hopeful about blockchain. His firmmainly uses informants on the ground to sniff out where in the production process food-fraud istaking place, and most of his work in China is with western companies that manufacture or sourceproduct there.“The problem is the data is only as reliable as the person providing the data,” said Weinberg, whorecalls seeing everything in China from synthetic eggs to fake shrimp that still sizzle in a wok. “Inmost supply chains there is one or more ‘unreliable’ data provider. This means blockchain is likelyuseless for protecting against food-fraud unless every piece of data is scrutinized to be accurate.”A months-long Bloomberg investigation into the global shrimp trade last year showed how unreliabledocumentation had fanned an illegal transhipping scheme involving Chinese aquaculture exporters.But blockchain is “light years” away from the system used by the global food industry today, whichrelies heavily on paper records, said Yiannas, Wal-Mart’s food safety chief. By recording the identityof those who input data into the chain, the technology removes the anonymity that has helped food-fraud to thrive, he said.The role of humans in recording the supply chain will also diminish, said Yiannas. “More and more ofthese documents will eventually be captured in an automated way.”China’s Food and Drug Administration didn’t immediately respond to an email requesting commenton the country’s food safety efforts.The challenges for China — “the factory of the world” — are especially vast because of its size,population, multilayered administrative divisions, and “the willingness of criminals to exploit everycorner that they can in order to make money,” said Michael Ellis, who ran Interpol’s trafficking inillicit goods unit until October.At Interpol, Ellis, a former detective with Scotland Yard in London, was involved in “Opson,” anoperation that led to the seizure of more than 10,000 tons and 1 million liters (264,000 gallons) ofhazardous fake-food and drinks across more than 50 countries.Without a presence to fight it, food-fraud globally “will explode,” Ellis said. “It will just continue togrow, and who knows where it will lead.”

Bloomberg, 7 August 2017

The new enemy in India's fight against inflation? Tomatoes

Surging onion prices have toppled governments in India. Now there’s a new threat looming for policymakers. Tomatoes.After touting better food management as a reason for record-low inflation during much of thesummer, a surge in the costs of vegetables and fruits is causing price pressures to simmer. Tomatoeshave been the main culprit so far, as poor transport and a lack of cold storage facilities lead towastage of as much as 16 percent of produce each year.Such inefficiencies and India’s 1.3 billion population distinguishes it from the global market, whereagricultural costs are falling. Food accounts for 46 percent of India’s consumption basket, whichmeans it plays an outsize role in determining headline inflation.“The present low level of food prices is unusual and is vulnerable to upward pressures," GovernorUrjit Patel said in the minutes of the latest monetary policy meeting, published Wednesday. "Anassessment of whether the recent deflation in food items is sustainable, despite a normal monsoon,would require more hard data going forward."

Consumer prices rose 2.4 percent in July, faster than the 2.1 percent estimated in a Bloombergsurvey, as a drop in food costs slowed to 0.3 percent from 2.1 percent in June. Wholesale inflationalso quickened, indicating price pressures are building up. Samiran Chakraborty and Anurag Jha,Mumbai-based economists at Citigroup Inc., said heavy rainfall and dwindling supply from statessuch as Karnataka, Maharashtra and Gujarat led to the tomato shortage.“The early trends for August suggest that the price rise has spread to another usual suspect amongperishables, i.e. onions," they wrote in an Aug. 14 note titled ‘Will Tomato Price Shock Derail RateEasing Hopes’. "Typically a monsoon-led spike in veggies normalizes over 3-5 months or closer to thewinter season. This year is unlikely to be different."Tomatoes, potatoes and onions form the holy trinity of Indian cooking, where they’re often swirledtogether with spices to form the base for several curries and snacks. Tomatoes are consumed in atleast 75 percent of Indian households, according to latest government data.Patel this month voted to lower the Reserve Bank of India’s benchmark repurchase rate to 6 percentfrom 6.25 percent, citing an urgent need to boost private investment. This will be the monetaryauthority’s final cut through 2018, according to most economists in a Bloomberg survey, withinflation expected to quicken toward the 4 percent medium term target.“We estimate CPI inflation at 4 percent to 4.5 percent as of end-March 2018," said Tanvee Jain, Indiaeconomist at UBS AG. That limits the scope for further easing, she said.

Anirban Nag, Bloomberg, 18 August 2017

Canadian retailer first of its kind to install rooftop garden

Green roofs aren’t necessarily new, but when a grocery store chain decides to install a rooftopgarden on one of its stores, that is refreshingly unique. The IGA in Montreal’s Saint-Laurent regionofficially launched its rooftop garden July 19. The project is managed by Ligne Verte (The Green Line)and has a year-round fulltime staff of two and a six-month contract position to supplement busiertimes. “It’s the largest commercial rooftop garden in Canada,” says Tim Murphy of Ligne Verte.Moreover, it’s the first of its kind in the country. Over 30 kinds of vegetables and greens are grownand harvested on a half-acre, grown in just six inches of soil. “A green roof garden allows us tonourish our passion for food while reducing our environmental footprint, something that isparticularly important to us. We are happy to give life to this innovative project and hope itencourages other companies to follow suit,” said Richard Duchemin, co-owner, IGA extra FamilleDuchemin.It’s a big step forward on many fronts since green roofs, the focus of Ligne Verte’s company, producemultiple benefits. A green roof can cool a building in the summer. It’s also the first store to use anirrigation system with water recovered from its dehumidification system. Plus, it creates habitat. “Tothat we get to add local food production,” he says. “And, just after one year we have some birdsnesting in the garden, we have sandpiper and ducks nest in the spring.” Pollinators also play a part;there is also a rooftop apiary of eight hives, run by a separate company. The honey is also sold in thestore.Murphy says that even though in the grocery store world the rule is to never run out of stock onsomething, growing seasonal items obviously means they’re only available for a certain amount oftime. “It’s a bit of a re-education for both the grocer and the shoppers but I think they’re enjoying it.It’s been an overwhelming success. We’re selling out,” he says. There’s a camera on the roof soshoppers can see what’s happening while they shop. “I think it’s attracting more for local organic.”Prices remain reasonable also, since there are no transportation costs, although Murphy remarksthat expenses are weighted towards labor because everything is done by hand. “Our product isdefinitely comparable (pricewise).”

As far as plans for other produce, Murphy says the strawberries they’ve planted will yield next year.“That’s probably the main (fruit) that we think we can succeed at. We’re going to give groundcherries a shot next year.” He has also expressed interest in growing mushrooms and definitelyincrease compost production so it can all be produced in house.Murphy is optimistic about creating more rooftop gardens. “I’m optimistic. We have gotten a fewcalls from other smaller grocers that would be willing. We can also do the same thing on anotherroof that’s not necessarily a grocery store. If a building wants to put in a green roof and growvegetables we can come in and rent space,” he notes. “We’re excited at how it’s turned out.”

Rebecca D. Dumais, FreshPlaza, 15 August 2017

On-the-go produce industry growing by 10% each year

On-the-go produce snacking has become a billion-dollar business, and while some areas of thegrocery store have struggled to find growth, that hasn’t been the case for this sub-category of thelarger “snackable” fruit and vegetable segment, according to a new Consumer Insights report fromThe Nielsen Co.In its report Nielsen said that the on-the-go snacking sub-category — defined as a set of packageditems sold in the produce department for the purpose of snacking — has posted a compound annualgrowth rate of more than 10% every year between 2012 and 2016.During that same period 900 new snacking items have been added to grocery shelves, including 600individual servings of fresh cut fruit, Nielsen noted. Overall, the category now exceeds $1.1 billion insales, Nielsen said.Nielsen noted that 32% of U.S. homes purchase on-the-go produce snacks an average of 3.1 timesper year.In terms of category breakdown, fresh fruit is the stand-out winner, according to Nielsen. As part ofits Nielsen Perishables Group FreshFacts research for the 52 weeks ended May 27, fresh snackingfruit accounted for 44% of all on-the-go snacking produce dollar share, up 17% from the same perioda year ago. Fresh smoothies accounted for 27% (up 0.3%), snacking vegetables for 17% (up 4%), driedfruit/nut snack mixes for 7% (up 8%) and fruit cups for 5% (down 10%), according to the survey.Nielsen attributed some of the disparity in the percentages to “four times more snacking fruit itemson the shelves than their vegetable counterparts.”So, where should retailers focus to reach consumers?“For starters, having options and variety is key,” Nielsen said. “Healthful snacking transcends all retailoutlets and can serve as a key point of differentiation within the produce department. Second, theyshould stay tuned in to potential mismatches between snacking and produce consumption trends.”Nielsen noted that its data show that private label and unbranded options are somewhatunderrepresented in the on-the-go snacking space.“This represents a possible opportunity to produce options in house to build market share andsales,” Nielsen said.The research firm’s data also indicate that brands are growing at a faster rate in the producedepartment compared with on-the-go snacking, which suggests room for improvement in brandedsnacking sales.“As with every category across the F.M.C.G. landscape, consumers have myriad options to choosefrom when it comes to snacking,” Nielsen said. “Fresh produce items play a critical role in deliveringon this need, but many fruits and vegetables still are not offered as an ‘on-the-go’ snack — a $1.1billion market that continues to grow. Understanding who, how, where and why shoppers choosedifferent items for snacking can help uncover new opportunities for distribution, innovation andmarketing to ensure success on an already crowded shelf.”

