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Annual Report 2011

Chairman’s Report

Dear Citrus Producers,I think that you will agree with me that the

2010 season was one that will be rememberedfor many years to come. It had its highs - an all-

time high export figure of 97 million cartonsexported and its lows - nearly losing 100 000

tons of Valencias in Europe due to Morpholine,and the strike by Portnet workers in May 2010.

From the CGA side it was a year when we wereinvolved in a wide range of activities. From the

mandate that we as CGA Board receive fromour producers I would like to highlight

the following areas.

Market AccessDuring the packing s eason of 2010 w e as anindustry ran into a situation where the EU puta ban on Morpholine. This ban had an impact onour Citrus in the EU with a value of R800m Rand. The CRI and CGA (Prof Vaughan Hattingh andMr Paul Hardman) tackled this issue and succeededin lifting the ban till the end of 2010 which allowedfor the last of South African Citrus to be sold.

Attention was also given to tariffs in importingcountries. The CEO of CGA has spent time with

DAFF officials t o help them understand theimpact on the fr esh fruit producers, especiallyCitrus pr oducers. This is sue will c ontinuereceiving attention until we are on a 0% tariff.

The mo st c oncerning on-g oing is sue underMarket Ac cess is the EU stanc e on CBS . Acomplaint has been lodged with the IPPC butup until the time of this report there has beenno movement from the IPPC side. The C GABoard are in constant communication with DAFFover this CBS complaint.

It remains encouraging to see the Ethical TradePortfolio driven by Colleen Chennells (underFruit SA) continues to lay a solid foundation forfuture ethical trade programmes. Harmonizationin Ethical Trade standards and the reduction ofduplicate audits r emains of par amountimportance and growers should expect to seehow their supply chains can dove-tail into theseindustry initiatives over the next 12 months.

InformationInformation only adds value if there is effectivecommunication. We try thr ough the CEO ’sweekly newsletter, CGA website and the GlobalCitrus Scan t o keep our pr oducers updated.Once a year a Stats booklet is distributed to allgrowers. This contains information on exports,inspections and crop distribution to the differentmarkets. The tree census information is crucialfor compiling this da ta and w e call on ourgrowers to update their tree census annually.

The variety focus groups play a very importantrole in c onsidering prospects for the cr ops,adjusting their estimates depending on marketconditions, and giving D AFF guidanc e on

dispensation requests when gr owers cannotmeet the standards set by the industry. Theyalso assist DAFF in setting the standards for theindustry at the annual review in September.

CGA continued to participate in focus groupmeetings of the EDiN pr oject under thecustodianship of PPECB. The development of theedi system is in progress with pilot t esting atidentified pack-houses planned for end July 2011.

The CMF (Citrus Mark eting Forum) also metthree times in the y ear giving the industryvaluable f eedback and advic e on o verseasmarkets and upda ting the estima tes of thevarious citrus groups.

LogistiekDie identifikasie v an knelpunt e is ‘n aan-eenlopende taak wat deurentuit aandag geniet.Punte wat reeds geidentifiseer is sluit in spoorvervoer met die uitdaging van toerusting tekorte,Maputo hawe ontwikkeling en toegang daartoe,behouering en die koste daarvan.

Die staking van Portnet hawe werkers in 2010het die vraag laat ontstaan of die sektor nie asessensiele dien geproklameer moet word nie.Die aansoek is egter afgewys met die rede datmense lewens nie ingevaar is as die sektor nieoperasioneel is nie.

Die instelling van ‘n logistiek e fokusgroep isafgehandel wat vir Mitchell Brooke, bestuurderlogistiek by die CGA behulpsaam gaan wees.

Fanie ViljoenChairman

3Citrus Growers’ Association of Southern AfricaAnnual Report 2011

4 Citrus Growers’ Association of Southern AfricaAnnual Report 2011

Transformation

Citrus GrowersDevelopment Chamber

In the year under review, transformation in the

citrus industry t ook a vibr ant new direction,

with emerging growers taking control of their

own destinies thr ough the f ormation of the

Citrus Growers Development Chamber (CGDC).

The Transformation Manager has established

close contact with local and provincial bodies

to ensure that every emerging citrus grower has

a voice.

Grower Development Fund

Flowing from the cooperation between the CGA

and the ADA in the social facilitation arena, the

CGA received funding from the ADA to support

two emerging citrus enterprises in the Nkwaleni

Valley in KwaZulu-Natal. A steering committee,

consisting of representatives of the gr owers,

ADA, CGA, Citrus Academy and ment ors was

formed, and all expenditure was approved by

the committee. The CGA would like to expand

this funding model to other provinces in 2011.

Skills Development andCapacity Building

The Citrus Academy is r esponsible for skills

development in the citrus industry . The

Transformation Manager of the CGA coordinates

with the Citrus Academy r egarding the skills

development needs of emerging growers.

Toyota New Harvest Farmerof the Year Competition

Lawrence Mgadle from the Eastern Cape waschosen as one of the finalists for the prestigiousToyota New Harvest Farmer of the Year award.This award recognises the achie vements ofemerging farmers and is always hotly contested.The CGA is very proud of this recognition forLawrence’s hard work and congratulates him ongetting to the finals.

NavorsingDie CRI is die na vorsing instansie w at allenavorsing vir die C GA koordineer. Daar w asgedurende Augustus 2010 w eereens ‘n baiegeslaagde na vorsing simpo suim aang ebied.Hierdie simposuim word elke twee jaar aangebieden is waarlik ‘n presitege byeenkoms.

Daar word jaarliks in die sitrus pr oduseerendgebiede navorsings prioriteite bepaal deur diegroeier gemeenskappe. Hierdie doelwitte wordgeprioritiseer en deur gegee aan CRI. Allenavorsing voorstelle met ‘n prioriteit van 3 wordgedoen al is dit slegs een area wat dit deurgee.

FinansiesDit gaan g oed met die C GA se finansies. Diemikpunt van een jaar se koste in reserve is bereik.Die reserve is daar gestel dat indien die industrie‘n erenstige terugslag beleef die werksaamhedekan voortgaan. Die inv ordering van dieheffings verloop vlot. 2009 en vr oeeris af gehandel. 2010 s e inv orderingis 98% v oltooi. V andat dieinvorderings punt verskuif isna pakhuis vlak is die proses

baie v ergemaklik. Die inv ordering met diePomelo Bemarkings heffing is daar nog ‘n paarknel punt wat aandag geniet.

Gedurende die afgelope jaar is die konsep van‘n suurlemoen sap en olie projek op die taf elgeplaas. Die beginsel bly dat die groeiers ingeligword en dat die finale besluit oor die pr ojekdeur die groeiers geneem sal word. Om al diekwel vrae te kan beantwoord betreffende dieprojek is g oedkeuring verleen dat ‘n le wens-vatbaarheid studie geloots word. Dit betekennie dat die projek goedgekeur is nie. Sodra dieinligting uit die lewensvatbaarheids studie bekendis sal ons na u toe kom en u stem sal tel.

Ek wil hiermee ook my mede dir ekteure enpersoneel van die C GA har tlik bedank vir uinsette en har de werk. Ek is oor tuig dat dieindustrie gesond is en dat daar ‘n voorspoedige2011 seisoen voor die deur lê.

Met dank aan u almal.

Chairman’s Report Continued

2010 is a year that will have significance forSouth Africa for years to come. The successfulhosting of the Soccer World Cup, the outpouring

of national pride, the slick working of publicservice and the beautiful stadia will remind usof a job well done. 2010 was also a significantyear for the southern African citrus industry as

a record volume of citrus was exported withreasonable to good returns back on the farm –

the final tally was just one million shy of onehundred million cartons. Almost 1.5 million tonsof citrus was grown, harvested, packed, transported,warehoused and shipped out of South Africa –resulting in significant employment (in many ofthe poorest regions of South Africa) and over

R6 billion in foreign exchange earnings.

But everything was not rosy – the protractedTransnet strike at South African ports left a wakeof reputational damage, additional costs andno clear winner. And to top it all shipping linesslapped a congestion surcharge onto the innocentparty – cargo owners. Fortunately for the citrusindustry some of these costs could be dodgedby switching to bulk reefer shipping. Theseunfortunate events at South African ports also

made Maputo in Mozambique an attractive option.

