Agriculture, Forestry & Fisheries, Rural Development & Land Reform Strategic plans & budget 2009/10: Ministers’ briefings

Meeting report

Co Chairperson Mr L Johnson (ANC) explained the reason for the joint meeting as being that the budget under discussion was based on the old budget of the previous administration and realignment according to the new dispensation would come into effect only from October 2009. Until that time, it was likely that the Committees would continue to meet jointly.

Co-Chairperson Mr S P Sizani (ANC) noted that the main purpose of this day's meeting was to prepare for the budget votes 23 and 27, on 17 June 2009. 

Department of Agriculture, Forestry and Fisheries (DAFF) Strategic Plan briefing
Ms Njabulo Nduli, Director General, Department of Agriculture, Forestry and Fisheries,  introduced members of State-Owned Enterprises (SOEs) and other entities. She noted that Members had already received full copies of the presentation (see attached document) and she would focus on the highlights.

She said that the main focus areas of the Department would lie in creating decent work, promoting food security, and the comprehensive rural development programme. The work of the Department was divided into five programmes. The Department had committed itself to social support, co-operative government, and partnerships for delivery, without which it could not hope to achieve its objectives.

Ms Nduli directed Members' attention to the legislative mandate of the Department, in particular related to monitoring, the Act governing genetically modified organisms, and legislation that the Department would table in the present financial year.

Under its first programme, Production and Resources Management, the Department would work in co-operation with the social cluster to improve household food security and ensure that food was affordable for all. There were food relief programmes for the poor, in cooperation with the Department of Social Development. The priorities for the 2009-2010 budget included the rolling-out of the livestock programme, and the Department's responses to the prevailing high prices of food items, in collaboration with the Department of Rural Development and Land Reform. Irrigation and access to roads would receive special attention.

Under the second programme, there was collaboration with the Department of Rural Development and Land Reform and with the provinces. It was important to promote shared growth and profitability. This included the livelihood support programme, a section dealing with agricultural research. It included agricultural training and extension. The Agricultural Research Council (ARC) allocation was managed from this programme. She noted that online extension facilities in three of the provinces had improved the Department's dissemination of information. Service agreements had been signed with 11 commodity organisations.

The Department was also dealing with the Agricultural Broad-based Black Economic Empowerment (AgriBEE) fund and Micro-agricultural Financial Institutions of South Africa (Mafisa). The Department had achieved progress in establishing the AgriBEE Council. It was hoped to focus on many matters in this financial year.

There would be targeted interventions in the provinces. With regard to the current financial year, there would be emphasis on developing the one-stop shop, remodelling, financing and funding to stimulate the sector. There would be emphasis on ensuring that emerging farmers had access to markets.

Trade and economic development was promoted in co-operation with the Department of Trade and Industry (dti). It was within this field that the National Agricultural Marketing Council functioned.

The Department gave extra attention to the vulnerable, facilitated the distribution of food parcels, and participated in the Public Works programme. AgriBEE and Mafisa funding would create additional opportunities. She emphasized the comprehensive rural development policy was highlighted and improved food security.

Discussion
Mr E Sulliman (ANC) referred to the Maputo Declaration at which African states had committed themselves to allocating at least 10% of their annual budgets to agriculture. At present South Africa's annual budget for agriculture was less than 1% of its national budget. He asked the Department what extraordinary steps it would take to convince the National Treasury to move towards 10%. Food security and poverty alleviation were problems of the utmost importance.

Ms Nduli responded that the Department was conducting an ongoing review of the budget for agriculture, to align it with the Maputo declaration.

Mr Sulliman asked why there was such a large increase in the remuneration of consultants. He said that in many cases, consultants lacked the required skills and that it would be better to capacitate people within the Department.

The Chief Financial Officer of the Department said that he would respond to this classification in writing, since he did not have the details of the classification with him, which he would need to explain in depth.

Co-Chairperson Johnson remarked that such questions were asked not only for the Members, but that others present would also have an interest in knowing the answers.

A Member said that some of the Committee were new Members. In view of their oversight role, he urged that the response must be communicated to all Members of the committees.

