Agricultural Research Council, Onderstepoort Biological Products, Marine Living Resource Fund, National Agricultural Marketing Council, Perishable Products Export Control Board Strategic Plans 2012

Agriculture, Land Reform and Rural Development

23 April 2012
Chairperson: Mr M Johnson (ANC)
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Meeting Summary

Five entities of the Department of Agriculture, Forestry and Fisheries (DAFF) presented their strategic plans. The Chairperson noted the Committee’s concerns that not sufficient Board members from the entities had attended the meeting, and he and other Members pointed out that they had been given ample notice of the meeting, that they were required to be present only once a year, and that this was the only opportunity the Committee had to interact with the members of the Boards. The entities, whilst submitting detailed documents, were asked to keep their presentations brief, given the time constraints.

The Agricultural Research Council (ARC) outlined its major challenges as including climate change, increased demand for food, lack of funding, ageing ICT infrastructure, science and technology developments, economic costs of business, regulatory systems and urbanisation. Particular climate change challenges included the emergence and management of new pests and disease, use of water, energy sources and biodiversity issues. The ARC had to consider changes in farming systems and players, the impact of international players on agricultural systems, and changing education and training landscapes. Some of the strategies it proposed included food security programmes and development of smallholder farmers, and had other programmes to increase production of crops, improvement and protection of animal health, natural resource management, and agricultural engineering and processing, food technology and safety, as well as a number of policies to deal with the various sub-sectors. Members asked how livestock numbers would be boosted, whether ARC was researching horse diseases, asked for comment on recent outbreaks of foot and mouth disease, in controlled areas, in Mpumalanga, and whether it was preparing for rinderpest outbreaks. The salaries of employees were questioned, and ARC was asked also to provide more details on the hiring of interns, the ageing infrastructure, links with other organisations, and research on indigenous knowledge.

Onderstepoort Biological Products (OBP) noted that it was a State Owned Entity, and aimed to achieve a skilled and capable workforce to support an inclusive growth path, to grow vibrant, equitable, and sustainable rural communities, and contribute towards food security for all. The job drivers were briefly explained. OBP had prioritised skills development through learnership and Internship programmes, bursaries and development programmes, and its training budget had increased. It was intending to partner with other international bodies to raise funding. Members asked about the website, what vaccines were produced by OBP, and called for an explanation on complaints that certain vaccines were not effective, as well as asking how OBP would ensure sufficient numbers of vaccines, and its research capacity.  Members asked how ARC and OBP had assisted farmers in producing more beef, whether OBP was accessing African or overseas markets, and clarity on the audits and protection of its intellectual property, including restraints of trade on staff.

The Marine Living Resources Fund (MLRF) outlined the key priorities for the Department of Agriculture, Forestry and Fisheries, noting that it intended, in the fisheries sector, to conduct fishery-specific research to inform the setting of total allowable catches, as well as sustainable development of aquaculture, to implement stock recovery for hake, abalone, West Coast rock lobster, and line fish, to encourage human consumption of anchovy, and to finalise and implement the small scale subsistence fisheries policy. MLRF also wanted to implement a proactive stakeholder engagement strategy, develop and finalise a Fisheries Charter to meet transformation targets. It would proclaim Fishing Harbours, with the necessary refrigeration and processing facilities, in three provinces, and would draw an integrated fisheries security strategy. The particular challenges in this sector included limited natural resources, problems around access to markets, climate change, the effects of illegal fishing, and capacity constraints. Members asked for an update on the allocation of rights, the vacancies, the terms of reference for the Commission of Inquiry, the current status of procurement, whether corruption charges had been laid in a particular case, the impact of grounding vessels on poaching, and the need to absorb the Marine and Coastal Management structure. Members wanted to know when the small scale fishing policy would be finalised, and asked if the reduction of rights of the large industrial companies would not lead to job losses in the sector.

