Agriculture, Forestry and Fisheries: Budgetary Review and Recommendation Report 2010

Meeting report

Committee’s draft Budgetary Review and Recommendations Report (BRRR)
The Chairperson tabled the draft Budgetary Review and Recommendations Report (BRRR or the Report) of the Committee. He further noted that responses to certain issues had not been received from the Minister and Deputy Minister. The Minister had not been able to meet with the Committee since August, but a meeting was now arranged for 26 October to discuss the BRRR. The Ncera Farms report had only been received the previous day.

Ms M Mabuza (ANC) said that this draft Report was supposed to speak to issues related to the Annual Report of the Department and its entities, the medium term expenditure, the short and long term strategic plans, the business plan, the expenditure report, the Departmental performance report, financial statements and other reports. She wondered if all these documents had been considered and included. She also thought that it was very important to have the Minister’s input on the Committees’ recommendations. She did not yet feel that the document was yet in the state where she would be happy to adopt it.

Dr L Bosman (DA) said that the current draft was the best report from the Secretariat yet, and that it included most of the issues that were dealt with in the Strategic Plan. However, feedback from the visits and presentations should be included in the finer analysis. A section should also be included, before the conclusion section, that noted issues that needed to be taken forward. He suggested that this be revised and incorporated.

Mr A Syme (Committee Secretary) responded that the Annual Report presentations and all the briefings conducted in the past two weeks had been factored in, but the other documents mentioned still needed to be included. It would require more time to include these documents.

Ms Mabuza enquired if the Committee was following the new BRRR procedure. She wondered if all from the Department, Committee secretaries, researchers, task teams and the Committee Members themselves were clear on how this document needed to be dealt with.

The Chairperson noted that the ability of portfolio committees to become involved in the budgetary matters was a new process. Another challenge was that the Parliamentary Budget Office that should take these processes forward had not yet been set up, but the National Treasury was playing a significant role in the interim. He asked whether Members would like to deal with issues now, or only in the following week.

Mr N Du Toit (DA) noted that this document would be for public consumption, and said that page numbers, and footnotes or references to relevant presentations and reports should be added. The Department, and not the Secretariat, should be responsible for this. Public perceptions had to be taken into account.

Ms Mabuza emphasised that it was important to note what information was being brought forward for the first time, so that an explanation could be offered by the Minister or Deputy Minister.

Dr Bosman asked if this document was from the Portfolio Committee, or represented an amalgamated output.

The Chairperson explained that it was a document that the Committee had to adopt and own. He agreed with Mr Du Toit that it needed to be fit for public consumption, and thus should be substantial and professional. It was important to communicate with the Secretariat around this.

Ms Mabuza emphasised that it was an important document for the Committee and Parliament, and should attract respect. She proposed that a workshop be held to scrutinise and revise it.

The Chairperson  also thought it would be useful to engage on the document before meeting with the Minister.

Mr Du Toit suggested that this meeting would be an appropriate time to scrutinise and revise the document, and then the Committee could consider a second draft.

The Chairperson thus asked that Members make their comments.

The Chairperson noted that the vision, mission and strategic priorities were not clearly delineated and needed to be clearly set out. Only the programmes were currently included. In addition, the quarterly expenditure review was currently not included. Page numbers were needed.

Dr Bosman noted that the performance of the sector was not clearly set out, involving the productivity of the sector with food security as the main goal.

Ms N Twala (ANC) highlighted the need for food security to be embedded in the mission statement.

Ms Mabuza said that it was not possible to amend the mission statement today.

Dr Bosman agreed with Ms Twala that it was necessary.

The Chairperson agreed that this was an important statement to be included.

Dr Bosman added that these issues were included under the ‘Committees observations’ section, and that the Department of Agriculture, Forestry and Fisheries (DAFF or the Department) was supposed to be guided by the Agricultural Sector Plan. DAFF needed to ensure alignment.

The Committee Researcher noted that the format of the report was based on a standard template. The Committee Members should be focusing on the content. She said that the vision and mission were included together. It would be possible to separate them out. Food security was included under the mission.

Mr Du Toit noted the issue of the Department of Water and Environmental Affairs (DEA) failing to report back.

Ms Mabuza explained that the Department of Environmental Affairs had not addressed issues that now had to be reported to the DAFF Committee (such as climate change and fisheries) because its last meeting had focused on finances. These were problematic. The Portfolio Committee on Water and Environmental Affairs should be asking the relevant Minister to respond on issues of wasteful expenditure before moving forward.

Mr Du Toit said that he had a problem with that. The former Department had been split, and both parties were demanding overseas trips. There was a danger of duplication.

