MAFISA, Ilima-Letsema & CASP agricultural programmes: 1st and 2nd quarter 2011 performance reports; Department of Water Affairs Blue and Green Drop reports

NCOP Land Reform, Environment, Mineral Resources and Energy

21 November 2011
Chairperson: Ms A Qikani (ANC, Eastern Cape)
Share this page:

Meeting Summary

The Department of Agriculture, Forestry and Fisheries (DAFF) updated the Committee on three programmes being managed by that Department. The Micro Agriculture Finance Institute of South Africa (MAFISA) had allocated R470 million to various institutions, and R260 million had been transferred to date. Two institutions, the Mpumalanga Agricultural Development Corporation and the Gauteng Economic Propeller had disbursed so little of their funds that their agreements had been terminated and the Department had requested that funds be returned. The Eastern Cape had received a significantly higher allocation than any other province.  Challenges facing the Department included the fragmented nature of different support programmes based across the country, the need for infrastructure, lack of skills and knowledge, increased climate and weather risks and the entitlement mentality held by some farmers and clients. The Department was developing a part-grant and part-loan system, to encourage more responsibility from farmers.

The first and second quarter reports for the Comprehensive Agricultural Support Programme (CASP) showed that a total of R1 billion had been allocated for the 2011/2012 financial year. This was spread across all nine provinces, but provinces were also encouraged to share their funding with other provincial entities where possible. The funds were spent on various grants, projects, training programmes and agricultural colleges.  Gauteng was the only province struggling to spend its allocation. The MEC for Gauteng had undertaken to hold a workshop with the Department to assess the situation. In the first and second quarters a total of 1 672 subsistence farmers, 12 482 smallholder farmers and 939 commercial farmers had received support across South Africa. 4340 farmers had received training. 1352 jobs had been created in the first quarter, most in Western Cape. The reporting template for CASP had been altered to try to assess whether funding was reaching new farmers, or those who had received grants in the past. Mpumalanga had indicated that no farmers were being supported but there was going to be follow-up on this information.

A report on the Ilima/Letsema project showed that funding was paid out, at 25% of budget per quarter, but only two provinces, the Free State and Western Cape had spent the full amount, although it was explained that this was because their planting took place at different times of the year, and it was expected that expenditure in the provinces who were only planting now would increase in the next quarters. Mpumalanga had not spent anything. In total 2 249 subsistence farmers, 1508 smallholder farmers and 464 commercial farmers had received support across South Africa. 670 jobs had been created. A standard operating procedure guide has been distributed to all provinces, using best practice from well-performing projects. Support would be provided to eleven agricultural colleges in seven provinces with infrastructural improvements, retraining of staff and governance strengthening.

Members requested information on the reasons for slow fund disbursement and on the criteria used in choosing the recipients of grants. Questions were asked on low job creation in Kwazulu Natal, the efficacy of agricultural colleges, and the timeframe given for institutions to return funds to the Department. Information on the MAFISA projects and the nature of follow up given to all projects was requested. Members expressed concern that there did not appear to be adequate monitoring by the Department. The Department was asked to provide answers in writing by 25 November.

The Department of Water Affairs then gave its Blue and Green Drop Reports, noting that this system was introduced to improve and incentivise drinking water and waste water management, by building and rewarding excellence. Targeted risk-based regulation was introduced to increase monitoring and reduce risk. Blue Drop certification was given if a 95% score was achieved across a number of different categories. 914 water supply systems had been assessed in 2011 and the national weighted average score had improved. Gauteng had the highest provincial scores, while Mpumalanga scored lowest. The outcome for the Green Drop assessment of wastewater management was less positive, although there had been improvements. Western Cape scored highest, but Free State had received alarmingly high risk scores. The Department was focusing in particular on wastewater management. It hoped to achieve 99% drinking water quality compliance and 80% wastewater quality compliance by 2014. Strategy was focussed on risk reduction and Municipal Water Quality Capacity Building. Members asked questions regarding the impact of the new Waste Management Act, water quality in the Hartebees area, and the frequency of water testing. Members asked for information on the criteria for testing, why municipalities failed to achieve Blue Drop status, and how people could protect themselves from bad quality water.

