SA Groundnut Forum (SAGF)
held on 28 October 2015 at 10:00 at the offices of the Oilseeds Industry, 49 River Road, Woodmead

1. Opening

   The meeting was opened with a prayer offered by Mr N Hawkins.

2. Welcome

   The Chairperson welcomed all present to the meeting of the Groundnut Forum.

3. Attendance

   Present
   Ms A van Deventer	Chairperson
   Ms P Campbell	Dept of Health
   Mr L de Kock	Roba Foods
   Mr C Dominic	Thokoman Foods
   Mr H Engelbrecht	PPECB Lab
   Mr D Frank	C Steinweg Bridge
   Mr N Hawkins	SAGIS
   Mr S Heilbron	PPECB
   Mr W Higgs	Triotrade Gauteng
   Mr G Keun	OAC
   Mr C Louw	GrainSA
   Ms WT Mafiri	DAFF
   Mr V Mapfumari	DAFF
   Ms D Marabe	DAFF
   Mr ML Mosome	DAFF
   Mr R Nerwich	The Snack Factory
   Mr JL Nienaber	RE Groundnuts
   Mr C Nortje	GWK
   Mr IF Prinsloo	Tiger Brands
   Ms M Scheepers	DAFF
   Dr G Thompson	ARC-GCI
   Mr W van der Walt	OAC and SANCU
   Mr A Visser	Golden Peanut & Tree Nut SA
   Apologies
   Mr A Evans	RE Groundnuts
   Mr F Minnaar	GrainSA
   Dr D Naicker	PPECB
   Mr P van Heerden	PPECB
   Dr C van der Merwe	Tiger Brands
   Ms J Sadie	DAFF
   Ms L Salomon	ARC-GCI
   Mr GJH Scholtemeijer	OAC
   Mr N Wegner	PPECB

4. Personalia

   Nothing noted.

5. Finalisation of agenda

   The agenda as tabled was approved with the following additions:

   • Item 9.3 – Feedback on Aflatoxin results by PPECB
   • Item 10.3 – Feedback on elite cultivar trials

6. Approval of minutes

   Approval of the minutes of the meeting of the SA Groundnut Forum held on 3 June 2015

   Resolution:

   1. That the minutes of the meeting of the SA Groundnut Forum that was held on 3 June 2015 be accepted as a true and fair reflection of that meeting, subject to the above amendments.

7. General feedback: OAC/OPDT and research activities

   Main points raised by the chairperson were:

   • Feedback on two meetings that had taken place on 20 July and 20 October 2015.
   • Groundnut research related funding for 2016/17 had been approved. The chairperson would inform the committee as soon as there were details of what would be planted.
   • The SA groundnut industry plan.
   • Critical issues in the BFAP 2012 Sustainability Report.

   Comments

   Mr Visser noted that the industry had an opportunity to put its needs on the table at OAC level. Further, that the whole industry should be involved in proposing a larger industry strategy. The chairperson agreed that support from the industry was necessary in order to present a proposal for a larger industry project to the OAC.

   Other countries had adopted practices that had improved their yield considerably, and this was something that the industry in South Africa could learn from. Global experiences could also inform the industry on issues of health benefits. Industry were not getting the benefit from elite trials, and it was important that this be restructured.

   The question was asked whether the industry was advertising to the end consumer in order to boost demand. In the past two to three years, prices for the end consumer had more than doubled, which had led to decreased consumption. It was necessary to increase yields so as to pass price reductions to the consumer.

   There would always be an opportunity to increase consumption as long as prices were reduced. Yields had been flat or down over the past few years, which had lead farmers to lose interest in the industry.

   The chairperson questioned whether a pricing study was necessary and how information on prices linked to production and consumption could be obtained.

   From the perspective of GrainSA, groundnuts would always be a profitable industry for farmers, however, profitability was affected by conditions such as insufficient rainfall. These poor conditions lead farmers to switch to other grain crops. Breeding new cultivars was another factor affecting the industry, as was food safety. Any perceived threat to production caused farmers to change to other crops. Many farmers had sold their peanut farming equipment, and it would be a difficult task to coax them back into the industry.

   Irrigation based farming could be considered to counter the lack of rainfall, however, irrigation areas do not have room for expansion. Crops other than groundnuts fare better under irrigation.

   It was very expensive for farmers to invest in equipment for groundnuts and considered less risky to invest in maize or sunflower crops.

   The chairperson felt it was important to persevere with efforts for higher yielding groundnut cultivars, and to continue with marketing strategies to increase consumption. She requested members to inform her of any further suggestions for improving the groundnut industry.

   Mr de Kock questioned how the industry could be more involved in implementing sustainability projects. The chairperson responded that it was necessary to get the participation of all the structures, including smaller players. She proposed establishing a small task team of ad hoc groups to determine guidelines, define the project scope, identify role players, and then roll out a project plan.

   Mr Dominic raised the issue of the quality of toxin; any rejections by peanut butter role players destroyed the industry. In this respect it was important to teach farmers how to care for their crops to achieve a better end product.

