ATC130520: Report of the Portfolio Committee on Agriculture, Forestry and Fisheries on the Oversight visit to Ncera Farms (PTY) Ltd in the Eastern Cape Province on 26 October and 27 November 2012
Agriculture, Land Reform and Rural Development
REPORT OF THE PORTFOLIO COMMIITTEE ON AGRICULTURE,
FORESTRY AND FISHERIES ON THE OVERSIGHT VISIT TO NCERA FARMS (PTY) LTD IN THE
EASTERN CAPE PROVINCE ON 26 OCTOBER AND 27 NOVEMBER 2012
The Portfolio Committee on
Agriculture, Forestry and Fisheries, having undertaken an oversight visit to
Ncera
Farms (Pty) Ltd in the
1. Background
Ncera
Farms (Pty) Ltd is a public company listed
under Schedule 3B of the Public Finance Management Act of 1999, with the Department
of Agriculture, Forestry and Fisheries (the Department) as its sole
shareholder. The primary function of the entity is to assist developing farmers
and rural communities by providing a variety of services such as advice and
training, agricultural extension services, the
mechanisation
of agricultural production, animal improvement schemes and marketing of
agricultural products. The aim of
Ncera
Farms (Pty)
Ltd as contained in the 2011/12 Strategic Plan and Annual Report is to
contribute to an industry focused farm management training, farmer support
services and the design of franchise-type agricultural business models for
farmers and beneficiaries of land reform in the surrounding areas.
During the previous financial year, 2010/11, briefings on the Strategic
Plan and Annual Report of
Ncera
Farms, the Committee
raised concerns regarding the poor standard and quality of the report in terms
of information provided and its overall performance. This has not been
addressed and similar issues were still prevalent in the 2011/12 Annual Report of
Ncera
Farms. The Committee decided not to consider
the Annual Report of
Ncera
Farms, which was not based
on an approved Strategic Plan and the reported programmes in the Annual Report were
also not based on the 2011/12 Strategic Plan that was presented but rejected by
the Committee on 29 March 2011. The Committee rejected the 2011/12 Strategic
Plan of
Ncera
Farms as it observed that the Plan lacked
detail and did not address the challenges that were prevalent in the entity
including those that were raised by the Committee after the oversight visit to
the entity in 2010 and during the 2009/10 Annual Repot presentation.
It was then resolved on 29 March
2011 that the Department must inform the Ministry to provide the Committee with
the following information:
-
Forensic Audit
Report of
Ncera
Farms,
-
A detailed
report on the operational and financial activities at
Ncera
Farms, and
-
That the Department
as the caretaker of the entity should collaborate with other relevant
government agencies and nearby academic institutions to redraft the
Strategic Plan and re-present it to the Committee.
However the issues that were raised were never addressed and a reworked
Strategic Plan for the 2011/12 financial year was never re-presented to the
Committee.
1.1.
Objective of the
Visit
Based on the fact that the issues
that were consistently raised by the Committee were not addressed and the new Strategic
Plan of
Ncera
Farms (Pty) Ltd was also never presented
to the Committee as requested, the Committee took a decision not to consider
the
Ncera
Farms (Pty) Ltd Annual Report but to
undertake a follow-up oversight visit to
Ncera
Farms.
The objective of the oversight visit was to engage with the
Ncera
Farms (Pty) Ltd Management, the Department of Agriculture, Forestry and
Fisheries and
Ncera
resettled Farmers to obtain
information regarding the challenges facing the entity in order for the
Committee to be able to make an informed decision when considering the entitys
Annual Report.
It was also envisaged that the
oversight visit will assist in determining the performance of the farms
against the service delivery commitment made by the Department via the Minister
to the people.
1.2.
Delegation
The delegation of the Committee composed of Mr M Johnson, ANC (Chairperson
and Leader of the delegation); Ms R
Nyalungu
, ANC; Mr
A Trollip, DA; Mr N
Bhanga
, COPE and Mr L Gaehler, UDM.
