Departments of Agriculture, Forestry and Fisheries (DAFF) & Rural Development & Land Reform Strategic Plans 2011

Meeting report

Department of Rural Development and Land Reform: Strategic Plan 2011 briefing.
Mr Mdu Shabane, Director General, Department of Rural Development and Land Reform, presented the strategic plans for 2011. He informed Members that the Department of Rural Development and Land Reform (DRDLR or the Department) had adopted an outcomes-based approach and that it was coordinating the implementation of Outcome 7. It was critical that the Department build Outcome 7 into the strategic plan and emphasise its concerns with rural development and land reform. The Department was therefore playing a role to initiate, facilitate, coordinate and organise rural strategies. There were five key outputs forming part of outcome 7. Outcome 1 included sustainable agrarian reform within a thriving farming sector, Outcome 2 included improved access to diverse and affordable food, and Outcome 3 looked at improved rural services to support sustainable livelihoods. Outcome 4 involved improved employment opportunities and economic livelihoods, and Outcome 5 created an enabling institutional environment for sustainable and inclusive development. Irrespective of the changes, the mandate remained as part of the Department. The total estimated budget expenditure was R9.381 billion.

Discussion
The Chairperson said that she had not been at the meeting when the Committee had requested the Department to respond to some issues. However, she pointed out that the responses had not yet been submitted to the Committee, and reminded the Department that it still needed to do so.

Mr M Mokgoro (ANC, Northern Cape) criticised the presentation, saying that it was difficult to follow because the order in which the slides were presented differed from the hard copy provided to him.

The Chairperson asked the Department to deal with the targets from programmes 3 and 5.

Mr D Worth (DA, Free State) pointed out that he found it difficult to understand why this Department had to pay for areas that needed to be farmed, instead of the Department of Agriculture Forestry and Fisheries (DAFF). He also queried why this Department was working with dams. He further asked what had been done about the statement, some time earlier, that there were about 4 000 outstanding land restitution cases, in which this Department had given an indication that it was going to buy the land, but nothing had happened yet.

Mr Mokgoro said that rural development had been a top priority of government since 1994, but results were not apparent. He wondered if there was enough land available for community rural development.

Mr M Makubela (COPE, Limpopo) asked the Department if the reduction of the budget from R16.7 billion down to just short of R10 billion was considered to be an achievement.

Mr Shabane apologised to the Committee for the nature of the presentation. He explained that the Committee’s instructions to the Department had been clear in that the Department was asked to focus on programmes 3 to 5 only. The presentation handed out in hard copy was more detailed, so the slide presentation was a selected extract, for the purposes of saving time. The strategic plan did set out all targets but not all could not be presented, due to time constraints. This presentation was focusing on the strategic programme for the future, and therefore did not deal with progress made in previous years. However, he indicated that the Department would be happy to provide a further report to the Committee showing in what places the Department had done community outreach, and what it had done.

Mr Mokgoro welcomed the suggestion that the Department present such reports to the Committee. He added that the Committee would call on the Department to explain if there were further queries.

Mr Shabane agreed that the Department would bring the query document to the Committee.

The Chairperson asked for a date of submission. There were still some outstanding matters.

Ms B Mabe (ANC, Free State) supported Mr Mokgoro’s request and also suggested that the Study Group needed to reconvene.

The Chairperson agreed with Ms Mabe and reminded the Committee about its mandate to focus on policy issues focusing on provinces.

She asked Mr Shabane to supply the Committee with the information by the following Friday.

Department of Agriculture, Forestry and Fisheries (DAFF) 2011 strategic plans
The Chairperson praised the Department of Agriculture, Forestry and Fisheries (DAFF) for its prompt response to the queries made the previous week, and commented that there were no further outstanding matters.

Mr Langa Zita, Director General, Department of Agriculture, Forestry and Fisheries, presented the Department’s Strategic Plan for 2011-2014. He covered sector performance in the agricultural production, producer prices of agricultural products, gross value of agricultural production, production costs, forestry, and fishery sectors.

He noted that the volume of agricultural production in 2009/10 was 4.8% higher than in 2008/09. Producer prices of agricultural products decreased, on average, by 2.2%, between 2008 and 2010. Field crops decreased from 2008to 2010. In terms of production costs, the expenditure on intermediate goods and services during 2009/10 rose by 6.4%. Expenditure on farm needs accounted for 22.9% of the total expenditure. The area under forestry was about 1,28 million hectares, which represented about 1,0% of the total land area of 122.3 million hectares of South Africa. The export of forestry products had increased from R9,5 billion in 2001 to 14,8 billion in 2008. Imports totaled 11.3 billion in 2008.

Mr Zita then outlined the economic viewpoint of the sector, pointing out that the volume of production had increased. Agricultural production, costs, and export of forestry products were all considered to be strategic sectors. Overall, the value of fishery products was about 6 billion and it was also regarded as quite an important sector. He reminded Members that rural development and agriculture were two main drivers of development in the country.

Mr Zita noted that the challenges included the unregulated market environment, which had the effect of exposing the sector to fluctuations in world prices, the decreasing share of field crops in agricultural production and South Africa’s move from being a net exporter of foods to being a net importer. There was also a growing dominance of retail chains and an increasing farmer-to-retail price differential. He noted that a fisherman would normally receive around 45%, but the retailer would usually sell the product at a price tag about 200% in excess of the supply price. He also noted the phenomenon of concentration, saying that this had an effect on transformation. Bigger players, with bigger volumes, could increase and reach the threshold much more easily than the smaller ones. The small holders also had other challenges, such as inadequate support services - including lack of technical support –and uncoordinated spatial plans to guide implementation of support programmes.

