Minister of Agriculture, Forestry and Fisheries 2013 Budget Speech & Response by DA

Briefing

29 May 2013

Minister of Agriculture, Forestry and Fisheries Ms Tina Joemat-Pettersson, gave her Budget Vote Speech on the 29 May 2013

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Honourable Speaker;
Chairperson of the Portfolio Committee;
Honourable Deputy Minister of Agriculture, Forestry and Fisheries;
Members of Parliament;
MECs of Agriculture;
Members of the Diplomatic Corps
Captains of Industry;
Winners of our National Female Entrepreneur Awards;
Leaders of political parties, Unions, NGOs, Community
Organisations and Faith-based Organisations;
Farm workers, Fisherfolk and Community Forestry Organisations;
Students and leaders from our colleges of agriculture and other
training institutions;
Our special guests;
Ladies and gentlemen and comrades.

Honourable Speaker, this 2013 Budget Vote for Agriculture, Forestry and Fisheries is centred on the theme of “UNITY IN ACTION TOWARDS SOCIO-ECONOMIC FREEDOM.”  In pursing ‘UNITY IN ACTION’ we will focus on fighting poverty and unemployment with household food security as our primary success indicator.

Honourable Speaker, as we table this Budget of R6.178 billion, we are reminded that we stood before this Esteemed House on 1 May 2012, to account for our work over the previous year and to table our performance commitments for the year ahead.

Honourable Speaker, this 2013/14 Budget Vote will follow the same approach. We will reflect on the achievements of 2012/13, followed by our commitments for the 2013/14 Budget with which we have been entrusted. 

Honourable Speaker, Food Security is a human right and a Constitutional mandate. The Bill of Rights states that “every citizen has a right to access to sufficient food and water” and that “the State must take reasonable legislative and other measures, within its available resources, to achieve the realisation of this right.”

I am convinced Honourable Speaker, that ‘Food Security For All’ will be the one issue on which we will be able to garner consensus in this House. A recent report that 12 million (22.7 per cent) South Africans have insufficient access to food has shocked our nation. For the greater number of South Africans who are gainfully employed, it was unthinkable that such huge numbers of citizens were going to bed hungry. The uncomfortable truth is that while South Africa is a food secure country, an alarming number of people are not getting enough sufficient food.

I am pleased to report that after previous stop-start efforts, a Food Security and Nutrition Policy has been developed and is in the Cabinet process. The main objective of this policy is to ensure that there is food security and good nutrition at all levels and segments of our society.  I will say more about this later, as the approval of the Food Security and Nutritional Policy is one of our priorities for the forthcoming year.

During the year under review, the Department, together with the Department of Rural Development and Land Reform, implemented an accelerated integrated agricultural production programme in seven provinces. This initiative, while being far from perfect, mobilised additional resources from different departments across all spheres of government such that we were able to place more than 35 000 additional hectares under production. While the fruits of this initiative will be evident in the forthcoming harvesting season, it has already positively impacted on job creation.

The fact that the latest jobs data from Statistics SA shows that agriculture is by far the largest contributor to job creation, and must count as one of our key successes. The sector has been able to sustain the growth recorded in the previous financial year. Nationally, the sector created 54 000 new jobs between January and March 2013, an increase of 7.9% (and 12.7% year-on-year). The sector now employees 739 000 people – up from 656 000 last year. Closer scrutiny of these figures shows that the job growth was experienced in the provinces where the food security intervention was implemented such as Eastern Cape, KwaZulu Natal and Mpumalanga. If our modest attempts yielded such measurable outcomes within such a short time, it demonstrates the potential impact of large-scale agricultural production could have on our economy.

We are proud of our successes in opening new markets for the sector. Firstly, our membership of BRICS enabled our participation in the Ministers of Agriculture and Agrarian Development Mechanism and where we immediately introduced trade as an area of cooperation among members. As a result the department has recently opened offices in India and Russia. In the current financial year, a new office will be opened in Brazil.

Asia’s changing consumption patterns, population growth, structural reforms and improved market access have contributed to an increase in exports from South Africa to the Asian countries. China is one of the largest export destinations for South Africa’s agriculture, forestry and fisheries products, followed by Indonesia, Japan and India. However, a number of problems are being experienced regarding non-tariff barriers put into place by some countries in Asia.