Mr du Toit noted that DAFF had not been requested to meet with Standing Committee on Public Accounts (SCOPA), because, although there were issues to be discussed, this Department was not one of those who would have to report urgently to SCOPA. The fact that it was not asked to appear should perhaps be mentioned. He reiterated that references were needed throughout, or perhaps a glossary should be added.

Dr Bosman concurred, and said that a briefing needed to be conducted on the issue surrounding DAFF and the DEA, and the Committee should also be briefed on the DEA’s past financial year.

Ms Mabuza concurred that clarity was needed as to the composition of the group going abroad.

The Chairperson said that this had been planned.

Dr Bosman brought attention to the 7.2% budget reduction in DAFF, which resulted in vacancies that could not be filled. He asked why the budget had been cut, and said that if there was no specific reason, then it should be increased.

The Chairperson said that the cuts could be related to financial management within the Department.

Ms Mabuza referred to the R16.8 million under expenditure, asking why the vacancies had not been filled from this funding.

Dr Bosman indicated that the budget was divided and allocated between different programmes, so the surpluses could well lie in areas not linked with human resources (HR). DAFF had spent 99% of its budget, so it was a relatively small surplus. Greater allocations seemed to be needed, to fill vacancies.

The Chairperson said that a financial management review included the need to equally measure performance reporting. The under expenditure should be noted, even though it was not a large amount.

Ms Mabuza asked if the aquaculture project in the Gariep was national or provincial. She also wanted a brief detailing the project on cattle. She asked if the problems in forestry and fisheries around resources had been solved, noting that fishery resources were apparently to be paid in batches.

Dr Bosman said that the National Department should be supporting Gariep.

The Chairperson said the Committee should get copies of the Memorandums of Understanding in regard to Gariep.

The Chairperson confirmed that the R208 million in regard to fisheries was in the process of being negotiated. Some feedback had indicated that it was not practical for DAFF to continue to deal with these programmes. This was an issue to be sorted out between DEA and DAFF.

Mr Du Toit said that the issues between DEA and DAFF were fraught with problems, and it seemed that the money to be transferred had not come through.

Mr du Toit suggested that it would be better to present this report with paragraphs and bullets numbered.

Dr Bosman referred to the provision of 84 000 meals per day, indicated in relation to the food banks, and asked if that should not be the responsibility of a department involved with social support.

Ms Mabuza wanted to know if these four entities referred to were food banks or reserves.

Dr Bosman responded that South Africa had no food reserve strategy. These were definitely food banks. The silos were privately owned. He highlighted the investigations into biofuel, which was now looking at maize as a source. However, maize was not ideal for biofuels, and sugarcane fuels were cheaper to produce. If maize were to be used, taxes would have to be abolished, and subsidies would have to be introduced. It may not be a profitable business. The Committee should ask the Minister to look into food reserves to create a food security strategy in the future.

Mr Du Toit noted the importance of maize, which was also vital for the farming of poultry. Chicken producers were the biggest consumers of maize in the country. He noted that larger countries would be happy to sell to South Africa at any time, but this would mean dependence. South Africa needed a strategy to counter being beholden to others.

Mr L Tolo (COPE) asked for clarity on whether food security referred to loss of products through theft.

Dr Bosman explained that it involved the availability of food, through looking at what was being produced, and its affordability. He said that South Africa was a net exporter.

The Chairperson said that it would be productive for the Committee to pay a visit to a local food bank as part of its oversight function.

The Chairperson commented on the tree planting project, and underscored the importance of community engagement, so that the project would be sustainable. Reflecting on the document in general, he noted that the programmes described did not give a very good overview of what the Department was doing. He did not feel that value for money was necessarily being produced.

Dr Bosman said that the Seed Distribution Fair was an educational programme, not related to the tree planting project, and did not usually involve the large scale offloading of seeds.

Mr Du Toit agreed with the Chairperson, saying that although there were nine provincial departments on the ground, there were problems of delivery as not much was happening. Interaction with the people on the ground was very poor. The only people in the field were the extension officers, and they were not doing enough. That was the reason why the farms in the emerging sector were collapsing.

Ms Mabuza agreed, saying that she had been disheartened by the progress of projects she had seen.

Mr Tolo asked who was responsible for the capacitation of support services, and who must offer support services, training and education to emerging farmers in particular. He cited a farm in Limpopo that, despite having received R8 million investment, was now falling apart.

Ms Mabuza responded that the same applied to whole groups of people. The Department had said that the responsibility for repairs and upkeep should be split equally between the Department and the farmers. There were problems with people simply being lazy.

Mr Du Toit said that the document needed to explain the way forward, and not simply set out failures. Details of what follow up was required, and what solutions were needed, should be included.