Co-chairperson Johnson confirmed that all Members would be informed of the Department's response when it was received. He added that since Members were preparing for the debate on 17 June 2009, the written response was required by Thursday, 11 June 2009.

Mr M Swathe (DA) asked what steps the Department of Agriculture was taking to support and facilitate those people who had recently been highlighted in the media as having receiving their farms, but no continuing support.

The Department responded that there could, for instance, be problems such as a fence being erected on one day, but disappearing the next. Beneficiaries also had a responsibility for care and maintenance of resources that had been given to them by way of continuing support.

Mr S Abram (ANC) asked what interventions the Departments proposed in the highveld area of Mpumalanga where, as a result of extensive mining activity, agricultural production had dropped. 

The Department responded that it had liaised with the Mpumalanga Provincial Department of Agriculture to ascertain how much land was likely to be lost to mining development. Current estimates were between 15 and 30%. The Department’s strategy was now to look at areas with high potential to which it could move the production of maize.

Mr Abram asked if the Department had made any studies on land which could be brought into production through irrigation in certain parts of our country, especially the Eastern parts with more rain and a higher water table. He conceded that the  construction of canals and dams in order to harness and store water was very expensive. He asked about the impact such a bold project would have on rural development and alleviation of poverty in those particular areas.

The Department’s representatives gave an estimate of the number of hectares of land that might be rehabilitated and brought into use by irrigation. That work was done by the provinces. However, particularly in the former homeland areas, there were conflicts as to how to revive the irrigation skills of the local population, and discussions were taking place in all provinces as to how best to tackle the issue. There were a number of schemes in Limpopo that were working quite well. In Mpumalanga there were clearly defined areas of potential for successful rehabilitation by irrigation schemes.

Mr Abram said that it was unfortunate that the Department of Agriculture had lost control of the Land Bank, which was now falling under National Treasury. He asked what sort of alignment the Department had with the Land Bank to assist people on the ground, and about the other forms of funding such as the Mafisa funding model, which would be accessed via other agencies. He asked the Departments what arrangements they had with those agencies to facilitate access to Mafisa funding, and whether the access to funding would be well-priced or overly bureaucratic.

Ms Nduli responded that there was a transition with regard to the Land Bank, which she confirmed was being administered by the National Treasury. She had worked with the Director-General of Rural Development and Land Reform, and the CEO of the Land Bank, to have quarterly meetings to address some of the challenges, especially at the level of implementation in the provinces. She affirmed that there was a need to ensure greater accountability, in terms of specific terms and conditions. The quarterly meetings had thus far enabled solutions at the operational level.

Mr Abram observed that Comprehensive Agricultural Support Project (CASP) funding was not reaching the people as it should. He asked what the Department was doing to ensure that no CASP funding had to be returned, unused, to National Treasury at the end of the financial year.

Ms Ntuli responded that CASP had been funded to include the extension recovery programme to the provinces. 73 projects had been completed in 2008-2009. In KwaZulu-Natal the Department could not do well with some of the projects. It did indicate, however, that there had been a slight improvement in the expenditure since 2004, when the performance was at 62%, until 2008, when it rose to 91%. ,She admitted that it was necessary to finalise the CASP funding and resolve its challenges. The criteria for CASP funding was too rigid, did not cover all requirements, and focused on the infrastructure without sufficient attention to the other supporting mechanisms. The Department welcomed the review of CASP. There was ongoing work in the Department of Rural Development and Land Reform to identify those projects that needed to be rehabilitated.

Mr L Bosman (DA) asked about increased access to State land, financial services and entrepreneurial support. He understood that such support would be channelled through the Land Bank. He asked how much State land was still available for distribution. He asked how the available money would be distributed and on what conditions.

Mr Thozi Gwanya, Director-General: Department of Rural Development and Land Reform, explained in detail that State land extended to that owned by national government and in the hands of various Departments of state, such as Agriculture, Defence, Health, and so forth. Most of the State land was encumbered, in so far as there were communities living on that land, especially in the former homeland areas.

Mr Bosman asked about the AgriBEE Charter. He knew that its Council had been constituted but had not yet met. He asked for the criteria for access to funding.

