Thank you very much for the invitation extended to me to open this conference. It is always a privilege for me to meet with new friends that could assist us in moving the boundaries of agriculture, especially if they are willing to join hands with the Western Cape Government in our effort to enhance the concept of IKAPA ELIHLUMAYO - which means, the growing cape.

In this growing cape we as a government wishes to create a home for all the people who live here. We need committed people to be our partners in pushing back the frontiers of poverty and thus improving the quality of life of those who were deprived for so many years.

The prosperity of the agricultural sector is linked to the extent to which primary production is aligned to the needs of the economy, both in terms of direct consumption of primary commodities and the demand for agricultural raw materials at the manufacturing level. It is important therefore that the vision for agriculture is seen in a broader view of the larger economy rather than a narrow focus on primary agricultural production.

Our social and business partners should strive to ensure that agriculture can:
a. Contribute to economic stability, development and growth for the benefit of all as the backbone of a thriving rural and provincial economy;
b. Play a harmonious part in the natural beauty and environmental stability of our landscape;
c. Help to foster reconciliation, equitable transformation and stability, which is the mainstream of a vibrant civil society and contributes to a safe and secure rural life.

At the NEPAD -meeting in July 2002, market access and agriculture was one of the six priority areas. Within this priority area one of the specific projects aims to strengthen and refocus the capacity of Africa's agricultural research and extension systems.

From the analysis by various classical and neo-classical authors, and confirmed by quantitative analysis in the Western Cape, it is clear that agriculture is able to play an important role in economic development. Increased productivity, and therefore lower production cost of food, in the agricultural sector of a developing nation may lead to the ready availability of food and foreign exchange earnings. This will not only lead to a better nurtured (and thus a more productive) rural population, but also the resulting higher levels of rural income will lead to both public and private capital formation and will result in the development of a rural market for the industrial sector.

The expansion of the industrial sector will lead to new job opportunities for which the agricultural sector is supposed to release labour. Due to the unique income elasticity of demand in developing countries, this in turn will again lead to increased demand for agricultural products, and therefore the start of a new cycle or, in other words, an upwards spiral of economic growth. It is therefore clear that productivity in the agricultural sector can play an important catalytic role.

Given the prominence that agriculture receives in both NEPAD and the G8's response, this message is evidently taken to heart. At the same time it is important to recognise that the future of South Africa is inexplicably linked to that of Africa. Thus, the agricultural development of Africa is also to the long-term advantage of South Africa and in our case the Western Cape. However, given the nature and extent of the natural resources in the rest of Africa, it is evident that this agricultural development will eventually lead to pressure on the local agricultural production base; specifically table grapes, grains, vegetables and animal products in the case of the Western Cape.

Farmers and also the Government can take one of two avenues in dealing with this situation. The first option is to ignore the threat and continue with business as usual (leading to problems over the longer term) or to actively discourage agricultural development in the rest of Africa to the detriment of South Africa as a whole and once again, the Western Cape in particular. This is a very shortsighted approach.

The second option to be considered is to actively support agricultural development in Africa and, almost more important, to diligently support local farmers to extend their production base to the rest of Africa. In addition to everything said previously, it makes good business sense for our farmers to internationally expand their production base:
a) To make use of selected and high quality natural resources in other countries.
b) As part of a risk-management strategy various forms of risk (natural, social, economic, price, structural) can be spread over more than one production base.
c) New market opportunities (both domestic and international through third-country trade agreements) may arise from this base.
d) Opportunities to leverage capital (specifically development capital) are present.
e) Opportunities for joint ventures with various partners (third country) do exist.

In concluding I believe that together we need to inspire excitement and vibrancy in addressing issues such as
(i) global competitiveness
(ii) enhancing people's quality of life
(iii) transformation
(iv) access and participation
(v) adding value and
(vi) attracting more investment.

Our common vision should guarantee sustained participation in the South African agricultural economy by all stakeholders that recognize the need to maintain and increase commercial production, to build international competitiveness and to address the historical legacies and biases that restricted the growth and development of agriculture.

Enquiries: Alie vanJaarsveld
082 777 7262