   The chairperson responded that it was necessary to examine production practices. The focus was usually on volume, however farmers had to be aware of other factors in order to turn the industry around.

   A suggestion was made by Mr Visser that the industry should consider conducting a small project to compare high-oleic versus low-oleic (Spanish Type) cultivars to determine whether there was any difference between the two in aflatoxin levels.

   The chairperson noted that high-yield, high-oleic cultivars were preferable, however, high-oleic varieties usually gave lower yields. Aflatoxin levels were also a factor to be managed. The severity of aflatoxin in South Africa, varied according to the year of production.

   Resolution:

   1. That a project plan be drafted for the groundnut industry, including parties that will be active in the rolling out thereof and reported on to the forum.

      Ms van Deventer

8. Matters arising from the previous meeting

   1. Farm audits: PPECB

      (Resolution 7.1.1 of the SA Groundnut Forum minutes of 03/06/2015)

      In his report Mr Heilbron highlighted the importance of food safety and the implications of not abiding by the regulations. He also stressed the issue of awareness, which related to the willingness of farmers to comply with the guidelines for the industry.

      The question arose on how to deal with farmers who did not comply with the audit findings. Of the 700 farmers, only 13 percent had been audited. The low percentage of farmers audited was attributed to the 20/80 principle applied, which meant only 20 percent of farmers who supplied 80 percent of the crop were audited. In answer to the question raised around the number of farmers that equated to 13 percent, Mr Heilbron responded that he did not have this information. The 20/80 ratio was determined by the production plant. The intention is to have 140 farmers audited by the next season.

      Concerning non-compliant farmers, Mr Heilbron proposed a non-punitive approach.

      It was mentioned that it might be worthwhile to consider GAP verification to be done by selection facilities in future, as part of their own HACCP certification. Mr Heilbron conceded that so called desk-top audits and ad hoc checking on farm level could be considered, but first a full profile in terms of producers must be established. Mr Heilbron proposed reexamining the profile of producers to avoid making assumptions.

      The chairperson noted that the third year audit cycle ought to be completed before making any changes to the auditing process. Problem areas associated with the audits would be taken up with the relevant departments. Concerning rolling out the process to all other commodities; if farmers were required to pay for all grains and not just groundnuts, they would feel more positive about being audited.

      Members of the forum were asked to comment on the grain check list for other commodities that had been circulated. Mr Mosome advised that an audit would be introduced for other commodities, not at farm level, but only in respect to silos. A provision had been made for export produce.

      It was noted that farmers were often inconsistent in the planting of groundnuts, or planting less than previous years. The chairperson responded that these inconsistencies would be revealed in the profile of the industry to be created. This will again be assessed at the end of the next season, when the principles can be revised and discussed with the relevant parties and governing bodies.

      It was noted that in South Africa, all processing, manufacturing, sorting and grading facilities had to be HACCP certified, irrespective of whether the product was for export or for the local market. Due diligence was required in terms of the Consumer Protection Act, and safety protection. Ms Campbell explained that legislation was introduced either via the Director-General, who had the power to legislate a certain sector of the industry, or in response to a request by 60 percent of the industry to impose HACCP requirements. In the case of the groundnut industry, the forum had requested the legislation.

      The chairperson commented that it was difficult to identify "backyard" operators, and requested that any such operators be reported to the forum or the relevant department. A suggestion was made that existing FBO registrations might be used as a basis to establish how many local entities have indeed been audited/checked for certification by DoH.

      The chairperson added that it was important to understand the South African legal environment, and proposed liaising with all the relevant departments to clarify the legislation.

      The chairperson noted that there was movement towards a national standard in respect of the legislation. This was confirmed by Ms Campbell who advised that import control in the past had been at provincial level, however, since April 2015, coordination was at national level with three regional directors (Coastal, Inland and Northern Region). The Department of Home Affairs is preparing to establish a new Border Management Agency.

      Resolutions:

      1. That the forum liaise with the various government departments to obtain clarity on the legislation affecting the different sectors of the grain industry.

         Ms van Deventer
         Mr Keun

      2. That feedback be given at the next forum meeting on the compliance status of processing and sorting facilities, according to the FBO list.

         Ms Campbell

   2. Customs and Excise – blanched groundnuts

      (Resolution 10.3.1 of the SA Groundnut Forum minutes of 03/06/2015)

      The chairperson informed the forum that SARS was still under the assumption that imported blanched groundnuts should be classified as raw nuts. A meeting was held amongst all importers affected by this ruling and it was decided to appoint a representative to address these issues with SARS. Applications had been issued to SARS and the matter was pending their response. The chairperson undertook to keep the forum updated on developments.

   3. GrainSA Funding Request

      (Resolution 10.5.3.1 of the SA Groundnut Forum minutes of 03/06/2015)

      The chairperson reported back concerning the dissemination of market information to the industry, within the context of funding an international market report. The chairperson suggested alternatives to a newsletter, such as a Facebook page that would provide snippets of news relevant to the industry. A newsletter was foreseen, but is pending finalisation of information sources and practical issues, such as outdated information. The chairperson advised that this matter will receive the necessary attention and that it will be considered along with the industry plan in progress.

