On behalf of the Government of the Western Cape and the Department ofAgriculture in the Western Cape, it is an honour for us to host thisconference in "Ikapa Elihlumayo", which means "the Growing Cape" and inthe province where we are set to make it a Home For All.

In this Growing Cape we are constantly looking for opportunities tointroduce ourselves and therefore I am always grateful for occasionslike this to introduce the roll of agriculture in the development of thepost apartheid South Africa.

It is important to identify the current challenges that agriculture isfacing and you will allow me to name a few.

• Land reform and Black Economic Empowerment remains a critical issuefor the social, political and economic stability of South Africa, andCreative solutions, not only regarding land ownership, but also in theup in downstream activities, are being developed and implemented.
• Food safety was in South Africa traditionally subservient to theavailability of food, it is becoming increasingly clear that food safetyissues are receiving mounting priority. This is not only the case forexport markets but also on the domestic market.
• It is true that many people are still going hungry every day in SouthAfrica and in the Western Cape. It is sad that this often occurs withinwalking distance from full granaries and packing sheds. Or, in otherwords, the food is available, but people do not have the money to buyfood. Thus, a food security strategy that is based on two legs isfollowed. The first is to enable people to have the financial measuresto buy food and the second is to help people to produce their own foodwithin their limited means.
• The agricultural sector is one of the primary custodians of thenatural resources and bio-diversity of the Western Cape. In addition tothe responsible use of these resources, possible climactic change canbecome a major issue. In addition, increasing pressure on theseresources due to population and economic growth necessitates a freshapproach.

As the minister responsible for agriculture in the province, I am proudof the contribution of viticulture, not only in South Africa, but alsointernationally. I am sure you will allow me to give you a littleinsight into the role of viticulture in South Africa.

South Africa is the world's sixth largest wine producer, accounting for2.8% of global production. The Western Cape's favourable climatic andsoil conditions make it home to most of South Africa's wineries,accounting for 90.5% of production. Viticulture contributes some 30% tothe region's horticultural income and about 3% to its Gross RegionalProduct. The gross output value of wine-industry-related firms is R14.6billion. In 2001, there were 4 390 primary wine producers and 388cellars - and increase of 15% over 1999. This included 67 cooperatives,91 estates, 219 private wine cellars and 11 producing wholesalers. Thearea under vines is some 106 000 hectares.

About 746 million litres ofwine are produced annually from 314 million vines. On average, 71% ofproduction finds its way into good wine (for drinking) - up from 65% in1999. Another 1% finds its way into rebate wine (for distillation of potstill brandy), 15% into distilling wine, and 13% into non-alcoholic usessuch as grape juice and grape concentrate.

The late 1990s saw considerable foreign investment in Western Capevineyards, large-scale replanting and quality improvements, leading to aboom in exports. There was an explosion in the number of wineries andwines produced - over 100 new wineries between 1999 and 2001, with quitea few more since then . There was also substantial investment ininformation technology, export infrastructure, and distributionfacilities. Given the low production costs in the Cape (despite the highcost of imported equipment and cost escalation caused by devaluation ofthe Rand), Cape wineries have proven competitive - particularly thosewineries producing fine a quality at a premium price.

The South African wine industry is encouraging people from previouslydisadvantaged communities to emerge as wine farmers/makers. To this end,the Wine Industry Trust was established in 1999, with funding of R370million over 10 years. One of its responsibilities is investment in"wine education" to facilitate entry into the industry. A number of Capewine farmers have established joint ventures with their workers, e.g.Spice Route, New Beginnings, Thandi Wines and Tukulu. The New Farmers'Development Corporation helps workers from disadvantaged communities tosecure capital for the establishment of commercially viable farms.

South African wine exports grew to 210 million litres in 2002 - up from50.7 million litres in 1994. Exports accounted for 33.5% of good wineproduction, compared to just 14.6% in 1995. In addition, 61.5 millionlitres of bulk wine were exported. Total export value for wines in 2001was about R4.5 billion. In 2001 South Africa imported 2.4 million litresof natural wine, 20 787 litres of fortified wine and 151 03 litres ofsparkling wine. Approximately 50% of bottled wine exports are to the UK,21% to the Netherlands, 9% to Scandinavia and 6.5% to Germany - togetheraccounting for more than 85% of South Africa's wine exports. Othermarkets currently representing less than 3% exports, but identified asgrowth opportunities, include the US, India, China and Japan .

Wine tourism has potential - 43% of tourists to South Africa visit thewine lands. The wine industry indirectly contributes more than R3.5billion annually to the tourism industry.

Looking at your program and the papers that will be delivered, it is anundeniable fact that this conference is of the utmost importance to thedevelopment of the Wine industry in the Western Cape. This industry isone of the main drivers in our agricultural empowerment programs in theWestern Cape.

Enquiries: Alie van Jaarsveld
Media Liaison: Ministry of Agriculture
Tel: 021 483 4700
Cell: 084 604 6701
Email: Avjaarsv@pgwc.gov.za