Meeting report

MAFISA, Ilima-Letsema and CASP programme updates: 1st and 2nd quarter 2011/12 programme reports: Department of Agriculture, Forestry and Fisheries presentation
Micro Agriculture Finance Institute of South Africa (MAFISA) performance report
Mr Jacob Hlatshwayo, Chief Financial Officer, Department of Agriculture, Forestry and Fisheries, began the presentation with a breakdown of the Micro Agriculture Finance Institute of South Africa (MAFISA) expenditure as at 31 October 2011 on intermediary entities.

He noted that in the first and second quarters of the 2011/12 financial year, R470 million was allocated to these institutions, but only R260 million had been transferred thus far. R100 million had been allocated to the Mpumalanga Agricultural Development Corporation (MADC/MEGA) and R50 million had been transferred, but thus far only R4.3 million of that had been disbursed. The Gauteng Economic Propeller had received R10 million of its allocated R30 million and had not yet disbursed even R1 million. Both institutions had been challenged due to merger processes and lack of capacity.

The Department of Agriculture, Forestry and Fisheries (DAFF or the Department) had had a series of meetings with both institutions and had been promised that performance would improve. The agreements made it clear that if the Department was not happy with the performance of an institution, funds would be recalled. This had eventually been the course of action taken and the agreements had been terminated. Letters had been sent requesting the return of funds. Kaapagri, another low disbursement performer would also be asked to return funds. The agreement with Sugar Association of South Africa (SASA) was new and therefore its low distribution figure (it had disbursed R4.1 million of R20 million) was of less concern.

The disbursement per province was listed, showing that the Eastern Cape had received a significantly higher allocation than any other province, at R100.8 million, followed by the North West at R48.9 million. The biggest province, the Northern Cape, only received R6.2 million. This was because a greater number of institutions were based in the Eastern Cape. However, he noted that the institutions were asked to work with all the provinces so as to achieve a better distribution of the funds.

Mr Hlatshwayo outlined the challenges for the Department. These included the fragmentation of support offered to different intermediaries. The proposed solution was to focus on integrated support so that every application received would be assessed, to check if the institution was already receiving funds from another area of government. Infrastructure also presented challenges, and better integration would also be developed in this area. The challenge of skills and knowledge would receive particular focus through a mentorship programme for training farmers. The challenge of capacity loss within institutions was seen to be beyond the Department’s control.

Weather and climate risk was another area that Mr Hlatshwayo wished to highlight in particular to the Committee. South Africa had already experienced increased floods, droughts and hail and most farmers did not have insurance. The Department was encouraging farmers to take insurance. The ‘entitlement mentality’ amongst farmers who demanded grants was also highlighted as a challenge. The Department was developing a part-grant and part-loan system, to encourage more responsibility from farmers.

Comprehensive Agricultural Support Programme (CASP) performance report
Ms Elder Mtshiza, Project Co-ordinator, Department of Agriculture, Forestry and Fisheries, presented the first and second quarterly reports for the Comprehensive Agricultural Support Programme (CASP). She began with the disbursement schedule. There was a total of just over R1 billion allocated across the nine provinces, of which the Eastern Cape had the highest allocation, at R174 million. These allocations went to various projects, training for farmers and agricultural colleges. The payment schedule was structured so that 10% of total funds allocated had been transferred in the first quarter and 20% in the second, whilst 35% would be transferred in both the third and fourth quarters. This was based on the previous expenditure patterns of provinces. It seemed that provinces struggled to spend funds because of the logistics of tenders and other technicalities.  