FreshPlaza, 21 August 2017

Convenience shopping a growing trend in fresh produce

Convenience shopping, both in the formal and informal sectors, is becoming a major factor in freshproduce retailing.This was according to Maryla Masojada, managing director of retail strategy specialists, TradeIntelligence, speaking at the recent Produce Market Association’s (PMA) Fresh ConnectionConference held in Cape Town.“The convenience trend is currently prevalent in the global and local market place, and it’s changingshopper behaviour, as well as store format,” Masojada said. She referred to the spaza shop format,which is part of informal wholesale and hybrid market.The trend of convenient shopping was also reflected in partnerships between major food retailersand petroleum companies with express shops and forecourt retail sites at their service stations.“This is changing the face of how consumers shop,” said Masojada.Turing to other trends in the retail industry, she said that there was a significant shift towards freshproduce, with every corporate retailer having “best in fresh” in its strategy.“Retailers are decreasing floor space for groceries and increasing shelf space for fresh produce. Itreally plays in your favour. When you walk into a store, the fresh produce is always in the front […].This is what shoppers are after,” she said.However, it was not possible to be a differentiator if everybody was implementing it. Success boileddown to execution, particularly with regard to presentation, communication to the shopper, andsupply chain management.She highlighted that the supply chain was one of the biggest conundrums that suppliers weregrappling with. “It’s the last frontier and whoever cracks it, will be the winner of the future. If you getit right, the margins will start to come.”Masojada said that the SA food market was worth R557 billion, of which 60% was accounted for bythe major supermarkets (R335 billion). Formal and hybrid wholesalers, with sales of R25 billion,accounted for 5% of the total market.However, the biggest unknown was the value of the informal wholesale and hybrid market. Estimatesof this market ranged from R31,8 billion, Pierre Heistein, Convener of Economics and R168 billion,according to TI.“Don’t underestimate this hidden economy. It’s just more difficult to see and reach,” she cautioneddelegates.

Jeandré du Preez, Farmer's Weekly, 24 August 2017

Zimbabwe avocado exports reach $4.2m

Zimbabwe's revenue from avocado exports increased by over 301.9 percent to $4.2 million last year,up from $1 million in 2012, driven mainly by large-scale avocado producers in Manicaland.In a monthly newsletter for July, the country’s national export promotion and trade developmentagency, ZimTrade said that official data from Trademap, indicated the major destination markets foravocados from Zimbabwe were The Netherlands, United Kingdom, France and Germany.“The major destination markets for Zimbabwe’s avocado exports in 2016 were The Netherlands,United Kingdom, France and Germany accounting for 68.3 percent, 13.4 percent, 9.0 percent and 6.6percent respectively.

“ZimTrade, therefore, urges both small and large-scale avocado producers to consolidate their ordersand increase exports to markets such as the European Union, the United States of America and Asia,”it said.Global demand for avocados increased by 120.1 percent from $2.2 billion in 2012 to $4.9 billion in2016. The USA, which accounted for 40.4 percent of global imports of avocados in 2016, recorded arapid increase in per capita consumption of the highly nutritious fruit from just over 1.5 kilogrammesin 2006 to more than three kg in 2015. Increased consumption in other countries such as China,Spain, UK and Germany, among others has put additional pressure on the present supply, therebydriving global prices higher.

FreshPlaza, 15 August 2017

Farming exports up 6% despite severe drought

Despite enduring the worst drought in more than a decade SA’s agricultural sector recorded apositive trade balance of $2.3bn in 2016.The Agriculture Business Chamber (Agbiz), which represents commercial farmers and agribusinessenterprises nationally, said this was boosted by growth in exports of fruits, beverages, spirits andvegetables, with the total agricultural export value amounting to $8.6bn, up 6% from 2015.These products are mainly grown in the Western Cape, which continues to be gripped by severedrought.Meanwhile, imports rose 26% year on year, reaching $6.3bn. This was driven by a notable uptick ingrain imports due to the drought, the chamber said.Agriculture is the backbone of the economy in the Western Cape. The province produces more thanhalf of SA’s agricultural exports, with the EU being one of the province’s main export destinations.The region also accounts for almost 75% of annual offshore wine sales, worth R5bn.Agbiz noted in its report on Tuesday that Africa remained SA’s largest market, accounting for 44% ofagricultural exports, which is 9% below the five-year average share.The EU accounted for 26% of SA’s agricultural exports in 2016, with Asia taking up 22%.The Americas and the rest of the world accounted for 5% and 3% of exports respectively.SA’s agricultural exports to Europe increased 5%, from $2.1bn in 2015 to $2.2bn in 2016. This wassupported by an uptick in exports of fruits, beverages and spirits, wool and meat, among otherproducts.After falling 18% year on year in 2015, SA’s agricultural exports to other African countries recovered4% in 2016, reaching $3.8bn.This uptick was driven by sugar and sugar confectionery, milling products, as well as exports ofvegetables and certain roots and tubers.SA’s agricultural exports to Asia increased 13%, from $1.66bn in 2015 to $1.87bn in 2016. Driving thecountry’s exports to Asia was an increase in fruits, wool, beverages, nuts and meat exports, amongother products."Given the recovery in agricultural production, we expect the South African agricultural tradebalance to remain positive in 2017," said Wandile Sihlobo, head of economic and agribusinessresearch at Agbiz."This will essentially support the country’s current account," he said.

Bekezela Phakathi, Business Day, 23 August 2017

Watermeters: Verwarring oor nuwe reëls

Die bepaling dat watermeting vanaf 1 Maart vanjaar verpligtend is, asook die maandelikse byhou vanwaterverbruikersrekords, het besproeiingsboere onkant gevang omdat daar geen gepaardgaanderegulasies was oor die tipe metingsinstrumente en gebruik daarvan nie.Nou is daar kommer dat watergebruikers vervolg kan word as hulle nie aan die Departement vanWaterwese en Sanitasie se vereistes in dié verband voldoen nie.Mnr. Wayman Kritzinger, voorsitter van Agri SA se natuurlike hulpbronnekomitee, sê ofskoonsommige boere intussen watermeters aangeskaf het, wat vanaf R5 000 beskikbaar is, het dieDepartment van Waterwese en Sanitasie en WNNR te kenne gegee dat die betrokke meters niebetroubaar is nie. Hulle is nou besig is om na ander meters te kyk wat aan hulle vereistes sal voldoen.Die betrokke meter sal glo sowat R20 000 kos.“Ons wag nou om te hoor wat aanvaarbaar sal wees en dan moet die besonderhede daarvan in ’nregulasie vervat word. Die grootste probleem is dat die kalibrasie van die meters elke vyf jaar slegsgedurende die droë tydperk, wat vier tot ses weke duur, gedoen sal kan word. Met meer as 6 000geregistreerde waterverbruikers sal dit ’n onbegonne taak wees.”Kritzinger sê dit is onaanvaarbaar dat besproeiingsboere wat reeds meters aangeskaf het, of beplanom dit te doen, nou in die duister is oor wat hulle te doen staan. “Ons raad is dat hulle moet wag totdaar meer duidelikheid oor die regulasies is. Die department het nietemin onderneem om landboute betrek wanneer daar verder oor die beskikbaarstelling van ’n doeltreffende en bekostigbareinstrumente, asook kalibrasie daarvan, onderhandel gaan word.Mnr. Adriaan Groenewald, ’n prokureur van Humansdorp wat spesialiseer in water-aangeleenthede,sê die watermeters is verpligtend vir diegene vir wie die departement opdrag gee om dit te installeer.“Die regulasies bepaal nie dat die meters deur die bank verpligtend is vanaf 1 Maart nie, maar diedepartement het nou die reg om, waar hulle meen dis nodig, vir daardie gebruiker opdrag te gee om’n meter te installeer. Dit is in elk geval ’n standaardklousule in lisensies deesdae.”Groenewald sê in geen stadium het die departement vereistes gestel vir sulke duur meters nie.“Daar is nog nie spesifikasies van hoe die meters moet wees nie. Daar is gewis baie meters in diemark wat nie betroubare lesings gee nie. DWS is besig om te kyk na riglyne in hierdie verband,” sê hy.Hy is bewus van gevalle waar die departement juis watervoorsieningsrade versoek het om nie “opdie spreekwoordelike wa te spring met ’n klomp spesifikasies nie”, want dit sou lei totonbekostigbare meters en dus onnodige uitgawes vir gebruikers.“Die doelwit is om die waterbron te beskerm. Die meeste van die waterdispute waarmee ekgekonfronteer word, sal gemaklik opgelos kan word deur doeltreffende, koste-effektiewe meting vanwatergebruik. Hierdie is ’n ideale geleentheid vir die besproeiingsektor om hande te vat met DWS enbehoorlike riglyne ingestel te kry,” sê Groenewald.

Jeanne van der Merwe & Theuns Botha, Landbou.com, 23 August 2017

Western Cape drought: A natural and man-made disaster

Hortgro’s irrigation seminar drew a large turnout of Western Cape fruit growers, indicative of theseverity of the water situation.“The future is dry,” says Prof Wiehann Steyn, crop production programme manager at HORTGROScience. “Drought is the new norm, with the probability that, according to climate change forecasts,we’ll be getting 30% less rainfall in future.”Marinus van der Merwe of Agri Western Cape’s Natural Resources Committee painted a troublingpicture of water access in the Western Cape, where agriculture has to compete with an ever growingurban population. “We’re in a perfect storm: there is a natural drought but we’re also experiencing aman-made drought. There have been projections that the Western Cape would run out of buffer