Mr Bosman asked about the comprehensive disaster relief system. This plan had been outstanding for a long time and he enquired when a Disaster Risk Management Act would be put into place.

The Department explained its approach to disasters, saying that there was a need for focus on specific areas. It was currently taking a step-by-step approach.

Mr Bosman also asked about the one-stop financial shop.

Mr Bosman asked how long it would take to implement the agricultural tariff policy as well as legislation governing the marketing of agricultural products, as the delay had a negative impact.

The Department responded that the draft legislation was in place. It should be tabled by the end of 2009 to the Minister and Departmental processes, and should be ready for legislative processes by the following year. More than 90% of the work had been completed.

Mr Bosman asserted that his questions had not been answered in sufficient detail.

The Department’s representatives expanded that the tariff policy had been concluded. Those characteristics especially important to the agricultural sector must be incorporated into the National industrial policy that was being completed by the Department of Trade and Industry. The two Directors-General had signed a Memorandum of Understanding on how this was to be implemented. The International Trade and Administration Commission was involved in the second part of the tariff policy, to incorporate specific conditions and variables that must be taken into consideration when tariffs for agricultural products were considered.

Mr Bosman asked about food and veterinary services. He asserted that South Africa had a problem with the control of diseases.  South Africa was not accredited for the export of many products, because of lack of implementation of many strategies, one of which was for meat and meat products.

The Department commented in general on food and veterinary services. The movement of people, the movement of insects, and the movement of goods brought diseases into the country. Thus the Department had intensified border control, especially at the harbours, and was working with the South African Police Services, for example at the Durban harbour. Plant diseases could remain in the ground for some time before becoming manifest. The Department’s surveillance on the impact of climate change had been documented in the report.

Mr J Gelderblom (ANC) asked how many research units were still effective. He said that it was only the quality of South Africa's products that would sell them.

Ms Nduli asked the CEO of the Agricultural Research Council to shed some light on the research capacity.

Dr Shadrack Moephuli, Chief Executive Officer, Agricultural Research Council said that this issue of the research capacity had been growing for the past ten years. The Council, problematically, had been losing capacity over the years, largely due to under investment in agricultural research, not only by government but also by the private sector. This under investment had negatively impacted on the Council's ability to recruit new scientists and to retain them. The Agricultural Research Council was composed of ten research institutes. It was trying to improve on its performance and retention of employees. The Council had implemented a new system of a dual career path, so a new employee did not have to wait for promotion until a more senior manager left, but could rather be promoted on the basis of expertise in his or her own field.

Mr Gelderblom asked about the training of emerging farmers. He had read the previous year that there was about R20 million allocated for that purpose that had not been spent. He asked about monitoring of the quality of the training programme and its progress. 

The Department responded that specific funds were to be used for training. Accredited service providers were used for the training that was funded by Sector Training and Education Authorities (SETAs). The Quality Assurance unit was very small, and could not adequately conduct monitoring and evaluation of the training. SETAs could use only a limited proportion (10%) of their funding for administrative matters. There were projects for specific commodities, but only limited funding for this exercise. A task team of eight persons had recently been put together – four from the commodity organisations, and four from four provincial departments of agriculture.

Mr Gelderblom asked for some specific information on the veterinary services.

A Member asked for a follow up on agricultural areas in Mpumalanga that had been affected by mining and asked what the Department was doing around the mining rights and issues. An area had been targeted for the growing of bio-fuel. It was important to know the specific intervention. Young people were becoming interested in agriculture and wanted to venture into that area.

The Member also noted that there were many areas where there were land disputes, including disputes with white farmers, and asked how these were being managed. He further asked about the process of management of resources for emerging farmers, pointing out that not every individual was able to use those resources.

Ms V Bam-Mugwanya (ANC) asked what provision was made to revitalise use of land for food production in rural areas. In many remote rural areas, there was much land that was lying fallow, because of lack of tools to till the land.

Ms  Bam-Mugwanya asked about compensation for agricultural land and property that had been destroyed in natural disasters.

