Tuesday, 2 April 2013

Aquaculture project ‘important first step, but more is needed’

BUSINESS has welcomed the Department of Trade and Industry’s launch of an aquaculture development and enhancement programme last week.

Aquaculture industry players said the move was an important first step, but cautioned that a multi-pronged approach would be necessary if it was to achieve its ambitions. The South African aquaculture industry is small in global and continental terms, and has been identified as one of the key growth sectors in the department’s industrial policy action plan.

But Western Cape Aquaculture Development Initiative CEO Edward Shalala has urged that the department link its incentive programme for marine and freshwater fishing projects with a financing mechanism. This would be to cover start-up and operational costs so that small entrepreneurs could obtain the means to enter the industry.

This was especially necessary as the initial capital investment required for an aquaculture enterprise was quite high.

The incentive programme will operate as a reimbursement grant after a pre-approved aquaculture project has been up and running for a year. It will form part of the department’s R800m enterprise development programme.

Further, it will offer a maximum of R40m on a cost-sharing basis for investment in machinery and equipment, bulk infrastructure, land and buildings, leasehold improvements, and competitiveness improvement activities.

The size of the incentive will depend on how well applicants score on the size of capital investment, job creation, geographic spread and contribution to broad-based black economic empowerment. It would be paid in two instalments.

A minimum investment has not been stipulated — the threshold at which Trade and Industry Minister Rob Davies would allow small entrepreneurs to enter the industry. Mr Davies said the incentive scheme was only one part of government’s strategy to develop aquaculture.

The life span of the incentive programme will be from September this year to March 2018 and it will be available for fish hatcheries, fish farms and for the production, processing and preserving of aquaculture fish.

A drawback of the grant, according to Mr Shalala, was that it would not cover electricity and labour costs, which were the two major cost items for aquaculture operations.

South African aquaculture production has largely been concentrated on rainbow trout, abalone, mussels, oysters and, increasingly, kabeljou, with most farms being located in the Western Cape.

Mr Shalala said the main challenge for entrepreneurs in the sector was matching species with their natural environment. This was difficult in South Africa because of its straight coastline and high-energy seas.

According to the Department of Agriculture, total production amounted to only 7,686 tons in 2011, of which about 1,000 tons was sea-weed. Mr Davies believes it would be possible to increase output dramatically over the next few years.
Original Article Here

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