Public Hearings on Financial & Fiscal Commission (FFC) recommendations on Division of Revenue for 2010/11 with Departments of Agriculture, Forestry & Fisheries, Water & Environmental Affairs, Human Settlements, Housing, Energy & National Treasury

NCOP Finance

06 August 2009
Chairperson: Mr C De Beer (ANC; Northern Cape)
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Meeting Summary

Delegates from the various departments briefed the Select Committee on Finance and Appropriations on their responses to the recommendations of the Financial and Fiscal Commission (FFC). The Department of Energy failed to arrive or send apology and there was some opinion shown that certain of the presentations were either avoiding the recommendations or were too wide in scope. In these cases the presenters were asked to prepare better for future meetings and in some instances were asked to provide written responses to certain member’s queries.

Meeting report

The Chairperson opened the meeting and asked Mr Trevor Balzer, Program Manager of Special Programs at the Department of Water and Environmental Affairs (DWEA) to address the Committee. The Chairperson pointed to the number of Acting Directors General (ADG) and other members who had been leading delegations and asked that it be put on record that where the Director General (DG) of a Department was not able to attend, an apology should be submitted in writing detailing their absence and who would act in their stead.

Department of Water and Environmental Affairs
Mr Trevor Balzer, Program Manager of Special Programs at the Department of Water and Environmental Affairs (DWEA) to address the Committee. The Chairperson pointed to the number of Acting Directors General (ADG) and other members who had been leading delegations and asked that it be put on record that where the Director General (DG) of a Department was not able to attend, an apology should be submitted in writing detailing their absence and who would act in their stead.

Mr Balzer apologised for his remiss about a written apology and introduced Ms Tandeka Mbassa as the leader of their delegation. Their acting Director General was busy in a SCOPA briefing next door. He then presented the department’s presentation highlighting the following points:
- On Slide three of the presentation the data did not precisely line up with the titles and he clarified that the amounts of R2.7 billion etc fell under the Water Services heading. 

- On Slide 5 he briefly explained the three conditional grants which the DWEA administered as the Regional Bulk Infrastructure Grant (RBI) which was intended to give extra support to those objectives which the Municipal Infrastructure Grant (MIG) targeted. Discussing this grant he noted particular issues highlighted by the FFC technical report as being Operations and Maintenance (O&M) which he felt should be engaged in much more detailed consideration in terms of asset management and O&M.

- Financial issues related to viability and funding were looked at in that the grant was situated in such a way that entities were forced to seek co-funding, not in the form of other grants but in other forms.

- The range of implementation options and sustainable management was look at with regard to water resources being a direct responsibility of the department but that O&M was a responsibility of local government and was a “particular area of concern”.

- The Water Services Operating Subsidy which was gradually being phased out and incorporated into the Equitable Share Allocations (ESA) of municipalities which the FFC tech report picked up as holding some issues, again linked to O&M. In effect funding was not ring-fenced and was not being put back into O&M which meant that infrastructure was being run down at a “critical rate” which was an area of great concern.
- The Water and Sanitation to Schools Grant was running out and the remainder was going to be used to address the backlog in access to schools as the target for clinics had already been met and the mandate handed to the Department Of Health.
- He discussed the Conditional Grants Allocations (Slide 9) explaining the depletion of the Water Services Operating Subsidy as being due to its planned integration with the ESA.
- Regarding the RBI he noted the annual increase in allocation but pointed to its being absolutely necessary due to the critical nature of the infrastructure and even with the increasing allocations believed that the department would be hard pressed in this regard. He asked his colleague Mr F Van Zyl to address the committee on some of the historical challenges facing the department.

Mr Van Zyl referred to Slide 10 which depicted the formal historic backlog regarding access to water. He explained government’s target of one hundred percent access, stating that the country was currently at about ninety percent, but that most issues, as depicted in the slide, were in the Eastern Cape (EC) and KwaZulu-Natal (KZN). Reasons for this were largely related to terrain in the water rich regions where water needed to be pumped to high altitudes. This was a bulk infrastructure challenge. In regions to the north, the problems were again of a bulk infrastructure nature but there were further availability issues. In the Northern Cape and North West Province the issues were once again of a bulk infrastructure nature, but water availability and quality were also of concern.