A highlight of the year is the formation of theCitrus Grower Development Chamber (CGDC)representing all emerging growers in the citrussector. The Chamber has met on two occasionsand has taken ownership of grower developmentin the citrus sector. Engagement with nationaland provincial government is starting to makeprogress; with mentorship, extension, socialfacilitation and institutional development beingprioritised. The LEMONEX project in Badplaaspromises to be the leader in the transformationfield should it be deemed feasible and desirable.

Grapefruit growers made a bold decision inlaunching market development campaigns inthe UK and Japan. This is the first time sincederegulation that citrus growers have funded acountry of origin campaign. These campaignsare scheduled for two years, after which growerswill once again take a decision on future funding.2010 was an “off season” for grapefruit, andtherefore the campaign was not really tested;2011 is looking like it will be more challenging.

Market access remains the top priority of theCGA – with GRO being the goal: Gain, Retainand Optimise. Towards the end of the yearunder review a draft protocol had been receivedfrom Thailand which will ultimately open thedoors to export citrus to that destination.Expanded access into the USA from regions inthe north of the country took a step forwardwith a positive US pathologists report whiletechnical exchanges took place in the endeavourto change the cold treatment to Japan. Thepresent European Union requirements withrespect to Citrus Black Spot have now been

challengedat InternationalPlant ProtectionConvention level, with some concerns aboutthe slow progress of South Africa’s submission.

Unfortunately the US officials reneged on anarrangement to reverse the treatment periodeven though South Africa had met all therequirements set by these officials. Attemptsto get the unjustified treatment period reversedare continuing. A highlight in retaining marketaccess was the first successful eradication of aninvasive fruit fly in northern regions of SouthAfrica. This was a true public-private partnershipwith all stakeholders working in a synchronisedand focused manner.

Significant work has been done in the field ofconsumer assurance. With our partners at FruitSouth Africa, an ethical trading champion hasbeen appointed to drive awareness andcompliance in the field of labour practices. Inaddition FSA continued its partnership with thewine industry in the confronting climate changeproject. The responsible use of plant protectionproducts continues to be a focus, with the pastyear throwing up some challenges in terms ofusage of waxes and haphazard decisions fromEU authorities.

Efficient administration of the statutory levy remainsthe key to future funding of Association activities.With levy collection at almost 100% ALL growersare funding their Association’s activities.

CEO’s Report

Justin ChadwickChief Executive Officer


Administration

The CGA Board of Directors - 2010/2011

GovernanceThe Citrus Growers Association of Southern

Africa (CGA) is governed by a twenty-memberBoard of Directors who represent eighteen citrusgrowing regions across South Africa, Swazilandand Zimbabwe. Two of these represent emerging

growers in the north and south. Providingexpertise in financial governance is the Chairman

of the Audit Committee. The NationalAgricultural Marketing Council (NAMC) have

observer status on the CGA Board.

During the year under review there were the following changes to the Board:

Region Outgoing Director New Director

Zimbabwe Chris Maggs Paul BristowVaalharts Jannie Smit Danie MathewsonSundays River Phillip du Plessis Pieter NortjeSenwes Tini Engelbrecht Charles Rossouw

By Gloria Weare


The CGA Staff - 2010/2011

RepresentationThe CGA is represented on various Boardsand Committees:

Citrus Research International (CRI):Jock Danckwerts, Hoppie Nel, Louis vonBroembsen, Mark Fry, Kobus de Kok, PietSmit (Letsitele). Also Flip Smit, AuditCommittee Chairman

Citrus Academy: Shane Dellis, MikeWoodburn, Graham Piner, Israel Nemaorani

River Bioscience: George Hall, Flip Smit

XSIT: Fanie Viljoen, Piet Smit (Citrusdal)

Citrus Industry Trust (CIT): Mark Fry

Agri SA: Antoine Rouillard, Hannes Nel

Citrus Improvement Scheme SteeringCommittee: Fanie Meyer

Citrus Marketing Forum (CMF):Peter Nicholson, Hoppie Nel, Gabrie van Eeden

Fruit South Africa: Justin Chadwick

Fruit South Africa Logistics Committee:Mitchell Brooke

Southern Hemisphere Association of FreshFruit Exporters (SHAFFE): Justin Chadwick

Southern Hemisphere Association of FreshFruit Exporters (SHAFFE): Justin Chadwick

Agricultural Trade Forum: Justin Chadwick

Market Access Committee: Elma Carstens,Justin Chadwick (secondus)

SPS/CLAM/Confronting Climate Change:Vaughan Hattingh, Paul Hardman (secondus)

MRL/SHAFFE Technical Workgroup/IFPS/Food Safety Forum/FS Harmonisation:P Hardman

BI (Bactrocera Invadens) Steering Committee:Vaughan Hattingh, Justin Chadwick

EDI Task Group: John Edmonds

PPECB: Tini Engelbrecht, Mzo Makhanya

MeetingsMeetings of the CGA Board

17th August 2010 Apologies: Jock Danckwerts, Antoine Rouillard, Per Noddeboe25th November 2010 Apologies: Tini Engelbrecht, Kobus van Zyl, Jannie Smit,

Phillip Dempsey, Michael Woodburn22nd March 2011 Apologies: Hannes Hobbs, Charles Rossouw

Executive Committee

Fanie Viljoen (Chairman); Hoppie Nel (Vice Chairman); George Hall, Graham Piner,Tini Engelbrecht (April to November 2010, Piet Smit (November 2010 to date)

Executive Meetings

25th May, 28th July 2010 No apologies6th October 2010 Apologies: Hoppie Nel9th March 2011 No apologies


Communication By Gloria Weare

There are several ways in which the CGA strivesto keep their grower members and stakeholdersaware of improvements, changes and important

information pertinent to the citrus industry.

As citrus growers are so widely spread, CGAhas found the following are the most successful.

Roadshows

Prior to the season each year, Justin Chadwick

and Paul Hardman each head up a team made

up of various CGA, CRI and Citrus Academy staff

and between them visit all regions, this past

year including Zimbabwe for the first time. This

is an ideal opportunity for growers to ask

questions, make suggestions and to be kept up

to date with what the CGA has achieved in the

past year and what it intends in the season ahead.

Weekly Newsletter

From the Desk of the CEO is prepared by Justin

Chadwick every Friday of the year, and is a

source of up to date pertinent information to

those in the industry. Anyone wanting to receive

the weekly electronic version can contact the

CGA office. It is also on the homepage of the

CGA website in English and Afrikaans (thanks to

Elma Carstens).

Global Citrus Scan &Logistics Updates

Global Citrus Scan (John Edmonds) and Logistics

Updates (Mitchell Brooke) are sent out in a

similar fashion and are also on the CGA website.

CGA WebsiteThe CGA website www.cga.co.za is user friendlyand topical. We also assist DAFF (Departmentof Agriculture, Forestry and Fisheries) byproviding a link to information of importanceto citrus growers on their website. A passwordprotected section is for the exclusive use ofCGA and CMF members. South AfricanStakeholders wishing to access this section cando so on registering with the CMF and payingan annual membership fee. All FPEF and CGAmembers are members of the CMF.

S A Fruit JournalThis is a bi-monthly publication shared withother fruit industries and distributed to allgrowers on our mailing list. CGA staff submitarticles of interest, particularly in the fields oftransformation, food safety and logistics, andthe Citrus Academy and CRI complete thesection from the citrus industry.


Global Citrus ConferenceOver 250 speakers and delegates attendedthe first Global Citrus Conference (GCC) hostedat the Bay Hotel in Camps Bay, Cape Town.

The conference , themed Cultivating NewIdeas: Growing Together , was a rousingsuccess, with delegates praising the qualityand relevance of the presentations, seamlessorganisation and outstanding venue.

Conference organiser Elize Noel says, “As oneof the top two citrus producers in the world,South Africa was the ideal location to hostthe first Global Citrus Conference. The eventproved to be a wonderful opportunity forthe global citrus family to get together forbusiness and networking.”

The conference exceeded our expectationsand objectives – which were to hold a citrus-specific conference, with new speakers andtopics offering useful and original insights.”

The presentations by both local and inter-national speakers highlighted many of themost pressing issues facing the industry today,from transport and logistical challenges, toethical fruit production and the impact offoreign producers on South Africa’s exports.

Speakers at theGlobal Citrus Conference 2010

with S Symington and J Chadwick

FinanceBy Robert Miller

Levy CollectionCGA Levy

Each year the Citrus Growers Associationinvoices for and collects the statutory levy dueon all citrus exported. This levy is used forresearch, market access, consumer assurance,information, logistics, transformation, marketdevelopment and administration.