The National Agricultural Marketing Council (NAMC), noted that it faced challenges in integrating black farmers, but was running targeted programmes for marketing of schemes, and training, and would offer technical production support and favourable financing. NAMC was aiming to achieve fairness for all producer segments, to transform industry trust, and would focus on a number of issues, including long term planning, good financial management and education. It recognised the need for planning around the impact of climate change on trade, the need to work with the BRICS countries, trade intelligence, and promotions. Members asked if there was input from black farmers, what the plans were to address revenue decline, how it was addressing climate change, and the quality of the trustees. They also asked what support was given to developing farmers.

The Perishable Products Export Control Board (PPECB) commented that its founding legislation and mandate were now outdated, and there was an urgent need to revise them. It listed its challenges as high inspection costs, coupled with poor or inconsistent service, communication with stakeholders, high staff turnover and lack of skilled replacements, and funding challenges. It was trying to work with NAMC help smallholder farmers, specifically with overseas markets, and noted that the African market, although it paid less, was also less exacting on standards. PPECB would, however, keep all its checking at a consistent level. Members were concerned about the outdated legislation, asked about duplication of duties with the Department of Health, but were generally satisfied about commitments shown. They questioned the import tariffs in India, and whether there were Competition Commission challenges.

Meeting report

Chairperson’s opening remarks
The Chairperson noted the apologies of the Minister and Deputy Minister of Agriculture, Forestry and Fisheries. He noted the importance of attendance of Board members, as well as executive management, when entities appeared before Committees. He noted that presently, Parliament played a minimal role in the appointment of board members of entities, and therefore seldom had a chance to interact with them. He also noted that the legislation now permitted Parliament to become more involved in the budgetary allocations to Departments and entities.

Agricultural Research Council (ARC) 2012Strategic Plan briefing
Mr Jonathan Godden, Chairperson, Agricultural Research Council, noted the apologies of some members of the Council (ARC) board, who had prior commitments. The ARC Council had asked management to speak to issues of Research and Development (R&D) and to address the concerns of small holder farmers. Council members would assist management when responding to the Committee’s questions.

The Chairperson said he was not impressed by the absence of most of the Board, and reiterated that the Committee wanted to become familiar and interact with those on the board.

Ms S Steyn (DA) remarked that the Board members had known about this meeting in advance, so their absence was not acceptable. These meetings only occurred once a year, and the Committee, as part of its oversight, needed to have Board members appear before it.

Ms Steyn also questioned the absence of Mr Langa Zita, Director General, Department of Agriculture Forestry and Fisheries, and asked who was leading the Departmental delegation.

Mr Sipho Ntombela, Acting Director General and Deputy Director General, Department of Agriculture, Forestry and Fisheries, noted that Mr Zita was presently overseas, and that he was, in his absence, acting as Director General.

Dr Shadrack Moephuli, President and Chief Executive Officer, Agricultural Research Council then tabled the strategic plan for 2012/13 to 2016/17. He noted that time constraints did not allow for a full presentation, and he would confine his presentation to a few main points. Firstly, he outlined the main challenges facing the ARC, which included climate change, increased demand for food, lack of funding, the ageing ICT infrastructure, science and technology developments, the need for successful agrarian transformation, the need to address the economic costs of doing business, regulatory systems and urbanisation.

There were a number of factors that would impact negatively on agriculture, in relation to climate change, including the emergence and management of new pests and diseases, utilisation of water resources and ability to replenish, energy sources and utilisation, and biodiversity conservation and prevention of generic resources.

He also highlighted that lack of funding and of scientific and technical capacity impacted on the ARC. It was further affected by policy and legislative changes, had to address regional food security, and compete for resources, including funding and human skills. There were changes in farming systems and players, the impact of international players on agricultural systems had to be considered, and there was a need for changing education and training landscapes. Furthermore, the ARC was affected by social and economic changes in South Africa and the Region, and was affected by the exchange rate and other input costs.

The ARC had strategies to meet government priorities, including those relating to food security and development of small-holder farmers The ARC proposed various programmes to meet developmental goals, which he outlined as including crop production, improvement and protection, animal production improvements and animal health, natural resource management, agriculture engineering, processing, food technology and safety. ARC also had policies around smallholder agricultural development, agricultural economics, business development and commercialisation, training and extension officers, and its own Administration and Corporate Affairs programmes. He referred Members to the presentation (see attached document) for more detail.