water supply and since 2014 there have been troubling technical reports on a shortage of reservoircapacity. For all intents and purposes, the regions of the agricultural sector that also feed into thissystem is at 100% water restrictions, when we look at water budget projections at current levels. Thiswill only be revised by 1 November, according to Department of Water and Sanitation sources.”“It might take two normal rainfall seasons to refill Western Cape capacity but it looks worse for theTheewaterskloof Dam region and the situation in the Upper Berg River, Winelands and the EGVV[Elgin, Grabouw, Vyeboom, Villiersdorp, a major topfruit production area] is disastrous,” continuedVan der Merwe, a topfuit (pomefruit) farmer himself. “Now we’re basically hoping for storms andfloods to get the dams full because winter’s over. We drastically need aligned priorities to keep ruraleconomies alive and we must create additional storage capacity – that is key to the survival ofirrigation farming in the Western Cape.”Planning irrigation under these circumstances necessitates all hands on deck. Daan Brink, technicaladvisor at the Two-a-Day Group pointed to the need for soil scientists to be brought in to analyse soilacross a farm (the Western Cape has a very wide spectrum of soil types) in order to categorise blocksaccording to texture, restrictive layers and so forth. “The basis of irrigation is block design based onsoil analyses. The current strategy is to irrigate less and in accordance with root distribution.”As for the water usage differences between apple cultivars, he confirmed that this was a negligiblefactor in irrigation planning.Werner de Leeuw den Bouter of Dynamic Irrigation explained how to calculate economical block sizedepending on the annual irrigation requirement, evapotranspiration, crop factor as well as theapplication rate of the system. Then this design must be matched with the soil map. “You shouldspend a bit of time on your block layout to accommodate soil types, it’s highly recommended,because you’ll sit with your irrigation design for the next ten to twenty years.”He suggested that rows in newer blocks should not exceed 100m in length, while keeping in mindannual inflation of about 7% in electricity tariffs. It may make financial sense to spend more moneyduring the installation of an irrigation system with bigger pipes that will save electricity during itslifetime due to lower water flow resistance.Agrimotion’s Mico Stander and Tiaan Snyman placed emphasis on soil moisture monitoring (throughan array of methods, from the well-known tensiometer, to capacitance probes that providecontinuous data sets, to phytomonitoring of sap flow, stem diameter, fruit growth) as well as onatmospheric monitoring of the vapour pressure deficit (VPD) and weather predictions. “This is themost integral part of your planning,” they said. “Capacitance allows you to set an upper line markingfield capacity, which is the water held against gravity, while the lower line is the refill point of 50%available water when the plant is working harder to take up water. These lines may changethroughout the season according to the plant's needs and the irrigation strategy. Irrigationscheduling should be done at least weekly and the more iterations of your irrigation cycle, the moreaccurate it will be.”A further refinement of irrigation scheduling, is irrigation according to phenological (fruitdevelopment) stages. Prof Stephanie Midgley, an independent plant production researcherassociated with Stellenbosch University, set out the periods of top irrigation priority. The fruit celldivision stage that lasts up to 40 to 50 days after full bloom is particularly sensitive to water stressbecause any shortcoming at this time can never be made up later, resulting in small fruit. However,tree water requirement during this stage is lower than during mid-summer and in the Western Capethe soil might still be relatively moist due to spring rains. Growers can save water during this stage bynot irrigating unnecessarily, but care should be taken when soils are dry to not stress the tree.Equal in importance is bud initiation in summer, when the foundation of the next season’s growth islaid down. Interestingly, during the period of fruit growth an apple tree is less water-sensitive and isable to extract moisture from the fruit to be used elsewhere in the plant, to be replenished at night.However, severe water stress during this stage negatively affects fruit quality and the value of thecrop by decreasing fruit size and increasing the incidence of sunburn. Hence, the decision of how

much to irrigate at this stage may depend on whether tree's survival is the only consideration orwhether fruit quality needs to be maintained.Mico Stander of Agrimotion elaborated on the principle of irrigation according to phenologicalstages. “To what degree can we stress the tree and within which dates? It’s difficult to answer but italso strongly depends on your soil type and root distribution within the soil.” Of equal importance iseffective soil infiltration: runoff during irrigation is unacceptable, especially under currentcircumstances. Water budgeting will become a sine qua non for farmers, which should be done everyfour to six weeks to make sure you’re still on track with your water use.Spreading out the available water across all existing orchards merely results in equal misery for bothfarmer and tree, said HORTGRO’s Prof Steyn. Some hard choices will have to be made, explainedMico Stander. “You must use water where you’re most likely to make money, therefore you have torank orchards according to income per unit water, Rand/m3. You’re going to see a lot of those ‘I’llgive it one more year’ trees being shaken out of the industry which isn’t necessarily a bad thing.”Orchards should be divided between those that earn the highest dividends, and these receive 100%of their water needs; orchards that you want to keep alive receive 25% while those from which onewishes to obtain a reasonable yield and young orchards receive 50% of their water needs.Lastly Jan Rossouw, estate manager of Lindeshof: Dutoit Agri, described how they had gone aboutfruit production during the 2016 season when they had less than half their usual water. “We kept aweekly record of every drop of water put down in our orchards. We reviewed our water budgetevery week, keeping evaporation in mind and distributing water timeously between the farm dams.”They, too, had to reduce their orchards. “Every orchard was evaluated according to merit. It was asad exercise but we removed 24ha. We determined the root depth of every orchard and I can’toveremphasise the importance of the phenological stages. And if you haven’t yet put down organicmaterial in your orchards – now’s the time.”They keep to a ratio of fruit to foliage of 1:25 and regularly measure fruit size for, as he pointed out,in this case, bigger is better. Foliage is pruned during summer, to keep down transpiration. Lastly,remember the post-harvest fertilisation programme when doing the water budgeting sums for theseason.“The tree looked after you throughout a difficult year and now you must look after the tree,” heconcluded. “We have all the tools in our toolbox to get through this.”

Carolize Jansen, FreshPlaza, 22 August 2017

Table grapes in Western Cape: drought causes uncertainty

While the first table grape vineyards in the northern regions of South Africa are pushing out theirnew leaves, Western Cape vineyards are still in their winter dormancy. Table grape growers, like allCape fruit growers, are uncertain of what the new season will hold, in light of irrigation restrictionsand below average rainfall thus far this winter.The first crop estimate of South African table grapes can be expected in November when the picturecoming from the early production areas – the Bushveld in Limpopo/Mpumalanga followed by theOrange River region – is clearer. Even then, explains Willem Bestbier, CEO of the South African TableGrape Industry (SATI), it is still too early for an accurate picture of Western Cape production whichfollows on the north. “Of course, the ongoing drought in the Western Cape heightens uncertainty inthe industry.”“As an industry we have come to terms with the reality that South Africa is a water-scarce countryand that everyone who shares a responsibility in this regard, takes that responsibility seriously. As anexample, one of our senior management and a researcher is currently engaged in a PhD at theUniversity of Stellenbosch regarding the so-called "water footprint” of table grape cultivation, with

the aim of optimizing water usage and thereby supporting the sustainability of our industry and theenvironment.”Willem Bestbier continues: “In the short term, we’re planning to host a seminar in the affected areasto inform our producers of best practice in this regard. The Northern production region depends onsummer rainfall, as does the Orange River region with regards to its water catchment areas. All othertable grape production areas are winter rainfall areas and therefore our industry is very dependenton adequate water supplies for irrigation.”A consultant to the industry told FreshPlaza: “Anything can still happen but I don’t believe that theharvest is in question. Without doubt we’re in a critical situation, but farmers are working moreparsimoniously with their water and especially in the Hex River Valley, there are a lot of boreholes.Also, farmers are diverting water from their vegetable crops or their wine grapes to their tablegrapes, so it’s as yet very difficult to determine what the impact’s going to be.”

Carolize Jansen, FreshPlaza, 23 August 2017

Nuwe wyndokkie wys bedryf se goeie kant

Nog ’n dokumentêr oor die Suid-Afrikaanse wynbedryf het die lig gesien. Hierdie keer vertel dit diepositiewe verhaal van opheffing en transformasie in die bedryf. Die video, van bykans 20 minutelank, is deur Wines of South Africa vervaardig en versprei.Hulle noem dit Creating the blend. Dit volg na die joernalis Tom Heinemann se dokumentêr getiteldBitter Grapes, oor swak werkstoestande in die wynbedryf, in Oktober verlede jaar opslae gemaak hetin Denemarke en Swede.“Daar is nog baie om te doen, maar ons behoort ook erkenning te gee aan al die liggame wat helpmet die welstand en positiewe groei van die 291 000 mense wat binne die wynbedryf werk,” lui ’nverklaring oor die nuwe dokumentêr.Die dokumentêr fokus veral op die goeie werk wat die VinPro-stigting en Wieta (die wynbedryf severeniging vir etiese handel) doen, asook opheffingswerk op plase soos Bosman Family Vineyeardsen by kelders soos Bonnievale Wyne.“Ek het besef ek kan nie op my eie uitbrei nie, en wie gaan jou beter help as jou werksmense,” vertelmnr. Jannie Bosman van Bosman Family Vineyards op Wellington in die video, wat onder meermelding maak van ’n nuwe moderne woonstelkompleks wat die onderneming vir sy plaaswerkersopgerig het.Verskeie ander programme wat waarde toevoeg tot wynbedryfswerkers word ook belig. Dit sluit ingrondeienaarskap, opvoeding, gesondheidsorg, opleiding en sake-geleenthede. “Die gesegde sê mosRome was nie een dag gebou nie. Dis ook die werklikheid vir die Suid-Afrikaanse wynbedryf, maar disopwindend om te weet die spreekwoordelike paaie word gebou, gelyk gemaak en geteer vir ’ngladder, meer genotvolle rit vir almal wat by die bedryf betrokke is,” lui die verklaring.

Lucille Botha, Landbou.com, 8 August 2017

Sitrusuitvoer uit Sondagsrivier tuimel

Sitrusuitvoer vanuit die Sondagsriviervallei sal volgens die jongste vooruitskatting die seisoen nettussen 16,9 en 17,5 miljoen kartonne beloop. Dit is bykans 23% minder as die vorige seisoen en 30%laer as die 22 miljoen kartonne wat in 2015 uitgevoer was.Die gegewens blyk uit ’n verslag van mnr. Deon Joubert, voorsitter van Agri SRV, wat tydens ’nvergadering van die vereniging op Addo bespreek is.

Volgens Joubert behoort die uitvoer teen 2020 tot bykans 26 miljoen kartonne te styg en teen 2025’n piek van 29,4 miljoen eenhede (15 kg/eenheid) te bereik. Hy het gesê dat daar tans 120sitrusboere in die Vallei is, waarvan die top 50 boere sowat 80% van die vrugte produseer.Die totale oppervlakte van die Sondagsriviervallei, wat 45 km lank en 6km breed is, beloop 30 000ha. Hiervan word 17 000 ha onder sitrus verbou.Hy het gesê die sitrusbedryf is belangrikste werkskepper in die Vallei met sy sowat 60 000 heeltydseinwoners. Om sitrus te produseer, kos tot R120 000/ha en die verpakkingskoste ’n verdere R80000/ha.Suurlemoene (7,5 miljoen kartonne) Valencias (5 miljoen kartonne) en nawels (2,8 miljoen kartonne)is die belangrikste variëteite wat in die streek verbou word. Van die 65 sent per karton watprodusente aan die Sitruskwekersvereniging betaal, word 40 sent per karton vir sitrusnavorsing (SRI)aangewend.