The delegation was supported by Ms
A
Kakaza
, Committee Secretary, Ms N
Mgxashe
and Mr N
Ginindza
, Committee Researchers and Ms N
Diya
, Committee Assistant.
The Committee was joined by the members of the Provincial Standing
Committee on Agriculture, Mr P
Nkayi
(Chairperson),
MPL; Mr DS
Neer
, MPL and Mr A
Pikinini
,
MPL. They were supported by Mr Q
Mafuya
, Committee
Legal Advisor.
2.
Engagements during oversight visit
2.1 Meeting with the Management of
Ncera
Farms
(Pty) Ltd
The Committee was welcomed by the
Chief Executive Officer (CEO), Mr
Mziwamadoda
Titimani
.
The following officials from the National Department of
Agriculture, Forestry and Fisheries,
Ncera
Farms (Pty)
Ltd Management and
Ncera
Farmers were in attendance: Dr
S Mkhize (Director: Provincial State-owned enterprises (
SOEs
)
and Performance Monitoring), Dr J
Moeng
(Director:
Smallholder Development), Mr S Masemola, Mr S
Nompozolo
(Director: Sectoral Colleges) and Mr D
Moeketsi
(Parliamentary Liaison Officer) (DAFF); Ms Z
Gana
, Mr
V
Booi
, Mr W
Fourie
, Mr PM
Rubushe
, Mr X
Mlumbi
(
Ncera
Farms (Pty) Ltd); Mr M
Qwabe
,
Mr Z
Matinise
, Mr E
Makisi
,
Mr S
Tshweli
and Mr N
Bhe
(
Ncera
Farmers).
During the meeting, the CEO informed members of the delegation that he agreed
that
Ncera
Farms as an entity was currently not
performing well. However, due to the fact that the entity has a new management
and was also in the process of finalising the turnaround strategy for the entity,
it must be given some time to improve its performance.
He reported that the
Ncera
area constitutes Welcome Home
Farm, where
Ncera
Farms (Pty) Ltd is located, and
surrounding farms and communities. The land area of
Ncera
Farms (Pty) Ltd (Welcome Home Farm) is approximately 1 500 hectares and
the surrounding 10 farms that are leased to 10 farmers are approximately
2 000 hectares.
He mentioned that the office area at Welcome Home farm
has four hectares that are planted with vegetables
(spinach, carrots, beetroot and butternut) and two tunnels for tomatoes and
green peppers. The vegetables are sold to the poor communities surrounding the
entity at an affordable price and to the market in
The entity also has a mechanisation workshop
with tractors and planters, which are used to assist the surrounding
communities. The workshop equipment is used to assist the communities in
ploughing their lands at a fee of R744 per hectare. The entity also has a truck
for transportation of animals from one area to another when there is a need.
Currently there are nine tractors and they are not operational, which poses a
challenge during the planting season. There were still some discussions with
AgriSETA
on the accreditation of the entitys training programmes
through Fort Cox College of Agriculture and Forestry.
Challenges
·
The 10 farmers that
have been given the surrounding farms by the former Department of Agriculture
and Land Affairs still have no leases but Permissions to Occupy (
PTOs
), which need to be renewed on an annual basis. The
farmers cannot use
PTOs
as collateral and without
official leases; the farmers cannot even borrow production capital from
financial institutions. Out of the 10 farmers that have been given the farms by
the former Department of Agriculture and Land Affairs, only two reside in the
farms, and some of the farms have been invaded by illegal occupants.
·
The land where the
entitys dairy infrastructure is located, which is currently unused as the
dairy cost centre was closed down and where the entitys other cattle are
grazing, does not belong to the entity but to Chief
Jongilangas
Tribal Authority. The former management of
Ncera
Farms (Pty) Ltd had an agreement with Chief
Jongilanga
to pay his electricity for the entitys cattle to graze on his land.
2.2 Site Visits
Mr
Qwabes
Farm
Mr
Qwabe
informed
the delegation that his farm is approximately 300 hectares and that half of the
land has been invaded with alien species that left him with little land to
farm.
