AGRO-PROCESSING SECTOR PLAYS A SIGNIFICANT ROLE IN SOUTH AFRICAN ECONOMY

AGRO-PROCESSING SECTOR PLAYS A SIGNIFICANT ROLE IN SOUTH AFRICAN ECONOMY – MINISTER DAVIES

BRIAN KAJENGO

The Minister of Trade and Industry, Dr Rob Davies says the 49 billion rand agro-processing sector plays a significant role in the South African economy in terms of job creation and sustainability. Minister Rob Davies was speaking over the weekend at the food processing sector meeting held in Cape Town.

The purpose of the meeting which attended by the Chief Executive Officers and representatives from different food processing companies was to share views, discuss and propose possible interventions on a variety of matters pertinent to the agro-processing sector.

Minister Davies said the largest sub-sector is continuously showing progress in terms of outputs and has grown by more than 2% than the rest of the manufacturing sector as a whole.

“Despite the continued ripple effect of the 2008 economic meltdown, food processing continues to be resilient and it is one the largest manufacturing sectors by employment with an estimate of 207 893 jobs in the 3rd quarter of 2013 against a backdrop of job losses in other parts of the sector. 

“It is also significant in value-addition terms, it contributes a significant composition of total manufacturing value-added. Agro-processing has been identified as a segment with a potential to actualise Macroeconomic objectives as pronounced in the New Growth Path (NGP) and the National Development plan (NDP) alike,” he added.

Minister Davies told the gathering that although the sector is facing many challenges such as imports competition, loss of market, and the unstable currency and exchange rate, it still has huge potential.

“South Africa’s agro-processing sector has the potential to become an industrial impetus that can create jobs and answer some of the macroeconomic questions such as trade deficit generated by too much imports against low export volumes.  An analysis of our imports points to glaring opportunities in articles such as wheat, soy bean, vegetable oils, read meat, tomato concentrates and industrial starch. Government will safeguard, intervene and support the sector where is necessary to remain competitive and stable,” he stated.

Minister Davies further said that government’s Manufacturing Competitiveness Enhancement Programme (MCEP) has supported 564 projects for investment support and approved R1.5 billion since its inception in 2012.  MCEP is meant to support and encourage enterprises to upgrade their production facilities, processes, products and up-skill workers as one of the many intervention set-up by government to assist the sector.

The Minister also stated that South Africa is paying particular attention to the issue of food standards for purposes of compliance in export markets. The dti is working with the relevant industry and SABS to develop voluntary standards and later compulsory specifications to protect SA consumers from low quality and fraudulent imports.