Honourable Speaker, in 2012/13, for the first time ever, communities who had leased their land to forestry commercial companies were compensated. The funds were being collected routinely from the commercial companies but not redistributed. Mindful of the impact of these funds on households, we are proud of this achievement.

The outbreak of the farm worker strikes in De Doorns towards the end of 2012 was disturbing, disruptive and significant for the industry. I must appreciate the response of my Cabinet colleagues who rallied around us to find solutions. They recognised that De Doorns was not merely manifesting a local or sectoral problem. Instead it was a national problem requiring an integrated national solution. The most significant outcome was the announcement of a revised sectoral determination of R105.00 per day minimum wage for the entire farming sector. Although not yet a decent wage, this is a major improvement in the employment conditions of farm workers.

The 2012 strikes reminded us of the unfortunate outbreak of xenophobia in De Doorns in 2008. What was different about the 2012 strike was the unity among farmworkers. ‘Different others’ spoke in one voice across the previous divisive barriers in their quest for a better life for all. Also significant was that De Doorns catapulted the farmers into a new coalition. While still retaining their existing structures, farmers have also responded as a collective, and recognise and want to be part of creating a new road map, for the sector.

While there is still much work to be done in resolving the pre-and post-strike issues, the ‘Unity in Action’ precipitated by conflict, augers well for charting a new path for the entire sector. Through a Dialogue facilitated by the Presidency, government is looking at the impact of the revised sectoral determination for both farmers and farm workers and at ways and means to offset this impact.

I am proud to announce that the department sustained its record of successive unqualified audit opinions on our financial performance information during my term in Office. In securing this external audit outcome, we have again demonstrated that the department is a compliant department standing tall among its peers in terms of the non-negotiable ethical business practices, controls and standards.

Regrettably, we did not fare as well in respect of the management of our non-financial performance information. Importantly though Honourable Speaker, we have interrogated our limitations and understand that we have to exercise greater diligence in respect of the oversight for the transfers and subsidies to provinces and entities. It accounts for a significant percentage of our Budget, 59.2%, which the House will agree, is significant. We will, going forward strengthen our contracting with provinces such that there is no ambiguity about the roles, responsibilities and the consequences if we fail to deliver what we had contracted to do.   

The other area in which we have not fared well is our intent to support new smallholder producers while continuing to support the existing producers. Effective and sustainable land resettlement is an area of corrective action which will receive our attention and in which we will seek advice and support in the current financial year.

The Budget of R6.178 billion allocated to the department budget will go a long way in delivering the Electoral Mandate of the Administration, Creating a Better Life For All.

We have allocated this budget as follows:

  • R663.9 million will be allocated for Administration;
  • Agriculture: will be allocated R4.554 billion;
  • Forestry R525.5 million; and,
  • Fisheries: R434 million.

Honourable Speaker, our 2013/14 projects/programmes are guided by the National Development Plan (NDP), the New Growth Path (NGP), the Industrial Policy Action Plan (IPAP) and the work of the Presidential Infrastructure Coordinating Commission (PICC), the PICC’s Strategic Integrated Project (SIPs), in particular.

SIP 11 is one of the eighteen flagship infrastructure projects overseen by the PICC. It seeks to ensure enabling agro-logistics and rural infrastructure investments that would unlock the potential of rural areas to create jobs. SIP 11 will entail the expansion of facilities for storage, transport links to main networks, fencing of farms, irrigation schemes, improved research and development on rural issues (including expansion of colleges of agriculture), processing facilities, forestry and fisheries infrastructure.

The department will continue its campaign of recognising and empowering women as contributors to food security and agricultural development. Through its premier Female Entrepreneur of the Year Awards annual event, women entrepreneurs across the sector are encouraged to participate. This prestigious event is sponsored by Total SA.

The department will continue to participate in the various trade negotiations and forums to enhance the interests of the South African agricultural sector. One of our strategic objectives is to increase intra-African trade which is currently about 10% of trade. While increased trade in Africa is a challenging terrain, the growth of the African market for agricultural products will enable South Africa to increase diversification of its export market and reduce dependence upon our traditional export markets, such as the European Union.

The Food and Agriculture Organisation (FAO) Council of the United Nations has awarded a bid to South Africa to host the 14th World Forestry Congress in 2015. It is the first time that a congress of this magnitude will be hosted on African soil since its inception in 1923. This honour was bestowed on us because of SA’s leading role in affore station. It will afford our Forestry colleagues to share with and learn from their peers from all corners of the globe.