The levy for the 2010 season was 39 cents per15 kg carton and the CGA has collected overR38 million from this levy. This represents over99% of the total levy due for the year. The smallremaining amount will be collected early in the2011/2012 financial year.

The statutory CGA levy for the remainder ofthe approved levy collection period is as follows:

2011 – 40 cents per 15kg carton2012 – 41 cents per 15kg carton

Grapefruit Levy

During the 2010/2011 financial year, a newstatutory levy was approved by the Minister forAgriculture, Forestry and Fisheries. This levy, whichis in addition to the normal CGA levy, is due ongrapefruit exported and will be used to fund marketdevelopment and consumer education in theUnited Kingdom and Japan for a two year period.

The statutory Grapefruit levy due for the twoyear period is as follows:

First Year (2010) – 60 cents per 15kg cartonSecond year (2011) – 65 cents per 15kg carton

During the 2010/2011 financial year, the CGAcollected R4.7 million from this levy.

Audit CommitteeThe members of the CGA Audit Committee forthe 2010 / 2011 financial year were Flip Smit(Chairman & CGA Finance Director), AntoineRouillard (CGA Director Pongola) and GrahamPiner (CGA Director Nelspruit).

The main functions of the CGA Audit Committeeare to identify any risks to the CGA and itssubsidiaries and to assist the various boards withthe management of these risks, to advise on andassist with the financial management and internalcontrols of the CGA and its subsidiaries and toensure compliance with various legal andregulatory requirements.

The Audit Committee held three meetings duringthe financial year on the 19 July 2010, 9 November2010 and the 7 March 2011.


Tree CensusThe CGA relies on gr owers to update theirorchard information on the web page designedfor this purpose. Thanks to the growers whotook the trouble to update their data on thesite. The results of this tree census are includedin the Citrus Statistics booklet.

Citrus Statistics BookletThe statistics booklet contains information onexports, inspections, crop distribution to themarkets and tr ends in r evenue generated byexports as well as information gleaned from thetree census. The 2010 citrus statistics bookletwas published and sent to all grower membersof CGA.

Variety Focus GroupsThe variety focus groups with representativesfrom the important growing areas of each ofthe main commodities met regularly during theseason t o c onsider the pr ospects f or andprogress of the years’ crop; discuss markets andgive DAFF guidance on dispensation requestswhen growers could not meet the standards setby the industry.

At the Citrus T echnical Workshops held inStellenbosch on 26 October 2010 the varietyfocus groups with other industry r ole playersreviewed the industry quality standar ds andmade recommendations to guide DAFF in settingthe standards for the industry a t the gradingmeeting in November. The contribution fromPPECB with respect to standards, dispensationsand participation in variety focus group activitieswas gr eatly appr eciated. PPECB and D AFFrepresentatives attended the United NationsEconomic Commission for Europe (UNECE) andOrganisation for Economic Co-operation andDevelopment (OECD) meetings to represent theinterests of the South African citrus industry .The variety focus groups also benefited from Dr.Graham Barry’s participation in the activities ofthe variety focus groups during the year.

The variety f ocus groups had tw enty-eightmeetings in 2010/11. At e very meeting therelevant variety focus group’s crop projectionwas r ev iewed and th is inf ormat ioncommunicated to the industry via the w eekly

“From the Desk of the CEO ” newsletter. Thisregular update of expected crop volume andquality f acilitates an understanding of theprevailing production conditions which in turn

helped build trust withr e c e i v e r s i nmarkets . The

table below showsthe original 2010

estimates, the actualvolumes achieved, and

the estimates for the 2011season. All figures are in 15 kilogram

equivalents. The variety focus groups aim

to estima te within 10% of final v olumesinspected and pas sed f or expor t b y PPECBinspectors. This was just achieved overall withthe actual being 6% abo ve the estimate. Thegrapefruit and soft citrus variety focus groupswere deadly accurate whilst lemon and navelsboth estimated 7% less than the final figure. TheValencia Focus Group was a lit tle pessimisticwith its original estimate being thirteen less thanwhat was realized.

Packed FiguresInformation on volumes packed was suppliedby PPECB on a weekly basis. These figures wereplaced on the CGA website, www.cga.co.za. Thepacked figures reflected the ac tual volumespacked to date, previous years packed figuresand the estimated packed figures for the currentseason. These figures were presented on a weeklyand cumulative basis.

Shipped FiguresInformation on v olumes shipped w as als osupplied by PPECB and posted on the websiteon a weekly basis. Thes e figures showed pervariety, per week what had been shipped into


Information By John Edmonds

the different markets. The estimated crop andprevious years shipping was also reflected. Thereis concern that the lag in capturing the shippeddata v olume as c ompared t o the v olumeinspected and passed for export creates a falseimpression of the st ock le vels. Visits w ereundertaken by CGA and PPECB staff t o pack-houses to investigate the flow of data and seekways to close the gap.

Electronic Data InterchangeCGA continued to participate in focus groupmeetings of the EDiN pr oject together withinformation service providers, export companies,logistical s ervice providers, Hor tgrow, CGA,SATGI and FPEF under the custodianship of PPECB.In 2010 standardized codes were implementedand a service provider appointed after a publictender pr ocess t o as sist PPECB in theimplementation of the system. The contract wasawarded to CX Solutions. C oncern with theperceived slow progress of implementation wasraised by the industry during the course of theyear. The development of the edi system is inprogress with pilot t esting at identified pack-houses planned for end July 2011.

InternationalInformation Exchange

Mediterranean Citrus Industry

The CLAM organization represents interests ofcitrus industries in the Medit erranean region,the largest citrus tr ading block in the w orld,representing about sixty-six percent of the worldtrade in fresh citrus fruit. CGA is a member ofCLAM, and was represented by Vaughan Hattinghand Justin Chadwick a t meetings held during2010/11. CLAM supplies CGA with informationpertaining to production and exports from theirmembers. CGA reciprocates by sending similarinformation to CLAM.

Southern Hemisphere Associationof Fresh Fruit Exporters (SHAFFE)

During 2010/11 SHAFFE members suppliedinformation of shipped b y v olume anddestination to the SHAFFE secretariat, who inturn supplied this inf ormation t o SHAFFEmembers. All southern hemisphere countriesexcept Brazil participate in this initiative. Thisweekly information is published on the C GAwebsite.

Citrus Marketing Forum(CMF)

The Citrus Gr owers’ As sociation and Fr eshProduce Exporters' Forum jointly fund the citrusinformation supplied in terms of an agreementwith PPECB. This information is supplied on aregular basis during the expor t season to allmembers of the Citrus marketing Forum (CMF).

The CMF is a joint f orum between growers,export agents and other role-players. It providesa pla tform f or the sharing of inf ormation,initiating research and investigations, and makingrecommendations on a wide range of industryissues. During the year under review the CMFmet three times on 17 May 2010, 27 October2010 and 24 March 2011. The input to the CMFfrom the variety focus group with respect toestimates, projections and growers’ feedbackwas facilitated by the CGA.


1-Citrus: Transportation andPort Harmonization Project

During the 2010 CGA Roadshows and CRIPackhouse Workgroup sessions, the topic of theDurban port congestion and truck bottleneckingwas repeatedly raised. Growers and stakeholdersreflected on the frustrations and added coststhat were caused by ongoing delays in theDurban port. The CGA consulted with a supplychain specialist Crickmay who have implementedinformation technology solutions to otheragricultural sectors. The project named 1-Citruswas thereafter developed and a steeringcommittee elected consisting of Durban portcold store managers and the respective regionalpackhouse study group chairman.

The aim of the project’s first phase ofdevelopment is to have a systematic truckbooking, routing and information mechanismto allow port cold stores to establish truckarrivals to the port. The system will also allowbetter management of transport through thecitrus chain and reports can be sent upstreamto transporters and packhouses detailingtransport timeframes through the chain.

Maputo PortTransportation charges for the northern citrusregions are considerably higher than regionslocated closer to ports. Geographically theMaputo port is located far closer to the citrusareas of Northern Swaziland, Malelane, Karino,Nelspruit, White River, Hoedspruit and Letsiteleas opposed to travelling an extra 450kms to theDurban port. It has been calculated that on averagean additional R3.00 per carton is spent to transportcitrus to Durban rather than shipping thoughMaputo. To reduce the cost of transportation, theMaputo port should be prioritised by theindustry. The main constraint at this timecontinues to be the lack of direct containershipping opportunities to the key citrus markets.

Another issue is the lack of backhaul cargo fromMaputo to the hinterland; this creates animbalance in transport charges between thesetwo ports. An estimated 500,000tons of citrusis produced in the aforementioned regions(Maputo port citrus hinterland) of which only65,000tons is exported through Maputo.

Development in Maputo is happening at a goodpace and it should only be a matter of timebefore container shipping lines adjust schedulesto add direct calls to Maputo. Once the Maputoport creates opportunity for a balance of importand export transit cargo, this should assist toreduce the high cost of transportation.

Citrus Rail TransportationRail transportation requires a high volumeof homogenous types of cargo moved

over far distances to compete with roadtransportation on pricing and efficiency. This

principle applies for citrus transportation andtherefore areas that produce high volumes ofcitrus and are located far from ports areconsidered rail viable. When considering break-bulk transportation, the area of Letsitele is themost viable area for rail transportation in termsof volume of production and distance from theDurban port.

The average volume of production is 240,000tons which is moved roughly 900kms to theDurban port, this equates to 216m ton kilometresof travel annually. So in essence as far as therailing of citrus to ports is concerned, theimmediate opportunity lies in the Letsitele area.

Two primary issues as far as rail goes is theshortage of rolling stock available to transportcitrus and the high cost of rail transport againstthe cost of road transport. During the year theCGA has met with senior members withinTransnet Freight Rail to emphasise the strategicimportance of rail to the area and to proposerail pricing strategies to attract more citrus tobe transported by rail.

The CGA also met with the Limpopo provincialdepartment of transport to reiterate the samesentiments emphasised with Transnet FreightRail. The Limpopo government is working closelywith Transnet on various agricultural logisticsinitiatives. A recommendation to growers andstakeholders producing citrus in the Letsitelearea is to prioritise the transportation of citruspacked for the Russian market by rail to theDurban FPT terminal where 95% of citrus isloaded to this market.

Another strategic development as far as railtransportation goes is the container rail initiatives.


Logistics By Mitchell Brooke

Four key projects that have been identified aspotential opportunities for the citrus growersof Mpumalanga, Limpopo and Zimbabwe arethe Reefer container rail hubs earmarked forNelspruit (Consolidation for Malelane, Karino,Nelspruit, White River and Hoedspruit), Letsitele,Polokwane (consolidation for Letsitele, thenorthern Limpopo region and Zimbabwe) andPretoria (consolidation for Marble Hall andGroblersdal). These hubs allow citrus to beconsolidated from multiple producers and thenpacked into Reefer containers which are thentransported by rail to the port containerterminals. This practice reduces the landsidecost by omitting port transport, handling andstorage costs. Trials conducted have suggestedthat Reefer Containers offer better cold chainintegrity than transporting to a port cold storeand packing a container.

Citrus High Cube PalletTransportation

Citrus High Cube pallet transportation hasbecome the norm in recent years. High cuberefers to a pallet that has an extra tier of cartonloaded above the standard height pallet;normally in the case of the 15kg carton astandard pallet would be stacked with 7 tiersof 10 cartons per tier. The high cube pallet isstacked with 8 tiers of 10 cartons per tier. Theconventional standard height pallet wouldweight on average 1,120kgs while the high cubepallet would weight 1,280kg s per pallet. Theconventional practice of loading the pallets ona truck to transport to port would normally beloaded up against the headboard of the reartrailer preventing the load from shifting forwardsin the event of sudden deceleration or braking.Because of the additional weight, when loadinghigh cube pallets they have to be placed about1,5m from the front headboard towards the

centre of the trailer. This is done to allow thetruck to be loaded and remain within the axleweight regulation of 18tons per axle group. Indoing so there is no solid structure to securethe load in the event of sudden decelerationor hard braking, the result is an increased amountof citrus arriving in ports damaged due to loadshifting and even collapse. This is more prolificin the case of open top cartons and when citrusis loaded on Tautliner truck trailers (trailers withside curtains). The consequence resulting fromthe high amount of damages has placed anenormous amount of risk on to the transporter.

Now faced with higher insurance premiums ornot being offered cover to transport citrus,transporters are reluctant to load citrus and optto transport alternatives. The damages occurwith higher frequency when transported fromthe northern regions where travel conditionsare harsh and the likelihood of load collapse ishigh. Currently there is a shortage in supply oftrucks in peak season creating a higher demandfor trucks with the consequence that growersare facing difficulty in moving citrus or they areforced to pay premium rates. The high level ofhigh cube pallet damage is exacerbating thetransport supply issue. There is strongrecommendation to abide by the cartonspecifications and packing guide lines asprovided by the Citrus Cold Chain Forum.

A further recommendation is to load citrus highcube pallets on flat bed truck trailers which aresecured by tarpaulins and netting offering morestability to the load than when loading inTautliner type truck trailers that offer limitedamount of support to the load.

All prioritised logistics projects and studiesundertaken are outlined in the Logistics sectionon the CGA website for further reference.



Market access was the reason for the formationof the CGA in 1997, and remains the key focusarea of the Association. The mantra for market

access is GRO – Gain, Retain and Optimise.Although gaining access is the exciting and

headline catching activity, retaining andoptimising usually takes up most resources.

ThailandOn the first of February 2011 a draft protocolto allow the importation of South African citruswas received from the authorities in Thailand.South Africa has been in this position twicebefore, only to have regime change in Thailandbring a stop to proceedings. The Departmentof Agriculture (DAFF), Citrus ResearchInternational (CRI) and CGA have workshoppedthe protocol and are in the process of sendinga response. Hopefully it will be third time lucky.

United States of AmericaAfter agreeing that the cold treatment wouldbe returned to the previous, technically justifiedtime period once a standard operating procedure(SOP) had been implemented at all packhousespacking for the USA , USDA APHIS reneged onthe agreement. The treatment period was onlyreversed after 15 July 2010, and there was noindication if this would be a permanent change.This “moving of the goalposts”, and total disregardfor agreements has infuriated growers deliveringto the US market. Ongoing attempts are beingmade to bring some sense into the arrangements.

The application to have pest free productionunits in low prevalence areas took a step forwardfollowing a positive report from the US pathologistwho visited the Northern Limpopo area.

European UnionThe risk management system for citrus blackspot passed the test as only a handful of infectedconsignments were intercepted for exports tothe EU. South Africa has acted responsibly inacceding to EU requests with regard to CBS, thisdespite leading CBS scientists conclusion thatEU measures are unnecessarily harsh. The SouthAfrican plant protection organisation (DAFF) hasformally requested the International PlantProtection Convention (IPPC) secretariat to set upa panel to consider all scientific evidence pertainingto the EU risk for CBS. Despite repeated requeststhe IPPC have yet to convene this panel. It is hopedthat 2011 will bring some finality to the debate.

TariffsSouth Africa’s admission to BRIC (Brazil, Russia,India and China) may result in accelerating presentbilateral talks with India. The South African citrusindustry is particularly eager to have the presenthigh tariffs reduced. All citrus types have beenincluded in the list sent to India requesting lowertariffs. Initial steps have been taken to get anextension of the zero tariff period in Iran.

JapanThis remains the most important destinationfor southern African grapefruit. CGA continuedwith the shipping coordination initiative so asto deliver rateably into the market, and tomonitor the fruit being delivered in terms oftype and colour. Weekly bulletins weredistributed to stakeholders in South Africa, andtranslated and distributed in Japan.

After an extremely lengthy engagement withJapan, including several official requests and

raising thematter inWTO SPSs i d e b a rdiscussions, Japan-MAFF finally formalisedacceptance of Cara-Cara navels from SA.

The empty deck testing of vessels destined forJapan was scrapped in 2010, leading to fasterturnaround time for vessels. In addition theJapanese inspector initiated the program, andthen returned to Japan (as opposed to previousyears when the inspectors remained in thecountry for the entire season).

Exchange of information with Japan authoritieswith respect to South Africa’s request for achange in the cold treatment conditions continues.

ChinaA meeting was held between CGA, CRI and DAFFin February to discuss and formulate alternativeoptions (system approach) for the 22-24 daymandatory cold treatment for FCM. CRI is inthe process of formulating alternative options.A request to export citrus to China through bulkreefers was again forwarded to DAFF.

BiosecurityIn May and July 2010 Bactrocera Invadens (BI),an invasive fruit fly, was found in two regionsbordering the Limpopo River in northern SouthAfrica. The Action Plan developed by DAFF andindustry was initiated and eradication measuresimplemented. Eradication was successful in bothregions (the first time BI has been eradicatedanywhere in the world). Surveillance continuesthroughout South Africa.

Market Access By Justin Chadwick/Vaughan Hattingh


Market DevelopmentBy Justin Chadwick

Grapefruit PromotionsAt the r equest of gr apefruit gr owers anapplication was made for the implementationof a sta tutory le vy f or the pr omotion ofgrapefruit in the UK and Japan. This applicationwas granted with a reduced period of two years(as oppo sed t o the r equested f our y ears).Department Trade and Industry (DTI) pledgedR2 million towards the campaign.

Japan Grapefruit PromotionsMarket Makers were contracted to carry outthe campaign in Japan. Emphasis w as put onpoint of sale material (retail posters, hangingPOS material, information booklets and in storepremium giveaways) and in store tasting. In additionthe campaign included advertisements in consumerand retail magazines, and development of a website.

The stores where sampling was held showedstrong sales increase, at some stores daily salesincreased by 140-185% (Mycal), weekly salesincreased by 300-350% (Fressay) and monthlysales increased by 110-140% (Aeon).

Figures from the Ministry of Agriculture in Japanshowed that the price per kilogram for grapefruitin 2010 was lower than in 2009 at the start ofthe season, yet the price increased at the laterpart (August to September) of the South Africangrapefruit season.

Planning for the 2011 campaign is well advanced.

UK Grapefruit PromotionsRED Communications were contracted to carryout the campaign in the UK. The UK campaignformed part of a wider South African fruit marketdevelopment in initiative under the “beautifulcountry, beautiful fruit” banner. As a result thegrapefruit initiative could leverage off the other

initiatives. The campaign included a launch event,development of campaign imag ery andphotography, information booklets and recipecards, signing up a celebrity chef and TV travelcelebrity, a breakfast audit used as the basis forradio interviews, a win a holiday to South Africaoffer, on line media, development of a website,a world cup wall chart and a campaign mascot.Four major r etailers in the UK carried outdifferent promotions in their st ores – thes eincluded in store radio, many in store samplingopportunities, retailer web sites, staff knowledgecards and staff posters, and retailer magazines.

Results: Volume

During the 12 w eek period, mid June t o midAugust, total grapefruit volume was up +1.9%,a performance which was hindered by a volumedecline in the discounter retailers.

In the major multiple retailers, where the focusof the promotional activity took place, volumewas up +6.5% (compared to a decline of -41.2%in discounters).

The top 4 retailers (Asda, Morrisons, Tesco, andSainsbury’s) all saw particularly strong volumegrowth for grapefruit during the pe ak SouthAfrican s eason and a t a time when thepromotional activity was taking place.

Across the whole of the citrus category, grapefruithas performed well against other fruits such asoranges, satsumas, and mandarins who all s aw adecline in volume during the same 12 week period.

Results: Value

During the 12 w eek period, mid June t o midAugust, total grapefruit value was up +7.4%, aperformance which w as hindered by a v aluedecline in the discounter retailers.

There was a strong value growth in the majormultiples of +12.7% (compared to a decline of-46.7% in discounters).

Again, the top 4 retailers (Asda, Morrisons, Tesco,and Sainsbury’s) all saw particularly strong valuegrowth for grapefruit during the pe ak SouthAfrican s eason and a t a time when thepromotional activity was taking place.

Grapefruit has performed well against the othercitrus fruits, with value growth for the periodon a par with easy peelers and ahead of satsumasand mandarins who saw a decline.

Fruit LogisticaIn February, 2011 CGA was allocated a room atthe South African pavilion at Fruit Logistica inBerlin, funded by DTI. The room was fully utilisedduring show hours, and provided an excellentvenue for exporters to meet with their clients.Once again the South African stand was a buzzof activity, with excellent construction and artwork.

Asiafruit LogisticaIn September, 2010 the South African stand wassignificantly bigger than previous years, and drewa lot of a ttention and int erest fr om sho wdelegates. This show is becoming in the e astwhat Fruit Logistica is in the west.

Demand forSummer Citrus in the USA

Together with Chile, Australia and Peru, SouthAfrica funded a study on demand f or summercitrus in the USA . The study w as conductedunder the auspices of SHAFFE. The results werevery encouraging; revealing that growth in thissector was possible. Media expo sure of thestudies major c onclusions, and additionalactivities will be undertaken in 2011.


Exports By John Edmunds

Soft Citrus Passed for Export Oranges Passed for Export

Weeks

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15kg

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8

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010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

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2010 Cumulative 2009 Cumulative 2010 Estimate

16

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10

8

6

4

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015 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

15kg

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121110

9876543210

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49

15kg

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Lemons Passed for ExportGrapefruit Passed for Export

2010 Cumulative 2009 Cumulative 2010 Estimate 2010 Cumulative 2009 Cumulative 2010 Estimate


Gaining, retaining and optimising access tomarkets for SA citrus in respect to meeting

sanitary requirements and empowering SA citrusproducers to reach consumer assurance

expectations, remains a key component to theoverall work undertaken by CGA. The

Morpholine incident that emerged in September2010 is clear example of where CGA played a

pivotal role in delivering continued access tothe European market which otherwise might

have been forfeited without CGA intervention.

Morpholine CaseBuyers in the UK conveyed to CGA a situationregarding the detection of Morpholine on applessourced from Chile and raised concern that asimilar problem could face SA citrus enteringthe UK. Morpholine is used in the formulationof some wax coatings for fruit. According tothe UK Food Standards Agency (FSA) Morpholinewas not listed as a Food Additive under the EUFood Additives legislation and therefore anypost-harvest treatments containing Morpholineused on fruit exported to the EU would bedeemed illegal. Non-compliant fruit containingMorpholine would need to be returned to thecountry of production, destroyed, or divertedto another market. Approximately 100 000 tonsof citrus fruit (valued at R400m) destined forthe EU was implicated in this incident.

Estimated losses of R800m were probably morerealistic when considering the entire costs ofrecalling, diverting (potentially causing a collapsein the price in other markets) or destroying therejected fruit.

It became apparent FSA and the European

Commission were unlikely to compromise ontheir classification of Morpholine as a FoodAdditive despite stating Morpholine was “lowrisk” from a consumer health perspective. Directengagement with FSA and the EuropeanCommission was made possible due tointeraction with EU regulatory bodies over thelast number of years. From a very tenableposition CGA requested a pragmatic resolutionto the impending crisis.

To strengthen the appeal CGA was able to elicitthe aid of DAFF (Director General), the SouthAfrican Ambassador’s office in Brussels, the HighCommissioner in the UK, affected retailers inthe UK, Freshfel and Fresh Produce Consortium(UK). All these parties are sincerely thanked fortheir valuable support and contribution toresolve the difficult situation.

FSA released a communiqué in October 2010indicating that fruits that are peeled (i.e. citrus)would be treated differently to fruit where theskin is typically consumed and would not beprevented from being sold in the UK. TheEuropean Commission further endorsed thisposition and provided a date (19th November2010) by which time all affected fruit must besold out of the entire EU market. In laterinvestigation by CGA there were no reports ofany SA citrus being held back from the marketon account of Morpholine use in 2010, anexceptionally welcome result given the initialnegative indications from the UK.

At the request of growers and exporters at theCitrus Marketing Forum (CMF) in October 2010,CGA worked with wax suppliers to ensure a similarpotential disruption to trade does not reoccur.

Consumer AssuranceBy Paul Hardman


Wax distributors provided greater assurancethat the formulations and ingredients used in citruswaxes for export fruit will not result in rejectedfruit in any receiving market via signed undertaking.These letters were posted on the CGA website.Looking forward Morpholine is unlikely to belisted as a Food Additive under EU law giventhe high costs of generating the appropriatedata in order to make such an application.

Changes to Food SafetyRequirements

Besides ongoing changes in Maximum ResidueLevels (MRL’s) for plant protection products byimporting citrus markets, which CGA/CRI havecommunicated throughout the year, the majorshifts in governments’ approaches to food safetyhave picked up pace. United States of America,Vietnam and Indonesia notified of new foodsafety legislation that would require exportingcountries having to fulfil very specific exportingcompliance steps (e.g. pre-clearance residuetesting, prior notification of the arrival ofconsignments). These new measures have adirect impact on the supply chain in terms of

costs of compliance but also theydemand significantly more

cooperation between thepublic and private

sector. Lack of capacity at DAFF remains achallenge, a problem that was compounded bythe loss of key staff during the year. For thisreason CGA have engaged extensively with DAFF:Directorate Food Safety and Quality Control inorder to see the finalization of the SA FoodControl Plan. This plan will describe the overallFood Safety approach used by DAFF and thefruit export industries and can be provided totrading partners to build their understandingand trust in SA fruit export supply chain. The endgoal of achieving recognition by trading partnerswill lead to the harmonization of official standardsrather than duplication, or worse multiplication,as these country requirements now demand.

