AFMA acts on behalf of its members and represents the formal animal feed industry on various platforms and committees by enhancing, protecting and ensuring the current and future interests of its members and industry. This includes liaison and engagements on all levels, i.e. liaising, workshopping, debating and lobbying with the following interest groups:
- Regulatory & Government
- Food Value Chain
- Grain Value chain
- Industry participants
In this process, attention is focused upon the:
- Feed regulatory environment
- Industry Self-Regulation
- Research and technical environment
- Management Information
- Training & Skills Development
- Commodity trade environment
- Industry and member communication
General Market Conditions
The 2015/16 period has been one of the most challenging years in South African agriculture history, experiencing a 2-3 spell of drought reaching its climax in 2015/16. To add to the drought situation encountered, the SA feed industry had to manage external variables impacting on the business environment of which the most challenging is the volatile exchange rate and the impact of dumped poultry into the South African market.
Against this background, South Africa became a net importer of Summer Grains and Oilseeds in 2015/16, placing South Africa in a Grains and Oilseed trade deficit.
SOUTH AFRICAN MAIZE PRODUCTION (TONNES)
Source: Sourth Africa AFMA
SOUTH AFRICAN SOY, SUNFLOWER & SORGHUM PRODUCTION (TONNES)
Source: Sourth Africa AFMA
SOUTH AFRICAN IMPORTS OF SOY, SUNFLOWER & SORGHUM (TONNES)
Source: Sourth Africa AFMA
SOUTH AFRICAN MAIZE TRADE (TONNES)
Source: Sourth Africa AFMA
Furthermore in terms of Maize trade, it is important to note that South Africa has reached GMO synchronisation status with the USA during 2015/16, with regards to GMO Maize events for Commodity Trade, which opened-up Maize trade from the USA to South Africa. This achievement was specifically made possible through years of negotiations and cooperation between the SA Department of Agriculture Forestry and Fisheries, AFMA, SACOTA and International Seed companies.
Despite the effects of the severe drought and external variables experienced, the demand for feed ingredients for animal feeds remained firm to adhere to the market demand for proteins (milk, meat and eggs).
AFMA FEED RAW MATERIAL USE (TONNE)
Source: South Africa AFMA
South Africa’s Grain Trade
(US$ / Rand Exchange Rate, 2014 – US$ 1 = R10.86; 2015 – US$1 = R12.77)
South Africa’s cereal exports dropped from US$ 801 million in 2014 to US$ 368 million in 2015. The large decline in cereal exports came on the back of the drought that had seen maize production fall by 27%. The largest fall in cereal exports was in maize, which decreased from US$ 451 million in 2014 to US$ 157 million in 2015.
Maize seed exports fell from US$ 147 million in 2014 to US$ 49 million in 2015. In the 2016/17 marketing season, production was predicted to fall by another 30%, supported by projections that South Africa would require 3.2 million tons of yellow maize and 1 million tons of white maize as a result of the drought.
South Africa’s Oilseed Trade
Overall, South Africa’s soybean and sunflower seed and oilcake imports during 2014 to 2015 remained stable at the same levels. The two oilseeds constituted 57% of the value of the country’s total oilseed imports in 2015. Soybean and sunflower seed production in the 2015/16 season is estimated at 750 250 tons and 742 750 tons, respectively. Soybean production fell from an all-time high of above 1 million tons in the 2014/15 season, whereas the sunflower seed crop grew 12% in the 2015/16 season due to a 25% increase in hectares planted.
South Africa’s dual soybean and sunflower seed crushing capacity is estimated at 2.5 million tons. However, the country’s maximum soybean crushing capacity is estimated at 1.75 million tons. Soybean imports are expected to increase in the 2016/17 season due to a decline in production on the one hand, while sunflower seed imports are expected to continue to decline owing to higher levels of production, on the other.
South Africa’s Animal Feed and Raw Materials
The value of imported animal feed products and related raw material declined from US$ 497 million in 2014 to US$ 321 million in 2015, while exports increased from US$ 249 million to US$ 235 million over the same period. Overall, the trade balance remained negative, but declined from US$ 258 million in 2014 to US$ 94 million in 2015.
Soya oilcake remained a major import component of animal feed raw materials, accounting for 55% of the tonnage (754 138 tons) in 2015. Argentina remains the primary source of Soybean meal for South Africa.
Sunflower oilcake makes up a relatively smaller share of total animal feed and raw material imports, accounting for 8% of volumes (188 536 tons) in 2015. Argentina is also the main source of sunflower oilcake for South Africa.
Association Activities — Feed Policy and Regulatory Environment
Animal Feed Forum (AFF)
AFMA meets with the Feed Regulator under Act 36 of 1947, (Directorate of Agricultural Inputs Control – AIC) – six times per year and in conjunction with other representatives from the Pet Food and Rendering industry sectors to discuss matters pertaining to the regulation and safe manufacturing of livestock feeds, pet food, raw materials and feed additives.