Discussion
Mr S Abram (ANC) asked the ARC how it planned to increase the numbers of local animals, such as sheep.

Dr Moephuli responded that the ARC had a programme of boosting numbers of dwindling livestock. An animal improvement scheme used embryo transfer to boost animal productivity.

Ms A Steyn (DA) wanted to know whether the ARC was doing research on horse diseases.

Dr Mohammed Jeenah, Executive Director, ARC, confirmed that the ARC was doing research on new vaccines for horse sickness.

Ms Steyn asked the ARC to confirm the rumour that there was an outbreak of Foot and Mouth disease (in a controlled area) in Mpumalanga.

Dr Jeenah confirmed that there was an outbreak of foot and mouth disease in a controlled area. He noted that this was nothing unusual.

Ms Steyn also wanted to know whether the ARC was preparing for the outbreak of rinderpest, which had been detected in some parts of Eastern Africa.

Dr Jeenah noted that viruses did not recognise borders, and that spread of this disease could be attributed to climate change and the movement of livestock.

Ms Steyn wanted to know the staff complement at ARC, and asked if there were disparities in salary between provincial and national departments.

Ms Makgkomo Umlaw, Executive for HR, ARC,  explained that salaries of employees were determined by the ARC Board. She noted that budget limitations affected the salaries. She also pointed out that ARC was competing with the private sector for professionals.

Ms Steyn also asked about the research link between Onderstepoort Biological Products (OBP) and ARC.

Dr P Hanekom, Member of the OBP Board, noted that OBP had a number of research collaborations with the ARC, but intended to strengthen the collaborative links.

Ms M Pilusa (ANC) raised concerns on ARC’s ageing infrastructure.

Dr Moephuli explained that the buildings were old, some exceeding twenty years old. The ARC would be asking National Treasury for more funding but in the meantime maintenance was ongoing.

Ms Pilusa asked how the ARC planned to overcome threats mentioned in its SWOT analysis.

Mr Gabriel Maluleke, Chief Financial Officer, ARC, noted that anticipation of threats in advance was crucial in mitigating the risks.

Ms Pilusa wanted to know the number of students recruited by ARC.

Mr L Gaehler (UDM) asked a question about students on learnership. He also wanted to know if the ARC was considering hiring them permanently.

Ms Umlaw explained that ARC was recruiting students at undergraduate level and postgraduate level and some would be absorbed permanently into the organisation.

Mr R Cebekhulu (IFP) asked whether there was research on fish that died in rivers and water weeds.

The Chairperson asked whether the ARC was using indigenous knowledge.

Dr Jeenah said the ARC, under its R&D activities, was doing work on traditional food and traditional medicine. He noted that isolating and protecting the active component of medicinal plants was of paramount importance.

Onderstepoort Biological Products (OBP) 2012 Strategic Plan briefing
Dr Hanekom took the opportunity to introduce board members and noted that the Chairperson, Dr H Adams, but was expected to join the team during the course of the meeting.

Mr Steven Cornelius, Chief Executive Officer, OBP, tabled the corporate plan for 2012/13 to 2015/16. He noted that OBP was a State Owned Entity (SOE) and would aim contribute towards achieving what was set out in the medium term strategic framework for the Agricultural sector, achieving a skilled and capable workforce to support an inclusive growth path, growing vibrant, equitable, and sustainable rural communities, and contributing towards food security for all.

The New Growth Path (NGP) drivers had included improving job creation in economic sectors, the agricultural value chain and manufacturing. Its job driver 3 envisaged seizing the potential of new economies and the Knowledge Economy. The Department of Agriculture Forestry and Fisheries (DAFF) strategic objectives included the increased profitable production of food, fibre and timber products by all categories of producers, including subsistence, smallholder and commercial producers.

Mr Cornelius noted that OBP had prioritised skills development through learnership and Internship programmes, bursaries and development programmes, and its training budget had increased. It was also looking to the possibility of raising more money through partnering with international bodies such as the United Nations. This was an important part in achieving OBP objectives.

Dr OBP, outlined the governance issues of OBP, in line with the attached presentation.

Mr Matsobane Gololo, Chief Financial Officer, OBP, briefly tabled and explained the financial issues (see attached presentation for more details).

