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The aim of this report is to summarise the main events at the meeting and identify the key role players. This report is not a verbatim transcript of proceedings.
LAND AND AGRICULTURE PORTFOLIO COMMITTEE
30 April 2002
KWAZULU-NATAL CANE GROWERS ASSOCIATION
Chairperson: Adv. S.P. Holomisa
Documents handed out: None
In the meeting two delegates from South African Cane Growers and the KwaZulu-Natal Cane Growers Association (KCG) presented their case to the Portfolio Committee. It seemed that the difference between these two associations was on how the development of small cane growers should be carried out.
The Chairperson told the Committee that property of the KwaZulu Cane Growers Association (KCG) should be transferred to a trust. The Minister would be responsible for appointing the trust. The issue was how the trust could be constituted. The Chairperson said the Committee was also interested to know how much money the Association had. A comprehensive forensic audit was needed to report on the state of finance of the Association.
Ms Ronel Van Zyl, from the Department of Agriculture, said the issue of finances of the KCG would be addressed by the Auditor-General through the Minister. She said a thorough forensic investigation was really needed to look at the finances of the Association. She added that if there were more than the R180 000 supposedly available there, the Trust Fund would be a better option to keep the money. The Department was of the view that the creation of a Trust fund was a better option and the Minister should appoint it.
The Chairperson said the Committee had to look at whether the KCG should be a Section 21 company.
Mr M. Maphalala (ANC) said the issue of the Auditor-General was important on the utilization of funds to date. He accepted the view that the Department should request the Auditor-General to make a forensic investigation, even if the delegates would provide background information on the funds; the Committee should go ahead with the request of the forensic audit.
Mr S. Farrow (DP) said he feared that the Auditor-General's report could take a long time to be finalized, something which could drag the process much further.
Mr P. Nefolovhodwe (AZAPO) said the KCG should produce financial statements even if the Committee decided to transfer the funds to a trust or not.
A statement from Dr Buthelezi - KwaZulu-Natal Cane Growers Association
Dr Buthelezi the Chairperson of the KCGA, made a statement on behalf of his delegation of four executive members from his Association. He said he was disappointed that his association was not informed of some of the decisions, meaning that the decisions were taken behind their backs. For instance, the levy that was agreed upon favoured commercial growers, not small-scale growers. He said they did not know that there was a Committee in Parliament dealing with problems of agriculture. He alleged that S.A. Cane Growers Association represented only the interests of commercial farmers. He said since the levy has been scrapped the KCG was unable to run its affairs.
He said the KCG was formed in 1936 by the likes of Chief Albert Luthuli and Dr John. L. Dube to enable African people to get involved in the sugar cane industry. Dr Buthelezi said African people wanted to be part of their development, not to be told how to develop themselves. He told the Committee that he was the fourth Chairperson of the Association since its founder, president Chief Albert Luthuli. At present, the association has about R3, 3 million.
KCG Legal Advisor Mr Hornby told the Committee that audited financial statements were being prepared, and they would be made available to the Committee in due course. From 1999 to 2001 a levy of R3million was collected, however, he did not know when the R6 million that was referred to in the meeting came from because the Auditor-General never contacted them on the issue. He said they would like the association to be a Section 21 Company. They have gone to grass-root growers to get a sense of what they were envisaging. He said he did not have a problem with the idea of a Section 21 or a Trust; he would support whichever idea on behalf of his clients.
The Chairperson asked what benefits do members of the association gain from the levy.
Mr Hornby said the money from the levy was used to run the affairs of the association. He said KCG would not have an income if the levy was abolished.
The Chairperson further asked whether the membership of KCG was through a group or individuals.
Mr Horny replied that membership of KCG was from a group of small scale cane growers
The Chairperson said the problem with the revocation of the levy was that the Cane Growers could not operate because they had no money.
Cane Growers Association of South Africa
Mr B. Galloway the Chairperson of S.A. Cane Growers Association told the Committee that his association represents every Cane Grower in South Africa irrespective of their size, colour or financial status. It is a federal organisation that represents the interests of different cane growers associations with a one ton, one vote system. A grower would chose which smaller association should he/she belong. The funding that had been accrued was R4million in a period of five years. Dr Buthelezi and Mr Kbumalo from the KCG were members of the Board of Executives of the South African Cane Growers; they sat in every meeting of the board. He said he would not like to comment on the allegations that SCG made, but was prepared to answer questions regarding S.A. cane growers.
Small Scale Growers
Mr Mzoneli from the small-scale growers said he was a member of the KCG until the levy was scrapped. He said the trouble began when the association wanted to take money on themselves. He asked KCG to have reputable fund managers, but this idea was rejected and he was later sidelined. He was seen as wanting to take over the association. He decided to leave quietly.
He said he decided to form the South African Small Growers Association Trust that gave a total of R5, 6million a year to the various small growers committees, and the KCG benefited from that. They had a lot of meetings with DTI, Premier of KwaZulu-Natal, MEC of Agriculture of KZN and including Dr Buthelezi. He said there was an institution called Igula, which was said to be an investment for small-scale growers. People subscribed to it. There was never a financial statement from the Igula, and people never got their investments back.
Mr Nefolovhodwe said there was a trust that Dr Buthelezi talked about, and the one that Mr Mzoneli just referred to. He asked what the problem was between all the trusts.
Mr Galloway said there was only one trust, the small-scale growers trust. The problem was that each association had different interpretations of development.
Mr Maphalala explained that Mr Galloway had said that he had no interest in the trusts, yet he was the chairperson of S.A. cane growers.
Mr Maphalala asked for documents to outline the figures, as there was a lot of confusion concerning them.
Mr Galloway said he represented various interests, not personal interests. He said as Chairperson of S.A. cane growers, he had no interest in the funds of the association. He agreed that the necessary documentation would be made available to the Committee.
Mr Radebe said the dispute seemed to be around development and asked what input these groups could make towards developments.
Mr Galloway said it was the people who should decide how they wanted to develop, because small scale farmers were developed from and by the communities. He said they had been trying to resolve the problems, but there were no dispute resolution mechanisms in place to assist in the process.
Mr Farrow said it was up to the Cane Growers to solve the problem of levies themselves, as it was not good for the Committee to deal with this confusion on who should pay levy and who should not.
Dr Buthelezi said what KCG needed was protection against domination in the cane growers industry. Their farmers were producing 39 tonnes per hectare, whereas commercial farmers were producing 80 tonnes per hectare.
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