Chairperson, Mr. Adrian Sayers, dr Piet van Rooyen, Members of the Steering Committee, Members of the task teams, Other distinguished guests, Ladies and Gentlemen.

I want to start of with a quote from the document that you have tabled here today and it reads as follows:

"It is in the Agriculture sector where long-term economic development will be won or lost. If there is peace in the rural areas we will have a future" . President Thabo Mbeki in his State of the Nation Address during 2003 said "our country has a continuing task to push back the frontiers of poverty and expand access to a better life for all. The challenge we all face as South Africans is to put our shoulder to the wheel to accelerate the pace of change".

I believe that these words together with the full content of the Freedom Charter should be our driving force in IKAPA ELIHLUMAYO.

In this growing Cape we as a government wishes to create a home for all the people who live here and 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.

In looking at this comprehensive report and the wide scope of very relevant key issues that is impacting on this sector, I am convinced that we have come a long way in the last year. I want to believe that the various role players have moved much closer to each other on their views of the sector and the concomitant road that we have to travel to reach our ultimate goal. I am also of the opinion that this document should serve as the roadmap in our effort to develop this sector to its full potential.

We need to shift the boundaries of the agricultural sector and we need to look innovatively at the whole value chain that is linked to this sector. We need partners who are willing to come on board to join hands with the Western Cape Government in our effort to enhance the concept of IKAPA ELIHLUMAYO.

It is clear that the Agricultural sector is a major contributor in our fight against poverty. In this regard I think it is important that we remind each other what the current performance of Agriculture is within the economy in the Western Cape and why we need to find urgent solutions for the challenges that lie ahead for us in order to grow this sector as a prominent role player, not only in South Africa but in Africa as a whole.

We have to acknowledge the fact that Agriculture is one of the primary pillars of the Western Cape economy. Although the province contributes some 14% to the country's Gross Domestic Product, it generates about 23% of the total value added of the Agriculture sector in South Africa, which was R25bn in 2001. Agriculture accounted for 5.2% of the Western Cape's Gross Regional Product in 2001. As many as 11 commodities contribute significantly to Agriculture production, with fruit, poultry/eggs, winter grains, viticulture and vegetables together comprising more than 75% of total output. Consequently, diversity of Agriculture enterprises also contributes to Agriculture's general stability.

Chairperson I don't want to go into detail on the statistics of the various industries in the Agricultural sector, as most people present are completely aware of the performance of these industries.

I would however, by way of example, stress the importance of the role of every one of these industries in the total performance of the economy in the Western Cape. South Africa is home to 70% of the world's 495 000 commercial ostriches (2003). The Western Cape, in turn, hosts 75% of South Africa's flock. Although the global flock decreased to the current levels from 750 000 in 1996, It is clear that the industry has reached its turning point. South Africa has re-establishing itself as the global leader in this industry with 72% of slaughtering and trade. Although leather was a major contributor to producer income in the past, ostrich meat is growing in importance due to its unique qualities and the opportunities it creates in the total value chain. The recent loss of income to the industry and the community as a whole, due to the threat of Avian Influenza, was severe and estimated at about R30 million per moth. If Agriculture, as a responsible Government Department in the Western Cape did not step in to protect the industry, it would have resulted in direct loss of about 30 000 jobs. The indirect effect would have been much worse for the total economy in the Southern Cape.

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. Therefore it is important that our social and business partners should strive to ensure that agriculture could:

• Contribute to economic stability, development and growth for the benefit of all as the backbone of a thriving rural and provincial economy;

• Play a harmonious part in the natural beauty and environmental stability of our landscape;

• 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.

• Contribute to sustainable Land reform and the sustainable protection of our natural resources.

I indicated that I believe that we have a role to play in Africa and therefore our planning for the future should also look at the program of The New Partnership for Africa's Development (NEPAD) and its vision and program of action for the redevelopment of Africa. Amongst other things Nepad wants to:

• Promote accelerated growth and sustainable development
• Eradicate widespread and severe poverty and
• Halt the marginalisation of Africa in the globalisation process.

At the NEPAD -meeting of Heads of State 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. I believe we have much to offer in this regard.

The G8 Heads of State at their Kananaskis Summit in Canada subsequently endorsed NEPAD. Importantly, the G8 Heads of State for this purpose pledged an increase in their Overseas Development Assistance (ODA) by US$12 billion per year by 2006. Eight specific focus areas were identified, of which three are very relevant:

1. Fostering Trade, Investment, Economic Growth and Sustainable Development.
2. Expanding Knowledge: Improving and Promoting Education and expanding Digital Opportunities.
3. Increasing Agricultural Productivity.

From analysis by various 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.

The agricultural development of Africa is also to the long-term advantage of South Africa and in particular 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 the Government can take one of two avenues in dealing with this situation. The first option is to ignore everything and continue with business as usual (leading to problems over the longer term). This is a very shortsighted approach. The second option to be considered is to actively support agricultural development 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:

• To make use of selected and high quality natural resources in other countries.

• 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.

• New market opportunities (both domestic and international through third-country trade agreements) may arise from this base.

• Opportunities to leverage capital (specifically development capital) are present.

• Opportunities for joint ventures with various partners do exist.

Chairperson I have not touched on crucial issues such as:

Land Reform and Agri- BEE; Human Resource Development; Social Development and Farm Workers; Research and development;

Natural environment; Food safety and Security; Extension services and Farmer support; Physical infrastructure and Institutional development, to name but a few of the very important key performance areas that are covered in the report.

I believe that together we need to inspire excitement and vibrancy and deal head on with 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.

I want to thank the whole team that worked very hard to produce this document that represents a consensus on crucial issues and identifies the desired intervention strategies that we have to implement to produce answers to the challenges that lie ahead for Agriculture and the Agri-business sector in the Western Cape.