In support of the government pro-poor forestry strategy, the department has been supporting small growers and communities in the Eastern Cape with environmental impact assessment. The results of this assessment will lead to the issuing of affore station licences. The area under consideration is approximately 13 000 ha. This will definitely lead to the empowerment of rural communities by making them owners of forest plantations.

In this financial year, an amount of R109 million has been allocated towards the LandCare Programme.  This will contribute significantly to 30 000 ha of degraded land to be rehabilitated. Through leasing of state land farms, 60 farms have already been secured, thereby contributing to food security and better quality of life for all.

The NDP has identified fisheries as an important vehicle in achieving its vision for an integrated and inclusive rural economy. It acknowledges that marine fishing is important for coastal communities with regard to job creation. It further acknowledges that those historically involved in fishing have frequently been ignored, and that many fishing rights allocated have been of small value. The current fishing rights allocations process will ensure that rights allocated are more economically viable in future.

Fishing contributes approximately 0.5% to the GDP and it accounts for around 2% of the GDP in the Western Cape. South Africa is a net exporter of fish and fish products and 55% of the demersal catches are exported. The aquaculture production level is 3 543 tons worth R218 million and it provides 2 000 jobs. The department has, during the past financial year, supported three fish farms, and is presently supporting five fish farms, and the department plans to support more fish farms by the end of 2014. In addition, two smallholder aquaculture producer associations were established.

The Small-scale Fisheries Policy was approved by Cabinet in May 2012 and will be implemented during this financial year. A National Aquaculture Strategy and Action Plan were also developed. Recently, Cabinet approved the National Aquaculture Policy Framework (NAPF). This policy provides a unified framework for the establishment and development of an industry that contributes towards sustainable job creation and increased investment.

The implementation of the Small-Scale Fisheries Policy will finally give formal recognition and appropriate legal protection to a previously ignored sector by adopting a developmental approach and rights-based allocation system for small-scale fishers. The allocation of rights within the small-scale sector, together with the reallocation of long-term rights, will contribute to the further transformation of the entire fisheries sector.

As part of our endeavour to contribute towards youth employment and entrepreneurial development, within the spirit of the youth accord. The department intend to ring fence a certain percentage of fishing rights allocation quotas, towards youth owned companies.

We spearheaded a campaign to turn colleges of agriculture into centres of excellence through the National Treasury approved Colleges Revitalisation Plan. This plan focuses on improving infrastructure at colleges, curricula review and provision of ICT equipment. R380 million has been allocated over the Medium Term Expenditure Framework (MTEF) to revitalise colleges of agriculture.  The Department is also in a process of pursuing the signing of a protocol with the Department of Higher Education and Training on issues relating to colleges of agriculture.

Honourable Members, we table the Budget of R 6.178 billion, which has been allocated to the Department of Agriculture, Forestry and Fisheries for the 2013/14 financial year.

We table the 2013/14 Agriculture, Forestry and Fisheries Budget to the House for endorsement.

We table this Budget confident that Honourable Members share the view that Agriculture, Forestry and Fisheries, is a Portfolio with enormous potential for growth and development.

We table this Budget with an appeal for ‘Unity in Action’ confident that this House will support the prioritisation and targets we have set for the year.

Honourable Speaker, I would like to conclude this Budget Vote with the following acknowledgements:

I am deeply grateful to the President for his support, his passion for the sector and his relentless advocacy for enabling communities to rekindle their indigenous knowledge in agricultural production so as to take charge of their own food security.
 

Similarly, I wish to express my gratitude to the Deputy President for his support particularly for walking ahead and alongside us in facilitating the series of Dialogues with communities.
 

I am indebted to all my Cabinet colleagues for their support, advice and collaboration. I especially wish to single out my colleagues leading Rural Development and Land Reform, Minister Nkwinti and Deputy Minster Tsenoli. I want to thank the Minister of Labour for her support and decisiveness in resolving the volatility in De Doorns. As well as the Minister of Trade and Industry. Our Portfolios are siblings to each other and their collegiality and passion for our terrain has enhanced the achievements we were able to report today.

My deep appreciation is also extended to:

  • The Honourable Mlungisi Johnson, Chairperson of the Portfolio Committee on Agriculture, Forestry and Fisheries and all members of this committee for their oversight and guidance.
    • The MECs of Agriculture.
    • Sector representatives
    • The Unions; and
    • the Captains of Industry

I am most appreciative of and always learn so much from our communities who have been listening to this live broadcast on community radio stations.

Closer home, I would like it thank, o Our Deputy Minister, the Honourable Pieter Mulder; The Acting Director-General Mr Sipho Ntombela and the entire senior management team for making all this possible.

Lastly, I want to most sincerely thank my sons, Terrence and Austin, for their unconditional love, patience and for forgiving me for the times they needed me to be with them but my work required me to be elsewhere. I also want to acknowledge my family and the caretakers of my sons.

Thank you for sharing today with me.

I thank you.

DA Shadow Minister of Agriculture, Forestry and Fisheries, Annette Steyn MP

Highlights:
•    Agriculture cannot afford to have a minister that is more concerned about winning votes for the ANC, than she is about ensuring food security for South Africa;
•    Of great concern is that threats of a second wave of strikes have been made despite the increase in the minimum wage from R69 to R105 a day;
•    Agriculture will thus lose its capacity for job creation if the growth of the sector is not supported;
•    Whilst agriculture has historically been a major employer, that role is diminishing; 
•    The DA welcomes the Ministers acknowledgement that South African Farmers, both commercial and small scale, need more support.


Chairperson,

The Oxford Business Group lists policy uncertainty as one of the key issues constraining growth in South Africa, citing “conflicting rhetoric, confusing legislative interpretations and…policy reversals” as key concerns.

Uncertainty in key policy areas were also noted by rating agencies prior to their downgrading of South Africa’s credit rating at the end of 2012 and beginning of 2013.

Agriculture is by its very nature characterised by uncertainty. 

In South Africa, the ANC government contributes to this uncertainty through: 
•    The lack of cohesion between different government departments; 
•    Uncertainty around land reform policy; and 
•    Sketchy frameworks for the implementation of strategic plans for agriculture. 
Voorsitter, Minister Joemat-Pettersson is daarom baie gelukkig dat Suid Afrika van die beste, indien nie die beste, landbouers in die wereld het nie. As dit nie hiervoor was nie sou Suid Afrika al reeds hongersnood beleef het.

Dit is waarom die Demokratiese Alliansie besef dat ons landbouers ‘n waardevolle bate vir ons land is. Hul is trouens die groep wat moet verseker dat Suid Afrikaners voedselsekerheid geniet en dat ons nie soos sommige van ons Afrika buurlande aan hongersnood lei nie. 

Dit maak ons dus bekommerd dat Mnr. Ernst Janovsky, landbou-ekonoom, voorspel dat die land teen omstreeks 2050 slegs 7 000 kommersiële boere oor sal hê. 
Die totale aantal kommersiële boere word tans op 35 000 geskat, maar ‘n aansienlike daling word oor die volgende vier dekades verwag.
Een van die faktore wat daartoe sal bydra, is die kosteknyptang wat die bedryf knou en tot skaalekonomie lei. Elektrisiteit, brandstof, kunsmis en arbeid is alles insette wat vinniger gestyg het as wat plaasinkomste toegeneem het.

Chairperson, it is for this reason that agriculture cannot afford to have a minister that is more concerned about winning votes for the ANC, than she is about ensuring food security for South Africa.

It came as no surprise to the DA when the Minister played a critical role in the Western Cape farmworker strike at the end of last year. Not only did her Department fuel the strike, but they also funded it.

The Department contributed R14 million during the violent strike. Not only was the strike violent and property damaged but levels of intimidation against non-striking farmworkers and their families was very high.

Of great concern is that threats of a second wave of strikes have been made despite the increase in the minimum wage from R69 to R105 a day. 

The Minister of Labour announced last week that almost 2 000 requests for exemptions to the minimum wage were received from farmers. 

The National Development Plan marks agriculture as a key job creator, proposing that it can create close to one million jobs by 2030. 

Even Microsoft founder, Bill Gates, agrees that investing in agriculture is essential if the fight against poverty is to succeed.

Whilst agriculture has historically been a major employer, that role is diminishing. Calculations by the South African Institute of Race Relations show that the agricultural sector has shed 331 000 jobs over the past 12 years.

This figure does not include possible job losses that would occur after the increase of the minimum wage.

Agriculture will thus lose its capacity for job creation if the growth of the sector is not supported. The need for greater support has never been higher in light of the announcement of the disappointing 0.9% GDP growth in the first quarter of this financial year.   

However government support is miniscule compared to support given by other countries to their farmers. The Producer Support Estimate (PSE), a measure of government assistance to farmers, is at 3% for South Africa compared to 12% for China and 24% for Russia.

Or in the words of Mr Morokolo of the Department of Agriculture “State support to South African agriculture was virtually lost during the dual processes of domestic market deregulation and trade liberalisation that took place from mid to late1990s.”  

The DA therefore welcomes the Ministers acknowledgement that South African Farmers, both commercial and small scale, need more support. 

This support could come in the form of additional funds from the National Treasury to fund the implementation of green box policies such as infrastructure support, research and development in agriculture, forestry and fisheries.

The agricultural sector remains the most distorted industry in the world.

To promote the comprehensive development of rural areas in China, the Chinese government applied many strategies. Including one guided by the principle of “giving more, taking less”. China even abolished the agriculture tax that had existed for more than 2 600 years.

By taking less, the government reformed the system of rural taxes and fees, such that the burden on farmers was lifted and they could rebuild their strength.

According to the Free Market Foundation, South Africans pay more than four months’ salary in taxes to fund government. This year the taxpayer worked from 1 January to 8 May only to be able to afford taxes.

Very little tax is used to benefit farmers; even rural roads are being fixed by farmers these days.

This is why the Democratic Alliance in the Western Cape is spending the bulk of its Agricultural budget on its farmer support and development program.

They have created expert panels for each commodity group, consisting of government and private sector experts. This means that since 2009 the Western Cape Government has supported a total of 252 projects through the commodity approach to the value of R 410 million. This has covered all 10 commodities currently involved across the entire province. 

In comparison, the leadership of Minister Joemat-Petterson could best be described by the Auditor General in the annual report of the department.

 “Insufficient communication between those charged with governance and the minister contributed to the lack of commitment and accountability by leadership to address repeat findings on reporting on predetermined objectives, governance and compliance.”

This is the reason why this department is stumbling from one crisis to the next.

The DA has learned that Minister Joemat-Pettersson is one of the main causes for the backlog in the registration of certain stock remedies after she failed to sign a document approving the use of outsourced experts who are crucial in the registration process.

This resulted in 2 197 registrations that have not been evaluated and waiting to be approved. 
 
The Minister has ignored calls to speed up the process to the point of flouting the law in disregarding a court order of the North Gauteng High Court instructing her to look into bringing the register up to date. In fact, a contempt of court judgment has been granted against her.


To further illustrate my point, while discussing the strategic plan of the department, the portfolio committee came to the conclusion that Ncera farms, should be shut down.

Ncera Farms is a public company that is wholly owned by the Department of Agriculture, Forestry and Fisheries. Its mandate is to provide extension, mechanical services, and training and agricultural support services to the farmers operating on Ncera Farms, as well as the neighboring communities. 

The Committee had reached the conclusion that Ncera Farms was a failed enterprise that should be shut down. The entity provided no value for the money invested in it and DAFF had not developed any plans to turn it around.  The State could not continue to fund an entity that was not financially viable. The farmers had reached the conclusion that DAFF was unwilling to assist them.

A total amount of R34 614 000 million has been pumped into Ncera since 1998.

If this is how the department treats its flagship training and development program, just imagine what kind of assistance small scale farmers receive through the department’s comprehensive agriculture support programme that provides post-settlement support to targeted land reform beneficiaries.

Alita van der Walt from Farmers Weekly sums it up perfectly:
“Until government realizes that handing out land and tractors will not turn emerging farmers into commercial farmers, transformation will be stuck in its current rut. 

Public-private partnerships are paying off. Why not strengthen these relationships rather than see white commercial agriculture as the enemy? 

White and black farmers alike simply want an environment favourable to successful business. They have been telling our ministers what the need and they have proof of what they can do under the right circumstances. When will they receive the support they need?”

The time for political point scoring has come to an end Minister. We reiterate our call from our last budget vote debate, for you to resign and allow more capable people to run the department.   

 

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