Expenditure trends as at the end of September 2011 revealed that Gauteng was the only province struggling to spend its funds. The Northern Cape and North West provinces had been contacted by the Department to fast track distribution. Letters had also been sent to the Gauteng Head of Department and the MEC of Gauteng asking for an explanation of the low disbursement and an assurance that this province would be able to spend the money. The MEC had undertaken to hold a workshop for the Department to assess the province’s plan and to gain assurance that spending could be achieved for the financial year. In the previous year, Gauteng had also shown the lowest performance in provincial disbursement.

The reporting template for farmers supported by CASP in each province had been altered, so as to establish whether support was going to new farmers or farmers who had previously received grants. The figures from Kwazulu Natal did not yet contain this information. No information on gender was given either, and this had been raised with the province. Mpumalanga had indicated that no farmers were supported, and it was hoped that was a reporting error, although the issue had been taken up with this province. Across all provinces, a total of 1 672 subsistence farmers had been supported, 12 482 smallholder farmers and 939 commercial farmers. CASP intended to integrate funding so that grant funding went to entities that were profitable, sustainable and would create jobs, therefore the emphasis would be on smallholders and commercial farmers. This was important for job creation and food security. 4 340 farmers had been trained in the first two quarters. 1 352 jobs were created in the first quarter, the majority of which were located in the Western Cape.

Ilima/Letsema project report
Ms Mtshiza then gave the second part of her presentation, which focussed on the Ilima/ Letsema project. 25% of allocated funds had been paid out during each quarter. Because of the production cycle of seasons, many provinces were struggling to spend their full funds and only two provinces had managed to spend the total of 50% they had received so far. These were the Free State which farmed largely livestock, and the Western Cape, due to the timing of its planting with the rainy season. The other provinces’ planting would only begin in the third quarter, so it was expected that their spending would increase at that time.  

She noted that the provinces were not being precise in predicting their quarter-by-quarter financial needs.

A total of 4 021 farmers had been supported through Ilima/Letsema. Mpumalanga had not spent anything and no one had been supported in that province. However the province had a specific project through which it was anticipated that high numbers of subsistence farmers would be supported.  Limpopo had done particularly well, reaching 1 000 subsistence farmers and 312 smallholders. In total 2 249 subsistence farmers, 1 508 smallholder farmers and 464 commercial farmers had received support across South Africa. 670 jobs had been created in the first quarter with Limpopo making the greatest contribution.

CASP would provide eleven agricultural colleges in seven provinces with infrastructural improvements, retraining of staff and governance strengthening.

Lessons taken from high performance provinces had been compiled in a standard operational procedure for all grants and financial support. This had been adopted by Treasury and circulated to all the provinces in an effort to push them toward best practice.

The Chairperson thanked the Department for the presentation. Due to time constraints, the Committee asked that the Department respond to questions in writing.

Ms N Magadla (ANC, KwaZulu Natal) asked whose duty it was to capacitate the MAFISA projects.

Ms Magadla asked why there were no jobs created through CASP in Kwazulu Natal. Farmers there apparently had complained about the effectiveness of CASP.

Mr G Mokgoro (ANC, Northern Cape) commented that it was not desirable for the Department to respond to the Committee’s questions in writing. The Committee needed to interact with the Department.

The Chairperson agreed but noted that the practicalities of time placed this constraint at this meeting.

Mr D Worth (DA, Free State) commented that he had requested information from the Department on land reform projects, and had found that 170 farms were unproductive and 30 had been abandoned. It seemed that some of those who received land were not interested in farming. He asked how the DAFF would ensure that only those who really wanted to farm were given assistance, and what the criteria were currently.

Mr M Makhubela (COPE, Limpopo) asked what the reason was for undisbursed funds, given that the need for the funds was still identified.

Mr Makhubela asked what criteria were used for the division of funds. It was indicated that this was done in accordance with the size of province, but he questioned what would be the situation if a bigger province had more projects than a smaller one.
Mr Makhubela noted that last year Gauteng had had the lowest spending but this year had improved, and he asked what had been done to effect that improvement.

Mr Makhubela asked for further clarity on the figures given for Kwazulu-Natal job creation through CASP and through Ilima/Letsema. A total was given, but he noted that the previous columns only indicated dashes, so he was not sure how that total was reached.