Theuns Botha, Landbou.com, 2 August 2017

Suurlemoenmark se bodem kan uitval

Sitrusprodusente moet weer dink oor nuwe aanplantings, aangesien wêreldwye oorproduksie prysehalveer het. ’n Waarskuwing is aan sitrusprodusente gerig om nuwe suurlemoen-aanplantings af te skaalaangesien ’n wêreldwye oorproduksie pryse verder kan laat tuimel. Pryse het die seisoen reedsgehalveer en ’n rekordoes van 19 miljoen kartonne sal na verwagting uitgevoer word.Mnr. Hannes de Waal, besturende direkteur van die SondagsrivierSitrusmaatskappy, sê boere moetversigtig wees met nuwe aanplantings, al is boompies beskikbaar. “Spaar julle geld of belê dit in ’nalternatiewe gewas. Hoewel lemmetjies as ’n alternatief vir suurlemoene beskou word, hetprodusente in Meksiko dit reeds grootskaals aangeplant.”De Waal sê die mark vir suurlemoene is tans baie traag, veral aangesien Argentinië en Spanje seproduksie genormaliseer het en hulle steeds nuwe aanplantings maak.“Hoewel dit in Argentinië en Turkye geryp het, is voorrade hoog en neem verbruik nie toe nie. Daar isverbasend min bevorderingsveldtogte en in sekere markte is kleinhandelaars onwillig om van die hoëprysvlakke af te sien, al het boere se pryse binne een seisoen halveer.”De Waal sê boere in die Sondagsriviervallei is beter as ander produksiegebiede in die landgeposisioneer om die “uitskud-periode” te oorleef.“Ons het ’n versappingsfabriek en is naby aan ’n uitvoerhawe geleë is. Ons het ook die swartvlek-uitdaging onder beheer en suurlemoene is nie vatbaar vir valskodlingmot nie.“Die opbrengs in nuwe boorde beloop sowat 90 t/ha. Hoewel moeilikheid op die horison is, maakons reg daarvoor en groei weer ons markaandeel in die Europese Unie,” sê De Waal.

Theuns Botha, Landbou.com, 28 August 2017

South Africa: Warm winter and low demand lead to vegetable oversupply

Across the country there is an oversupply of most vegetables, a product of the warm winter as wellas depressed buying power on the part of South African consumers.In the tomato producing areas in the interior of the country, growers usually plant extra to provide amargin in the case of frost damage, which largely didn’t occur this year. “Everyone who stuck atomato plant in the ground this year got a harvest,” a grower told FreshPlaza. “There’s been no colddamage so everything’s ending up at the market.”

As a result there are large volumes of tomatoes on the market, but on the small side, getting lowprices, R20 (€1.25) to R40 (€2.50) per 6kg box less than usual. “The guys in the Lowveld should’vefinished by now, with frost killing the plants, but they’re still delivering to the market, mostly smalltomatoes,” explains Bossie Boshoff of Farmers Trust agency at the Tshwane fresh produce market.“There’s a real shortage in medium plus to large tomatoes.”Medium plus to large tomatoes therefore obtain good prices “but no-one’s running for the smalltomatoes”, as Ockert Coetsee, agent at the Botha & Roodt agency at the Johannesburg fresh producemarket puts it. “Nothing’s getting good prices at the moment. With onions, it’s incredible – it’s goingfor about R18 [€1.13] for a 10kg bag! That’s R1,80 [€0.11] per kg – really low. The buying power justisn’t there.”At the Cape Town fresh produce market, whose tomatoes come principally from the East Londonarea in the Eastern Cape, from along the Orange River in the Northern Cape as well as from LimpopoProvince in the north, there similarly is an oversupply.Green beans, usually at levels of R60 (€3.77) to R80 (€5.03) this time of the year, now go for betweenR25 (€1.57) and R40 (€2.50) and bell peppers, normally R50 (€3.14) to R80 (€5.03), are down to R30(€1.88) to R45 (€2.82), all because of an oversupply, says Bossie Boshoff.There is a silver lining to the situation: “This just shows why the fresh market system is so wonderful– it gives people access to high quality produce and at a time of oversupply like now, at reallyaffordable prices,” says Jaco Oosthuizen, managing director of RSA Marketing, one of the largestmarket agencies in the country. “It’s totally governed by the laws of supply and demand.”All of the market agents that FreshPlaza spoke to, at markets across the country, however lament theweakening of demand which normally dips during the middle of the month, but agents agree thatsomething else also accounts for the slackness, and that would be an economy in recession.

Carolize Jansen, FreshPlaza, 14 August 2017

Western Cape government backs Philippi's farming potential

The Western Cape government has thrown its weight behind the Philippi Horticultural Area's (PHA)farming potential and the development of an integrated agri-park in the area.But, the standing committee on economic opportunities, tourism and agriculture in the provinciallegislature is adamant the City of Cape Town concludes its 6 month environmental impact andfeasibility study before deciding on any future developments.The provincial government wants to develop Philippi into a "dedicated, integrated, and self-sustaining agri-park to capitalise on the immense agricultural and job-creating potential of theregion," standing committee chairperson Beverley Schäfer said. "We have previously called for thePhilippi Horticultural Area (PHA) to be classified as an Agricultural Development Zone (ADZ) toprotect the long-term farming potential of the land."The development is expected to create some 112 000 jobs and bring R8.1 billion in revenue into thelocal economy."Pursuant to a presentation by the Philippi Economic Development Initiative (PEDI) at the WesternCape Provincial Parliament today, it was revealed that Philippi is earmarked to be a leadingagricultural hub in the Province bringing in some R8.1 billion in revenue for the City of Cape Town,and creating 112 000 jobs in the Metro," Shäfer said."I have written to the Executive Mayor of the City of Cape Town, Patricia De Lille, recommending thatthe City await the results of a 6 month long impact study into the agricultural footprint and viabilityof the PHA before any decisions are taken for its future development."Philippi, along with the PHA, have the potential to house a variety of agri-processing industries,specialised agricultural academies, business incubators, and green human settlement projects where

the members of the surrounding previously disadvantaged communities can be catapulted intoemployment in a thriving industrial zone as the bread basket of the City of Cape Town."We know that Philippi will be developed as a regional transport hub, with 6 proposed MyCiti busroutes and a central station, as well as the development of an aerotropolis with proposed upgradesto Cape Town International Airport. Furthermore, the Western Cape Department of Transport andPublic Works is also building major motorways in the area and connecting roads to nearby towns.This is key infrastructure to support an agri-park which Philippi is poised to become. "The development of this area as an agricultural hub is so vital because of its self-sustainingapproach to farming, making sole use of water from the underground Cape aquifer and drawing nowater from the City itself. It presents immense opportunity for upcoming farmers to compete withcommercial farming in the Province, creating an enabling environment for various agriculturalindustries to launch and flourish."As the DA in the Western Cape, we will continue to support initiatives which have the potential tocreate jobs for our people and grow the food to feed them. This is part of our mandate to create anopen, opportunity society for all," Shäfer said.

Cape Argus, 16 August 2017

Kevin Lovell bedank skielik

Die hoof uitvoerende beampte van die SA Pluimveevereniging (SAPV), mnr. Kevin Lovell, het bedank.Lovell sê in ʼn nuusverklaring dat hy ná 11 jaar as hoof uitvoerende beampte van die SAPV besluit hetom van 17 Augustus uit sy pos te tree. Die raad van die vereniging het dr. Charlotte Nkuna vir dievolgende tyd as waarnemende hoof uitvoerende beampte aangestel.“Op versoek van die Raad sal ek voortgaan om die organisasie vir ‘n beperkte tydperk by te staan oorsake wat my aandag vereis.”Lovell sê in die 113 jaar van bestaan het die SAPV dienste aan die pluimveebedryf verskaf. Hierdieaktiwiteite bly steeds baie relevant vir die huidige omstandighede in die bedryf, insluitendehandelsaangeleenthede, soos storting en goedkoop invoer, siektes soos die onlangse H5N8-voëlgriep-uitbrekings, die droogte en die uitwerking daarvan op die pluimveebedryf, asookvraagstukke oor die mark wat produsente én verbruikers bekommer.Hy sê in die verklaring dat hy almal bedank vir die geleentheid wat hy gegee is om in die bedryf tewerk en om met lede, media en belanghebbendes te kon skakel. “Dit was ‘n eer om u almal te dien.”

Jan Bezuidenhout, Landbou.com, 16 August 2017

South Africa's poultry industry is hurting as avian flu worsens

The outbreak of avian influenza in the Western Cape has led to the culling of more than 300 000chickens in the past two months. According to industry experts, the number of culled chickens will not necessarily result in a shortageof poultry or an increase in the price in the short term, but it can have ramifications in the long term. New cases were detected on a poultry farm in the Paardeberg region in the Western Cape. Theprovince's department of agriculture reported on Monday that at least 30 000 chickens had died,while a further 110 000 have had to be culled, following the reports.The national Department of Agriculture, Forestry and Fisheries said avian flu, which was firstdetected in Villiers in the Free State and Standerton in Mpumalanga, had already impacted on theindustry. “All the affected farms have been placed under quarantine,” the department said.

Western Cape economic opportunities MEC Alan Winde said the affected farms had beenquarantined. “Three ostrich farms are quarantined in the Heidelberg region, as well as one farm inthe Paardeberg region. "And we are conducting tests, because it is contagious. We are also askingpeople to notify us if they are picking anything up,” he said.Paul Makube, a senior agricultural economist at First National Bank, said the outbreak could forcesmall poultry producers out of business. “The country has just come out of the drought, so the smallplayers will not survive the avian flu, if it is not contained. This will lead to job losses and put aserious dent in the price of chicken in the long run,” Makube said.He added that in the short term local demand could be met by imports, but this would result in localproducers losing market share. Poultry producer Astral Foods reported last week that the outbreakhad set the company back R50million since it was detected on its farms in June.But South Africa is not the only country fighting the disease. The World Health Organisation hasreported avian influenza in the US, Hong Kong, China and in some parts of Europe and Africa.“Unfortunately, the authorities cannot tell in advance where the next outbreak will occur. They canonly try to contain it once the disease has been reported,” Makube said.The KwaZulu-Natal chairperson of the National African Farmers Union said although the province hadnot recorded any new cases, it was important for small farmers to be given training on how to dealwith the avian flu outbreak if it was detected on their farms.