Discussion
Ms Steyn asked where OBP had information on its website that would address rumours and inform people of the correct position.

Dr Hanekom confirmed that at the moment OBP’s website was not working properly. Various pages were under construction and OBP would look at fast-tracking this process.

Ms Steyn asked how many vaccines were produced by OBP.

Dr Hanekom said OBP produced every vaccine in South Africa.

Ms Steyn also asked if OBP had capacity to do research on prevention of disease.

Mr L Van Dalen (DA) wanted to know why some OBP vaccines were not working.

Mr Cornelius noted that vaccines underwent quality control tests up to three months, and vaccines were refrigerated.

The Chairman stated that farmers were complaining about vaccines that were not effective.

Dr Hanekom noted that OBP did not release vaccines that had not passed quality control. She indicated that failure of vaccines could be due to the fact that farmers may not administer them correctly.

Mr van Dalen queried the fact that OBP was listed as a Schedule 2 entity in the document handed out. He asked if this was a printing error, and, if so, how many other errors were in the document.

Mr Van Dalen also asked how many full time researchers were employed by OBP, and whether there was enough stock of vaccines, in the event of outbreak of disease.

Dr Hanekom said OBP was working with ARC on the vaccine bank, to ensure that there would be enough vaccines in case of an outbreak.

Mr Cebekhulu wanted to know how far OBP had gone in assisting subsistence farmers with producing more beef.

Dr Moephuli had addressed this question earlier, explaining the ARC had a programme (animal improvement scheme) of boosting livestock numbers through the use of technology in embryo transfer. He said this would boost productivity, profitability and animal health. He noted that ARC was looking at training farmers to do this themselves.

Mr C Msimang (IFP) asked how OBP ensured that it had sustainable funding.

Mr Cornelius noted that OBP was looking at getting investors.

Mr Msimang wanted to know whether OBP was accessing African or overseas markets.

Mr Cornelius said OBP was selling vaccines internationally. He noted that there was competition in the market.

Mr Msimang also asked whether there were any follow-ups on OBP’s products in rural areas, and whether the vaccines were working in rural areas.

Mr Cornelius noted that OBP had partnership with BEE companies that distribute to provinces.

Mr Msimang wanted to know whether OBP was doing research on buffaloes carrying foot and mouth diseases.

Dr Jeenah, ARC, noted that the ARC was doing studies on this, and that it was true that some wild animals did carry viruses.

Ms Pilusa wanted clarity on the position around the audits.

Dr Hanekom noted that OBP had recently hired an experienced Financial Officer to address the issues. The qualifications in the previous audits were based on a technical issue, as the auditor wanted to know the cost of every vaccine that was produced.

The Chairperson asked whether OBP had a restraint of trade in respect of its employees, and in what kind of partnerships OBP was involved.

Mr Cornelius said OBP was looking at safeguarding intellectual property (IP) and was reviewing staff contracts. He noted that OBP was looking at strategic partnership.

Ms Steyn asked for an indication of what the process was in registering a new vaccine.

Mr Cornelius said a new vaccine registration was registered according to the relevant legislation, and a full dossier of documents was required.

The Chairperson noted that Members did have further questions, but time constraints prohibited them.

Marine Living Resources Fund (MLRF) 2012 to 2017 Strategic Plan briefing
The Chairperson noted that this was the first time the Marine Living Resources Fund (MLRF) was appearing before the Committee.

Ms Sue Middleton, Acting Deputy Director General: Fisheries, DAFF, tabled the presentation and mentioned key priorities for the DAFF in respect of fisheries. These were to conduct fishery-specific research to inform the setting of total allowable catches and effort in 22 fishing sectors, to do research in support of a competitive and  sustainable development of aquaculture in South Africa, to implement a stock recovery strategy for hake, abalone, West Coast rock lobster, and line fish, and to finalise and implement the small scale subsistence fisheries policy. The MLRF also aimed to broaden the scope of the aquaculture sector, to develop and implement a proactive stakeholder engagement strategy, and to develop and finalise a Fisheries Charter, to meet transformation targets within the fishing sector.