Mr Mokgoro commented that little information had been given on the MAFISA projects. He asked if business plans were drawn, and noted that if so, then the expenditure would have to follow the business plans. 

Mr Mokgoro commented that the terminology in the presentation on Ilima/Letsema was confusing.  He asked if the money was assigned to projects, and they were left to spend that money as they chose, or whether there was ongoing monitoring. He also asked if there was training and skills transfer to ensure that tasks could be implemented, and the funds could be spent. He asked if there was any assessment done of the financial management skills of those assisted. He also asked what crops were being planted, if there was necessary equipment provided for ploughing, and if irrigation was used or whether farmers simply waited for rain, in which case this would pose the risk of projects collapsing in times of drought.

Mr Mokgoro asked if there were still agricultural colleges in South Africa, and if they were producing many professional farmers. He did not see this on the ground, despite being a farmer himself.

The Chairperson asked what the timeframe was for the institutions with which agreements had been terminated, to return the funds as requested.

The Chairperson asked for an update regarding an irrigation matter in the Eastern Cape, and asked for clarity on the number of farmers supported by CASP.

The Chairperson concluded that the Committee would need to meet with the Department again. The Committee was not happy with the monitoring of projects by the DAFF, and commented that it wanted to see more improvements during oversight visits. The Department was asked to respond to the questions by 25 November.

Department of Water Affairs presentations on Green Drop and Blue Drop reports
Mr Leonardo Manus, Director: Water Services Regulation, Department of Water Affairs, noted that the Department of Water Affairs (DWA) had introduced an alternative regulation approach for both drinking water and waste water, in order to improve the quality of water services. These were the world-renowned Blue Drop (drinking water management) and Green Drop (waste water management) Certification Programme. They formed part of an incentive-based regulation approach. They were introduced in 2008 when it was decided that a paradigm shift was necessary in the Department because previous regulations had yielded limited success. Traditionally, regulations until then had covered only compliance monitoring and enforcement, in line with international standards, but it was decided that the particular challenges in South Africa made it appropriate to adopt a more innovative approach to regulation, when the Blue Drop and Green Drop benchmarking systems were introduced.

Targeted risk-based regulation had also been introduced, to ensure that risks in the quality of drinking water were reduced, and that this was monitored in an ongoing process. The Department aimed for excellence as an accepted norm. The Blue Drop status could only be achieved once excellent quality had been achieved. This would ensure sustainable improvement in waste-water and drinking water management. Public confidence in drinking water would also be improved with access to credible information. The Blue Drop certification would be given only to drinking water management systems that achieved a score of 95% in the categories of Drinking Water Quality (DWQ) Compliance, Water Safety Planning, DWQ Monitoring Programme, Asset Management, Process Control Skills, Analysis Credibility, Submission of Results and Publication of Performance. All DWQ information was available on the Blue Drop website, and this was also accessible by cell phone.

For the 2011 Blue Drop report, 914 water supply systems were assessed, in comparison with 787 in 2010, and 402 in 2009. The number of Blue Drop certified systems had increased from 25 in 2009 to 66 in 2011. The national (weighted average) Blue Drop score had increased from 51.4% in 2009 to 72.9% in 2011, indicating that the regulation programme was stimulating progress. The compliance records of drinking water quality had also improved.

Water Safety Planning was a new concept introduced by the World Health Organisation (WHO) to ensure that all possible risks were managed to ensure the continued supply of safe drinking water. South Africa was recognised as one of the countries who were managing to implement this concept fast. In 2009 only 9 water supply systems had water safety. This had increased to 490 in 2011. 349 systems adhered to acceptable implementation requirement. There was still a lot of work to be done but significant progress had been made. 