Facility registration for sterilising and rendering plants, as well as matters related to Inspection Services, is routinely discussed. The AFF continues to provide a valuable platform for industry and government to recognise concerns and also to work towards finding a solution together.
During the liaison meetings of the past year, significant focus was placed on the registration status of farm feeds due to the ever increasing backlog of registration applications and the resultant negative impact it has on trade in the feed industry. The confirmed capacity constraints within the Regulator, as well as a significant increase in the number of products to be registered, contributed to the growing backlog.
AFMA continued its participation in the Act 36 – Registration Working Group, which formed the basis of establishing an accurate progress report on the registration status of farm feeds. From these reports, the number of backlogged registration applications could be quantified and an action plan formulated for the Feed Registration Backlog Project (FRBP) that commenced in November 2015.
Feed Safety Forum (FSF)
The Feed Safety Forum provides direct liaison opportunities between the feed industry and the Directorate of Animal Health (AH) and Veterinary Public Health (VPH). Matters pertaining to bovine spongiform encephalopathy (BSE), traceability, blood meal use and the import of processed animal proteins are addressed on a regular basis by this forum. Due to the scheduling of the FSF on the same day as the AFF, interdepartmental discussions with industry can be accommodated.
In September 2016, the directors of Animal Health and AIC met with the feed industry to discuss the lack of a documented traceability system for processed animal proteins in South Africa, and the negative impact it has on the export of meat from South Africa. The blood meal procedure in terms of the traceability requirements [Veterinary Procedural Notice (VPN)] and the application process is being finalised.
AFMA’s involvement in the Blood Meal Working Group will ensure that the working group maintains pressure to implement it in 2016. This will enable feed manufacturers, which should meet the traceability and control measures as outlined in the VPN, to include blood meal in their monogastric formulations under controlled conditions.
Inspection Compliance Forum (ICF)
The Inspection Compliance Forum (ICF) convenes quarterly and provides feedback to industry via the participating member associations on general trends of noncompliance across all disciplines under AIC. The associations are AFMA, the Pet Food Industry Association (PFI), the Rendering and Sterilizing Association (RSA), Fertiliser Association of Southern Africa (FERTASA), the Association of Veterinary and Crop Associations of South Africa (AVCASA) and the South African Pest Control Association (SAPCA).
The illegal repackaging of farm feed, pet food and fertiliser, as well as the decanting of agricultural remedies into smaller containers, remains matters looked into. AIC’s Inspection Services have embarked on an awareness campaign to educate the rural consumer about the dangers and risks associated with these practices, and will launch public awareness sessions in conjunction with the municipalities in the targeted areas.
Furthermore, industry members of the ICF have been requested to assist with compiling a one-page awareness document that will be distributed at the public awareness sessions in the coming year.
Illegal imports of unregistered pesticides and other agricultural remedies have escalated during this reporting period and remain a concern. In addition, Inspection Services informed the ICF that the disposal of obsolete stock of agricultural remedies from farms is becoming a serious problem – this is partly due to the limited service providers available in South Africa, the cost involved and the lack of a sustainable action plan to remedy the situation in the long term. AVCASA will play an important role in trying to resolve this matter in the coming year.
AFMA Strategic Activities
AFMA Feed Registration Service (FRS)
The first phase of the Feed Registration Service as part of the AFMA strategy was launched on 1 July 2015. The value-added service is voluntary and available to all AFMA members at a minimal administration fee. The service was designed to address some of the major shortcomings and challenges already identified as primary contributors to the increasing backlog.
The partnership between industry and government, as emphasised by the FRS initiative, is endorsed by the Feed Regulator and supported by the Chief Director of the Directorate: Inspection and Quarantine services of the National Department of Agriculture, Forestry and Fisheries (DAFF).
In response to the collaboration with the Feed Regulator, AFMA appointed an Administrator in March 2015 to facilitate the registration service. The Administrator has received extensive training on Act 36 of 1947 and has been working closely with the Registrar’s office throughout the year. The service aims to streamline the process towards a shorter registration approval time and offers a dedicated contact person at the AFMA office who will assist:
- Receive and screen applications
- Ensure that all required documents are included before submission
- Confirm the correct registration fee to be paid
- Submit the application/dossier in person to the Registrar’s office
- Meet with a dedicated contact person from the Registrar’s office at least weekly to follow up
- Communicate all requests from the Registrar regarding additional or outstanding information and clarification directly to the applicant
- Actively pursue the most efficient assessment process for the dossier submitted
- Personally collect the registration certificate upon completion, verify that it is correct and arrange for its collection by the applicant
- Provide consistent information regarding fees, forms, supporting documents, etc.