Ms Bam-Mugwanya commented on the irrigation scheme in the former homeland of Transkei. The problem there was lack of social facilitation and communication with the relevant stakeholders.

Mr P Pretorius (DA) asked about the reference to  a move by the Department to reduce input costs and to put in place incentive schemes. He wanted to know how farmers could be enabled to lower their food costs. 

Ms Nduli responded that the Department was liaising with the Departments of Trade and Industry and with the Ministerial Committee that was responding to the high price of food. The Department was working to reduce input costs and was further liaising with the Competition Commission. There was a need to reduce the cost of fertilizers and transport, including an attempt to move from road to rail transport, as a long term strategy, to reduce costs. The Departments sought to reduce imports of food by better control at borders, by increasing domestic production, and by collaboration with the Competition Commission.

Mr Pretorius asked about extension officers. There was a shortage of such officers, and he asked for confirmation whether the Department’s plan to recruit about 150 extension officers per annum was sufficient. 

The Department responded that extensive training was being done in the extension recovery programme, including deploying more extension officers. This was dependent on available finances, which indeed were not sufficient.

Co-Chairperson Sizani, noting that the Directors-General had indicated that they had no legal recourse on the Land Bank, asked the Ministers to address the repossession of farms from the resettled farmers. Settlement support was lacking for those farmers. He asked what the Department was doing to redistribute land. He disputed the Land Bank's entitlement to repossess such lands, claiming that its mandate should instead be to support the farmers. He further asked about the interest rates of Mafisa and the Land Bank. The development approach for both Land Bank and Mafisa was not to compete with the commercial banks, but rather to support the farmers. However, the interest rates were not supporting agricultural activity, but instead were defining these institutions as just another commercial banking operation; therefore what was their purpose.

The Minister of Agriculture, Forestry and Fisheries, Ms Tina Joemat-Pettersson responded that the Land Bank was quite a sensitive matter. She had had bi-lateral talks with the Minister of Finance and with National Treasury to evaluate the progress made thus far. The necessary administrative stabilisation had happened; and she was confident that it was now possible to progress to the next stage of addressing the shortcomings, gaps and weaknesses of the Land Bank. The outstanding matter was recapitalisation. If this was insufficient, it would not be possible to  address the loan schemes or the interest rates, which should be lower than the prime rate. Currently that rate was above prime. She agreed that it was unacceptable for the Land Bank to lend money at the rate of prime plus 5%, since this was a contradiction of its function as a facilitative bank. The reason that emerging farmers had recourse to the Land Bank was that it was easier to approach than the commercial banks, not that it necessarily offered a better rate of interest. The lending rate was indeed a problem. The Land Bank expected repayment on the loan from the very first month, which was something difficult even for commercial farmers. The Ministry was further concerned that it could take almost two years for a loan application to be processed and for the applicant to be informed of the outcome. By then most of the projects had collapsed. She had conducted a pilot study to demonstrate the complexities of loan application processing for projects. A further problem lay in the continuous shifting of goalposts, which made it virtually impossible for emerging farmers to access any kind of funding from the Land Bank.

Deputy Minister of Agriculture, Forestry and Fisheries, Dr Pieter Mulder, expressed gratitude for his own appointment, saying that although the announcement had been a surprise to many, it had nonetheless created much goodwill.

Department of Rural Development and Land Reform (DRDLR) Strategic  Plan briefing
Mr Thozi Gwanya, Director-General, Department of Rural Development and Land Reform, focused on the strategic plan, as detailed in the documents circulated to Members. He also highlighted the medium term strategic framework, as well as the key priorities, saying that these were found in more detail in the attached documents. He noted that the programmes included administration, surveying and mapping; the Requisition Programme, which dealt with land claims; the Land Tenure Reform Programme, which dealt with redistribution of land; and the Spatial Planning Programme, which dealt with questions of settlement and development across various areas. Auxiliary services included the registration of deeds.

Mr Gwanya noted that under the Medium Term Strategic Framework (MTSF), the Department had ten outreach projects. It aimed to accelerate growth and transformation, while creating decent work and sustainable livelihood, in the manner of implementation of the land reform and rural development programmes. The comprehensive rural development strategy, which was linked to land and agrarian reform and to ensuring food security for all, was highlighted. Increased food production was linked to land reform. Rural towns were to be revitalised. Qualitative and quantitative results were sought. Vulnerable groups were to be supported. Land beneficiaries would be assisted, in collaboration with the Department of Agriculture, Forestry and Fisheries. There were to be partnerships with commercial agriculture to promote AgriBEE and to increase employment and agricultural production. Social justice and sustainable socio-economic development were to be emphasised, as well as ensuring the availability of adequate resources for rural development, food security and water supply at the household level. These rights were to be integrated into a common approach to support the Comprehensive Rural Development Programme.  There had been slow progress on the distribution of land, but the Department sought solutions to the problems in achieving sustainable land reform, such as enabling government to buy land with moveable assets. He explained that if the State was buying a dairy farm, it should be able to purchase the milking equipment on site, not merely the land.

The Department had received some audit report qualifications, particularly with regard to asset management. The Department had also learned by experience that there was no single appropriate continuing support measure for the beneficiaries of land reform. They had various needs. Having common products was not in itself sufficient. There were households with no space even for gardening, and  2 million rural people lived in such households. A special product would be needed for them. 

The Department also aimed to assist the small commercial land holders so that they could operate even more efficiently as small-holders. The next category was the well-established commercial farmers.

A major challenge was the large amount of finance that the Department needed to resolve outstanding land claims. It faced a huge problem of escalating land prices. This was common to all land reform programmes, and it was still happening in South Africa despite the recession which caused lowering of house prices, since the prices of farms were not dropping. The land was bought by Government, and this exacerbated the problem. Similar trends had been seen in Kenya and Brazil and in other countries carrying out land reform.

There were also boundary conflicts between communities, and these took a long time to resolve. There were disputes over land prices. About 200 cases were before the land claims court because of  disputes between landowners or beneficiaries. One of the challenges had been the insufficient capacity of the former Department of Land Affairs. The Department had also lacked the required competencies, meaning that it took longer to achieve the desired results. It should be noted that the challenges had contributed to the delays in the settlement of claims.

Deeds Registration included national mapping and other imagery in support of national infrastructure. Navigation aids for motorcar drivers were supported by maps compiled by this section of the Department. The support given by these components of the Department to land reform was very important. The Deeds Registration component processed all deeds transfer in the country. The Department was working with other countries on the mapping of Africa. The Land Use Management Bill was the responsibility of this component.

The Corporate Services department employed more than 4 000 people. The vacancy rate had been reduced from 27% to 16.5%, but the Department aimed to achieve the norm of 10%. The Department lacked the necessary number of valuers, surveyors, and town planners. More development economists, social workers, and social facilitators were needed.  Corporate services also included information technology, human resources, and legal services, as well as contract auditing, particularly with regard to risk management. The Department was liaising with the Auditor-General's Office and National Treasury.

The Department had drafted a policy on the ownership of land by foreigners and had issued a White Paper on the implementation of the Comprehensive Rural Development Programme.

The Department recognised that it was necessary to improve the quality of life for people in the places where they lived, without requiring them to move to the towns. The Department emphasised the issue of food security and the establishment of a rural development agency. 

Discussion
Ms L Moss (ANC) asked if there was a loophole in legislation, stating that the issue of farm evictions must be resolved. She was not aware of an office dealing with this. She urged that stakeholders must work together with the Department.

Mr Bosman said that the rural development strategy was most important to everyone. As indicated by the Departments the revitalisation of rural towns and creation of job opportunities went further than land reform. There should be inter-governmental cooperation to achieve this goal, otherwise there would not be any useful change. He asked whether other departments would be willing to contribute.

Mr Gwanya responded that his Department would co-operate with other departments, who had special competencies that were needed to assist rural development and land reform.

Mr Bosman asked about the Security of Tenure Act, which had provoked much discussion. There were few figures currently available on farm evictions. The previous administration had a strategy for the evicted rural dwellers, which had been approved but not implemented. He asked if this strategy was still in place. It was necessary to get away from the negative picture of this Act.

Mr Gwanya responded that the Department had a policy to acquire land for people who were living on farms. The strategy of establishing agri-villages would be part of the Department's response. The response to calls for assistance should be a comprehensive one.

Co-chairperson Mr Sizani emphasised the concerns of Members over farm evictions and appealed to the Minister for a demonstrable solution.

Mr Swathe asked about a specific pilot project, saying that he had received calls from constituents who wanted information. 

Mr Gwanya replied that even the Department itself did not have all the necessary details.

Mr Abram asked about the reasons for the discrepancy between the prices paid by private individuals and by the State when buying land. He gave examples from his own area, saying that a farm sold three years ago for R1.9 million was then re-sold to the Department for R7 million. He asked if the Department had been forced to buy, since this was not a market-related figure. He further cited an article in Farmer's Weekly about an auction sale in the Eastern Cape at which the Department had outbid everyone else and paid the highest prices. He noted that it was the Committee’s duty to ensure that  maximum benefit was received for every rand of public money.

The Deputy Minister of Rural Development and Land Reform, Dr Joe Phaahla, said that the highest bidder had been O R Tambo District Municipality.

Co-chairperson Sizani told the Minister he was happy to know that the President was forming a Planning Commission so that all spheres of government could adopt a uniform approach to the purchase of land. It should be remembered that the district municipalities had no responsibilities for buying farms.

Mr Gwanya  concurred with Mr Abram, and said that he was undertaking a review of the situation. The Department could not afford this escalation of land prices.

Mr Abram asked about the purchase of going concerns for distribution to beneficiaries. Often, by the time the sale was concluded, such venture were no longer going concerns, and he asked that specific information, including the location of the concerns, be provided.

Mr Gwanya noted Mr Abram's question.

Ms A Steyn (DA) said that the Department should be helped with the negotiation of prices. Farmers could advise. She was very worried about the rural development plan. Before re-starting pilot projects, it was desirable to study the experience of municipalities with previous projects. 

Minister of Rural Development and Land Reform Mr Gugile Nkwinti, emphasised the importance of the Comprehensive Rural Development Programme and assured Ms Steyn that the new Department definitely did not want to reinvent the wheel. The Department was keen to learn from those previous initiatives.

Mr L Gaehler (UDM) spoke about outstanding land claims in his area. There had been land invasions, and he asked how the Department planned to resolve these matters. Some of this was prime land that could be used. Delays were costing the taxpayer dearly. The 'willing buyer, willing seller' concept was just not working. This applied also to the Department of Public Works. He suggested that the Departments concerned should collaborate.

Mr Gwanya reported successful outcomes following negotiations in some such disputes, for example the stadium at Mthatha.

Mr Pretorius asked about the Land Reform Programme, and about the Department's projections, which seemed to be unrealistic.

Mr Gwanya explained the role of the provincial land reform offices.

An ANC Member referred to an interview, broadcast on 07 June 2009, in which the President spoke about the shortage of skills and the need to harness the talents of those students who did not matriculate.

Mr Gwanya replied that the Department was interacting with universities to address the skills shortage, especially with regard to the shortage of surveyors. The issue of transformation in some faculties was a serious challenge. The Department had set itself a target of hiring 400 unemployed school leavers. Already 128 had been employed under such contracts. There would be co-operation with the Department of Education in a number of areas.

Minister Nkwinti was confident that Members would appreciate the enormity of the challenges faced by the new Department, especially in terms of the redistribution of land. However, he admitted that it was almost certain that the Department, for various reasons, would fall short of its 2014 targets for land redistribution. Moreover, with the current recession, the revenue available to government would be even less. Even if economic circumstances were normal, prices would still increase, and make it difficult to acquire the balance of 20 million hectares. If no specific solution was found to the problem of land reform, then there was a danger that South Africa would experience similar problems to other countries in Africa.

Deputy Minister Phaahla said that landless people and many in the ANC had affirmed that the 'willing seller, willing buyer' system did not work. A pragmatic solution was sought. He had been advised that it would be useful to talk with a collective of farmers, who knew about the market conditions for farm land, and that would seem a useful opportunity.

The meeting was adjourned