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Date : 05/12/2002
Source: Mpumalanga Provincial Government
Title: Mahlangu: Launch of Mpumalanga Agricultural Development Corporation


REMARKS BY MPUMALANGA PREMIER NJ MAHLANGU AT THE LAUNCH OF THE MPUMALANGA AGRICULTURAL DEVELOPMENT CORPORATION, Parks Board Auditorium, Nelspruit, 5 December 2002

Programme Director
Honourable delegates
Distinguished guests
Ladies and gentlemen

I feel extremely honoured to have been asked to be part of the birth of a young organisation with old roots. Shortly after the first democratic elections the Mpumalanga Provincial Government adopted a Provincial Growth and Development Strategy.

The Strategy' s central objective is the alleviation of poverty and general improvement in living standards of the people. Poverty alleviation, in essence, means ensuring that everyone - including the most vulnerable in society - have access to basic needs and services that are essential for their survival and well-being.

These basic services include shelter, education, health, transport, and land and food security.

In order to ensure that there is a better life for all our people, we had to identify those things that we had to do in order to turn things around. These included good governance, human resource development, economic growth and social development.

We also had to work hard in ensuring that our people had access to, among other things, education, safe water, basic sanitation and land.

Precisely because of our apartheid past, the majority of our people had no access to the things I mentioned above. But then how do we ensure that we move forwards with speed in ensuring that our people gain access to these basic needs?

Part of the strategy was to restructure state assets and free the land so that the people can produce food.

Programme Director, in 1994 when the democratic government took over it inherited a number of parastatals. These included the KwaNdebele Development Corporation, the KwaNdebele Agricultural Company, the KaNgwane Developmental Corporation and AgriWane.

Right from the beginning it became clear that these parastatals were disjunctive and mostly controlled by departments not in line with the functions these bodies were supposed to perform. For example the Department of Finance would be in charge of a parastatal dealing with agriculture.

That is why there had to be some rationalisation.

This resulted in the formation of the Mpumalanga Development Corporation to replace all the former parastatals.

But then we found that the MDC was not rendering quality service to its clients. We also found that a lot of money was used on personnel rather than on helping the corporation's clients. It therefore became necessary to restructure the Mpumalanga Development Corporation.

After months of research we agreed on the dis-establishment of the MDC. In its place we established the Mpumalanga Agricultural Development Corporation (MADC), which we are launching today, the Mpumalanga Economic Empowerment Corporation, the Mpumalanga Regional Training Trust and the Mpumalanga Housing Finance Corporation. These bodies were established in July 2000. These parastatals were placed under various departments in accordance with their core functions.

Our view is that a particular department dealing with the core functions of that parastatal would be better placed to lead and be in charge of that body. It is because of that reason that the MADC was placed under the direct control of the MEC for Agriculture.

Since the establishments of these parastatals in July 2000, a lot of things have happened. But let's admit that immediately after the establishment of the parastatals the province was faced with financial problems and the parastatals could therefore not perform the functions that were expected of them. They have been working on what one can call skeleton funding.

That is why at the end of December 2001 the Mpumalanga Executive Council undertook an investigation into all parastatals in the entire province. The investigation revealed that parastatals needed more money. A total of R114 million was made available to parastatals to revive their assets, particularly their infrastructure and also to provide training to their clients. The Mpumalanga Agricultural Development Corporation received R13, 6 m (R13 611 944 to be exact) of the R114 million. With this money the parastatals had to install and rebuild infrastructure such as irrigation schemes that had fallen into disuse and rehabilitate dams, farm roads etc.

More than 200 farmers received business training from the Mpumalanga Regional Training Trust. These included emerging farmers with potential and those who owed the parastatals. And many farmers are beneficiaries of our loan scheme.

The reality faced by farmers - especially black farmers, whether small scale or not - is that they have limited access to land and capital, and have received inadequate or inappropriate research and extension support. This has resulted in chronically low standards of living and reliance to a greater or lesser extent on subsistence production.

To achieve the government's objectives of black empowerment and poverty alleviation, we have evolved a policy to address the problems faced by black farmers in general and resource-poor farmers in particular.

Furthermore, increasing productivity in small-scale agriculture will have significant broader economic benefits. During the ploughing season this year we realised that the MADC was not able to finance all potential or emerging farmers worthy of financing.

The Executive Council decided to allocate R10 million out of savings made in various departments, to try and alleviate this problem. At the same time we also noted that the MADC was not able to improve the pipe reticulation system in the fields of emerging farmers. The result was that even if the common irrigation scheme was upgraded or repaired, water was still not reaching the fields. Emerging farmer had to bear a heavy financial burden to repair pipe reticulation. This would have resulted in the farmer being in a worse position than they were before the irrigation scheme was restored.

The Executive Council again decided to make R7 million available to the MADC to reticulate pipes in the fields of these farms. And I hope that the MADC is continuing with this work.

You see the Executive Council felt that in this way agriculture in the province would be given a boost.

A boost, which would make the sector more viable so that it can contribute to the economy of the province. About two weeks ago we decided to put money aside to deal with bulk water supply for agricultural purposes. Out of R131, 978 million, which was made available for water supply and roads in rural areas, we allocated R29 million to the agricultural sector for the purposes of having bulk water supply to farms that have irrigation facilities.

In this way we believe that the formerly disadvantaged farmers would be able to plough and plant their crops throughout the year just like their white counterparts in other parts of the province. I am aware that more money is needed to have a full and sufficient irrigation scheme in place in every area where disadvantaged people find themselves.

But a start has been made with the funding we have provided. I am happy to inform the farming community and the public of Mpumalanga Province that we are determined to change their lives for the better.

Let me today proudly proclaim that we have no regrets that we took the bold step of establishing the MADC, which we are formally launching today. We can look forward to great deeds from this parastatal.

Recently we visited the People's Republic of China. During that visit MADC's CEO Mr Veli Mahlangu, Mpumalanga Investment Initiative CEO Mr Musi Skhosana and the Economic Special Advisor in my office, Dr Rejoice Simelane, had discussion with a very affluent women farmer in Chong Ching province.

This woman farmer is a very successful farmer cultivating flowers. She has agreed to come and look at investment opportunities in Mpumalanga province and our offices are busy working on getting her over here.

Let me also reveal that we are looking at resuscitating the flower fields along the Moloto Road and also around the Dullstroom-Belfast area. We believe that the resuscitation and upgrading of these farms will create more jobs, particularly for our women in this province.

These are some of the projects that we are putting as challenges to the MADC. I expect to see the results sooner rather than later. To the MADC and the MEC for Agriculture, let me say: with the same commitment you have displayed in the past, let us now join together with our communities to build a provincial farming sector rooted in a radiant spirit of justice, compassion and delivery.

At all times putting the interests of the people above self. We wish the MADC success confident that it will, as always, not disappoint the expectations of its clients. It is therefore my pleasure and privilege to declare the MADC officially launched and to give it to the people of the province to utilise.

I thank you.

Contact: George Mohlamonyane on 082 802 8460 / 013 766 2288
Issued by Office of the Premier, Mpumalanga
5 December 2002

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