Sandile Mchunu, Business Report, 30 August 2017

Inenting van pluimvee in SA teen H5N8?

Die pluimveebedryf en die staat vergader binnekort oor voorstelle vir die inenting van pluimvee teendie H5N8-virus. ’n Baie streng en goed deurdagte uittreestrategie, gegrond op wetenskaplike bewyse, blyk die enigsteuitweg vir die land te wees om sy pluimveebedryf van die hoogs aansteeklike H5N8-virus te red.Dit kom nadat die pluimveebedryf, wat reeds meer as 600 000 hoenders en duisende eiers weens dievirus verloor het, die Departement van Landbou, Bosbou en Visserye versoek het om toe te laat datdie voëls teen die virus ingeënt moet word.Geen van die volstruise by twee volstruisplase by Heidelberg in die Wes-Kaap, wat positief vir dievirus getoets het, het nog daarvan gevrek nie en is ook nie uitgeslag nie. Die plase is wel onderkwarantyn geplaas en toetse word voortdurend op die voëls gedoen.Mpumalanga, Gauteng, Kwazulu-Natal en Noordwes word ook deur die virus geraak en altesaam 24uitbrekings het plaasgevind. Dit is op tien kommersiële plase, drie uitbrekings onder volstruise, drieonder werfhoenders, vyf onder wilde voëls en drie by voëls wat as troeteldiere aangehou word.Dr. Mpho Maja, nasionale direkteur vir dieregesondheid by die Departement van Landbou, Bosbouen Visserye, het gesê wanneer met inenting begin word, sal hulle presies moet weet wanneer en hoedie inentingsproses gestop moet word, om nie ’n endemiese siektetoestand te skep nie. Diedepartement het duur lesse geleer toe hy sowat 15 jaar gelede toegelaat het dat voëls teen die H6-virus ingeënt word. “Ons het ongelukkig ’n endemiese situasie geskep weens daardie aksie.”Maar, met die lesse geleer uit hierdie voorval, stel dit die land in ’n posisie om hierdie keer die foutevan die verlede te omseil.Bitter min lande volg egter die inentingsroete. “Die meeste lande was ongelukkig nie suksesvol omdeur inenting ontslae van die siekte ontslae te raak nie.”Maja het gesê die departement sal kyk na die suksesse en die mislukkings van die onderskeie landewat inentings gedoen het om die beste besluit vir die plaaslike pluimveebedryf te kan neem.Egipte, wat een van die lande was wat sy hoenders teen die virus ingeënt het, het agterna aangeduidat hierdie voorkomingsmaatreël ’n fout was.

Die bedryf het reeds sy voorstel by die departement ingehandig vir inenting, asook dat vrugbareeiers ingevoer moet word om die gaping toe te maak wat ontstaan het weens die uitslag van dievoëls.Maja het aangedui dat dié eiers onder streng kwarantynmaatreëls vanaf Brasilië ingevoer sal word.Mnr. Piet Kleyn, hoof uitvoerende beampte van die Volstruissakekamer, het uitgelig dat dieviruslading in die omgewing is so hoog dat die beste biosekuriteit op die oomblik verbreek en datslim gespeel moet word hoe nou teen die virus opgetree kan word.Die virus is een wat die wêreld nog nie voorheen beleef het nie. Suid-Korea het 40 miljoen stukspluimvee van kant gemaak, sonder om die probleem op te los. “Dit is moeilik om te sê deur dievrekmaak van die voëls of natuurlike uitfasering van die virus in die omgewing die virus stop. Ek dinkdit gaan alles op die einde van die dag oor die volhoubaarheid in die toekoms. Ons moet kyk wat isdie beste oplossing, nie net vir Suid-Afrika nie, maar wêreldwyd want op die oomblik is die strategie(om voëls van kant te maak) nie volhoubaar nie.”Die departement en die bedryf vergader binnekort om dié voorstelle te bespreek.

Joylene van Wyk, Landbou.com, 31 August 2017

New black 'boers' need a helping hand to till the land

This week I addressed the African Farmers Association of South Africa's Young Farmers Summit aboutentrepreneurship.Although I was meant to be the one imparting knowledge, I observed first-hand the real challengesfacing new entrants to this industry.Afasa Youth is spearheaded by a former banker, now a young farmer, Nono Sekhoto, who saw aunique opportunity in facilitating appropriate support for young people who have made farmingtheir career choice.South African agriculture is a well-organised industry.At its heart is primary agriculture - the farming sector. This is where the production of food happens,and where the entire value chain is most threatened. Although farming on its own is a smallcontributor to the economy, it is supported by the linkages that drive production of the raw materialrequired for agro-processing, which contributes significantly to job creation and up to 16% to GDP.Without a well-established and successful farming industry, the agricultural sector in its current glorywouldn't exist.So how do we secure the future of the farming industry, given its white Afrikaans dominance andpoor black participation?"Currently, the farming industry in South Africa is dominated by about 35,000 white commercialfarmers who contribute as much as 80% of food production in the country."These farmers represent about 30% of the country's farmers, whereas the rest are made up ofsmall-scale commercial farmers, smallholder farmers and subsistence farmers, the majority of whomare black," says Sekhoto.So why do black people not feature in the top 35,000 commercial farmers? The answer lies in theway the system was built.White commercial farmers were created through accessing the land, knowledge and resources thatwere transferred from generation to generation.The white farmer grew up watching his father farm the land. He was exposed to the culture andunderstanding of how things work around the farm at an early age. He would then be sent off to beeducated in agricultural studies and return to work on the family farm. During this time, the youngfarmer would learn from his father, who would mentor him until the farm was handed over to him.And so the cycle would continue.Until today, it was rare to hear of people leaving the cities and moving to rural areas to farm.

A farmer was born on the farm, grew up on the farm and taught to own and operate his own farm.And it was often a "he", as girls were hardly seen as fitting heirs to the family's farming operation.Today, however, a number of black people, including women, are switching city living for farming.Access to farming land is often secured via government programmes, and, armed with a passion forthe industry and the desire to make a commercial success of it, these first-generation farmers aretrying their best.But many are walking onto these farms with inadequate support, little to no farming skills and pooraccess to finance and markets. Most of all, unlike for the young white farmer, there is no one on thefarms to guide and mentor them.The slow pace of transformation in the farming industry is a consequence of not creating viablesupport channels and support programmes for these new entrants.Some have developed partnerships and even genuine friendships with white farmers with moreexperience than them, and this has assisted greatly. But the vast majority are often left to their owndevices through the most trying times in their businesses.Most white commercial farmers are ageing with little succession planning. Their children are oftenlured into other careers, and are not keen to "boer" like their fathers. We clearly need to find ways toconnect the new entrants with the experienced old hands."There is no shortage of passion and desire to put in the hard work among us as new players - wejust need support, especially from the established commercial farmers, the government and theindustry players. It is in the interest of us all," says Sekhoto.

Andile Khumalo, Business Day, 20 August 2017

Banking & Capital Markets

Veranderinge in landboufinansiering

Die landskap vir finansiering in die landbou het die afgelope drie dekades aansienlik verander – veralwat die omvang van lenings en ’n fokus-verandering by van die vernaamste finansierders behels, sêmnr. Zhann Meyer, hoof van landboukommoditeite by Nedbank.Meyer sê in ’n meningstuk in die middel-1980’s was die totale primêre landbouskuld sowat R13miljard. Van die totale skuld het 22% by die Land Bank gelê, kommersiële banke het 26% daarvangedra en koöperasies sowat 30%.“Teen die einde van 2016 het hierdie finansieringsprentjie aansienlik verander met boerderyskuldwat al op sowat R145 miljard gestaan het. Die Land Bank se aandeel van die skuld het rofwegdieselfde gebly op 28%, maar die verhouding tussen banke en landboubesighede verskil noudramaties. Banke dra nou rofweg 60% by tot die landbou-finansiering en landboubesighede seaandeel het tot net sowat 7% gekrimp.”Hy skryf dit toe aan veranderinge in die eienaarskap van die ou koöperasies en ook hulle benaderingtot lenings wat verander het. Waar die koöperasies in die verlede kollektief deur boere besit is enlenings as ’n natuurlike uitbreiding van dienste gesien is, word die meerderheid nou deurinstitusionele beleggers besit wat ’n ander benadering het.“Die Land Bank het sy deurslaggewende rol behou as ’n finansierder van boere, maar deesdae is ditin ’n mindere mate gevestigde kommersiële boere en in ’n groter mate ’n transformasie-rol met diefinansiering van nuwe toetreders. Die gaping wat deur koöperasies en die Land Bank gelaat is, is deurdie kommersiële banke gevul.”

Meyer wys daarop dat die groter betrokkenheid van kommersiële instellings ook gerugsteun is deurdie groei in die waarde van landbougrond. Die waarde van Suid-Afrika se landbou-bates word opR420 miljard geraam, waarvan grond en verbeteringe meer as helfte van die waarde is.“Hierdie fisiese bates maak die betrokkenheid by die landbou meer haalbaar en verskaf ook diekollateraal sodat banke finansiële oplossings aan boere kan bied. Hierdie betrokkenheid van dieprivate sektor strek ook veel wyer as net die verskaffing van krediet. As kommersiële instellings hetbanke ’n gevestigde belang om te verseker boerderye is suksesvol. Daarom is die fokus deesdae baiemeer op ’n vennootskapsbenadering.”Hy sê behalwe vir die finansiële steun, bied banke ook ander vorme van kundigheid, hulp en raad aanboere. Verlede jaar se droogte is ’n voorbeeld. “Terwyl banke boere gehelp het met finansiering vanmeer volhoubare waterinfratruktuur soos boorgate en damme te midde van die droogte, help hulleterselftertyd om die boerderye op die langer termyn volhoubaar te maak in die lig vanwaterskaarste.”Hy sê die vennootskapsbenadering strek ook wyer na die volle waardeketting omdat boerdery net2,5% tot die BBP bydra. Sekondêre bedrywe rondom landbou stoot die ekonomiese waarde op nameer as 25% van die BBP. “Hierdie aansienlike toename in die vlakke van betrokkenheid deurfinasiële instelling by die landbou is van die grootste belang. Deur finansiëel en intellektueel in dielandbou en die sekondêre bedrywe te belê, help banke nie net boere nie. Hulle help metwerkskepping, voedselsekerheid en die ekonomiese groei wat die land dringend nodig het.”