He mentioned that the livestock that
he had could not graze in some of the areas due to the unfinished fencing.
Another challenge that he was experiencing was the borehole in the farm that
only works for six months at a time. The farmer also raised concerns with
regard to their PTO contracts that had already expired in September 2012 and
nothing has been done to ensure that the contracts were renewed.
The Department reported that the request
for leases of the 10 farmers with the option to purchase was submitted to the
Minister of Public Works for approval. The Department of Public Works is the
owner of the land however, due to agricultural activities that are taking place
on the land; the land is being administered by the Department of Agriculture,
Forestry and Fisheries (DAFF). The Department also mentioned that approximately
6% of the total value of each farm would be the annual rental with 10%
escalation. However, with the
PTOs
that they
currently have, there was no rental.
Mr
Matinises
Farm
Mr
Matinise
informed the delegation that his farm is approximately 379 hectares and he
resides at the farm with his family. He mentioned that since 2008 when he took
over the farm, he had never farmed in the land due to a group of people led by a
gentleman called Mr Albert, who invaded his farm and denied him access to farm
the land. Whenever he tried to farm, his livestock was stabbed and others were
killed. He currently rents land elsewhere for his livestock. The group invaded
his farm since 2008 immediately after it was allocated to him. Mr
Matinise
reported that he had immediately reported the
matter to DAFF, which was then the Department of Agriculture and Land Affairs.
However, to date, nothing has been done. The group insist that Mr
Matinise
must leave as he had no right to the land and
claim that the land belongs to their ancestors. They sometimes threaten him and
his family; hold protests in the farm and on one occasion, killed two of his
dogs and placed the corpses at his farm house gate. He further reported the
case and the continuing invasions to the Police, the Provincial Authorities and
to the State Attorney but nothing has been done.
Mr
Makisis
Farm
Mr
Makisis
farm is approximately 367 hectares. He explained that the farm was allocated to
him after he applied and was interviewed following an advertisement that was
placed in the Eastern Cape Herald and the Daily Dispatch newspapers. Mr
Makisi
mentioned that since 2008 when the farm was
allocated to him, he had spent approximately R1 million on infrastructure
development such as house renovations, fencing and road infrastructure. He also
had a problem with people who invaded the farm and killed 12 of his cattle. He
had stopped the process of land cultivation following an announcement that was made
by Ms
Xingwana
, the former Minister of Agriculture
and Land Affairs that the process of the allocation of the 10 farms was going
to be reversed. As a result, approximately 50 employees from his farm lost
their jobs. He also mentioned that the Government has never assisted the
farmers since they were settled in the farms. This was, and is still a concern
to the farmers as nothing gets addressed and they are at the mercy of illegal
occupants.
3. Committee findings
During the discussion and site
visits the Committee observed the following:
·
That the Committee was
fundamentally dealing with an entity that was not doing well at all as what was
seen on the ground was not reflecting the 13 years of the entitys existence.
·
The workshop was
not in a functioning state as the management of
Ncera
claimed.
·
There was no
significant investment from Government in the
Ncera
Farms that were allocated to farmers.
·
There was no formal
training or formal outreach programme in regard to agricultural activities that
the entity was involved in to assist and to develop the communities around the
area.
·
Unlike in other
provinces, no farming packages were given by the Eastern Cape Provincial
Department to assist the farmers.
·
There was no
provincial or even local support that was given to the farmers in order for
them to farm effectively.
·
There were delays
in the accreditation of the
Ncera
Farms (Pty) Ltd for
the entity to provide training on agricultural activities, which is its mandate.
·
There was no
integrated approach and coordination of activities between the National
Department of Agriculture, Forestry and Fisheries and the Provincial Department
of Agriculture.
·
Although the budget
of
Ncera
Farms (Pty) Ltd was increased, there was no
improvement in the performance of the entity as was observed during the site
visit to the farms.
·
The entity was busy
operating as a sales business without much success instead of providing support
and training to the farmers and communities around the area to improve agricultural
production.
·
There was a concern
regarding the manner in which the 10 farms were allocated to the now struggling
farmers, which created tensions within the community and invasion of some of
the farms by some community members.