The economic impact and potential of the required Bulk Infrastructure needed to be carefully planned so that maximum sustained benefit could be achieved. Aside from the historic backlog, there were almost double the amount of new households requiring water and this moved the focus toward the major cities where bulk infrastructure was in place, but internal infrastructure (both water and sanitation) direct to the houses was lacking. He stressed the need therefore for aligned planning and implementation so as to ensure that development was sustainable, something which was currently a major problem.

Mr Balzer continued his presentation, apologising for the inflated amount of R80 billion needed for addressing the bulk infrastructure needs in municipalities (Slide 11), which he noted was closer to R60 billion, still a huge amount. He noted that although household access to basic RDP level water was at ninety six percent, sanitation was only at seventy six percent indicating the necessity of greater attention to the “back end” and the “dirty end” which was having a negative effect on the environment as well as on resources. This in turn was causing serious knock-on effects in terms of the costs involved in cleaning water.

Referring to the challenges faced by the department (Slide 12), Mr Balzer commented on the difficulty of meeting the 2014 universal access goal if the bulk infrastructure was not taken care of. He noted the need to address the issues facing the Extended Sustainable Settlements Programme which had not been addressed yet. He emphasised once again the need to focus attention on Bulk Water Infrastructure both on a regional and internal level and especially regarding waste water treatment, drinking water quality, bulk supply for housing programmes and asset management. Most importantly though, he noted a serious need to start looking into the “less sexy” and exciting work such as sustainable management and O&M, which would become critical problems if not addressed soon.
Addressing the issues raised by the FFC (Slide 14), Mr Balzer stressed the need to move away from the “proliferation of conditional grants”, as many of the projects for which these grants would be used would expend the entire grant. An example of the multi-billion rand requirements of the greater Johannesburg waste water system, which if attended to in full would expire the grant on its own. A further example was given of the R3 billion which would be required for their proposed Vaal river cleanup program.

Addressing the principles found on Slide 16 he made special note of the fifth point which stated that focus should be on outcomes and not expenditure alone.

Mr E Sogoni (ANC), Chairperson of the Standing Committee on Appropriations, asked for clarification on this point.

Mr Balzer explained that he simply meant that when driving decisions, the outcomes should be the driving factor and not the expenditure, citing that in the past they had been “whipped” for not using their entire budget, even though on those occasions there had been very good reasons for their not expending their budget. He simply believed that efficiency of outcomes should be the focus of decisions and not the ability to spend. He further noted, regarding Slide 19, that the DoRB focussed highly on monitoring as opposed to sector leadership, strategic planning and regulatory responsibilities, suggesting that the primary legislation should be used more for this purpose, giving them greater scope to lead in their sector. He asked his colleague to address some of the particular problem areas, including specific legislation, which they had identified.

Mr Sogoni pointed out that there would be a more appropriate meeting soon which would be better suited to detailed discussion of such things, but that if the presenters felt it pertinent to raise some issues presently then they should feel free to do so in brief.

Mr Van Zyl explained that whilst they support the conditions, there were some inconsistencies which they would like addressed, mostly pertaining to issues with MIG. For instance, they totally supported section 21 which provided that they must get municipalities and local authorities involved in the planning and sustainability discussions, but that there was no such provision in the MIG, allowing municipalities to spend freely without proper planning or foresight. Even though the department had compiled a listing of special conditions for the DGs, these had not of late been complied with. He highlighted the scarcity of water and wanted to stress that parties considered this when planning and implementing projects and followed the conditions laid out by the department. He noted a further problem regarding MIG and the big cities in that they were not allowed to monitor anything in the big cities. He asked simply that the same conditions and rules be applied to MIG and the municipalities so that they would be able to monitor, give strategic advice and ensure the reduction of fund leakage.

Mr Balzar continued with the General Recommendations (Slide 24) most of which had been discussed before. He explained that the more specific issues dealt with on Slides 26 and 27 would be more usefully discussed in a re-submission.

Discussion
Mr Sogoni said that he believed that the presentation should be speaking more directly to the FFC’s recommendations and that the division of revenue should be discussed in October and be more forward looking to the period 2010/11. He voiced concern that the presentation was not focussed on the correct issues.

The Chairperson agreed with Mr Sogoni, speaking to the fact that he had before the meeting asked that the presentations be geared toward the recommendations of the FFC, which he could not see anything of as he paged through the presentation [Though it did explicitly appear on Slide14 and was included to a differing extent on many of the other slides]. He asked for a response.

Mr T Chaane (ANC, Northern Cape) responded that he believed the Committee had allowed the department to get lost in their presentation, and only now three pages from the end were stopping them.

The Chairperson agreed, but reiterated that they were asked to respond only to the specific recommendations of the FFC at this particular meeting and asked that they now stick to this.

Mr Sogoni asked that they give the department time to go and prepare a proper response.

Mr B Mnguni (ANC; Free State) believed that they should be given the chance to finish what they had prepared.

The Chairperson asked for the committee’s opinion

Mr Chaane believed that since they had misunderstood their mandate for that day, there was little point in continuing and they should be given the opportunity to prepare for another day.

Mr Sogoni agreed, and asked that the department be given the date of their next appearance before they left.

The Chairperson thanked the DWEA, but apologised that he could not provide a date at present but asked a member of his staff to attend to the matter. He asked the next department to prepare to deliver their presentation.

Department of Human Settlements
Mr Mziwonke Dlabantu, Deputy Director General: Department of Human Settlements (DHS), began by apologising for the absence of the DG who had to attend another meeting and introduced his colleagues. He explained that the presentation would be focusing on the matter of rental housing which was now a mandate of the DHS.

Mr B Mashile (ANC; Mpumalanga) voiced confusion, as he believed that the objective of these discussions was to address the recommendations of the FFC for 2010/11, but that what the department had just voiced as their intentions to present about would avoid all such issues.

Mr Dlabantu explained that the DHS was still unsettled on many of the issues, and had opted not to discuss that which they where not decided on, but rather to focus specifically on the issues which they were prepared to discuss, namely Chapter 5 of the recommendations which focused on one of their main mandates, being that of rental housing.

Mr Mashile believed that due to their only recently acquiring many of their new mandates, they were not fully ready to comment and should be given a later date when they could respond more fully.

Mr Sogoni defended the DHS on the premise that their response was directed at the FFC’s Chapter 5 which related directly to their mandate of rental housing, and that if the committee desired any further input on different mandates, they could call them back to respond in turn to those inquiries at a later date. He mentioned that this highlighted a general problem that was arising of the poor coordination amongst departments which were essentially working together toward a central goal. He felt however that they should be given the opportunity to respond as what had been prepared was directly linked to the FFC’s recommendations.

The Chairperson agreed, thanked Mr Sogoni for his input and asked the DHS to proceed.

Ms Odette Crofton, Rental Housing and Community Driven Initiatives, presented the DHS’s presentation verbatim, elaborating only briefly on Slide 13, that Point 4 concerning the effect of changes in income bands would have the effect of creating inconsistency between the different programs in ownership and rental.

Discussion
The Chairperson thanked the DHS, commented that “housing gives our people dignity” and opened the floor to questions.

Mr Mnguni asked if the DHS had considered the infrastructure development required in terms of for instance water, electricity and sewerage. He further asked if, since the residents who would be occupying this rental housing where likely to be in the lower income bracket, transit costs had been incorporated into the DHS’s thinking.

Dr J Rabie (DA; Western Cape) asked how the DHS intended to control the long term collection of rent.

Ms R Mashigo (ANC) asked what the DHS thoughts were about the Development Facilitation Act through which reclaimed land was meant to be used for housing developments for the underprivileged, but was instead used for the construction of holiday houses for wealthy people. This was achieved through tribunal courts which held a lot of loopholes.

Mr S Abraham enquired about the “processes” which were to be put in place for the care and maintenance of the rental stock, and whether some of the cost and administration of such processes could not possibly be offset by having the lessee take ownership of the property after a period of time. Secondly Mr Abraham asked what measures were being put in place to assist farmers in providing better housing for their employees. Lastly he enquired as to any details surrounding a Cape Times poster on a lamp post that morning, titled something to the effect of R2 billion gone “astray” with the development of the N2 Gateway.

The Chairperson commented that a story to that effect had appeared on the six o’ clock radio news as well.

Mr Mashile asked if the programme had been looked at holistically in terms of infrastructure (roads, water, electricity, sanitation) and whether the DWEA had committed to the provision of water.
He also noted that the rental housing scheme was to be nationally managed, pointing to the problems experienced by housing subsidy schemes at the provincial level and the problems which they had caused for the municipalities. Councillors were being chased around for not delivering houses, when it was not within their power to do so. He believed that such problems would only be compounded by aggregating up such responsibilities to national level and believed that perhaps the DHS should rather be looking to management at the local level.

Mr Abraham posed his question to the DHS, DWEA and Department of Rural Development and Land Reform and asked, given that providing water to existing settlements would cost about a quarter of a billion rand, would it not be better to rather focus on improving the exiting settlements instead. In this regard he asked whether there was “synergy” between the departments.

The Chairperson asked that if their answer was ‘yes’, could they explain how and why that would be.

Mr Sogoni asked what the involvement of the private sector would be in developments as it was the policy of government to include the private sector. He noted that in Apartheid times there were the hostels which were a form of rental stock. He asked, since all the concern seemed to be toward those people who wished to move to the cities, what were the policies concerning those people who wanted to move to rural settlements. Was there anyone within the department, of rural heritage, who could provide a rural perspective. Lastly, some people were applying for RDP housing on their existing properties so that they could use it for storage and he asked the DHS thoughts on this.

The Chairperson stated that town spatial planning should be geared toward communities, beginning with the playgrounds and sports fields. What was the DHS doing about planning communities where children could play without being run over or hurt.

Mr Dlambantu noted that social housing design had begun to provide for grassy spaces and playgrounds between the multi-story developments, but that this was not always done. He believed that this was a “design issue” which needed to be infused into the norms and standards of the special planning. He intended to take this on personally. He ensured the Co-Chairperson that people applying for RDP housing for storage purposes were unlikely to meet the criteria. Regarding coordination and communication between departments, there were provisions in place where they would be required to look systematically into each and every project and assess with which other departments they should liaise.

About national management of rental stock, he wanted to clarify that it was the funding which would come from the national program, but that the holding of stock would be by local or provincial entities set up for that purpose. These entities would need to provide the excess capital for the construction of stock and would have to adhere to a stringent selection process.  These entities would, amongst other things need to factor in the maintenance of stock for twenty to thirty years, as this would be a requirement right from the point of attaining investment. They were proposing that once projects were ready to begin, funding flowed straight to the construction so that unnecessary difficulties and hold-ups were avoided. Once stock was developed, it was pooled under one institution which was then responsible for managing it in the public interest.

Ms Crofton, speaking to the restructuring zones (DRZ’s in slides), noted that such zones only worked in the right areas where people both desired to stay and were able to pay the rent. In areas where slum landlords had taken over housing, the introduction of rental housing zones tended to turn that around, leading to the term ‘restructuring zone’. She noted that the social housing programme did rely heavily on the investment, synergy, cross-subsidisation and involvement of the private sector. To ensure that the developments were located in optimal areas, and were not purely designated by national, all three spheres of government were involved. Zones would be “initiated and debated at local level, supported by the provinces and finally adopted and approved by national”. There would be a six to seven year pipeline of planned rental stock, with stock at the end of the pipeline ready for construction that year, including inter-department coordination in terms of water and electricity etc. The DHS would also be able to provide details of stock to be built the following year and the year after that and be able to provide details at what stage those projects where. A further aspect which aided in the process was the fact that most DRZs were in urban and developed areas, where the infrastructure already existed, and the only issues were around connection. This however was also aided by the pipeline process. The most critical aspect of rental stock was maintenance and the DHS was expending great energy in selecting the institutions which would manage, monitor and maintain the stock and government’s investment. She emphasised the fact that rental housing was not free housing and that the collection of rent was critical to the maintenance of stock. Noted was the fact that the rental agreements were legally set out in the Rental Housing Act and Tribunals, but that the department took steps to ensure that agents were capable before the fact rather than waiting till after the damage was done. Regarding maintenance, there was an upfront maintenance provision, and that further maintenance as well as debt to the private sector was reclaimed from rent. The maintenance was an ongoing issue, all that changed was from where the funding came. She explained that if the resident was to take ownership, then the responsibility of maintenance would be taken on by him.

Mr Dlabantu commented that he had not seen the news headline concerning the N2 Gateway, but that any amount of R2 billion lost was not true as they had not yet reached that sort of figure, although they were close. He believed that the issues were likely linked to problems of quality of construction of “some” of the units. The relevant construction companies had been asked to deal with improvements and quality issues.  However he believed that the Standing Committee on Public Accounts (SCOPA) was better suited to handle such issues about the N2 Gateway [as was happening that day]. He also believed that most of the attention was negative attention and avoided the good which had been done. The DHS had developed a farm worker housing programme, which they would like to present to the committee, but feedback was not comprehensive at that point.

The Chairperson asked whether the DHS was involved in discussions with the Department of Agriculture, Forestries and Fisheries (DAFF) about the provisions of farm worker housing on commercial farms.

Mr Dlabantu replied that those discussions were implemented at provincial level and that provinces were expected to take part.

The Chairperson asked whether the DHS monitored whether such discussions were taking place.

Mr Dlabantu replied that they did not.

The Chairperson believed that they should, an opinion which was met with general agreement in the committee room.

Mr Mashile agreed with the Chairperson, explaining that houses built on farms would create new villages as opposed to the stand alone houses currently there. He further referred to the requirements for infrastructure which new developments required, and the poor planning and implementation which took place in this regard at provincial level.

Mr Abraham requested that the DHS respond in writing regarding their “interaction policy” with the new Department of Rural Development (DRD), how they had intended to work with them and what processes were in place since the DRD was already planning new settlements. It was his belief that their aim should be to work toward “a property owning democracy”, to which there was again general agreement.

Mr W Makhubela asked if there was any way, since most of the new farm settlements where built near rivers, that water quality could be inspected as part of the planning process.

Mr Sogoni vehemently expressed an opinion that the DHS was “very dismissive” about many of the issues at hand and he believed that they would still be sitting with the same problems the following year. He expressed great concern that that was the state things were in.

Mr Dlabantu responded that the DHS would be very happy to provide written responses to those questions posed by Mr Abrahams. He diplomatically apologised for the dismissive impression which Mr Sogoni had imposed on him and the DHS, explaining that it was perhaps simply the level of detail which he was able to provide at that time. He continued to further elaborate on some of the areas which he believed Mr Sogoni was concerned about.

The Chairperson thanked and released the DHS.

Department of Agriculture, Forestries and Fisheries (DAFF)
The Chairperson asked that they limit their presentation to fifteen minutes and only to those details concerning the FFC’s recommendations. Mr Mashile commented that perhaps there was an error on the committee’s part that information was not being conveyed to the necessary parties early enough since again he had received a copy of the presentation only that morning. He believed that if they were to make valuable contributions, they required the documents in advance.

Mr Andile Hawes referred to the written apology of their acting director and introduced his colleagues.

Mr Bayete Ndlaleni, National Programmes Manager, explained that they had focused on the chapters of the FFC report which dealt mostly with the DAFF, namely Chapters 1, 2 and 3. He asked however that they be allowed to provide some introductory background to the comments. He presented the DAFF’s response (see document), adding extra commentary on the following issues. He referred to the opinion of economists that the agricultural market was affected less severely by the global financial and economic crisis. This he felt added credence to the commitments made at the Maputo Declaration for governments to allocate at least 10% of their budgets to agriculture as it was a more stable market. He noted reasons for wanting to group the three grants under one comprehensive grant, the Comprehensive Agricultural Support Programme (CASP), as aiding toward the creation of a one-stop shop so that “double dishing” and the spreading thin of grants could be avoided. This would also assist in having the grants delivered straight to ground level where they were needed.

Discussion
Mr Abraham enquired about a quote he had heard on the seven o’ clock news in which the CEO of the Land Bank had stated that there were at least “fifteen hundred” farmers that were in difficulty with the Land Bank and that approximately 350 farms were in the process of repossession or auction with a “significant” number of those farmers being emerging farmers. With this in mind, he asked what the outcomes had been of the programs they had been running, essentially, “what were the outcomes and achievements with all that expenditure?”

He asked to what extent the DAFF grants complemented other poverty alleviation programs. He believed that there had been “dismal failure” in terms of the support which the DAFF was meant to provide in situations of land restitution or past programs of the old Department of Land Affairs. Specifically, he asked how many rural extension officers were in the country, whether they were adequately qualified and what the ratio of extension officers was to the farmers who they were supposed to assist. He enquired as to DAFF’s intervention where hundreds of farmers had been losing their land. Had the DAFF taken any steps toward a rescue or resuscitation plan to help stop these farmers from losing their land, and were any such plans sustainable? He asked whether any of these problems were hindering the objective of having 30% of commercial farms in the hands of emergent farmers by 2014. Lastly why was information only being provided for CASP and LandCare and not for ILima/Letsema or Disaster Relief? With specific focus on disaster relief he noted that with recent droughts and veld fires, relief had only reached applicants two years after the disaster. There was “no point giving you money when you’re dead already”. He asked why there was such a time gap between disaster, application and payout. Finally he asked whether the committee should be approving further funding for such a “dismal failure”.

Mr Makhubela enquired as to how the DAFF would like the committee to assist in terms of their budget issues. Secondly he asked what the specific advantages of consolidating the grants would be and what the disadvantages of keeping them separate would be.

Dr J Rabie, speaking to the LandCare MTEF allocations, enquired why the Western Cape was receiving the lowest payout even though the province was responsible for most of the country’s agricultural exports.

Mr Mashile, referring back to Mr Makhubela’s question of consolidating grants, suggested that instead of consolidating the grants, better coordination between them might alleviate the problem without the need to go to the length of consolidating them. He asked DAFF whether they were sure that incorporating the Disaster Relief Fund into the Equitable Share was the best way to administer it, since once the funds were in the hands of the provinces, they tended to be used for different purposes as perhaps the provinces were not aware of the intended use of the monies. He also asked the DAFF to revisit the issue of conditional grants and whether they undermined the needs of the people on the ground. Was there a way to avoid the parachute projects involved with those grants?

Mr Sogoni asked for clarity on the trend in many of the departments [none specifically mentioned although DAFF implied] to create new programs wherever existing programs failed or encountered difficulty, as opposed to working toward fixing the existing program’s faults. He also asked what “proliferation of grants” meant and why it was a problem. He also asked why the provinces kept their agricultural budgets the same year on year as opposed to increasing them. What was DAFF’s relationship with the provincial governments, particularly as to what they were doing financially at that level? Departments were giving funds to the provinces without any authority to see what was being done with those funds.

Mr Mnguni explained that the proliferation of grants meant the creation of many smaller grants, and that the DAFF was seeking to consolidate this under fewer or one grant which could be employed more effectively.

Mr Sogoni thanked Mr Mnguni for the clarification but stated that he did not believe that that would solve the problem since if the provinces wanted to employ the grants for many different purposes, this would not stop them.

Mr Mnguni asked what the actual effects of these grants were on the poor, how they intended to stop the grants being used by the provinces for things which they were not meant for. How did they intend to stop leakage and how much assistance was being given to those people on the ground in the form which they required it?

Mr Sogoni asked that if DAFF was not able to reply satisfactorily to any of the questions, specifically those requiring detail, that they should be given the opportunity to respond in writing. He also noted a trend in the department’s presentation that they were seeking more money. He referred to the department’s budget cut from three to two percent of national budget over the period 2007-2009 as well as the committee’s own research showing a 47% cut in funding from DoRA. He believed that there was only one reason that the government would cut funding to such an essential program, and that was if there had been a lack of performance. He believed that the central problem was one of coordination.

The Chairperson asked about the monitoring processes which the DAFF had, as this was one of their objectives mentioned in the presentation. More specifically he asked to whom the extension officers were meant to report.

Mr Leese (DA; Western Cape) explained that a major problem in his constituency of Ladismith was the communal initiatives as well as the private initiatives given funding by the DAFF. He told a story about two friends of his (one Zulu speaking and one Sotho speaking) who had totally forsaken the grants and programs of the DAFF, even though the Sotho speaker was an employee of the DAFF, saying that there was just no point as it was too hard to access. Both these men had established farms without any assistance, even though they had tried very hard to gain access to Land Bank loans (one of them being successful in the end). The point he wanted to make was that although monitoring was important, there was also the big issue of accessibility.