In addition to the stock recovery strategy, DAFF intended to promote consumption of anchovy in the human markets.

Fishing harbours would be proclaimed in Kwazulu Natal (KZN), Eastern Cape and Northern Cape. These harbours would have refrigeration and processing facilities for smallholder fisherman.

She also mentioned development and implementation of an integrated fisheries security strategy to ensure better compliance, monitoring and enforcement efforts; and to promote job creation and sustainable economic livelihoods.

Ms Middleton noted that, although South Africa had a well established fishery sector, the sector also faced a number of challenges which limited the realisation of its ability to contribute to key government imperatives of sustainable use of marine living resources, and ensuring food security for all. The constraints included limited natural resources, problems around access to markets, climate change, the effects of illegal fishing, and capacity constraints. She referred Members to her presentation document for more detail.

Discussion
Mr van Dalen wanted to know what was happening with the allocation of rights. He also asked about the status of the fund raised through confiscated abalone.

Ms Middleton said the DAFF was now in a position of allocating fishing rights.

Mr van Dalen also asked about the vacancies in the Department. He also sought more detail on the terms of reference of the Commission of Inquiry that was established to investigate corrupt tender allocations.

Ms Middleton said the Department was still in talks with the Presidency, and the terms of reference had not yet been finalised.

Mr van Dalen asked if procurement had in the meantime been brought to a halt.

Ms Middleton said procurement had not stopped, and the DAFF was conducting “business as usual”.

Mr Van Dalen asked about the status of a particular case involving corruption, asking if charges had been laid.

Ms Middleton confirmed that corruption charges had been laid with the South African Police Service (SAPS), by the Director General, based upon the misrepresentation.

Mr van Dalen asked about the impact of grounding patrol vessels on poaching.
 
Ms Middleton said the DAFF was using an integrated security structure that involved the South African Police Service, South African Revenue Services, the SARS customs branch, and was also employing military veterans.

Ms N Phaliso (ANC) raised concerns about the Marine and Coastal Management structure. She said the structure must be absorbed. She also raised concerns on transformation, the small scale fisheries policy, and under-development of aquaculture.

Mr Ntombela, DAFF,  said the fisheries function would spread to other provinces, and DAFF would promote other provinces.

Ms Middleton said that transformation issues had been raised by the Department of Trade and Industry (dti). The DAFF did not, as yet, have an aquaculture policy, as this policy was in the process of being formulated.

Ms Phaliso asked what stage the small scale fishing policy had reached, and when it was likely to be finalised. The latter question was taken up also by Ms Nyalungu, who asked for the time-frames.

Ms Middleton said that policies must be in place by this time next year. She said the Department was presently conducting interviews with poor communities.

Ms N Twala (ANC) wanted to know the number of vessels patrolling on the Namibian side.

Ms Middleton said patrol vessels had been handed over to the South African Navy.

Ms Twala wanted more details on the scope of the MLRF.

Mr van Dalen was worried about the reduction of rights of the large industrial companies, at the expense of increasing rights of small holder farmers, as he noted that this was likely to lead to reduction of jobs.

Ms Middleton said the DAFF had no intension of nationalising the big five companies. Instead, the DAFF was looking at new ways of allocating rights.

National Agricultural Marketing Council (NAMC) 2012-2017 Strategic Plan briefing
five year strategic plan 2012-2017
Mr Tshilo Ronald Ramabulana, Chief Executive Officer, National Agricultural Marketing Council (NAMC), noted that the Chairperson of the NAMC Board was not well, and was not able to make the presentation. Instead, he would present the five-year strategic plan to the Committee.

Mr Ramabulana grouped the challenges facing NAMC under headings of Integrating Black Farmers, Transforming industry trust, Levying administration institutions, and Market development. In relation to the first group of challenges, of integration, he said that NAMC was running programmes for marketing schemes in identified products, as well as targeted training programmes, and was aiming to give farmers a greater share of the profit from the sale of the products, as well as technical production support and favourable financing terms.