Nico van Burick, Landbou.com, 15 August 2017

Karaan lê tuig neer by Land Bank

‘n Paar maande voor die verstryking van sy termyn het prof. Mohammad Karaan bedank as lid vandie direksie van Land Bank.Karaan was voorsitter van die bank se krediet- en beleggingskomitee. Hoewel sy tweede termyn asraadslid in Desember tot einde sou loop, geld sy bedanking vanaf 31 Augustus.Volgens Karaan was die tyd ryp om die Land Bank vaarwel te roep. “Ek het op ’n laagtepunt ingeklim(by die Land Bank), maar die onlangse goeie resultate was ’n toppunt. Dit het my laat dink dis dieregte tyd om uit te klim,” het hy aan Landbou.com gesê.Volgens die Land Bank se 2017-jaarverslag het die bank, ondanks die droogte en wispelturigeekonomiese toestande, se netto rente-inkomste met bykans 11% na R1,256 miljard gestyg sedert dievorige jaar. Die netto rentekoers-marge het tot 3,1 % gestyg (vanaf 3% in 2016 se finansiële jaar).Mnr. Bennie van Rooy, finansiële hoof van die Land Bank, het die grootste waardering vir die werkwat Karaan as raadslid gedoen het. “Hy het baie landboukennis gebring in ’n tyd wat daar nie baielandboukenners op die direksie was nie.” Karaan het verskeie belange wat hy vorentoe gaan najaag.Me. Dumo Motau sal voortaan die leisels by dié komitee hou. Sy is in Maart vir ’n tweede termyn opdie raad aangestel.“Me. Motau het wye ervaring in bankwese, kredietrisikobestuur en ontwikkelingsfinansiering inverskeie omgewings en instellings opgedoen.”Sy het haar loopbaan in die bankbedryf begin by die Ontwikkelingsbank van Suidelike Afrika. Daarnahet sy ook by die Suid-Afrikaanse Reserwebank en die Tesourie gewerk.“Die proses om ’n plaasvervanger vir prof. Karaan aan te stel, het reeds begin. Die Bank het reedsmet die Minister van Finansies en die Nasionale Tesourie gesels om te verseker dat die raad bestaanuit lede met die gepaste kennis en kundigheid om die raad by te staan in die uitvoering van sy pligte,”lui ’n verklaring.

Lucille Botha, Landbou.com, 16 August 2017

Land Bank lewer stewige resultate

Die Land Bank het ʼn stewige stel resultate bekend gestel en het weer eens ʼn ongekwalifiseerdeoudit gekry. Ondanks die droogte kon die Land Bank in die boekjaar tot einde Maart vanjaar sy bruto leningsboekmet 11% vergroot.Volgens mnr. Bennie van Rooy, finansiële hoof, het die bank se wins met 13% gegroei.Danksy die goeie reën laat in 2016 het boere meer geleen om te plant, het mnr. TP Nchocho,uitvoerende hoof, gesê.Die Land Bank se versekeringsmaatskappy (LBIC) was wel weens die vorige seisoen se droogte onderdruk, omdat die verhouding van eise teenoor premies baie hoog was.Volgens Nchocho is die LBIC is egter goed gekapitaliseer en sal aanhou om risikodekking aan diesektor te bied.Hy het die pluimveebedryf uitgelig as een wat in die tydperk van verslagdoening swaargekry het. DieLand Bank het nie groot blootstelling aan die sektor nie, maar waar hy wel blootgestel is, het diebank help soek na oplossings om werkgeleenthede te behou en na geleenthede vir konsolidasie.Volgens Nchocho het die bank só gehelp om sowat 3 500 werkgeleenthede in die sektor te behou.Die bank was verder in die breë betrokke by die skep van 15 360 nuwe werkgeleenthede in dielandbou.Die bank se ontwikkelingsleningsboek, wat lenings aan histories benadeelde individue ofondernemings met ʼn meerderheid swart aandeelhouers insluit, het van R2,5 miljard in die 2016-boekjaar tot R4,9 miljard in die jongste boekjaar gestyg.Nchocho het gesê die bank ondersoek innoverende waardeketting-finansieringsvennootskappewaardeur opkomende boere ondersteun kan word, selfs al het hulle nie sekuriteit nie.Volgens hom is daar onvoldoende sinergieë tussen die belangrikste instellings betrokke bytransformasie in die sektor.Dit gebeur byvoorbeeld dat daar ʼn goeie projek is, maar die nodige infrastruktuur of iets soos ʼnwaterlisensie is nie gereed nie.Nchocho sê baie meer kan gesamentlike ondernemings bereik word. Die bank het onlangsafsonderlik met sowel Agri SA as die African Farmers’Association of South Africa (Afasa) hieroorvergader.Volgens Van Rooy maak die bank goeie vordering om meer medium- en langtermynfinansiering teverkry, om so sy herfinansieringsrisiko te verlaag en algemene likiditeitsvlakke te verbeter. Die bankhet voorheen hoofsaaklik korttermynfinansiering gehad.Teen einde Maart aanstaande jaar behoort die bank sy mikpunt te bereik dat 50% van syfinansieringsprofiel op medium termyn is. Die bank is ook goed op dreef om die grondslag van sybeleggers te verbreed.In dieselfde tydperk het institusionele beleggers se aandeel van 11,2% tot 50,3% gegroei.Nchocho het gesê dit is belangrik dat Suid-Afrika nie verder afgegradeer word nie.

Carien Kruger, Landbou.com, 4 August 2017

Land Bank on track to fulfilling developmental mandate

NASTASSIA ARENDSE: The Land and Agricultural Development Bank of South Africa, also known asthe Land Bank, has delivered its full-year results. This after operating in an economy that had toughagricultural conditions, including the worst drought in a century and a contracting economy.To find out more about the results I am joined in the studio by chief executive “TP” Nchocho. Thankyou so much for your time.TP NCHOCHO: Thank you very much.

• NASTASSIA ARENDSE: Take me though the overall numbers that you delivered today.TP NCHOCHO: Perhaps before the numbers, again just underling the point that you started with, thatis that the sector comes from two years of negative growth, largely attributable to a severe droughtover 2015 and 2016. But thanks to the rains that started coming back towards the end of 2016 thereis a recovery on the go in the agricultural sector.So, from an investment perspective, or lending activities perspective, we have disbursed this year inthe order of R4.8bn in new loans, and this is up from a figure of R3.6bn last year in new advances.Just to mention there, somewhere in the region of R2bn of that money has been disbursed toenterprises that are classified as developmental or transformative – in other words, they weresubstantively owned by black people, either in a majority sense or wholly so.And then from a revenue perspective, our net interest income, which is a measure of the netrevenue that we make having taken into account the cost of our own borrowings, that figure is up10% to R1.3bn from a figure of R1.1bn I think last year. And so under the circumstances that’s great.What we have done with regard to the cost structure was to manage it and contain it significantly, soour expenses are up by a figure of around 4.6%, which is okay, more than acceptable really, for anorganisation like ours, which is very human-intensive. More than 75% of our operating costs areattributable to human costs.And then from a profit point of view, really also great, because our profit was almost R350m thisyear, up from just over R300m last year. So a 13% uptick in the bottom line. So in that sense that’sgreat.But also on the balance-sheet side of the equation, that’s also where things are great because wehave seen growth in our loan assets by about 11% from R39bn last year to close off at R43.3bn loansthis year that we are reporting on. And the measure of our loan-book health, as you would know,being the ratio of non-performing loans, loans that are outstanding for a period more than 90 days –that figure stood at 8.8% of the loan book last year. It is down to 7.1% this year, and well within ourprudential level. Our prudential upper limit that we have set for ourselves is 10%, given the riskysector that we operate in.So overall I think great under the circumstances.• NASTASSIA ARENDSE: Speaking of the risky sector that you are operating in, and looking atthe current environment right now, what’s worrying you when you look at the global economy, whenyou look at what’s happening locally?TP NCHOCHO: There are a couple of things that are worrisome. The first one is the local currencycredit rating, which at the moment has been kept at investment grade – we cannot afford a situationwhere we experience a further downgrade. That would be calamitous because it would translate intoextraordinarily difficult circumstances – both to raise money for us in the local markets, and also thecost thereof. That’s the one thing.The second thing that is of great worry to me is that the land-reform programme in the country, asmuch as it was initiated and funded well, is suffering from sustainability problems in the sense that,as much as agricultural opportunities, farms and land, are presented to emerging farmers, blackpeople, we are all aware – and this is a matter of public record – that a substantial portion of thoseopportunities don’t really sustain productivity and viability. And we can talk about many reasonswhy.So unless we get the land reform programme right, we stand the risk of undermining the productivityof the agricultural sector in the long term.Then the third point of worry, perhaps, is that the agricultural sector by its design requires thatsupport comes from various quarters. The Department of Land Reform provides opportunity forland. The Department of Agriculture is required to provide technical support services, extensionservices, market-access arrangements and so on. Infrastructure is required in farming areas toprovide for water and things like that. So the point that I’m making is that at the moment there is notenough synergy and seamless collaboration across all entities that need to support the agriculturalsector, particularly from a transformation perspective.

And so these are the kind of things that I think are holding back the great potential that the sectorhas.• NASTASSIA ARENDSE: Have you raised those concerns about how we get together to sortthese issues out?TP NCHOCHO: On a continuous basis, really, and the conversations are encouraging. But I don’t thinkthey are moving in my view as fast as I would like towards a point of conclusion. We are grateful wehave a good working relationship with all the departments – Land Reform, DAF, Water Affairs, as wellas the industry bodies like AgriSA, which represents predominantly white established agriculture,and another organisation called AFASA, the Association of African Farmers of South Africa, which ispredominantly a black organisation. I was saying to them yesterday at their conference, AFASA, thatwe believe one way in which constraints and hurdles in this sector could be overcome is throughstronger business and investment partnerships between established agriculture as well as emergingagriculture, where you enter into joint ventures. Genuine risk-sharing entrepreneur JVs. And we havethose work.• NASTASSIA ARENDSE: Some of the things that you are doing to help female farmers I findquite impressive – because I always think it’s quite encouraging when I see a lot of womenparticipating in the agricultural sector. Take me through some of your call it development impactinitiatives as the Land Bank.TP NCHOCHO: There are a couple. There is one specific example somewhere in the Limpopo area,where there is a dairy farmer, a family that owns a dairy farm. They’ve been farming for many years.The lady who runs the production unit there, the processing of milk, is a microbiologist. She is in hermid-thirties, I think. An opportunity has arisen where a piece of land came up for sale just next tothat existing farm. What we have done, and we are busy with that project, is, as the Land Bank, tofacilitate the acquisition of this new farm by black people, including women, this lady; and we aregoing to create a joint-venture structure around that. So what will then happen is that this newproject will leverage on the existing technical and marketing capabilities of the existing farm. That isthe one.In the Free Sate we have done a very interesting project in the livestock area, in cattle farming. Wehave anchored the development of about 60 black emerging farmers in that region around a well-established livestock farmer. So not only do they get assistance from us by way of financing, but theyare assisted by this existing farmer to provide them with all the expert support in terms of running abreeding programme, medicating the animals when they are sick, fattening them up through properfeeding programmes and things like that. The reason I mention that is because out of that 60 about32 or 33 of them are women. It’s very interesting to visit that area and see them in action.• NASTASSIA ARENDSE: Speaking about money and women helping some of the farmers, howmuch money do you have right now in cash to help out other people who are emerging farmers?What’s your risk appetite right now?TP NCHOCHO: Let me put it this way. Because the Land Bank has sustained a good financialperformance profile and is progressively strengthening its balance sheet year on year, and indeedsustaining a very clean and a very clear governance dispensation, where there are no shenanigansand everything, as an organisation we continue to attract adequate funding from capital marketslocally, as well as raising long-term financing facilities from international institutions such as theAfrican Development Bank, the World Bank, and other syndicated arrangements. So on anaggregated basis, as we speak here today, we have in excess of R9bn of facilities that could bedisbursed out to farmers. But as the opportunities come through, you’ll appreciate they need to gothrough a proper assessment process.And yes, a common problem that black emerging farmers come across, yes, is very often perhapsthere is a need to contribute their own equity into projects, so that the projects are not over-leveraged. It’s a challenge.

Very often the second issue Is that, because they don’t have long, extended track records when weseek to validate their route to market arrangements, you find a sense of vulnerability in theirmarketing arrangements or their access to market systems are not very solidified.Thirdly, very often emerging farmers struggle with risk-mitigation instruments around natural perils.The drought effects of the past two years actually destroyed more emerging farmers than you canimagine, relative to established farmers, because they don’t have insurance. Premiums are tooexpensive to afford.So what’s available on the insurance side? Remember the Land Bank has a subsidiary which is call theLand Bank Insurance Company, and it provides both short-term and life cover. But the premiums areexpensive. Hence one of the things that I’ve been talking about in recent times is the fact that wehave worked together with National Treasury as well as the Department of Land Reform to puttogether a very coherent submission to government recommending the establishment of a nationalinsurance subsidy scheme, where, as an example, let’s say the premium costs R1, an emergingfarmer would pay 40c and maybe government subsidises them 60c to make it affordable. And then itwould be differentiated for established farmers. Maybe in that equation the farmer would pay 70cand government would subsidise. But it would provide blanket cover for an entire sector to copewith natural perils.Then with regard to addressing market access arrangements, one way – and I don’t think it’s the onlyway – is really to negotiate as part of the de-risking of the project at the point of arranging themoney. Arrange a solid take-off arrangement with regard to the sale of product. You might have seenin the paper that last week the head of transformation at Pick n Pay came to my office and we signeda cooperation agreement where increasingly we hope that a lot of the emerging farmers that wework with can be supported financially, but also with production techniques, so that they enhanceboth their quality and their quantities to be able to supply, among other things, into an opportunitysuch as Pick 'n Pay.So if we expand these models of de-risking projects by arranging market access and technicalsupport, we can expand on our envelope of unsecured lending because where you have this marketaccess as an institution we do have the appetite to offer unsecured loans underpinned by soundcommercial agreements.• NASTASSIA ARENDSE: Looking ahead, what are the key focus areas between you and yourteam? What are you guys going to be working on?TP NCHOCHO: The one thing, as the Land Bank – and again we have talked about it – is that if wetake our loan book and say, to what extent as we speak today have we advanced substantial fundingto black-owned enterprises, the transformation agenda, the truth is that it is not significant. It is lessthan 10% of our loan book, in the region of 10%. But interestingly we have doubled that figure inrand-value terms; about R2.5bn of black-owned owned enterprises were financed by us last year.That number this year at closing is R4.9bn, almost double. So it is that line of our lending that wewould like to extend going forward – more funding to black people on a sustainable basis. It’s noteasy, because it’s not a grant programme that we run. We are running a lending programme whichhas to be undertaken on a sound basis.And then the second thing that we are really seized with that I touched on earlier, we mustorchestrate better synergy. There has to be a system in this nation of assisting emerging farmers on astimulus basis. Someone who walks into the Department of Land Reform, if they are lucky enough tobe allocated a farm, should go through a stimulus process to a point where they are able to put seedsin the ground or animals in the field and start farming. But to able to do that you need these sectordepartments and stakeholders, including the Land Bank, to work in a synergistic way on a seriousbasis – not on an “if it arises” kind of basis, but on a coordinated, well-orchestrate basis. And in doingso, the agricultural organised bodies such as AFASA and AgriSA have a crucial role to play in terms ofencouraging their membership into collaborative initiatives.• NASTASSIA ARENDSE: All right, TP, we’ll have to leave it there. Thank you so much for yourtime.

TP NCHOCHO: Much appreciated, thank you.

Nastassia Arendse, Moneyweb, 3 August 2017

Lenings vir álle boere in rampgebiede

Die Land Bank se spesiale lenings vir alle boere in droogtegeteisterde gebiede is vir langer beskikbaargemaak sodat boere in die drie Kaapse provinsies ook daaruit voordeel kan trek.Die Nywerheidontwikkelingskorporasie (NOK) het einde Maart verlede jaar R400 miljoen aan diebank beskikbaar gestel om vir droogteverligting aan boere te kan leen.Mnr. Bennie van Rooy, finansiële hoof van die bank, sê die NOK het nou die tydperk waarin die geldbeskikbaar is, tot Maart 2018 verleng.Indien nodig, sal die bank by die NOK aansoek kan doen om die lening vir nóg ʼn verdere jaarbeskikbaar te stel, sê Van Rooy.“Die lenings word vir 10 jaar teen prima minus 3% aan boere toegestaan,” sê van Rooy. Boere inamptelik verklaarde rampgebiede kan aansoek doen.“Om te kwalifiseer, moet ʼn boer nadelig deur die droogte beïnvloed word en daarna volg ons ʼnkredietproses om die lening goed te keur.”In die somersaaigebiede is lenings van R210 miljoen goedgekeur, waarvan sowat R115 miljoen reedsbenut is.“Daar is dus nog R95 miljoen beskikbaar vir lenings reeds goedgekeur en nog R190 miljoen vir nuweaansoeke.”Oor die feit dat die volle bedrag nie deur boere in somersaaigebiede gebruik is nie, sê Van Rooy dieLand Bank se rol hang af van die hoeveelheid aansoeke wat hy ontvang en hoe kredietwaardig dieaansoeke is.“Uit die aard van die saak het die meer gunstige 2016-ʼ17- seisoen in die somersaaigebiede ʼn grootrol in die afname in aansoeke gespeel.”

Carien Kruger, Landbou.com, 15 August 2017

More opportunities for emerging grain farmers

Emerging grain farmers in the Eastern Cape could benefit from an empowerment project launchedby the Black Business Council (BBC) in partnership with Ikhephu Agricultural Secondary Cooperative.The BBC Grain Production Project to launched on August 15, is based in Elliot, Eastern Cape. Theproject aims to support emerging farmers, involving them in an integrated value chain model, so thatthey can become commercial farmers.“One of the key challenges facing emerging farmers is their lack of collateral and security. It meansthey often cannot access production finance and hence cannot use their resource base to its fullestcapability,” said BBC president Danisa Baloyi. The project also includes the involvement of the BBC’s partners BHBW (a Barloworld and BayWaCompany), Land Bank, Unigrain, Tongaat Hullet, Dupont, Kynoch and VBS Mutual Bank.The project will help transform the agricultural sector by changing the participation of black playersto be more involved in the value chain by being “value creators”. The project will also help upscalebusiness competencies and improve market access for these farmers.Baloyi said the project is expected to make a contribution to GDP, transform the sector, createsustainable skills transfer, create jobs and help ensure food security.Previously, the Land Bank announced a partnership with retailer Pick n Pay to develop smallbusinesses in the agriculture sector.

Through Pick n Pay’s Enterprise and Supplier Development Programme, Land Bank will providefinancial support to emerging farmers.