4.
Conclusion
Members of
the Committee, having interacted with the Department of Agriculture, Forestry
and Fisheries, the Management of
Ncera
Farms (Pty)
Ltd and the
Ncera
settled farmers recognised that after
13 years of existence, the
Ncera
entity was not implementing
its mandate and that there was a need for an urgent intervention by Government.
5.
Recommendations
The Minister should ensure that:
·
The Department fast
tracks the drafting of the Turnaround Strategy of
Ncera
Farms (Pty) Ltd in order to assist the entity in its current situation. The Turnaround
Strategy should include a monitoring, reporting and evaluation framework of the
funds that are transferred to the entity - to be submitted within three months
of the tabling of this report.
·
The current nine
old tractors should be replaced with three new tractors that would be in a good
condition to assist the communities around
Ncera
.
·
The Agreement
between Chief
Jongilanga
and the
Ncera
Farms (Pty) Ltd Management must be in writing with clear terms and conditions.
·
The Department
should ensure that there is an integrated approach between the National and the
Provincial Departments on tractors and that
Ncera
Farms could also request some assistance from the Province in this regard.
·
The Provincial Standing
Committee should also assist in fast tracking and finalising the accreditation
process through
·
The Department
should provide the Portfolio Committee with a detailed report on why the
Provinces were receiving different assistance with regard to farm packages.
·
The Department must
present a detailed report to the Portfolio Committee on what informed the decision
to increase the budget of
Ncera
Farms (Pty) Ltd for
2011/12.
·
The Department
should ensure that
Ncera
Farms (Pty) Ltd operates as a
government entity not a business entity that focuses on selling its produce. According
to the mandate of the entity, it should provide agricultural extension services
support the mechanisation of agricultural production, trains and advises
farmers on crop, vegetable and animal production, markets agricultural products
and supports animal improvement schemes targeting nearby farmers and
communities.
·
The Department
should present to the Portfolio Committee the Forensic Audit Report on
Ncera
Farms (Pty) Ltd within one month of the tabling of
this report.
·
The Department must
provide the Committee with the state of the 10 leased farms at
Ncera
, with details on how these farms were allocated to
the farmers.
6. Follow up Oversight Visit to
Ncera
Farms
(Pty) Ltd on 27 November 2012
During the Committee oversight visit
to
Ncera
Farms on 26 October 2012 it was resolved
that a follow up oversight need to be arranged in order to engage with the Minister
of Agriculture, Forestry and Fisheries, MEC for Rural Development and Agrarian
Reform in the Eastern Cape
Province on
how to take
Ncera
Farms (Pty) Ltd forward. The
Committee, therefore, undertook a follow up visit to
Ncera
Farms (Pty) Ltd on the 27 November 2012 to meet with the relevant stakeholders.
6.1 Delegation
The delegation of the Committee composed of Mr M Johnson, ANC
(Chairperson and Leader of the delegation); Ms R
Nyalungu
,
ANC; Ms M
Pilusa-Mosoane
, ANC, Mr S Abram, ANC, Ms N
Twala
, ANC, Mr A Trollip, DA; Mr N
Bhanga
,
COPE, Mr RN
Cebekhulu
, IFP and Mr L Gaehler, UDM. The
delegation was supported by Ms
A
Kakaza
,
Committee Secretary, Ms N
Mgxashe
and Mr N
Ginindza
, Committee Researchers and Ms N
Diya
, Committee Assistant.
6.2 Meeting with the relevant stakeholders at
Ncera
Farms (Pty) Ltd
The Committee was welcomed by the
Chief Executive Officer (CEO), Mr
Mziwamadoda
Titimani
.