Discussion
Ms N Magadla (ANC, KwaZulu Natal) asked the Department why there were so many decreases of figures presented in the report. She also asked about the Department’s stand on job creation and the export market.

Mr Worth queried why both the DRDLR and DAFF were dealing with the revitalisation of irrigation schemes, which the Committee had noted during its oversight visits. He asked who would take final responsibility for the 27 schemes. He asked what was being done about the 6 000 tonnes of edible oil available in the country. He noted that the food price had risen from R6 billion to R12 billion and asked for more details on this. He also asked what had been happening in 2007, noting that about R23 billion was spent on importing food. He also wanted to know what the Department’s capability was for veterinary issues, the progress on biofuels and progress on genetically modified organisms.

Ms Mabe said that the feedback received from the community during the election campaigns showed that the people were not feeling the impact of the DAFF in their areas. This did not support the positive presentation that the Members had received today.

Mr Mokgoro asked about the support from the Department to the small farmers. He suggested that the Department needed to have extension officers visiting the areas from time to time, to check whether farmers were doing the right things, and to help to understand and avoid incidents that resulted in death of livestock.

 Ms Mabe conveyed a question from a community on why farmers were not subsidised by Government. 

The Chairperson said that nothing had been done about soil erosion. She also asked, the Department to provide the Committee with some comments on interventions to address challenges, and specifically to say what support was provided to the rural areas.

Mr Zita indicated that importing was not necessarily a bad thing and that in fact it had positive effects in that it created jobs for people in South Africa.

He answered the questions on biofuel by saying that government was looking at using sugar as there was a surplus of this product.

In regard to the question on genetically modified organisms, he agreed that this was a challenge and that the Department was still working on the issue, which was still quite new in this country.

Mr Zita assured Ms Mabe that he understood the frustrations expressed to her by the community. He explained that the DAFF was working on identifying its own staff members to work with communities and farmers on commodity groups. DAFF had also arranged that all Directors would “adopt” municipalities, so that, once a month, they would go out to visit those municipalities and be involved in their activities for at least a week.

Mr Zita also said that the Department was rolling out training to help farmers to access finance and markets. DAFF was asking all smallholders at least to draw up some plans, although it did not expect them to be fancy. The DAFF could then formulate part-plans that would enable it to assess the nature of the soil and what crops would best grow there. The Department was also working on the “Zero Hunger Campaign”, which would help the smallholders to have guaranteed access to the State markets, and envisaged that State entities – such as hospitals –would buy the smallholders’ crops to provide them with a ready market. Another opportunity that it would utilize would be the support of students at universities. DAFF also wanted to ensure subsidisation of food to restaurants all over the country. This model has been adapted from Brazil, where it had been implemented for some time, with significant success.

Mr Zita assured Mr Mokgoro that he would communicate with him directly and would ensure that people were sent to assess the livestock in the affected areas, and investigate the deaths. He added that R700 million had been put aside to support farmers.

In response to the community’s questions around subsidies, Mr Zita explained that South Africa did not have the money to pay subsidies. In Europe, there was sufficient money. South Africa had only cheap credit or grants, and these operated instead of the subsidies that were offered elsewhere.

Mr Makhubela asked Mr Zita why he was saying now that there was insufficient funding, pointing out that there was a 5-year strategy. He asked how Brazil and Europe managed to get the money that had helped them to pay subsidies, in order to reach their current status. He remarked that  South Africa needed to consider this, and to adopt lessons from other countries for the long term.

Mr Mokgoro asked the Department to give an example of an agricultural policy that had touched the lives of poor people.

Mr Zita commented that several factors needed to be considered, in the case of Europe and Brazil. Brazil had a population of over 100 million, but was a relatively homogeneous country that had a very big middle class of 20 million, compared to South Africa’s middle class of 4 million. Brazil’s capacity to create wealth was therefore much bigger than South Africa’s. European countries were very advanced.  Most of their funding came from areas of manufacturing and services, so that the budget for agriculture was, relatively speaking, only a small part. South Africa would develop its own way, but he assured the Committee that it would take lessons from other countries. 

Dr Mono Mashaba, Acting Deputy Director-General: Fisheries, DAFF, said that the issue of credit access was an issue in the new democracy. There was also another issue of mentorship. It was not possible to teach every single farmer, through formal “schooling”, but DAFF was taking a hands-on approach. The Department was looking to strengthen and increase production in rural areas. Much had already been done. It was important for the Department to sit down and review the process, and check whether the spending had produced good results.

Ms Mabe said that it was high time that this Department did a review and checked its processes to see if the investments it was making were indeed justified.

The Chairperson agreed. She asked the Department to submit the documents needed. She also asked for details on when the “Zero Hunger” campaign would be finalised, so that the Committee could exercise some oversight by way of a visit.

Adoption of Minutes
The Committee tabled and adopted the minutes of the meeting on 29 March 2011.

The Committee tabled the minutes of 12 April. Mr Makhubela asked when the issue around the voting power would be finalised.

The Chairperson said that she would ask the relevant persons.

It was noted that this was the meeting chaired by Mr Mokgoro, at which certain questions asked of the DRDLR had not been answered. Members adopted the minutes.

Other business
The Chairperson asked that Members should read through the India report in preparation for its adoption at a later meeting. No recommendations were noted here, as the Members should indicate what they wanted to have included.

The Chairperson noted a request to Land Bank to extend the period for nominations. The Minister had advised that the period had been extended to 15 June 2011.

The meeting was adjourned.