A website was developed for the FRS to provide a dedicated platform where all relevant information on the service and Act 36 registration requirements can be hosted. For more information please visit www.afmafeedregistration.co.za.
During the reporting period, the FRS handled more than 780 applications, of which 95% have obtained registration certificates at the time of print. It became apparent that the progress and impact of the FRS was overshadowed by the huge amount of backlogged applications and that a strategic shift was required to prioritise the elimination of the backlog before the impact of the FRS could be measured meaningfully.
In view of the successful completion of the Feed Registration Backlog Project (FRBP) towards the end of the previous year, it is expected that the focus will return to optimising the value-added service to AFMA members in the year to come. Subsequent to the resignation of the Administrator, a new appointment was made in June 2016 and the service will continue for the coming year.
Feed Registration Backlog Project (FRBP)
On 4 September 2015, the AFMA Annual General Meeting (AGM) accepted the resolution by the Board of Directors to initiate a Feed Registration Backlog Project to be funded by AFMA. The project, to the value of ± US$ 100 000, was launched in October 2015. A tender request based on strict legal guidelines was issued and invited interested parties to provide sufficient and capable resources to access all outstanding new registration applications within a specified time limit. The tender was awarded to a consortium of experienced and specialised consultants, and the project kicked off on 9 November 2015.
The project team operated under the same conditions of accountability, integrity and confidentiality as the permanent technical advisory team of the Registrar and each application and its assessment records are fully traceable. The project was closely monitored by AFMA throughout all procedures, and regular meetings were scheduled to track the progress made and to resolve any issues that may have arisen from the operation of the project. The project team was based at the office of the Registrar to further improve project communication and outputs.
The FRBP consisted of 874 backlogged registration applications and covered not only livestock feeds, but the entire spectrum of raw materials (12%), feed additives (19%), livestock feed (25%) and pet food (44%). Collectively, the project team members spent just over 200 workdays (eight-hour days) on the project, even stretching across the December holidays.
The project concluded on 31 March 2016, with all 874 applications having been assessed and 469 registration certificates issued. The remaining 43% of applications were placed on hold, as they were still awaiting response from the registration holder.
By July 2016 the majority of the on-hold applications were concluded by Act 36 and the overall project outcome resulted in the finalisation and registration of 764 applications, while there were 62 rejections and 48 on-hold applications. The FRBP was undoubtedly a success – not only in accomplishing its goal in clearing the backlog, but also in providing valuable insight into the challenges faced by Act 36 and assisting in identifying areas for improvement. A thorough wrap-up session was held by the project team, AFMA and the Act 36 assessment team, where the lessons learnt were outlined and action plans were formulated to address the major concerns.
The biggest concern emanated from the fact that only 9% of all applications could be recommended for registration after the first round of assessment. This indicated a lack of skill and understanding by applicants to correctly complete registration applications, thus severely impacting the efficiency of the registration approval process. The matter was further complicated by the variety of application forms available and a number of ambiguous requests for information. To address this challenge, the Registration Working Group, in partnership with the consortium of consultants, developed a simplified and consolidated application form. A second outcome of the FRBP was to host a workshop to introduce the newly revised application form to the public and also to address some of the major lessons learned from the FRBP.
Progress on the Feeds Bill was slow during the previous year, since most of the time and resources relating to Act 36 was spent on the FRBP. The Feed Regulator has, however, met with the Red Meat Industry Forum (RMIF) and producer groups, as stakeholders of the proposed legislation, and an agreement was reached with regard to the inclusion of self-mixers in the Feeds Bill. The principal agreement is that self-mixers will be included in the legislation, which they will use registered products (ingredients) and that facilities that sell feed to third parties will apply for facility licensing.
Act 36 has also started preparing for the socio-economic impact assessment that needs to be conducted for any new legislation in South Africa. This is a new requirement that was not part of the previous effort to pass the Bill in Parliament in 2013. In July 2016, AFMA and the Pet Food Industry Association (PFI) met with the Registrar of Act 36 to discuss the Feeds Bill and action plan going forward.
A working group was formed with AIC, AFMA and the PFI and it is proposed that they provide initial comments on key elements of the draft bill by September 2016. Subsequently, AIC should engage in intergovernmental and public consultation towards the end of 2016. The working group will reconvene in the first quarter of 2017 to discuss and finalise the inputs received from the consultation sessions – the outcome of which is expected to be a draft Bill based on the principles and objectives to ensure safe feed for safe food and to be inclusive of all agricultural inputs to the food chain. AFMA will continue its active participation and support of this process throughout the next period.
Self-Regulation — AFMA Code of Conduct
During the period under review, the AFMA Code of Conduct has entered its eighth year of implementation, with most of the AFMA members having completed their third Code of Conduct compliance audit successfully.