Mr Mashile suggested that they engaged the department in a serious discussion about the extension officers at another time, as he believed they needed investigation.

Mr Hawes believed that there was one underlying question which was whether they knew where they were going. Because of the problems that had been highlighted there were certain policy decisions which they had made right from the start to attempt to fix those issues. The first of these was getting their governance structures in place, so that communication and coordination concerning policy issues could be done properly. This was done under a programme called the Land and Agricultural Reform Program (LARP) which promoted the integration of planning. There had been difficulties in communication between departments but that was no excuse and they were attempting to overcome those hurdles. The second plan which they introduced was a central planning process which allowed the coordination of all aspects of the planning process. He noted that a problem which they faced was the prioritisation of communities to agriculture. These programmes were allowing them to move forward and their assessment of the DoRA funding had allowed them to identify their weaknesses. The first such problem which they had identified was the poor quality of work and business plans being done within the DoRA programme. In this regard they had developed one guideline for all the provinces in terms of business plan writing. He agreed with the point made by Mr Abraham that future reports needed to be outcomes based, and committed to making them so.

He noted that the FFC’s report was focused on specific departments only and he believed that the report should focus holistically on all departments as their work was integrated in terms of the economic goals of the country. There had been no investment in agricultural infrastructure since he had been involved (1988) and he believed that this was a shortcoming, especially in terms of research and development (R&D) which was not given enough attention. The monitoring and assessment process was effectively nonexistent and this was an area which required serious improvement as currently everyone was doing their own thing without having to answer to anyone.

They intended to handle the issues by splitting responsibility between national, provincial and district municipalities. District municipalities would have to identify and implement projects which would lead to growth in those areas. The district municipalities lacked capacity to do this in certain situations, and the DAFF was trying to involve community groups in these cases as often they had the capacity which the municipalities lacked. He noted the critical importance of providing proper support for emerging farmers, but stated that he was unable at that time to provide the ratio of extension workers to farmers as requested by the Chairperson. In this regard, he explained that when the program was started, the process was to recruit extension officials as they were needed. He agreed however that there were serious issues involved with the capacity and efficiency of the extension workers and believed that a major problem in this regard was the lack of specialists. He explained that not enough people holding the correct education were available for employment. He mentioned a programme of contact with all levels of farmers from household farmers to commercial farmers. He also referred to the mentorship programme started in 2006 which was due for assessment and expansion this year. Lastly he expressed a wish to return to the old (good) checks and balances processes which had been abolished. Generally he felt that the DAFF needed to be more scientific and impersonal in designing processes and needed to communicate and work closer with National Treasury.

Mr Abraham commented that he enjoyed the enthusiasm of Mr Hawes but still held doubts due to the past problems related to the DAFF. He also asked that the few questions which were not answered be responded to in writing.

The Chairperson asked that the DAFF include in their written response, information about what bursaries the department offered to students wishing to study agricultural sciences and whether they intended to make use of the agricultural high schools which he had previously made a presentation on and which showed some promising pilots in the Eastern Cape.

Ms Wendy Fanoe, Acting Chief Director of Intergovernmental Policy and Planning at the National Treasury, mentioned the issue raised by the DWEA about operations and management and stated that it was important to consider how to fund such processes. About the DHS presentation, she said that it was critical that included in their integrated planning process was the informing of the specific housing programme that needed to be supported so that the appropriate funding could easily flow with it. On the presentation by DAFF, she noted that although agriculture reform and support was extremely important, past performance on the spending was poor and she was glad to hear that the department was taking this very seriously. Generally, in the future, they needed to be much more proactive in seeing how they could take the FFC’s recommendations forward. However it was not a one way process in that when the FFC made recommendations and they began to follow them, and they found that the objectives of the spending were not met, or the spending had an unintended effect. There were processes which allowed them to request the FFC that further work be done and she felt that this should be used more in the future. The issues of coordination, she agreed was important and wished to extend that to national coordinating with provincial, provincial with local and running in the other direction as well. Lastly, she lastly that they needed to look at boosting expenditure in terms of need and not spending capacity and also that the issue of disaster management was not a DAFF issue alone but a national issue which needed to be looked into.

The Chairperson addressed some administrative issues before adjourning the meeting.                                                                                                 

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