      This matter is concluded under the current heading and will in future be addressed under the Industry Strategical Plan.

      Resolution:

      1. That a communication option to the industry will be considered.

         (This matter is concluded under the current heading and will in future be addressed under the Industry Strategical Plan.)

         Ms van Deventer

   4. Producer Grading Guideline Amendments

      (Resolutions 10.9.1 and 10.9.2 of the SA Groundnut Forum minutes of 03/06/2015)

      Concerning the amendments to the Producer Stock Grading Guidelines to accommodate bulk intakes, the chairperson reported that Mr Wegner was currently out of the country but was in the process of reviewing international documents on the matter to provide a perspective for the South African situation. If the international data and documentation proved inadequate in providing guidance for the South African market, then a South African study would be necessary. The Chairperson agreed to give feedback on this issue at the next meeting.

      Resolution:

      1. That feedback be given on Producer Grading Guideline Amendments.

         Ms van Deventer
         Mr Wegner

   5. Amendments to export regulation to include SADC countries

      (Resolution 10.10.1 of the SA Groundnut Forum minutes of 03/06/2015)

      The Chairperson reported that the issue of amending and understanding the export regulations was part of the broader industry project. As part of this wider scope project, she undertook to convene a meeting with the government departments to discuss the scope and impact of the various regulations and statutory measures currently in place.

      This point is therefore concluded and will in future be addressed as part of the Industry Strategical Plan. If the particular regulation or amendments warrants specific discussion in future, the matter will be returned to the agenda.

      Resolution:

      1. That the Chairperson convene a meeting with government departments to discuss the scope and impact of the various regulations and statutory measures currently in place.

         (This matter will in future be addressed under the Strategic Industry Plan.)

         Ms van Deventer

9. Industry information and marketing aspects

   1. SAGIS: general feedback and market information – presentation

      Mr Hawkins presented the latest figures on:

      • Supply and demand.
      • Production and producer deliveries.
      • Imports and exports.
      • The consumption of groundnuts.
      • Price movements, and
      • SARS statistics.

      Mr Hawkins noted that SARS import figures differed to those of the industry, but that import parity prices were more or less on a par. Likewise in terms of exports per country, SARS figures were not congruent with those of the industry, raising the concern that SAGIS was not receiving full information from the industry, and especially from traders.

      There were no questions pertaining to the presentation.

   2. Crop and area estimates

      Ms Scheepers briefed the forum on crop estimates as per the document that was circulated.

      It was noted that there was a decrease in planting because of drought conditions. The North West and Free State were the areas where most planting would be taking place. Planting would be constrained in the Northern Cape area.

      On the issue of tonnage production, Mr Visser was of the opinion that South Africa should not be in a situation of having to import groundnuts. He suggested aiming for production of 100 000 tons for the next five years. However, another proposal was made for a figure of between 120 000 to 130 000 tons. It was noted that South Africa's processing capacity could be increased if there were more shifts, but that this would put pressure on prices.

      Mr Heilbron suggested viewing the industry production trends historically. It was noted that the SAGIS website contained historical information dating back to 1940; at one stage the Limpopo province produced more groundnuts than the rest of the country.

   3. PPECB Laboratory Services groundnuts report

      Mr Engelbrecht gave an overview of the 2014/2015 aflatoxin results based on samples sent to the PPECB laboratory.

      The chairperson commented that there was no regulation which prescribes how stack numbers are allocated or formatted, which meant that PPECB can only make the best possible assumption on crop year based on the stack numbers given by selection facilities. There is no way for them to confirm the actual crop year.

      Mr Engelbrecht reported that 95 export stacks had been tested, versus 18 local stacks, however, it was not always clear whether the local stacks were from local or import supply.

10. Additional matters

    1. Articles

       The forum noted the articles that were included in the agenda. The chairperson requested that ideas or articles for future publications of the Oilseed Focus be forwarded.

    2. MRL List

       It was noted that the latest MRL list had been updated and circulated by email. Ms Campbell confirmed that the registration of pesticides fell under Act 36 of 1947.

       Mr Visser requested that the industry consider applying to the EU to increase the MRL on Fosetyl-Al. Although this was not used directly on groundnuts in South Africa, levels have been detected in Europe. Fosetyl-Al was assumed to generate from the soil. Mr Visser agreed to draft a concept letter to be forwarded to the chairperson, who would address the issue at the next Food Safety Forum meeting in November.

       Resolution:

       1. That Mr Visser draft a concept letter on Fosetyl-Al for the attention of the Chairperson.

          Mr Visser
          Ms van Deventer

    3. Feedback on Elite Cultivar Trials

       The matter was discussed under item 7.

11. Election of office bearers

    1. Election of Vice-Chairperson

       Mr Lourens de Kock was unanimously re-elected as vice-chairperson.

12. Meeting dates 2016

    The meeting dates agreed upon for 2016 were:

    • 18 February
    • 27 July
    • 26 October

13. Adjournment

    There being no further business, the meeting was adjourned at 13h20.

    The chairperson thanked the forum members for their attendance and wished everyone a good festive season.