The National Blue Drop comparative analysis showed that Gauteng scored best out of the provinces, at 95.1%, while Mpumalanga was lowest with a score of 56.5%. This gave some indication of where attention was needed. The Blue Drop certification brought attention to drinking water quality issues and hope for improvement. The story of Ukahlamba / Joe Gcabi was an example of this. In 2008 there had been an outbreak of diarrhoea due to poor water quality, but by 2011 this area achieved Blue Drop certification. However, serious improvement was still required for wastewater management in the area, because a Green Drop score of 22% meant that risk was high.

In South Africa, wastewater management ranged from excellent to extremely poor. The Green Drop certification programme assessed Waste-water Quality Compliance, Risk Abatement and Management, Local Regulation, Management Accountability, Asset Management and Process Management Control. In the 2011 Green Drop Report, there was overall improvement in performance, but it was still not excellent. Of the 317 wastewater systems, 38.6% had achieved a score of below 30%, meaning they were in a critical state. 40 systems, or 5%, had achieved excellent scores. Only 60 South African wastewater works were classified as macro in size, and none of these were in a critical state. It was clear that it was the smaller works that required attention. In 2011, 821 wastewater systems were assessed, as compared to 444 being assessed in 2009. The number of Green Drop certified systems increased from 33 to 40, in spite of 20 systems losing their Green Drop status since the previous audit cycle.  The national Green Drop Comparative Analysis figures showed that the Western Cape had 19 certified systems and had the highest provincial score at 83.1%. The Free State had achieved an alarmingly high risk rating of 83%, and several other provinces were not far behind this number, such as Limpopo at 79%. These numbers indicated a desperate need for improvement. The Department had therefore been working on the Municipal Water Quality Work Plan and had held a conference that was attended by almost 900 delegates, to develop a comprehensive work plan to ensure that targets were met. The objectives for 2014 were to achieve 99% drinking water quality compliance, and 80% wastewater quality compliance.  Wastewater Risk Abatement Planning would strategically reduce wastewater risks in order to facilitate a sustainable turn around. Municipal Water Quality Capacity Building would involve multi sector support programmes, consultative auditing and an Accelerated Community Infrastructure Programme. Enforcement protocols would be implemented. It was important also to ensure that changes were economically viable.

In closing, Mr Manus presented the top ten performing municipalities for both Blue Drop and Green Drop, (see attached presentation) and noted that, despite challenges, the Department wished to remain focussed on the excellent progress.

Mr Worth thanked the Department of Water Affairs and asked if the Waste Management Act, which had recently been passed, would be of help in this process.

Mr Manus answered that the Waste Management Act dealt with solid waste. The Green Drop programme dealt with liquid sewerage waste, so this did not apply.

Mr Makhubela commented that there had been complaints about water quality in Hartebees, and asked how this area had been rated.

Mr Manus responded that the 2011 Blue Drop Report would give the exact rating for Hartebees. However, he was aware that it had not scored well and there were major problems that needed to be improved.

Mr Makhubela asked how often the water at different systems was tested.

Mr Manus answered that Blue Drop certification was awarded for two years, but was checked annually. Quality reports had to be submitted monthly, through selected laboratories. That information was available to all people in South Africa. If the Department could not be assured that a system had what it took to retain its Blue Drop status, then that status would not be awarded.

Mr Mokgoro asked what the reasons could be that prevented some municipalities not reaching Blue Drop status, and what were the reasons, asking if this related mostly to lack of equipment, inadequate skills or negligence.

Mr Manus answered that some systems missed out on getting a Blue Drop award not necessarily because of the quality of their water, but because of inadequate management systems.

Mr Mokgoro asked what consumers could do to protect themselves and their families when they were not sure of the water quality.

Mr Manus answered that the trouble was that drinking water could look perfectly clean but not be. The Department had to stay abreast of the information supplied by laboratories. Should quality be breached, the Department would issue notices to residences that they should boil their water. Boiling water before drinking could ensure that families and communities were safeguarded.

Mr Mokgoro asked how the Department engaged with municipalities that had not yet reached Blue Drop status.

This question was not answered.

The meeting was adjourned.


  • We don't have attendance info for this committee meeting

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: