SA Groundnut Forum (SAGF)
held on 24 April 2008 at 10:00 at the offices of the ARC-GCI, Sellschop Building, Potchefstroom

1. Opening

   The meeting was opened with prayer offered by Dr van der Walt.

2. Welcome

   The Chairperson welcomed all present.

3. Attendance

   Present
   Mr JCG du Preez	Chairperson
   Mr P Botha	GrainSA
   Dr J Dreyer	ARC-GCI
   Ms M Edwards	Nola
   Mr RW Higgs	Triotrade
   Mr N Hawkins	GrainSA
   Mr G Keun	CEO: OPDT/OAC
   Mr B Makhafola	National Department of Agriculture
   Mr C Mathews	Department of Agriculture: Mpumalanga
   Mr J Roux	Safrinut / The New Nut Co.
   Mr RE Nerwich	The Snack Factory
   Mr GC Nortjé	GWK
   Dr J Swanevelder	SANNIC
   Dr W van der Walt	SANCU
   Mr PJ van Heerden	PPECB
   Mr J Vorster	NWK
   Ms E Harmse	Secretariat
   Apologies
   Ms R Beukes	National Department of Agriculture
   Mr A Bosman	PPECB
   Mr S Cilliers	Sunland International
   Mr S Coetzee	PPECB
   Mr J Cohn	OLAM SA
   Mr A Cronjé	Tiger Brands
   Mr O de Witt	SA Peanut Company
   Ms A Enslin	SAGIS
   Mr D Kock	Grain Silo Industry
   Mr C Lourens	RE Groundnuts
   Mr PG Louw	Grain Silo Industry
   Mr JAM Potgieter	GrainSA
   Mr GJH Scholtemeijer	Chairperson: Oilseeds Advisory Committee
   Dr PJA van der Merwe	ARC-GCI
   Ms A van Deventer	SA Peanut Company

4. Personalia

   None reported.

5. Confirmation of agenda

   The agenda was accepted as it stood, with the addition of:

   • Item 9.2 – FBO Codes;
   • Item 9.3 – PPECB inspections.

6. Approval of minutes

   1. Approval of the minutes of the meeting of the SA Groundnut Forum held on 12 February 2008

      Resolved:

      1. That the minutes of the meeting of the SA Groundnut Forum, which was held on 12 February 2008, be accepted as a true and fair reflection of that meeting.

7. Matters arising

   1. Good agricultural and processing practices

      (Resolution 7.1.1 of the SA Groundnut Forum minutes of 12 February 2008)

      The Chairperson reported that the Groundnut Forum's document on good agricultural and processing practices had been completed. He added that said document was based on the Processors and Traders Association's (PTA) document on good manufacturing practices, which had been amended according to the requirements of the checklist of the National Department of Agriculture (NDA). He reported that the document had been circulated to the members of the Forum in electronic format during February, and that the HACCP principles, which were to be issued as an attachment to the Forum's document on good manufacturing practices, had been made available earlier that week for the members' comment. Mr Keun confirmed that he would resend the documents under discussion to Mr Botha of GrainSA, Mr Roux of Safrinut / The New Nut Co and Mr van Heerden of PPECB, who indicated that they had not received such.

      The members were in agreement that the deadline of 23 May 2008 for comments on the document was acceptable, and that their approval of the document would be considered implicit if no responses had been received by that date. The members noted that the document would subsequently be submitted to the National Department of Agriculture, for evaluation and comment on the way good manufacturing and processing practices and HACCP principles were applied in the local groundnut industry.

      Resolved:

      1. That the Forum's approval of the document on good manufacturing practices, amended according to the requirements of the checklist of the National Department of Agriculture (NDA), as well as the attachment on HACCP principles, would be considered implicit if no responses had been received by 23 May 2008.

         Chairperson
         Mr Keun

   2. Investigation: Agri-Inspec

      (Resolution 7.2.1 of the SA Groundnut Forum minutes of 12 February 2008)

      The Chairperson reported that the Department of Health (DOH) had informed the provincial and local authorities about the transgressions identified in the Agri-Inspec report, following on the investigation into the presence of inadmissable levels of aflatoxin in peanut butter supplied to schools, hospitals and jails, but that no feedback had been received to date.

      On Mr Hawkins' comment that the Agri-Inspec report should be made available to the members of the Groundnut Forum, so that problems in the industry could be addressed and rectified, Mr Keun remarked that the investigation was based on random checks, to obtain an indication of the extent of aflatoxin contamination in peanut butter, in order to alert the Department of Health on areas of concern. He mentioned that the OAC had alerted those manufacturers identified as suppliers of sub-standard peanut butter.

      The Chairperson reported that a research project was currently underway to evaluate the efficacy of Afla-Guard, a biological control agent against aflatoxin. Following on an extensive discussion of possible ways to manage the problem of aflatoxin contamination in peanut butter, it was noted that the problem would not be resolved by hedging the truth, and that a multi-faceted solution would have to be identified by the industry as a whole. The meeting accepted Mr Roux's suggestion that a task team, consisting of representatives of all the role players in the industry, be appointed to investigate possible solutions to the problem. It was agreed that the task team would consist of Mr A Bosman, Mr O de Witt, Mr N Hawkins, Mr J Roux, and the Chairperson, who would act as convenor of the task team, with other members of the task team to be co-opted as and when required.

      Resolved:

      1. That a task team, consisting of representatives of all the role players in the industry, be appointed to investigate possible solutions to the problem of aflatoxin contamination in peanut butter.

         Chairperson

      2. That the aflatoxin task team would consist of Mr A Bosman, Mr O de Witt, Mr N Hawkins, Mr J Roux, and the Chairperson, who would act as convenor of the task team, with other members of the task team to be co-opted as and when required.

         Chairperson

   3. Sustainability of the groundnut industry

      (Resolutions 7.3.1 to 7.3.4 of the SA Groundnut Forum minutes of 12 February 2008)

      The Chairperson reminded the members that they had decided to form a Groundnut Research Priority Committee. He added that the Groundnut Research Priority Committee would be tasked with identifying research requirements within the groundnut industry, and advising the Oilseeds Advisory Committee on such.

      The members were in agreement that the Groundnut Research Priority Committee would be representative of all sectors of the industry, and would consist of a representative of the Oilseeds Advisory Committee (OAC), who would serve as convenor, and one representative from each of the following sectors: producers, processors, the trading industry, the manufacturing industry, including both roasters and manufacturers, the consumers, and the Agricultural Research Council (ARC).

      The following members were elected to serve on the Groundnut Research Priority Committee:

      Convenor: Representative of OAC	Mr JCG du Preez
      Representative of Producers	Mr P Botha
      Representative of Processors	Chairperson of Processors' Association
      Representative of Traders	Mr O de Witt
      Representative of Manufacturers	Ms M Edwards
      Representative of Consumers	Dr W van der Walt
      Representative of ARC	Specialist to be co-opted

      The members noted that the groundnut research projects on cultivar evaluation and breeding had been approved, after revised project proposals were submitted following on the OAC's request that groundnut research be rationalized with the view to contributing to a broad national strategy. It was also noted that Mr Mathews' project on a groundnut development programme for smallholder farmers in Mpumalanga had been approved, as well as a project on the efficacy testing of Afla-Guard, a biological soil treatment aimed at the reduction or prevention of the formation of aflatoxin on groundnuts during production and storage.

      With reference to the possible introduction of promising cultivars from other countries with the potential of being grown successfully in South Africa, the Chairperson reported that Mr Loubser was still awaiting feedback from the International Seed Federation (ISF), who had indicated that they would conduct an international enquiry to identify possible role players in this regard. Dr van der Walt mentioned that information could also be sourced from the internet, at www.worldseed.org and www.seedquest.com.

      The Chairperson ruled that the draft motivation for the appointment of a person to promote groundnut production, compiled by Dr Dreyer and Mr Cohn, would be considered at a future meeting of the Forum.

      Resolved:

      1. That the Groundnut Research Priority Committee would be representative of all sectors of the industry, and would consist of a representative of the Oilseeds Advisory Committee (OAC), who would serve as convenor, and one representative from each of the following sectors: producers, processors, the trading industry, the manufacturing industry including both roasters and manufacturers, the consumers, and the Agricultural Research Council (ARC).

         Chairperson
         Mr Keun

      2. That the following members be elected to serve on the Groundnut Research Priority Committee:

         Representative of OAC	Mr JCG du Preez
         Producers	Mr P Botha
         Processors	Chairperson:Processors Assoc.
         Traders	Mr O de Witt
         Manufacturers	Ms M Edwards
         Consumers	Dr W van der Walt
         ARC	Specialist to be co-opted

         Chairperson
         Mr Keun

      3. That the draft motivation for the appointment of a person to promote groundnut production, compiled by Mr Cohn and Dr Dreyer, would be considered at a future meeting of the Forum.

         Chairperson
         Mr Keun

   4. Draft regulations pertaining to the grading and packaging of groundnuts of primary producers destined for packaging in the Republic of South Africa

      (Resolution 7.4.1 of the SA Groundnut Forum minutes of 12 February 2008)

      The Chairperson referred the members to their resolution which stated 'That implementation of Resolution 9.2.1 of the Forum meeting held on 26 September 2007, on the finalisation of the promulgation of the regulations relating to the grading and packaging of producers' stock groundnuts, be held in abeyance until feedback is received from the GrainSA Congress.' He reported that it was not possible to provide producers at the Congress groundnut breakaway session on 6 March with clarity on the guidelines and regulations, producers' and processors' gradings, and the importance of food safety and protecting the industry from imports of dubious quality, due to a lack of time.

      Mr Hawkins said the main problem producers had with the grading regulations concerned the issue of aflatoxin. The Chairperson stated that the rest of the industry were of the opinion that producers' regulations would be beneficial to the industry, and suggested that any possible contentious issues, on which the industry could not come to an agreement, should not be included in the grading regulations. Mr Makhofola noted that the regulations could only be promulgated if all stakeholders in the industry bought into the process.

      Following on a short discussion, it was resolved that Mr van Heerden would act as the convenor of a small work group tasked with discussing the final details of the draft regulations. It was further resolved that the work group would consist of a representative from PPECB (Mr van Heerden), GrainSA (Mr Hawkins) and the Chairperson of the Processors and Traders' Association. Mr van Heerden confirmed that he would call a meeting of the work group, in order to finalise the regulations relating to the grading and packaging of groundnuts of primary producers destined for packaging in the Republic of South Africa. The Chairperson mentioned that the Groundnut Forum would then resubmit the draft regulations to Mr Makhafola of the Department of Agriculture (DOA), so that the regulations could be promulgated.

      Resolved:

      1. That a small work group, consisting of representatives from PPECB (Mr van Heerden), GrainSA (Mr Hawkins) and the Chairperson of the Processors and Traders' Association be appointed, in order to finalise the regulations relating to the grading and packaging of groundnuts of primary producers destined for packaging in the Republic of South Africa.

         Mr van Heerden
         Mr Hawkins
         Chairperson: Processors and
         Traders' Association

   5. Seed scheme

      (Resolution 7.5.1 of the SA Groundnut Forum minutes of 12 February 2008)

      Dr Dreyer requested that this discussion item be held in abeyance.

      Resolved:

      1. That the options for future seed production be held in abeyance until clarity has been established on the possible commercialisation of a number of the ARC's functions.

         Mr Keun
         Dr Dreyer

   6. International Standards

      (Resolutions 7.6.1 and 7.6.2 of the SA Groundnut Forum minutes of 12 February 2008)

      The Chairperson tabled Annexure D, with Ms van Deventer's memorandum on the establishment of an industry standard description of South African cultivars. He reminded the members that they had agreed that the Forum should consider complying with international standards, other than legislative, as required by importers of South African groundnuts. He said the members had a lengthy discussion at a previous meeting on the template detailing information required by international markets for the South African product to comply with international labelling requirements, which Ms van Deventer had drawn up. He added that Ms van Deventer had finalised the template, as requested, and had made a number of comments for consideration by the Forum.

      The Chairperson referred the meeting to Ms van Deventer's comment that the Forum should obtain consensus on the cultivars which should be included, and opened the matter for discussion. The members were in agreement that Kwarts, Akwa, Anel and SA Juweel, although the latter is yet to be released commercially, should be identified as the cultivars exported from South Africa, and that GMO status should be reconfirmed on an annual basis. The members confirmed that it would be adequate if the average nutritional values per cultivar were indicated. Following on a discussion on the basis on which the tests should be repeated and standards adjusted, whether annually, bienially etc, it was noted that any number of variables had to be taken into consideration, as the composition of each cultivar changed with the specific environment, such as irrigation and dryland, and warmer and cooler areas. Dr van der Walt mentioned that one 100g sample would not suffice, as the same cultivar performed differently under different production environments, and biological variation would have to be determined. He volunteered to determine how other crops were analysed for their average food composition and parameters determined for biological variation.

      It was resolved to refer the matter of determining the nutritional values of certain groundnut cultivars to the Medical Research Council (MRC), who had undertaken a similar project for the wheat industry. The Chairperson confirmed that he would approach the MRC in this regard, so that a project proposal and project budget could be sourced.

      Resolved:

      1. That the Medical Research Council be approached with the view to obtaining a project proposal and project budget for determining the nutritional values of the groundnut cultivars Akwa, Kwarts, Anel and SA Juweel.

         Chairperson

   7. 8th African Crop Science Society Conference – Report

      (Resolution 9.2.1 of the SA Groundnut Forum minutes of 12 February 2008)

      The Chairperson invited Mr Mathews to take the floor. Mr Mathews reported on his attendance of the 8th African Crop Science Society Conference, held during October 2007, in Egypt. He said the conference focused on crop research technology dissemination and adoption, to increase food supply and reduce hunger and poverty in Africa. He mentioned that he delivered a paper on new groundnut varieties for smallholder farmers, based on the research programme carried out in Mpumalanga during 2000 to 2006, and gave a brief outline of his presentation. He expressed his gratitude to the Department of Agriculture in Mpumalanga and the Oilseeds Advisory Committee/OPDT, who had jointly funded his attendance as one of thirteen South African delegates.

8. Industry information and marketing aspects

   1. SAGIS: General feedback and market information

      The Chairperson tabled the market information prepared for the Groundnut Forum by SAGIS and dated 24 April, as well as the SAGIS weekly bulletin dated 8 April and the monthly bulletin dated 27 March 2008.

      With reference to item 2.1 of the SAGIS market information, the Chairperson remarked that Mr de Witt had requested, via an email communication, that the sentence reading 'SAGIS received a request, via SA Peanut Company, to investigate an export parity price for groundnuts' be rectified, as the Groundnut Forum, and not SA Peanut Company, had requested that the export parity price for groundnuts be investigated. He said that GrainSA had, to the best of his knowledge, originally requested that an import, and not an export, parity price for groundnuts be investigated. He requested that the minutes of the appropriate meeting of the Groundnut Forum be scrutinised, in order to establish what the actual request was, and who had made the request. He asked that SAGIS be informed accordingly.

      Resolved:

      1. That the minutes of the appropriate meeting of the Groundnut Forum be scrutinised, in order to establish what the actual request to SAGIS was with regard to providing parity price information for groundnuts, and who had made the request, and that SAGIS be informed accordingly.

         Mr Keun

   2. Crop and Area estimates

      (Resolution 8.1.1 of the SA Groundnut Forum minutes of 12 February 2008)

      The Chairperson tabled the area and second production forecast of summer crops for the 2007/2008 season, as well as correspondence between Mr Roux and Ms Scheepers, relating to the upward increase of area planted to groundnuts as reflected in the March survey, as opposed to the hectares indicated at time of planting, in October. He mentioned that a possible explanation for this could be that the Crop Estimates Committee had utilised new systems and sources.

      The Chairperson referred to the resolution taken at the previous meeting, which stated 'That Ms Scheepers, as representative of the Crop Estimates Committee, be requested to investigate sourcing appropriate contacts in an effort to obtain more accurate information on which estimates could be based ...' which resolution found its origin in the increased hectares planted. He said although Ms Scheepers had, by means of an email dated 28 March, delivered comment on the way the crop estimates information was collated, he could not derive a direct explanation for the unexpected increase in hectares planted from the content of her letter. He ruled that the matter be held in abeyance, until such time Ms Scheepers could attend a meeting of the Forum and provide more clarity on the issue.

      The members of the Forum took cognisance of Mr Roux's statement that inaccurate area and crop estimates had substantial financial implications for the industry. They also took cognisance of the area and second production forecast of summer crops for the 2007/2008 season, and were in agreement that the final crop could be in excess of the estimated 80 650 tons.

      Resolved:

      1. That Ms Scheepers, as representative of the Crop Estimates Committee, be requested to investigate sourcing appropriate contacts in an effort to obtain more accurate information on which estimates could be based, on the proviso that all information sourced would be treated with utmost confidentiality.

         Ms Scheepers

   3. Import and export parity prices

      (Resolution of the SA Groundnut Forum minutes of 12 February 2008)

      The Chairperson tabled Mr de Witt's proposed model for calculating an export parity price for groundnuts, included in annexure G. He reported that the issue of calculating an export parity price had been discussed by Messrs De Witt, Lourens, Roux, and representatives of GrainSA.

      Mr Hawkins reported that GrainSA preferred that both import and export parity prices be made available. He noted that it was important that the producer understood that he would receive less for his product in a surplus year than in a year in which shortages were experienced, whereby imports were necessitated. He indicated that the technique applied in calculating the export parity price was not as much the issue as was the fact that the producers did not understand that the import and export parity price pertained to processed groundnuts, and not to producers' stock groundnuts. He said GrainSA's model allowed for calculating a derived price for producers' stock. He reported that the meeting had come to an agreement that producers should be better informed with regard to the fact that certain costs had to be deducted from the export parity price for processed groundnuts before an export parity price for producers' stock could be calculated. He mentioned that an article in this regard would be published in SAGrain, and that producers would also be informed that the export parity price pertained to choice grade groundnuts. He said Messrs De Witt, Lourens and Roux had agreed to share details of export costs, such as processing, storing, and financing, so that a more accurate export parity price and derived producer price could be calculated. He said they had also agreed to find a source of international information on producers' stock, in order to establish whether this information could be applied to calculate a usable import and export parity price. He stressed the fact that he did not report on behalf of Messrs De Witt, Lourens and Roux, but that the report reflected his opinion on the meeting.

      Mr Hawkins suggested that SAGIS be approached with the request to provide market information of an acceptable standard, which would meet the requirements of all concerned. He said GrainSA would calculate a derived producer price for choice grade groundnuts, should SAGIS not be in a position to calculate such a price, as it provided producers with a broad view of prices in the international arena.

      The Chairperson referred to Mr De Witt's calculation of ZAR11 120,00 as an export parity price for groundnuts, based on market related freight costs to Europe, and taking into consideration the selling price of US$1 700,00 for 40/40 Runners as per OilWorld's latest report. He said Mr De Witt was of the opinion that GrainSA's export parity price of ZAR12 161,00 for groundnuts created unrealistic expectations among producers. There was general agreement from those concerned that Mr de Witt's calculation was on the conservative side.

      The Chairperson said Mr de Witt had indicated that agreement had been reached that pricing information was urgently required by the producers, but that serious consideration should be given to the continued publishing of unrealistic figures, as this led to confusion and created negativity amongst producers. He added that further input on this issue was clearly required, as all parties concerned were not satisfied with the information provided. He ruled that Messrs de Witt, Lourens, and Roux and GrainSA would continue to refine the model on which the calculation of the export parity price and the derived producers price for groundnuts is based, and provide the Forum with feedback in this regard.

      Resolved:

      1. That Messrs de Witt, Lourens, Roux and GrainSA would continue to refine the model on which the calculation of the export parity price and the derived producers' price for groundnuts is based, and provide the Forum with feedback in this regard.

         Messrs De Witt, Lourens, Roux and GrainSA

9. Additional items

   1. PPECB Levies

      The members took cognisance of the PPECB Board Notice on the imposition of levies on perishable products, which may be exported from the Republic of South Africa, and noted that these levies will be valid from 1 April 2008 until further notice.

   2. FBO Codes

      In response to a question by Mr Higgs, Mr van Heerden explained that the marking requirements issued in 2006, which prescribed that the FBO (Food Business Operator) codes had to be indicated on the card, was applicable to exports, and concerned traceability of an exported product right back to the producer on the farm. He said the FBO code of the processing factory was of particular significance, and not necessarily the FBO code pertaining to the producer, as groundnuts from more than one producer could be in a particular container. He cautioned that the factory had to ascertain which producers' groundnuts were included in a specific container, and added that this process could be managed by proper record keeping. It was noted that overseas buyers were particularly concerned about the container number and the lot number, and that the factory had to ensure that every producer in a lot number could be traced.

   3. PPECB Audits

      The Chairperson reported that Mr de Witt of SA Peanut had requested that the issue of the timing of PPECB audits of factories be added to the agenda of the meeting. He noted that the issue of concern was when a specific factory, that had been contracted by, for example, SA Peanut, for a specific season, was audited during that season by PPECB, and not granted PPECB certification. He said Mr de Witt proposed that PPECB consider auditing factories before the commencement of the season, preferably in the last few months of the previous season, or to carry out the audit during the next season.

      Mr van Heerden said all factories had to be audited each year, and stated that it was not possible to audit a factory which was not in operation, as the issue of employees' hygiene was of concern, amongst others. He said his intention was to do a food safety audit at six of the producers delivering to a particular factory during the year, and if one of the producers refused such an audit, that particular factory would not be allowed to do any exports, even if the factory had passed the audit and had received approval and certification, except if the factory could prove that groundnuts from that producer were stored separately and would not be exported. He said this would also be applicable to any producer who failed an audit and could not attain the required standard within 28 days. He confirmed that a list of PPECB-approved factories could not be made available under any circumstances.

      The Chairperson confirmed that he would refer Mr de Witt for further information on PPECB audits of factories to Mr van Heerden.

      Noted:

      1. That the Chairperson would refer Mr de Witt to Mr van Heerden for further information on PPECB audits of factories.

         Chairperson

10. Meeting dates

    The next meeting of the Forum will take place at 10:00, on 24 July 2008, at the offices of the Oilseeds Industry in Rivonia.

11. Adjournment

    The Chairperson thanked the members of the Forum for their attendance at, and contributions to the meeting, and wished all a safe journey home. There being no further matters for discussion, the meeting was adjourned at 15:00.