The Department of Trade and Industry (DTI) has invested R736-million in incentives in the food-processing sector over the past three years, Trade and Industry Minister Dr Rob Davies said.

Addressing representatives from the food-processing sector in Johannesburg last week to discuss impediments to accelerated growth in the sector, he stated that the DTI’s Enterprise Investment Programme had disbursed funds of R636-million, thereby facilitating investments of R3.7-billion in the sector and contributing to the retention of 14 000 jobs, while creating 7 000 news jobs.

The department’s Cooperative Incentive Scheme had disbursed more than R100-million in support of agro-processing projects.

The Minister also mentioned that two major projects in food processing to the value of R1.1-billion have recently been approved for the 12i Tax Incentive.

Further, he said that the recently pronounced Special Economic Zones programme offered opportunities for farmers to assist the government in undertaking long-term planning, adding that this would help reduce infrastructure and logistics costs and locate food-processing investments in regions, including rural areas, where economic sustainability can be entrenched.

Davies told the gathering that South Africa was paying particular attention to the issue of food standards for purposes of compliance in export markets and using standards to curb the influx of inferior imports.

“The DTI is currently working with the relevant industry and the South African Bureau of Standards to develop voluntary standards and compulsory specifications to protect South African consumers from low quality and fraudulent imports…Standards will also be used as an instrument towards promoting healthier lifestyles,” he said.

Davies pointed out that the traditional export markets for South African food processors, namely Europe and the US, were expected to register relatively low growth for the next two to three years. However, significant opportunities for South African produce existed in China, India, Brazil and Russia, as well as the African continent and the Middle-East region.

The Minister appealed to South African food processors to actively investigate these opportunities and to develop new products and packaging to exploit the market opportunities that these countries and regions represent.

Further, Davies launched the first phase of the Organic Farmer/Retailer Programme (OFRP) at retailer Pick n Pay. The programme is a joint venture between the DTI and Pick n Pay, as well as supermarket chains Shoprite and Spar.

Pick n Pay is the first retailer to agree to provide dedicated organic produce shelf-space in 50 stores countrywide as its contribution to facilitating the development of the organic produce sector and emerging farmers.

The OFRP seeks to address supply failures by assisting smallholder farmers to meet the requirements of formal retailers. Davies said the DTI and the Department of Agriculture, Forestry and Fisheries sought to achieve this by providing technical assistance to smallholder farmers to ensure improved understanding of retailers’ procurement processes, product specifications and product demand to smooth the supply of organic produce.

“The second objective of the programme is to encourage retailers and consumers to demand organic produce in larger quantities and varieties. This is necessary as many consumers see organic produce as an expensive alternative to conventional farm produce,” Davies said.

However, he stated that the retailers taking part had committed to pricing their organic products at similar prices to their conventionally farmed products.