Dr Bosman agreed that the services rendered were inadequate. There was not enough technical support. The Limpopo examples were happening all over the country. 90% of the emerging farmers had failed because of the lack of agricultural support services. Infrastructure was being dismantled. There was no Sector Black Economic Empowerment (BEE) Code being gazetted, and no agreements had been made.

The Chairperson said that several hard questions had not been asked before putting people on the land. The issue of food security thus came up repeatedly. He questioned what the role of this Committee must be when an institution was clearly not working.

Mr Tolo agreed that details of expenditure needed to be clarified. 339 clients had received R19.7 million, but it was not clear where this was. He noted that corruption was high in South Africa..

The Chairperson emphasised that it was very important that there must be monitoring of the grant funding for small farms that remained small forever. The real support given must be measured and the results must become evident as to what was being achieved, and how these were moving towards becoming mainstreamed.

Dr Bosman noted this was another discrepancy between DAFF and the Department of Rural Development and Land Reform (DRDLR). The DRDLR had four categories for farming, namely, garden, small scale, emerging, and large scale. Most small scale farms needed an extra income, but DAFF wanted to upgrade them to increase yields and become independent. There was a clash of intention here.

The Chairperson responded that there was a need for alignment of categories. In regard to the grant funded farms, there was also a need to benchmark support against progress.

Ms Mabuza asked which department disposed of land.

Dr Bosman replied that it was the DRDLR, which now had taken over from the former Department of Land Affairs. That was an issue of importance, because once that land had been distributed, the responsibility for whether it was successful or failed fell upon DAFF. Furthermore, Comprehensive Agricultural Support Programme (CASP) had withdrawn R8 million of funding from support to farmers, and had put it to resource management for food banks. It was important to oversee these matters, by monitoring, and by insisting that reports be received.

Mr Du Toit reiterated the need for details. The BRRR needed to refer to all the reports that gave input into the end product. The Committee should stress its concern on the issue of money being diverted from CASP, thus lessening support to farmers. He also said that the outcomes from those reports should be considered.

The Chairperson asked what the contribution of agriculture, fisheries and forestry was to Gross Domestic Product (GDP).

Dr Bosman responded that in the primary sector, it was between 5% and 6%, and beyond the primary sector, approximately 25%.

Mr Tolo referred to emerging black farmers being trained, saying that it was important to ask people with the appropriate experience for help.

The Chairperson was reminded of the need to request DAFF to bring a list of legislative review before the Committee.

Ms Mabuza referred to the 385 emerging farmers trained in marketing. She asked what training was being referred to in the draft Report.

Dr Bosman noted that DAFF wanted an additional R100 million per annum for training and agricultural development purposes. However this was the training on which the Committee had some doubt.

The Chairperson wondered where these capacitated people were.

Mr Du Toit said that he was stunned at what the Department was doing wrong. He highlighted that DAFF had no plan for the marketing of cooperatives.

Dr Bosman concurred that marketing was a key priority, and that an action plan was needed to provide instructions to the Department. The Cooperative Act had been changed to allow for small cooperatives. The use of cooperatives should be a strategy recommended to the Department.

Dr Bosman then referred to the veterinarians that had been removed from their posts to do office work, and noted that there was friction in DAFF about bio-security problems.

Mr Du Toit again re-emphasised the need for details. The Department should be highlighting the failures as well as the achievements. There were vacancies in border control, and he wondered whether and to what extent this unit had been strengthened, and whether DAFF was any closer to reaching its targets.

Ms Mabuza said that it was important to have a continuation of matters when Ministers were deployed, otherwise delivery would suffer. For example, there was a problem of the agricultural colleges that had been closed, and the Department had then suggested that the issues be addressed from scratch. In regard to the veterinarians, she noted that there was no account given of this by the DAFF.

Dr Bosman then noted the issues surrounding Rift Valley Fever, which had caused China to stop buying wool from South Africa for a year. There was a need to get back into negotiations to reach an agreement, as, internationally, rules and regulations stipulated that wool could not carry Rift Valley Fever.

The Chairperson said that the matter had been on the table during the President’s last visit to China, but he was not aware what had happened. He asked if wool fell under DAFF. He noted that an international conference surrounding wool that had taken place in Jansenville, when he had asked if DAFF was participating, and was told that it was not.

Mr Du Toit noted that some divisions of the Department did not understand the importance of their job.

Mr Tolo noted that border control regarding animal movement was not always effective.

Dr Bosman indicated that there was a border control mechanism between South Africa and Zimbabwe, and with Mozambique, in terms of which veterinarians would inject all cattle in the area, and there was a ten kilometre monitoring zone to check for outbreaks. South Africa was very dependant on this mechanism. Recently, an outbreak had been reported in one of the areas through which cattle moved. The cattle movement was worrying. Added dangers were posed by the fact that game animals were not vaccinated.