AFMA aims to align its self-regulatory industry initiative with the regulatory requirements for facility audits by AIC Inspection Services and also with the Food Safety Initiative of the Consumer Goods Council of South Africa, thereby providing compliant members with a bigger scope and value-added audit. During the alignment process, the concept and particulars of the AFMA Feed Safety Scheme will be outlined in detail and requirements for additional auditing bodies to be appointed will be incorporated. It is a transparent process and stakeholders are continuously consulted along the way. The process is expected to be concluded by mid-2017.
Feed Miller Qualification
The learning material for the feed miller qualification has been finalised. The next phase is to implement a pilot project to evaluate the material in practice and to make adjustments where and if necessary.
AFMA has also reached an agreement with the University of Pretoria (UP) to deliver the qualification as a university certificate. AFMA will further engage in detailed discussions on this option with the university, including the registration of the qualification as a UP Programme with Higher Education.
AFMA Training Feed Mill
AFMA has reached an agreement with the University of Pretoria (UP) to establish a training feed mill at its experimental farm. The aim of this project has three objectives: the practical assessment of learners according to the feed miller qualification, feed processing research projects, and academic programmes for undergraduate and postgraduate students.
A memorandum of understanding between AFMA and UP in this regard has been drafted and will be submitted to UP for comment.
AFMA Feed Milling Short Course
AFMA, in association with NEFeed Milling Consulting, hosted its 5th feed milling short course from 30 May 2016 to 9 June 2016 in Johannesburg.
The course, with the largest number of delegates to date (40 delegates), hosted delegates from across the SADC region. A number of 28 delegates were from AFMA members based within the borders of South Africa, while two delegates represented Mauritius (Meaders Feeds) and two delegates represented Namibia (Feedmaster).
In addition, as part of the larger Southern Africa Feed Manufacturers’ Association (SAFMA) initiative driven by AFMA, the US Grains Council (USGC) sponsored a number of eight delegates from TAFMA to attend the course in South Africa Topics that were covered during the two-week course were as follows:
- Aspiration systems
- Batch mixing plant
- Size reduction
- Liquid addition
- Hygienising and compacting
- Conditioning with steam
- Drying and cooling
Delegates attending the course gave the following feedback: “Impressive”, “Informative”, “Excellent”, “Learned something that can be implemented in practice”.
What is evident is that there is a real need in the industry for a course of this nature – the question was even raised why this course could not be presented on an annual basis. AFMA will therefore investigate hosting the course again in 2017, should there be sufficient interest from members.
TAFMA Training and Mentorship (Tanzanian Feed Manufacturer’s Association)
TAFMA was officially established on 30 January 1990 in Dar-es-Salaam to provide a common forum and platform for members and affiliated parties to discuss matters impacting on the direct business and business environment of the animal feed manufacturers of Tanzania.
In line with AFMA’s development of its regional initiative, the Southern Africa Feed Manufacturers’ Association (SAFMA), AFMA was approached by TAFMA for guidance and advice on the operation of a non-profit organisation (NPO) that would assist TAFMA in providing enhanced services to its members.
This business relationship was formally established after AFMA’s visit to Tanzania to attend the SADC Regional Poultry and Feeds Liaison Forum, where the SAFMA concept was presented and explained to TAFMA members. The event took place in Dar-es-Salaam from 3 to 6 December 2015. At a meeting held on 6 May 2016, it was agreed that representatives of TAFMA would visit South Africa for training and mentoring.
AFMA will provide training and mentorship in respect of the following:
- Organisational structure
- Establishment and functions of committees
- Development of policies that are beneficial to the industry
- Funding of the association
- Improved communication with members
- Creating industry standards and feed/food safety programmes to gain customer and consumer confidence
- Lobbying government departments and other role players in the industry
- Addressing regulatory matters on behalf of members
- Collaborating on public relations messages to influence public opinion
- Providing industry-specific training and skills development opportunities for members
- Arranging industry workshops, conferences and forums for discussion and dialogue
- Presenting networking opportunities for companies or individuals
- Coordinating research projects
- Supplying relevant information on input suppliers and service providers
- Offering opportunities to put buyers and sellers in contact with each other
- Mediating industry disputes with regard to procurement contracts
- Assimilation of feed industry statistics
Through these efforts, AFMA will strive to assist TAFMA in providing much-needed value-added services to its members, increasing its membership base, enabling the feed industry in Tanzania to grow from strength to strength, and ultimately ensuring safe feeds resulting in safe food for Tanzanian consumers.
It is foreseen that this blueprint of a Feed Association’s principal functions and objectives can further be implemented by other feed associations in Southern Africa to support the establishment of a regional feed and feed-related association, SAFMA, which has the feed value chain principle in mind.
For more information please visit: www.afma.co.za.