The following officials from the National Department of
Agriculture, Forestry and Fisheries,
Ncera
Farms (Pty)
Ltd Management and
Ncera
Farmers were in attendance: Mr
S
Ntombela
(Acting Director-General) , Dr S Mkhize
(Director: Provincial
SOEs
and Performance
Monitoring) , Dr J
Moeng
, Mr S Masemola, Mr S
Nompozolo
and Mr D
Moeketsi
(DAFF); Ms Z
Gana
, Mr V
Booi
,
Mr W
Fourie
, Mr PM
Rubushe
,
Mr X
Mlumbi
(
Ncera
Farms
(Pty) Ltd); Mr M
Qwabe
, Mr Z
Matinise
,
Mr E
Makisi
, Mr S
Tshweli
and Mr N
Bhe
(
Ncera
Farmers).
During the meeting the Chairperson
reported that the Minister and the provincial MEC had sent apologies and
therefore, were not going to be part of the meeting as per the resolution of
the Committee. The Committee was disappointed with the absence of the Executive
authorities as it was planning to effectively address the numerous challenges
at
Ncera
Farms (Pty) Ltd. The Chairperson also
mentioned that the Committee had finally, officially received the forensic
report on
Ncera
Farms (Pty) Ltd from the Department.
However, the Committee had not yet been briefed by the Department on the
report.
The Acting Director-General of the
Department of Agriculture, Forestry and Fisheries, Mr S
Ntombela
,
in his opening remarks, informed the Committee that an invitation was sent to
the provincial department. However, there was no provincial official present in
the meeting. He mentioned that he only heard about the
Ncera
Farms Forensic Report for the first time when it was mentioned by the Committee
during the Annual Report briefings in October 2012; as the report was never
mentioned or discussed in any of the departmental management forums he attended.
He mentioned that it was only then after his enquiry, that the report was
sourced and subsequently tabled for discussion at the management level. He
mentioned that key issues that he observed from the report were lack of governance
and misconduct of departmental officials. He had instructed the relevant
officials in the Department to look at the issues and on who was at fault in
the process and come up with solutions. In this regard, the Department was also
doing a feasibility study on what needs to be done. Currently,
Ncera
Farms (Pty) Ltd had no Board of Directors and the
National Treasurys opinion on
Ncera
Farms (Pty) Ltd was
that it was running at a loss. However, the long-term future of the entity will
need a political decision.
Mr
Titimani
reported, for the first time since the Committee has been dealing with
Ncera
, a dispute about ownership of land around
Ncera
between the
Phatho
and the
Jongilanga
Chieftaincies. However, the community
representatives from both Chieftaincies disputed the fact and said there was no
dispute on land ownership. They mentioned that their concern is the rights of
farm dwellers who have been residing in the
Ncera
farms
all their lives and farming in these farms were their only way to survive.
Representatives from the
Jongilanga
Chieftaincy (
Imidushane
)
reported that they have nothing against the developments at
Ncera
as their land falls outside the entity and the 10 state farms. However, they want
to make sure that everybody in the area including farm dwellers benefit from
developments at
Ncera
.
Representatives of the
Phatho
Chieftaincy from
Tsholomnqa
had conflicting
statements regarding claims they have lodged or not lodged against some of the
state farms. Some acknowledged that the farms were bought from white commercial
farmers by the former
Ciskeian
government and have
since been classified as state farms. The
Phatho
Chieftaincy representatives were also concerned by the well-being of the farm
dwellers and the surrounding communities and how they will benefit from what is
taking place at
Ncera
.
7.
Committee observations
The Committee observed that the
communities surrounding the entity,
Ncera
Farms (Pty)
Ltd were not confused about what is happening at
Ncera
and were not necessarily against agricultural development to produce food for
the people of the
The Committee also observed that the
entity was not doing what it was mandated to do, i.e. providing extension
support, mechanical services, training and agricultural support services to the
farmers that were settled on
Ncera
Farms and the
neighbouring communities. In addition, the Department as the Caretaker never
addressed the plight of farm dwellers and the ongoing conflict between
different stakeholders and the resettled farmers.
8.
Recommendations
The Committee recommends that the Department
investigates what would be the best path to follow in ensuring that all the
affected stakeholders of the
Ncera
farms benefit from
the operations of the entity and the conflict among stakeholders is resolved.
Report to be considered.
Documents
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