Dr Bosman indicated the need to receive more information about the afforestation programme, which mitigated against the effects of climate change.

The Chairperson said that there was a programme involving 100 000 hectares, of which 60 000 were in the Eastern Cape and 40 000 in Kwazulu Natal) but could not recall that much progress was being made. He knew that there had also been a water license issue. There was a need to get a response from DAFF and Department of Water and Environmental Affairs on this.

Dr Bosman reiterated the need for a report to be presented on this matter.

Ms Mabuza noted that in regard to water licenses, 150 000 applications had been received, and less than 2 000 had been approved. No new applications were being received this year while the backlog was being dealt with.

The Chairperson said that there had not been enough information on forestry and fisheries, and with regard to the fisheries function, there had not been an answer from DEA about the transfer of assets. The Chief Financial Officer had noted that the asset register was not up to scratch.

Ms Mabuza asked about issues surrounding the Foot and Mouth vaccine.

Dr Bosman responded that South Africa had run out of its supply, and was forced to buy about R14 million worth from Botswana.

The Chairperson referred to the one million trees campaign, asking if this was an annual target.

Ms Mabuza then enquired about the monitoring and upkeep of the trees in the tree planting project, and noted that the Council for Scientific and Industrial Research (CSIR) project in Limpopo, using mopane trees, was going well, and the wood was being used for various useful purposes. She had spoken to a CSIR employee who suggested that the Department should give the trees to CSIR to let the latter deal with the project rollout.

The Chairperson asked if the campaign was sustainable, and if the trees were being cared for, so that the targets could be measured in terms of quality rather than quantity.

The Chairperson asked for comment by the Committee on the budget.

Mr Du Toit said that he wanted details on the money not spent, which was R16.8 million.

Dr Bosman noted the need for control on grants and goods disbursed. DAFF had spent 53% of the budget on the programmes, and he felt that there was not enough monitoring taking place. For instance, a 40-ton truck containing seeds had reached its destination but the seeds were sold, rather than being planted.

The Chairperson recommended that the Committee conduct dedicated sessions on all of the projects that were receiving grants from CASP. The budget for CASP projects had been increased to almost R1 billion, from the former R700 million, and more details were needed. Stories of successes and failures should be discussed. There was a problem of abuse of resources in South Africa.

The Chairperson said that often South African departments were paying for membership of various international organisations, but were not actually participating.

Dr Bosman agreed that he had not always noted South Africa’s participation. He said membership was very useful.

The Chairperson wanted to know the number of organisations to which South Africa subscribed, and the costs and level of participation involved.

Ms Mabuza requested more information in the Report about the various reported rollovers.

Dr Bosman agreed, noting that each rollover needed to be looked at individually, as they ranged across a number of reasons.

Mr Du Toit reported that his experiences in SCOPA had shown that the most common problems in Departmental Annual Reports related to compliance with the law, strategic planning, the audit committees and internal audits. These should all be addressed in the Committee’s recommendations. The problem of vacancies was well illustrated by the Agricultural Research Council’s R50 million leave accrual.

Ms Mabuza requested a management response to the issues raised by the Auditor-General. She said that most departments intentionally delayed their response until the Auditor-General’s process came to an end, and that for these reasons, as noted in the Report, an unqualified report did not translate into effective service delivery.

The Chairperson recommended that the Committee address this at the quarterly review meeting in November.

Mr Du Toit agreed with Ms Mabuza. He said that it was important to receive the management letter but it was sometimes held back. Management was protecting itself, making it very difficult for performance management to be judged. This was why it was important to put the audit committee performance right, because this would address financial and management performance. He also noted that the information around travel and conferences was missing. A chapter should be included on international travel, the benefits derived and costs incurred.

Ms Mabuza emphasised the danger of shifting veterinarians to other positions, while trying to appoint new ones, as shown by the 31.7% vacancy rate for veterinarians.

Dr Bosman agreed. He also drew attention to provincial research institutions that fell under the provincial departments, which were said to be failing completely. He raised the possibility of moving these institutions to the Agricultural Research Council (ARC). In relation to the National Agricultural Marketing Council, he wondered if there was any collusion in the sector, and said this should receive more focus. He then asked about the Land Bank, and the findings of the investigations into the BEE Fund, on which no report had been given to the Committee. He recommended asking the Minister for a report on the matter, as the funds come from DAFF

The Chairperson agreed that the Committee must then call for a report on the Agri-BEE funds, and the Committee also reserved the right to call Land Bank in to brief the Committee.

The meeting was adjourned.