Representation andEngagement

CGA has actively participated in a number offorums and working groups in order to givecitrus producers a “voice” when decisions aremade around food safety and Good AgriculturalPractice standards. Involvement in the followingorganizations continued from 2009/10: CODEX(via Department of Health and DAFF representatives),International Federation of Produce Standards(including the Food Safety Working Group),GLOBALGAP National Technical Workgroup(especially on the revision of Version 4), FoodSafety Forum, and the CGA Sustainability HelpDesk (which helps to coordinate Tesco Nuture’s

PPPL). IFPS participation provides access tothe Global Food Safety Initiative. Newinitiatives in the last twelve months werethe SHAFFE Technical Work Group (PaulHardman, Chair) and the Fruit South AfricaTechnical Workgroup. Most notably SHAFFE

technical workgroup published a paperoutlining key Food Safety and GAP principles

to which SHAFFE members subscribe, and can be

used when engaging with retailers when non-

official food safety requirements are beingnegotiated. The over-riding goal of engagingthrough all these various institutions is to seeharmonization of produce standards and thatthese standards begin to add greater v alue togrowers’ businesses. To this end it was pleasingto see South African retailers adoptingGLOBALGAP certification scheme in 2010 astheir accepted on-farm assurance scheme ratherthan developing something new SA scheme.

Ethical TradeThe NAMC Section 7 Committee on EthicalTrade in the export fruit sector concluded theirwork in November 2010 and the final reportapproved at the NAMC Board Meeting inFebruary 2011. It became apparent from thisrobust stakeholder engagement process thatFruit SA should continue to drive its own EthicalTrade initiatives (through Colleen Chennells).Recent work includes the development of anEthical Trade Handbook, development of adispute resolution mechanism to helpemployees and employers, and engagementwith retailers and buyers to discuss theirexpectation from a SA Ethical Trade programme.The response to these activities from buyersand retailers in countries were SA citrus is soldhas been extremely positive.

Carbon FootprintAlthough the online Carbon Calculator, as partof the Confronting Climate Change: A fruit andwine initiative, has been available to citrusproducers since 2009 there has been little useof the tool. Growers are encouraged to beginmeasuring their carbon footprint as this becomesan ever more important issue for global foodsupply webs, and the fact that energy costs areincreasing sharply. In 2011 CGA will be lookingto help more growers enter their data online.


ProcessesA key component of the industry' s technicalResearch and Development strategy has beenensuring that the priorities are clearly identifiedand tha t thes e r eflect the needs andopportunities across the value chain. CRI switchedfrom an annual comprehensive priority reviewprocess to a two-yearly cycle, where the detailedreview alternates with the two-yearly researchsymposium. Since there was a symposium in2010, priority setting was limited to identifyingany changes As with the full priority r eviewprocess, inputs were obtained from each regionaltechnology transfer group and various workinggroups of the citrus cold chain forum, namelythe packhouse working groups and the citrusexporters technical panel.

CRI continued using the c oncept of subjec tspecialist committees, with e ach committeechaired by a grower nominated CRI director, toannually review research proposals and makefunding recommendations to the CRI Board ofDirectors. Such committees operated for eachof the research programmes (Integrated PestManagement, Disease Management and Crop &Fruit Quality Manag ement) and Cultiv arEvaluation. The 2011-12 CRI budg et w asapproved by the CRI Boar d on 19 No vember2010 and thereafter endorsed by the CGA Boardof Directors. Whereas the four year levy businessplan caters for a 7% annual increase in budgetaryallocation for research, greater than budgetedlevy income realised from the 2010 expor tseason enabled approval of a greater increasein the budgeted 2011-12 research expenditure.The CRI Group alliance partnership model was

retained with strong growth taking place in theutilisation of capacity at Universities.

During the report period Mr Gerhard Scheepersresigned from the CRI Board. Gerhard will beremembered for his strong leadership role asone of the founder CRI Directors who played akey role in the establishment of River Bioscienceand Xsit. Mr Piet Smit was appointed as a newCRI Director.

ProgrammesThe CRI research portfolio remained focusedon the o verarching priority of S anitary andPhytosanitary Market Access, with CRI's CEOfocusing on the co-ordination of market accessand biosecurity technical inputs.

Most noteworthy developments include thesuccessful det ection, c ontainment anderadication of two incursions of the inv asivefruit fly Bactrocera invadens, the avoidance ofserious industry lo sses fr om c oncernssurrounding morpholine in post-harvest waxesand pr ogression of ac cess t o Thailand t onegotiation of a final protocol.

The Int egrated P est Manag ement (IPM)programme continued to apply most availableentomology resources towards addressing thechallenges posed by False Codling Moth (FCM)and Fruit Flies. The efficac y of a post-harvestcold treatment protocol for B. invadens wassuccessfully v alidated thr ough trial w orkexecuted by CRI in Kenya. The efficacy of theSterile Insect Technique (SIT) for the control ofFCM in the East ern Cape w as demonstratedthrough successful trial w ork. Two previousattempts to determine potential efficacy of this

Research & TechnicalBy Vaughan Hattingh


technique in the Limpopo r egion w ereinconclusive, but a r epeat of these trials wasinitiated in 2010 in pursuit of a conclusive result. The Disease Management programme directedconsiderable resources towards supporting theCitrus Improvement Scheme with upgrading theviroid diagno stic s ystems and optimisingpackhouse procedures to enable the industryto better manage post-harvest decay. The Cropand Fruit Quality Management programme madegood progress in advancing the understandingof rind dis orders and ther eby cr eating theopportunity for the futur e development ofhandling procedures that will reduce the risk ofconsequent losses.

Citrus Improvement SchemeThe CIS continued to be operated by CRI withguidance from the CIS Advis ory Committee.Earlier viroid concerns were successfully dealtwith and improved virology diagnostic processesand procedures were implemented to providethe industry with impr oved protection. CRIcommissioned a panel of int ernationalimprovement scheme specialists to review theSA CIS and pr ovide recommendations. It isnoteworthy that the reviewers endorsed the SACIS as being world class. The review panel alsoidentified areas of concern and provided CRIwith a list of r ecommendations on ho w tofurther improve the scheme. An action plan to

implement thes e r ecommendations w asendorsed by the CIS Advis ory Committee. Acitrus-free protected zone around the CitrusFoundation Block w as pr omulgated int olegislation as an important biosecurity measure.Pursuit of a sta tutory CIS c ontinued, butremained unresolved by year end and will remaina priority. Considerable investment was madeinto bolstering the CIS infrastructure at the CFB,but fur ther infrastructure development willcontinue for some time into the future to ensurethat the CFB is able t o ensur e supply ofunpredictable fluctuations in budwood demand.

Cultivar developmentIn accordance with recommendations from theCultivar Evaluation Committee, CRI proceededwith extensive expansion of the industry cultivarevaluation project, aimed at providing growerswith impar tial and r eliable inf ormation oncultivar planting options. In collaboration withthe CRI regional technology transfer groups, CRIcoordinated a suc cessful s eries of r egionalcultivar planning and advisory workshops. Goodprogress was made by CRI in securing cultivarrights for several new cultivar options fr ombreeding and development programmes aroundthe world and from locally occurring mutations.Likewise, a few irregularities in the awarding orclaiming of rights to cultivars by various partieswere highlighted in pursuit of pr otecting thecultivar ac cess rights of citrus gr owerscollectively. A strategic decision was made byboth CRI and CGA Boards to effect a structuralreorganisation of industry structures' involvementin the areas of cultivar rights acquisition andcultivar rights management. The cultivar rightsacquisition and management components ofcultivar development will in future be handledby a ne w, not f or profit, CGA Citrus CultivarManagement Company. CRI will hand over theseissues to this new entity once established and

CRI will ther eafter ha ve no fur ther dir ectinvolvement in this aspec t of cultiv ardevelopment. CRI will r etain the cultiv arevaluation, breeding and development functionsas a programme within the research portfolio.This struc tural chang e is aimed a t bet terpositioning CRI to continue operating the CISas a statutory scheme.

ExtensionCRI extension coordinators, with the aid of somemembers of the SA Society of Sub-tr opical &Citrus Consultants, continued to actively engagethe network of 32 regional technology transfergroups. CRI's extension division continued tocoordinate the activities of the Citrus Cold ChainForum (CCCF). The annual series of meetings ofthe Packhouse Study Groups, was convened byCRI in February 2011. These events continued togrow impressively in terms of participation, with2011 attendance collectively equalling participationin the two-yearly citrus research symposium.

Maintenance and further development of theCCCF r eceived a boo st with alloca tion ofadditional funds by the Citrus Res earch Trust.The sixth citrus r esearch s ymposium w aspresented by CRI in July 2010. At tendancereached a record level of 450 delegates and hasbecome the principal sho wcase f orum f ortransfer of research findings from scientists tothe composite primary t echnology transfercapacity of the industry.

CRI continued to host CGA's transformationextension initiative through the two regionalextensionists. In addition to the fore mentionedabove, the other communication tools that werewell utilis ed t o c ommunicate t echnicalinformation to the industry were the 2010 CRIGroup Annual Res earch Report, the SA FruitJournal, the Cutting Edge, the CRI Net and variousscientific journals.


Citrus GrowersDevelopment Chamber

In the year under review, transformation in thecitrus industry took a vibrant new direction, withemerging growers taking control of their owndestinies through the Citrus GrowersDevelopment Chamber (CGDC).

The CGDC was established at a meeting ofemergent growers in May 2010, as an outcomeof a 2008 workshop where emerging growers askedto have a more structured voice within the CGA.The CGDC consists of fifteen representativesfrom magisterial districts where emerging citrusgrowers are active. A chairperson and vice chair-person were elected from these representatives.

The first meeting of the CGDC was held on the23rd of March 2011, in Johannesburg. At thismeeting, members mapped out the activitiesthat the chamber will be involved in, whichcoincide with the activities undertaken by the

CGA transformation portfolio. The establishmentof the chamber fostered even closer linksbetween the CGA and emerging citrus growers,and shows that the growers are ready to takeup the challenge and engage with stakeholdersinvolved in transformation.

Local and provincial structures were alsoestablished to make sure that every emergentcitrus grower has a voice.

The CGDC also have representation on each ofthe five variety focus group committees, theCGA Logistics Committee and the CitrusMarketing Forum.

MentorshipSince 2006, the CGA has had an agreement withthe Department of Agriculture, Forestry andFisheries to undertake a mentorship programmefor selected emerging citrus growers. Thementoring programme was expected to ensurereal transformation by assisting growers in the

development of their technical, financial andbusiness management skills.

In April 2010, the funding and management ofthe mentorship programme was transferred tothe provincial departments of agriculture andrural development. This transfer did not gosmoothly, resulting in funding not immediatelybecoming available from the provincialdepartments. Alternative funding was securedfrom the AgriSETA, channelled through theCitrus Academy.

During the year under review, thir teenenterprises received support through thementorship programme; one in LimpopoProvince, two in Mpumulanga, three in KwaZulu-Natal and seven in the Eastern Cape.

ExtensionThe CGA funds two CRI extension officersdedicated to working with emerging farmers,split into the northern and southern regions. Inaddition, the CGA T ransformation Managerworks with the national and provincialdepartments of agriculture to improve thequality of their extension services.

Skills Development andCapacity Building

The Citrus Academy is responsible for skillsdevelopment in the citrus industry. TheTransformation Manager of the CGA coordinateswith the Citrus Academy regarding the skillsdevelopment needs of emerging growers. Thisrelates particularly to skills planning, and externaland internal capacity building programmes.

TransformationBy Lukhanyo Nkombisa

The Citrus Growers Development Chamber - 2010/2011


Social FacilitationIn February 2010 the CGA considered a proposalfor social, legal and institutional support toemerging citrus growers in KwaZulu-Natal, whoacquired land through various land reformprogrammes. The project had two distinctphases, with phase 1 being project investigationand assessment and phase two being aboutsupport and mentorship through participatoryprocesses and detailed business planning. TheAgri Business Development Agency (ADA) agreedto fund the second phase of the project, whilethe CGA funded the first phase.

Phase one was completed in May 2010 and adetailed report submitted to the CGA and theADA. Planning around phase two are underway,and it is expected that this phase will beimplemented by the middle of 2011.

The CGA views this as a workable model forsocial facilitation and intends to expand thisprogramme to other provinces, provided that localagencies are willing to cooperate on the same basis.

Grower Development FundFlowing from the cooperation between the CGAand the ADA in the social facilitation project,the ADA approached the CGA about channelingfunding to support two emerging citrus enterprisesin the Nkwaleni Valley in KwaZulu-Natal. TheCGA received funding from the ADA for thispurpose. A steering committee, consisting ofrepresentatives of the growers, ADA, CGA, CitrusAcademy and mentors was formed, and allexpenditure was approved by the committee.The CGA reported to committee members onthe status of the funds to ensure transparencyand accountability. The CGA would like to expandthis funding model to other provinces in 2011.

Engagements withGovernment Departments

The CGA takes responsibility of engaging withthe provincial and national departments ofagriculture on behalf of emerging citrus growers,to address various aspects of their operations.

National Department ofAgriculture, Forestry and

FisheriesCGA, CRI and CA approach the NationalDepartment of Agriculture, Forestry and Fisheriesdirectorate Education Training and ExtensionServices, to present their Citrus Extension Learningprogramme model for provincial extension officersto become citrus specialist. The objectives ofthe Citrus Extension learning programme are to:

• Provide a tool through which extensionofficers are able to develop their skills in andknowledge of citrus production, in order toequip and enable them to provide technicalsupport and advice to citrus growers.

• Address the particular challenges that hamperthe implementation of existing classroom-based learning programmes, including timeconstraints, geographical dispersal, differencesin provincial extension structures, and varyinglevels of existing skills, knowledge and experience.

Citrus orchards in Sundays River Valley


• Encourage extension officers to make use oflearning opportunities and knowledgeresources within their working environments.

The group that are targeted by this programmeare particularly extension officers that areinvolved in or are required to be involved inproviding technical support and advice to citrusgrowers and packhouses, in all citrus-growingregions in Southern Africa.

Eastern Cape

Engagement with the Eastern Cape Departmentof Rural Development and Agrarian Reformcentred on the drafting of a memorandum ofunderstanding to govern mentorship funding inthe provinces and structure extension servicesto allow for the development of extensionofficers that specialise in citrus production. Atthe end of the period under review, the CGAwas awaiting a response from the department.

KwaZulu-Natal

Apart from cooperating with the ADA in thesocial facilitation and Grower DevelopmentFund projects, the CGA engaged with the provincialDepartment for Agriculture, EnvironmentalAffairs and Rural Development regardingmentorship funding and extension services.

Limpopo

The CGA and CRI first signed a MoU with theLimpopo Department of Agriculture (LDA) in2007. As a result of this agreement, the LDA hasextension officers dedicated to providing technicalsupport on citrus production. The agreementwas renewed in the year under review. Negotiationsaround mentorship funding are on-going.

Mpumalanga

At the end of the period under review, the CGAhas not successfully engaged with the provincialDepartment of Agriculture, Rural Developmentand Land Administration, despite numerous efforts.

Emerging Grower DatabaseIn 2008, the CGA, with the assistance of theCitrus Academy, undertook a project to developa database of emerging citrus farmers in SouthAfrica. The purpose of the initiative was toenable the CGA to identify areas in which BEEenterprises experience specific challenges, toprovide general statistics on transformation inthe industry to interested parties, and to providespecific information to organisations that arein a position to assist BEE enterprises. Theinformation in the database was updated andexpanded in the year under review.

Toyota New Harvest Farmerof the Year Competition

Lawrence Mgadle from the Eastern Cape waschosen as one of the finalists for the prestigiousToyota New Harvest Farmer of the Year award.This award recognises the achievements ofemerging farmers and is always hotly contested.The CGA is very proud of this recognition forLawrence’s hard work and congratulate him ongetting to the finals.

Portfolio CommitteeRepresentation

CGA was invited to Parliament by the portfoliocommittee on Agriculture to a public hearingon transformation within the Agricultural Sector.The purpose of this public hearing was theportfolio committee wanted to know the initiativesof the commodity organisation, agricultural stateown businesses, and government on transformationand also find the reason of making the situationbetter to ensure proper service delivery insupport of all emerging farmers .

