AGRICULTURAL RESEARCH COUNCIL

Presentation to Parliament11 October 2007

Presented By Chief Executive Officer Dr Shadrack Moephuli

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ARC DELEGATION

• Ms. Jean Davidson – Council Chair

• Mr. Elton Bosch – Council Deputy Chair

• Mr. Thabiso Mudau – Stakeholder relations

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MANDATE OF THE ARC

OBJECTIVE: To promote agriculture and the industry in order to contribute to the improvement of the quality of life of the people of RSA

THROUGH:Conduct researchDevelop technologyTransfer technology that promotes agriculture and

industry.

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SPECIFIC ARC GOALS IN SUPPORT OF NATIONAL PRIORITIES

– The sustainable use of the natural resource base and the environment

– The competitiveness of the South African agricultural sector

– Increased participation, equity and access to the sector (by resource-poor farmers)

– Support for the production of high quality, safe food, and

– Generating knowledge for an informed society

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ARC’S CONTRIBUTION TO NATIONAL INITIATIVES

The ARC plays an important role in the following :

• Comprehensive Agricultural Support Programme (CASP), • Integrated Food Security and Nutrition Programme (IFSNP),

Poverty Alleviation, • Land Reform for Agricultural Development (LRAD),• Accelerated and Shared Growth Initiative of South Africa

(ASGISA),• Government regulatory responsibilities, (eg sanitary and

phytosanitary controls)• Ensuring a sustainable use of limited natural resources (soil,

water, and agro-biodiversity)

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Agricultural Research Agricultural Research Council Research Farms, Council Research Farms,

institutes & Offices institutes & Offices

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74201

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45-48

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6483

8123

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50-51

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2524

East London

Durban

Bloemfontein

Johannesburg

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Potgietersrus

Upington

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Middelburg

Cape Town4

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Vryburg

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ARC’S CONTRIBUTION TO THE AGRICULTURAL SECTOR

– Optimum value addition on primary agriculture products to the agricultural value chain

– Sustainable use of natural resources– Research on climate change– Elimination of diseases and pests that undermine

agricultural production– Effective entry point control of “imported” weeds, pests &

diseases– Development and growth of regional and international

markets for agricultural products– Commitment to regional initiatives eg NEPAD & SADC

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ARC’S ACHIEVEMENTS IN DELIVERING ON ITS MANDATE

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Sugar Dry Bean • The speckled sugar dry bean cultivar Sederberg was bred at ARC-GCI to

improve the resistance of dry bean cultivars to fungal diseases.

• Sederberg is resistant to the fungal diseases rust and angular leaf spot and is resistant to bean common mosaic virus (BCMV).

• It is high yielding and widely adapted especially in the high rainfall areas where fungal diseases are a problem.

• ARC released Sederberg, a red speckled

sugarbean (Type II growth habit) with rust

(UR-11 and UR-13), ALS and Bean Common

Mosiac Virus resistance.

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PRODUCTION GUIDELINES • Another focus on competitiveness is improved production practices that lower

production costs, increase profitability and add value to products: 9000 copies of Maize Information Guide (MIG 2006) containing technical information were printed and mailed to 7000 producers. A total of 1000 copies were also supplied to the Small-Scale farmer section of Grain SA for use in their study groups.

• Two Production guidelines, namely “Guidelines for the Production of small grains in the Summer Rainfall Region” and “ Guidelines for the Production of small grains in the Winter Rainfall Region” were made available during April 2006 to 6500 producers, extension officers and scientists. These production guides contain technical information and updated improved technologies such as effective growth regulators, herbicide resistance, seeding density, pest and disease control as well as information on explained cultivars.

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MAIZE • A quality protein maize (QPM) cultivar SAM1109 has been developed and breeder seed

produced for seed companies, 420 tons of certified maize seed of open-pollinated cultivars were produced for resource poor and developing farmers, primarily in Limpopo, Mpumalanga and the Eastern Cape provinces, in partnerships with a small seed company.

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Food Security, Nutrition and Health• Vitamin A deficiency – 33%• Model for household food production

– nutrition education, cultivation & growth monitoring programm

• MRC + ARC + International Collaboration

• Food based approach to alleviate vitamin A deficiency

• Introduction of orange fleshed sweet potato, other vit. A rich vegetables – carrots, swiss chard, butternut etc.

• Biofortification• Training in 6 provinces: E. Cape, Free

State, Limpopo, Gauteng and Mpumalanga – 200 school garden projects

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CULTIVATION OF GRAPES• Establishment of

vineyard– Low cost soil preparation– Planting of cuttings from

vines known for mass grape production

– Production of Villard blanc 39 tons per Hectare

– Eksteenskuil producers

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COMPETITIVENESS & MARKET ACCESS

• 45% SA drief fruit industry depends on nectarines

• New nectarine cultivars • Yellow skin – world first• Plant Breeders Rights• Red/yellow skin – good for

poor handling and storage environments

• Fruit don’t lose firmness as rapidly; easier to harvest and market over a longer time

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BIOCONTROL• Mango scale is a major pest. • In 1996 a parasitoid was imported from

Thailand, mass-reared at the ARC in Nelspruit, released in many mango producing areas of Mpumalanga and Limpopo for the biological control of mango scale.

• In 2006, another major survey was conducted in most mango producing areas ranging from Mussina in the north of Limpopo to Port Edward in the south of KZN to determine the current status of the imported biocontrol agent. The parasitoid was recovered from all sites, even in areas such as Tshipise and Thohoyandou in Limpopo and the entire KwaZulu/Natal, where it had never been released.

• This confirms the successful establishment and remarkable distribution of the parasitoid in all mango producing areas in South Africa.

• Impact of biological control enables most mango producers to rely on natural control, using an estimated 40% less toxic insecticides.

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• PUTUVELD model + GIS prediction for production potential and climate risk for grasslands

• Production traits for Dairy Cattle – 1000 Farmers benefitted.• Breeding index for feedlot profitability completed, used in 9

provinces and reached +/- 1000 farmers.• Established rangeland monitoring programme with DoA.• Technology to control and manage build up of lactic acid in

ruminants – feedlot animal can eat more and produce more milk, improved weight gains etc.

• LidcatTM technology for positive identification of livestock – stock theft deterrent

• Performance tests on livestock owned by communal farmers – raised market prices of beef animals from black farmers

ANIMAL PRODUCTION

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1. Developed and validated a test for detection of infection of cattle with Brucella abortus – Brucella Rapid Test (BRT)

• Easy to use and interpret• Combined with vaccination strategy to protect uninfected female animals

2. Developed an improved test for Rift Valley Fever that uses a recombinant protein instead of the whole virus. Currently validating the test and will commercialize if successful.

3. Classical swine fever (CSF) surveillance is ongoing and in the affected province of the Eastern Cape, in excess of 12,998 samples have been tested.

4. Ongoing surveillance of transboundary animal disease (e.g. Foot and Mouth & African swine fever).

5. Training on serological diagnosis of avian influenza to enhance SADC country participants’ abilities for surveillance of AI.

6. Continued the Pesticide Residue Monitoring programme

ANIMAL DISEASES

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1. Poor farming practices – bad crop rotation resulted in accumulation of soil – borne plant pathogens – impact has been diminishing crop yields among commercial and small scale farmers in KZN.

2. Early warning forecast of locust outbreak information to DoA through the ICOSAMP (Information Core for Southern African Migrant Pests) – ARC coordinates and releases to SADC Countries.

3. Herbicide trials on pompom weed indicate a growing alien invasive, particularly in Gauteng.

4. Identified 5 potential biological control agents for an emerging weed (balloon vine) during a field survey in Argentina.

5. Identified plant feeding mites on imported fruit tree cuttings with pest species not present in RSA. Prevented inadvertent importation of new alien invasive species and potential pests.

6. Developed land suitability maps for 6 biofuel crops (sunflower, soya bean, maize, grain sorghum, sugar cane and sugar beet).

The Public Support Services Division

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8. Utilized coarse resolution satellite imagery (used for drought monitoring and crop estimation) to develop products from data retrieved from the geostationary MSG (Meteosat Second Generation) satellite.

9. National asset register comprised of a collection of over 13 000 maps – land suitability

10. The National Collections of insects, arachnids, nematodes and fungi of the ARC are among the most important and comprehensive biological and taxonomic reference resources of their kind in Africa.

11. Spiders as biological control agents

The Public Support Services Division (cont.)

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PARTNERSHIPS & RESEARCHIn Partnership with the International Centre

for Development Oriented Research in Agriculture (ICRA), ARC has conducted 16 field studies with provinces on various priority research issues identified by provinces. The aim of the studies was: (i) to enhance inter-disciplinary teamwork among researchers, (ii) link research and extension in responding to farmer's priorities, (iii) empower farmers to identify and elaborate on their research needs and enable farmers to contribute their own knowledge into the research agenda, and (iv) provide insight for researchers to design responsive interventions.

Participatory Research with Farmers

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INDIGENOUS KNOWLEDGE SYSTEMS

Commercialisation of Indigenous plants

Devils’ Claw Project: Two hundredfarmers (200) are participating in theproduction and processing of Devils’ Clawindigenous medical plant in Ganyesa, NorthWest Province in partnership with NWDepartment of Agriculture, BophirimaMunicipality, and Traditional Leaders. ARCSkills transferred to farmers include artificialpropagation, grading & weighing, packaging ,aswell as business management and marketingof the processed product. Commercialisation ofThis ARC Research Product resulted in thecreation of a Public Company owned andoperated by beneficiaries: SekamoPharmaceuticals cc for Devil’s Claw.

Devil’s claw spiny fruit showcasing claw-like structures

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BIOFUELS/SMME DEVELOPMENT

Oil Seed Crop Production for

Biofuels

• Oil Seed Crop Farmers: In partnership with Limpopo Department of Agriculture, 35 farmers in Limpopo, were trained on production technologies, business skills and activities that will enable them to become sustainable SMMEs linked to Biodiesel Production for the Biofuels industry.

Farmers participating in practical soil preparations at the Farmer Development

Centre in Tompi Seleka

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1. The ARC Invested 3% of our labour cost (including statutory skills-levy contributions) in human resource development. A large portion of this was invested in the Professional Development Programme and the ARC Transformational Capacity Building Programme on the formal and informal training of core staff. The bulk of the budget went to skills development to support employment equity.

2. The Professional Development Programme had 60 candidates, 26 males and 34 females. Of the 60 candidates, two completed their PhD studies and eight completed MSc degrees.

3. Continued with the capacity building programme which was launched in April 2005. The purpose of the programme is to create a pool of young scientists from the previously disadvantaged groups. During the period under review the programme had 126 candidates.

Human Resources Overview

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QUALITY OF SCIENTIFIC CAPACITY Qualifications of Staff Number % of Total Staff

(2698)

% Research Staff (923)

Research staff with PhD degrees

170 6.30 18.40

Research staff with masters degree

260 9.60 28.20

Professional Engineers & Veterinarians

20 0.70 2.20

Staff enrolled for Masters/PhD degrees

118 4.40 12.80

Staff enrolled for Engineering/Veterinary degrees

4 0.10 0.40

Total Staff 2,698

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DEVELOPMENT OF SCIENTIFIC CAPACITY

Study Programme Male Female Total

PhD 12 3 15

MSc 32 35 67

BSc (Hons) 4 10 14

BTech 7 10 17

BAgric 2 3 5

NDipl 1 5 6

Adv Dipl 1 1 2

TOTAL 59 67 126

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MANAGING OUR FINANCES

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AUDITOR GENERAL’S REPORT & AUDIT

COMMITTEE REPORT FOR 2005/06

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AUDIT QUALIFICATION • Non-compliance with IAS 16 Property,

Plant and Equipment

-The useful lives and residual values of property, plan

and equipment were not reviewed in the current period

as required by IAS16 Property, Plant and Equipment

• Existence of Accounts Receivable– The receivables balance includes an amount of R49,7 million which the entity claims is

due to it in respect of VAT on the Parliamentary grant that is recoverable from the transferring agent. At the date of this report, the entity had not received any confirmation from the transferring agent in respect of the acceptance of this liability.

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AUDIT EMPHASIS OF MATTERAuditor-General raised Emphasis of matter items:

• Weaknesses in internal control • Implementation of Supply Chain Management • Changes to financial statements• Performance information

• WHAT’S THE OUTCOME FOR 2006/07?

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Matters emphasised in the Auditor-General report

1999-2000

2000-2001

2001-2002

2002 - 2003

2003-2004

2004-2005

2005-2006

2006-2007

Legislative compliance x x  - x x x - -

Forensic investigations x  - -  - - -  -  - 

Internal control x x x -  - x x -

Provision for post-retirement medical aid benefits x x  - - - - - -

Pension fund contributions x  - - - - - - -

Transfer of land and buildings from the state x x  - - - - - -

Going concern x x x -  - - - -

Depreciation and impairment of land and buildings  - x   -  - - x -

Performance information  - -  x x x - x -

Implementation of SCM - - - - - - x  - 

Changes to financial statements - - - - - - x  -

Financial statements - unqualified opinion yes yes yes yes yes yes no yes

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AGRICULTURAL RESEARCH COUNCIL

NINE YEAR REVIEW

  2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/9

  R '000 R '000 R '000 R '000 R '000 R '000 R '000 R '000 R '000

INCOME STATEMENT

Parliamentary Grant 434,175 457,186 320,708 276,140 267,552 267,683 276,278 274,519 286,410

External Income 259,798 196,966 224,514 212,252 239,513 261,036 167,915 157,909 129,716

Total Expenditure 697,259 652,931 552,177 495,984 473,672 496,521 450,333 440,692 474,862

Total Remuneration Cost 415,974 395,965 315,853 284,228 263,630 289,804 284,589 285,397 295,300

Other Expenditure 281,285 261,089 236,324 211,756 210,042 266,556 165,744 155,295 179,562

Investment Income 11,693 11,183 12,761 13,955 9,568 6,293 6,173 8,311 13,823

Net Surplus\(Deficit) 8,955 12,910 6,069 6,363 36,893 (21,347) 33 47 (44,913)

                   

BALANCE SHEET

Property, plant and equipment 521,596 396,961 380,999 375,683 385,441 395,214 544,452 545,236 547,572

Other Assets 2,231 1,236 850 845 183 188 185 131 96

Current assets (excluding cash) 79,629 128,735 73,394 67,475 75,407 65,857 66,264 47,130 35,848

Cash resources (net of bank overdraft) 96,656 152,823 152,412 102,679 80,512 65,541 20,157 25,683 57,650

Total Assets 700,112 679,755 607,655 546,682 541,543 526,800 631,058 618,180 641,166

Summary of Financial performance for nine years

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SEVEN YEAR REVIEW GRAPH

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100,000

200,000

300,000

400,000

500,000

600,000

700,000

1998/9 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06

Parliamentary Grant External Income Total Expenditure

Total Remuneration Cost Other Expenditure

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ARC at a glance

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100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1998/9 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07

Year

R'000s

Parliamentary Grant External Income Total Revenue

Total Expenditure Total Remuneration Cost

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NEW DIRECTION• Scientific capacity & excellence• Broadening diversity – skills base• Improving internal systems (HR, Financial & risk

management policies)• Communicating research outputs – visibility,

relations with user groups• Organizational structure & performance• Competitiveness for research funds• Collaboration – adjunct posts, students• Capital Expenditure – infrastructure

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CONCLUSION• The year under review has been one of many changes in the ARC, particularly in

leadership.• Responding to compliance requirements has brought challenges on Human

Resource Management and the need for new policies and systems.• Improvements in performance continue at the forefront of the ARC researchers and

other personnel. • The Council and employees of the ARC wish to thank the Honourable Minister, Ms.

Lulu Xingwana for her leadership and support. • We also thank the support and leadership of the Agriculture and Land Affairs

Portfolio Committee.

THANK YOU!