Lameez Omarjee, Fin24, 20 August 2017

Futuregrowth keeps an eye on developments at the IDC

Fund manager Futuregrowth is keeping an eye on developments at the Industrial DevelopmentCorporation (IDC), one of the state-owned companies it previously froze funding to, after thedevelopment financier failed to disclose details relating to loans to politically exposed persons in itsrecently released annual report.The IDC committed to "disclose the quantum and performance of all deals concluded with politicallyexposed persons in their annual integrated report and on their website", Futuregrowth said onthawing its line of funding last November.IDC spokesman Mandla Mpangase confirmed in July that the corporation was on track to disclosethese details on the release of its annual report on July 31."In fact, our minister has given an undertaking to this effect," he said.But this did not happen. The sole reference to politically exposed persons in the annual report wasone line from board chairman Busisiwe Mabuza saying that the corporation was still identifyingappropriate forms of disclosing transactions including those involving the politically connected.Mpangase had not responded to requests for comment at the time of publication.Gershwin Long, an infrastructure and development sector investment analyst at Futuregrowth, saidthat while the IDC committed to certain items it would report on in future, these were not legallycontracted for."They have committed to ongoing reporting and we continue to keep a keen eye on developments inthis respect."Long did not directly respond to questions about what this meant for the fund manager’s line offunding to the IDC."Futuregrowth continues to keep a close eye on governance-related matters."Based on the public disclosure of certain reporting requirements committed to by the IDC, itappears as if the IDC are working towards appropriate forms of disclosure."The Land Bank, the first state-owned enterprise to have its Futuregrowth funding ban lifted, also didnot report on loans to the politically connected in its annual report released earlier in August.This comes after chairman Arthur Moloto said in 2016 that the board had bolstered governance byapproving a policy on lending to politically exposed persons — a concern Futuregrowth chiefinvestment officer Andrew Canter had raised.Land Bank spokeswoman Tabby Tsengiwe said it had responded to some investor concerns includingamending the quorum for the board and lending committee to a two-thirds majority. This wasdisclosed in the annual report."We introduced a code of conduct and ethics policy at the Land Bank and we have a politicallyexposed person policy in place," she said.The policy is on the website. The bank has also appointed a compliance officer to tackle moneylaundering and to screen politically exposed persons.Long indicated that the Land Bank was already acting on its policy regarding politically exposedindividuals."In a road show with the Land Bank team hosted by Futuregrowth last week, the CFO [chief financialofficer] confirmed that the policy had been ‘tested’ recently," said Long."He made reference to a loan recommended for approval to the credit committee that wassubsequently referred to the board, given the involvement of a [politically exposed person]. The loanhas since been referred back to the deal team for reworking," said Long.

Moyagabo Maake, Business Day, 15 August 2017

Treasury vague over R9bn jobs fund and R28bn IFMS ‘tender’

The national Treasury continues to dodge questions about a suspicious R28 billion integratedfinancial management system (IFMS) “tender”. It has also failed to respond to requests for a full list of the beneficiaries of the R9bn Jobs Fund,which President Jacob Zuma announced during his State of the Nation address in February 2011.Business Report (BR) reported on the Jobs Fund in February and recently followed up with a series ofquestions to the Treasury about the status of the fund.These questions related to the amount paid out to date to enterprises, how many permanent jobshad been created since 2011 and who managed and implemented (the mandate) of the Jobs Fund.The Treasury was also requested to provide a full list of all the companies, non-governmentalorganisations (NGOs) and organisations that had received funding from the Jobs Fund since 2011.BR recently reported on the status of the IFMS and asked who had been awarded this multi-billion“tender” that dates back to when Trevor Manuel was Minister of Finance.A source close to the Treasury revealed to BR that it had paid Oracle R461million up front in licensingfees (without a tender), that the amount allocated for the IFMS “tender” currently totalled R28bn,and that there was a suspicious contractual agreement between Abacus and the Treasury.Reply from the Jobs Fund:“To date the fund has demonstrated that it is possible for the private sector, public sector and civilsociety organisations to collaborate, share risk and achieve greater social impact by implementinginnovative models for job creation and, thereby, catalysing broader participation and inclusion in theeconomy.“Initiatives supported cover a wide range of interventions, from micro finance to support ruralwomen, to guarantee schemes to crowd in pension fund investments for the support of SME (smalland medium enterprise) development, to agriculture support for small holder farmers thuscontributing to food security and more resilient farmers.“The fund has also supported initiatives that have improved the skills match between unemployedyouth and existing vacant positions and thereby accelerated the transition of youth from educationinto employment. Through its support the fund has catalysed the achievement of scale in theoperations of funding partners thereby resulting in a more inclusive economy.“In evaluating projects within its portfolio, the fund is able to demonstrate how effective design ofbusiness incubators can help reduce the failure rate of start-ups. However, the evaluation also notesthat the shortage of opportunity-driven entrepreneurs is a limiting factor to expanding the sector.“Well-structured business franchising models have also been identified as an opportunity to enhanceSME’s chance of success. By the end of March 2016 more than 12000 businesses had receivedfunding through projects supported by the Jobs Fund.“The impact and results thus far achieved through the fund’s support for innovative employmentcreation models indicates that the Jobs Fund’s strategy remains relevant to addressing the challengeof unemployment in South Africa.More than 155000 permanent jobs have been created as a result of the interventions of our projectpartners. Of that, 60percent of the jobs were taken up by women, 40percent by men; 60 percentwent to youth and 98percent to previously disadvantaged individuals.“The fund was established in June 2011. The first year of operations focused on a design of operatingprocedures. From mid-2012 to December 2016 the Jobs Fund has focused on building its projectpipeline and currently has an approved portfolio of 117 projects, R6.1bn in grant funds have beenallocated to these projects.“Against this grant amount, the fund will potentially leverage an additional R8.6bn from projectpartners toward job creation. Of the R6.1bn allocated as per the draw-down requests from our

matched funding partners, R3.96bn has been disbursed to 110 implementing projects.Disbursements only occur as per the draw-down schedule provided by our project partners andwhen projects achieve their contracted targets and when projects have paid their matched fundinginto the project account.“In addition to the 155000 sustainable jobs, the Jobs Fund project partners have also created 27314short-term jobs and provided work readiness and technical training to 209845 participants. At a timewhen it is increasingly important that public institutions and programmes transparently account forhow public finances are spent, the Jobs Fund has put in place measures to ensure the integrity of thework being done to reduce unemployment, poverty and inequality in South Africa.“Jobs Fund Partners (JFPs) are held accountable to their approved Activities Based Costing ProjectImplementation Plans, signed grant agreements, as well as the fund’s operating guideline. Asoutlined in these crucial documents, there are numerous control measures in place to ensure theintegrity of the numbers reported to and by the Jobs Fund.“To proactively manage project implementation challenges quarterly, site visits are conducted. Thesesite visits also enable the Jobs Fund team to corroborate the quarterly reports submitted by JFPs andto collect additional evidence of progress. The site visits also entail meeting directly with projectbeneficiaries.“Disbursements are output based. A disbursement committee considers the performance of theproject against targets set. It considers the analysis submitted by the financial analyst and monitoringand evaluation specialists as well as the report of the legal specialist who comment on contractualcompliance related issues. Projects will receive disbursements for the new quarter only when theyhave achieved a minimum of 80percent of the contracted output for the previous quarter.“The Jobs Fund performs a validation check, on a sample basis, of the reported performance andexpenditure numbers on a quarterly basis. This validation is performed against a set of agreedevidence, such as employment contracts, letters of employment, payroll information, certificates oftraining completion, invoices, bank statements, and loan books. The fund will withhold disbursementif this requirement is not met, until the JFP and its allocated team develops a remedial action plan toensure that the project meets all requirements for the next disbursement period as well as make upfor the shortfall of the previous one.“Projects are required to conduct performance audits, which assess the validity, accuracy andcompleteness of the project’s quarterly reporting information. Projects are required to submitannual audit reports based on the terms of reference circulated for auditors by the fund as well asconsult with the fund when appointing their auditors. Over and above this, the fund annuallyconducts independent audits of sample projects to verify performance of the selected projects. TheJobs Fund itself is subject to the National Treasury’s internal audit framework as well as that of theAuditor-General of South Africa.“In support of the fund’s learning agenda, it has put in place a monitoring and evaluation frameworkthat prescribes that projects undergo multi-level evaluations. These include independent mid-termand summative evaluations budgeted for before project implementation. The fund also annuallyselects projects that could provide insight into effective project design and implementation or thatprovide insight into how best to achieve scale. The Jobs Fund as a programme is also subject toevaluation by independent evaluators.“Good governance is a cornerstone of the effective operation of the fund and enables it to ensurethat public funds are targeted toward addressing the challenges of unemployment, poverty andinequality and thereby contributing toward the achievement of inclusive economic growth”. TheNational Treasury ignored the request for a full list of the successful applicants.Various requests via e-mail and in person to the Treasury media representatives remain unanswered.BR recently launched the BR Corruption Buster Series. The team shall investigate. BR is concernedthat no media statement or tender has been issued about the allocation of R28bn for theimplementation of the IFMS.

Minister Malusi Gigaba’s spokesperson, Mayihlome Tshwete, responded yesterday: “There is noattempt on the part of the National Treasury to conceal anything pertaining to IFMS. The concerns ofIFMS have been identified and corrective remedial actions are being finalised. Minister Gigaba hasrequested the DG (director-general) to resolve the matters that are still outstanding with urgency.We expect to brief the public on this soon.”

Adri Senekal de Wet, Business Report, 23 August 2017

Sale of Greece’s National Bank’s SA unit gets green light

South Africa’s competition watchdog on Wednesday said it had given a green light to the sale of theSouth African Bank of Athens (SABA), owned by Greece’s National Bank (NBG), to a subsidiary ofAFGRI Holdings and Fairfax Africa Investment.Greece’s second-largest lender in March agreed to sell all its 99.8% stake in SABA to AFGRI Holdingsas part of an EU-approved restructuring plan.The Competition Tribunal said it had approved the merger on Tuesday, giving GroCapital control ofSABA, with South Africa’s finance minister indicating he will not oppose the merger.SABA, established in 1947, provides banking services to medium-sized local businesses. AFGRI is anagricultural, financial services and food processing company operating in South Africa and 14 othercountries in Africa.National Bank, late last year sold its United Bulgarian Bank to Belgium’s KBC Group in a 610 millioneuro ($720 million) deal.

Reuters, 24 August 2017

Tribunal approves SA Bank of Athens merger

The Competition Tribunal has approved a large merger between GroCapital Holdings, a subsidiary ofAFGRI Holdings and Fairfax Africa Investment, and the South African Bank of Athens (SABA).The merger was approved by the Tribunal on 22 August, 2017 without conditions.Minister of Finance Malusi Gigaba has indicated that he will not oppose the merger.Post-merger, GroCapital will control South African Bank of Athens. Target firm SABA is controlled bythe National Bank of Greece S.A.AFGRI Holdings is an agricultural services, financial services and food processing company operatingin South Africa, and SABA is a South African-based bank providing business banking services tomedium-sized local businesses, as well as niche transactional banking solutions to the broadermarket.

Fin24, 23 August 2017

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