The outcome of that was that the portfoliocommittee will compile a report with all therecommendations that were made to better thesituation and ensure that all stakeholders involveare working together to ensure proper supportto all emerging farmers in the country.


Citrus AcademyBursary Fund

The implementation and selection policies forthe Citrus Academy Bursary Fund remained thesame and were applied consistently. Thefollowing allocations were made in the periodunder review:

Description 2010 2011

Value of Bursary Fund R1,258,120 R1,337,851

Number of Students 54 52

The BEE Bursary Support programme wasexpanded in 2011, with the allocations setout below made in the period under review.Please note that these figures are included inthe table above.

Description 2010 2011

Value of Support

to BEEBS students R124,223 R197,344

Number of BEEBS Students 8 12

Twenty students graduated at the end of 2010,of which four continued their studies in 2011towards further qualifications. Four graduateswere absorbed into the industry in permanentpositions. Five students were unable to completetheir studies in 2010. Thirty-three students werecarried forward to 2011 and nineteen newstudents entered the fund at the start of 2011,bringing the total number of students on theBursary Fund in 2011 to fifty-two.

Citrus Academy By Jacomien de Klerk

Citrus Academy Board of DirectorsRepresentation Name Date of Appointment

CGA (Chairperson from 2010/8/18) Shane Dellis (Chairperson) 2009/04/01

CGA Mike Woodburn (Vice Chairperson) 2009/04/01

CGA Graham Piner 2009/04/01

CGA - Emergent Farmer Representative Israel Nemaorani 2007/04/01

Donors (Citrus Industry Trust) Mark Fry 2007/04/01

Service Providers Joy van Biljon 2009/01/26

Skills Development Specialist Santa de Jager 2009/01/26

The Chief Executive Officer of the CGA and a representative of the CGA Audit Committee areinvited to attend Citrus Academy board meetings as observers.

Two board meetings were held during the period under review: 18th August 2010 Apologies: Joyvan Biljon and Santa de Jager), and 22nd March 2011 (Apologies Mark Fry and Santa de Jager). TheAnnual General Meeting of the Citrus Academy was held on the 17th of August 2010 at theChampagne Sports Resort, Drakensberg.

Financial ResultsFunding received from the CGA, as approvedby the CGA board of directors, is used foroverheads, salaries, and funding of on-goingprojects. Additional funding is secured andappropriated for specific projects.

In the 2010/2011 financial year, the CitrusAcademy achieved a surplus of R193,962, incomparison with the shortfall of R739,353of the previous year.

Whereas the previous shortfall was duemostly to the development cost of the CitrusPostharvest Series, the surplus can be ascribedto a partial recovery of this developmentcost through sales of the series, in additionto a tight control of overhead expenditure.

As always, our deep appreciation goes to theCitrus Industry Trust and the AgriSETA, whoseinvaluable support makes the operation BursaryFund possible.

The following numbers of students took part inexperiential learning programs in the year underreview.

We would like to thank the following companiesfor providing experiential learning opportunitiesto Citrus Academy Bursary Fund students:

AA Market Agency, Ashton Extracts, BavariaCitrus Estate, Citrus Research International,Crocodile Valley Citrus Company, Du Roi IPM,Eden Agri Services, Glen Laboratory, GoldenFrontiers Citrus, Mouton Boerdery, Neos Estates,Proveg East London, Rhodes University, RiversideCitrus, SASA, Soleil Citrus, Sundays River CitrusCompany, Woodburn Estate

Capacity BuildingWorkshops

No request was received for capacity buildingworkshop during the year under review.

Mentorship FundingThe Citrus Academy channelled R346,491 fromthe AgriSETA to the Citrus Growers’ Association

for mentorship funding.

Learning ProgrammeDevelopment

During the year under review, focus was onplanning and development of Citrus Extensionprogramme, for which implementation isplanned for 2011, depending on the availabilityof funding. In addition, planning was completedfor a Citrus Pest Monitoring programme, to bedeveloped in 2011. The Citrus Academy is alsocooperating with the other fruit industries inthe development of an Ethical Trading learningprogramme.

Citrus Postharvest SeriesThe Citrus Postharvest Series were extendedduring this year. Eleven modules, including thenine learning modules, were translated intoAfrikaans and made available on a separate DVD.

The two modules on rail transport were furthermoreproduced, concluding the development of theseries. Unit standard alignment and implementationdocumentation that form part of the serviceprovider pack were also finalised.

In our continuing efforts to foster cooperationbetween the industries, a licensing agreement wassigned with SATGI for them to use the series as thebasis for their own series on postharvest practices.

Learning MaterialDevelopment of learning material wascompleted. The South African SubtropicalGrowers’ Association (SUBTROP) and the SouthAfrican Table Grape Industry (SATI) continuedwith their adaption of the learning material fortheir commodities. Planning is for productionlearning material to be adapted once occupationalqualifications has been developed.


Citrus Academy Students at the Global Citrus Conference 2010

Category Students: 2010 2011

Vacation Work 23

Internships 6 4

WorkplaceExperience Grants 4 2

Industry Exposure Program 33


Abridged Financial Statements

Actual Budget Actual Budget2009/10 2010/11 2010/11 2011/12

Income 35 649 305 32 840 000 47 003 455 49 000 000

RSA Levy 32 482 223 31 200 000 36 981 291 35 200 000Swaziland/Zimbabwe Levy 673 259 340 000 951 594 700 000Grapefruit Promotion Levy 6 743 620 6 500 000Draw from Reserves 5 300 000Interest 889 976 1 000 000 1 417 328 1 000 000Dividends Received - River Bioscience 300 042 300 042Other Income 1 303 805 300 000 609 580 300 000

Expenditure 31 014 332 33 129 135 37 730 453 48 211 130

Staff Costs 2 799 384 2 919 533 3 026 947 3 189 400Travel and Accomodation 228 252 179 000 267 902 269 000Office - Rent and Equipment 241 574 320 352 308 854 328 220Office Expenses 315 935 339 000 332 993 386 000Board Expenses 291 322 483 250 427 040 483 250Services (Accounting and Legal) 237 872 350 000 291 533 400 000Suscriptions 56 420 232 000 197 223 220 000Communication 151 615 167 000 155 526 188 000Market Access 1 084 822 1 360 000 1 841 790 2 568 000Reseach Programmes - Citrus Research International 19 870 000 20 972 000 21 280 838 22 440 040Reseach Programmes - Citrus Research Trust 2 266 000Transformation 2 397 687 2 033 000 2 382 551 2 238 400Transformation - Citrus Academy 1 441 190 1 620 000 1 681 340 1 782 000Depreciation 19 022 32 000 28 782 32 000Information 330 021 302 000 299 493 430 000Provision for doubtful debts/Bad Debts (963 783) 1 687 916Leave Pay Provision 332 156 (110 968)Infrastructure and Logistics 509 211 880 000 630 916 970 820Market Development 1 359 751 880 000 2 919 549 970 000Grapefruit Promotions 6 500 000Citrus Cultivar Management Company 2 500 000General 211 881 60 000 80 228 50 000

Net Surplus/(Loss) for Year 4 634 973 (289 135) 9 273 002 788 870


21 619 3877 2415 2292

1807 344 661 52 960

208 1905 5081 1561 3407

867 57 34 46 761

SWAZILAND

3337 774 1833 220 11983

Limpopo Province

Free State

124 96 318 41 291

Northern Cape

12 43 2 4

North West

KwaZulu-Natal

Gauteng

Eastern Cape

Western Cape

2712 642 3007 623 5066

Mpumalanga

NAMIBIA

Boland

Eastern Cape Midlands

Sundays River Valley

Patensie

KZNMidlands

Nkwalini

Pongola

Onderberg

NelspruitSenwes Tvl

Hoedspruit

Vaalharts

Western Cape

Letsitele

Limpopo

LESOTHO

ZIMBABWE

Total Hectares TotalEastern Cape 12 162KZN 3 824Limpopo 18 146Mpumalanga 12 050Northern Cape 871North West 61Swaziland 1 764Western Cape 9 224

58 102

Citrus Producing RegionsKey to Hectares Total

Grapefruit & Pummelos 9 075

Lemon & Limes 4 449

Navel 14 853

Soft Citrus 4 960

Valencia & Midseasons 24 765

58 102

www.cga.co.za

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