In order to transform the industry trust and levy administration institutions, he noted that the NAMC was aiming for fairness to all producer segments, and responsiveness to industry challenges. NAMC would focus on long term strategic planning, good financial management, and holding of education sessions for all trustees on roles and responsibilities. It wanted to have a clear communication strategy with grassroots organisations and people, and to achieve good succession planning  and empowerment.

In the area of market development, Mr Ramabulana outlined trade and administration, the need for planning on the impact of climate change on trade, the need to work with the BRICS countries, trade intelligence, and promotions.

Discussion
Mr Abram raised a question on the collection of levies and asked whether NAMC was getting input from black farmers, and what its plans were for the future, in the light of its declining revenue.

Mr Ramabulana said NAMC had met with a number of black farmers, who had raised a number of issues that NAMC was considering.

Mr Abram wanted to know what relationship NAMC had with Green South Africa, and how NAMC was planned to address challenges around climate change.

Ms Steyn raised concerns with the estimation of crops in 2012. She was also concerned about the competence of the trustees.

Mr Ramabulana said the quality of trustees had improved through experience and education.

Ms Steyn was also concerned about statutory measures, she asked if this was a way of getting funding.

Ms Sarah Mavhulawa, Chief Financial Officer, NAMC, said the money did not come to NAMC. She explained that NAMC facilitated the process.

Mr Msimang wanted to know about challenges in integrating black farmers, and what assistance was given to black farmers. He too was interested to hear why the budget was lessening.

Mr Cebekhulu also made enquiries about the support given to developing farmers. He asked if there was a database of these farmers.

Mr Ramabulana said training was provided to farmers on improving the quality of animals. He said also that 90% of animals were sold. Mr Ramabulana noted that NAMC did not provide transportation to farmers for their products. Information was available on how the levies money was spent.

Ms Twala wanted clarity on the efforts around citrus farming.

Perishable Products Export Control Board (PPECB) 2012 t0 2015 Strategic Plan & Budget briefing
Mr Louis Vorster, Chairperson, Perishable Products Export Control Board, introduced the members of the Board (PPECB) who were present, and, in answer to the Chairperson’s interjection as to why the majority of Board members were absent, said that he was not aware that the Committee expected the entire Board to appear before the Committee. He apologised for this oversight.

Mr Stuart Symington, Chief Executive Officer, PPECB, noted that the PPECB was established in terms of legislation, but its founding Act was now outdated, and it was now urgent that a review of the PPECB mandate be held.

He outlined a number of challenges, such as high inspection costs, coupled with poor or inconsistent service, communication with stakeholders, the fact that the PPECB staff turnover was high, with lack of skilled replacements to fill the positions, and there was a need to review the inspection methodologies. Funding was also raised as a major challenge. He referred Members to the attached presentation documents, for more information.

Mr Symington noted that PPECB would work with NAMC to help smallholder farmers, specifically with overseas markets. He also noted that collaboration with other entities was paramount. PPECB would also assist smallholder farmers in developing export markets within the African market. He noted that the African market was less fussy about standards of products.

Mr Symington, however, stressed the fact that PPECB would conduct checks at the same level regardless of the target market.

Discussion
Ms Steyn raised concerns on the Act that needed to be changed and the duplication of duties with the Department of Health.

Ms Nokulunga Maswana, Executive: Statutory Services, PPECB, said the Department of Health had a role to play in terms of regulation.

Mr van Dalen was impressed by the offer from PPECB to work with NAMC in helping smallholder farmers. He noted that more exports were needed.

Mr Abram was also concerned about the fact that the Act and mandate were outdated, but was generally satisfied with the commitment shown by PPECB. He added that government needed to take note of what the sector needed.

The Chairperson asked what the tariff structure was for imports in India.

Mr Dean Martin, Executive: Value Added Services, PPECB, noted that tariffs in India were at 2%.

Mr van Dalen enquired why the African countries were “less fussy” about South African products. He wanted to know whether this had anything to do with labelling and credibility.

Mr Symington noted that South Africa did not export much to African countries, since they tended to pay less.

Ms Steyn asked whether PPECB had any challenges with the Competition Commission.

Mr Symington said that the PPECB had not been involved at all in anything to do with private company collusions and price fixing, although he was aware that some private companies were allegedly colluding with overseas companies in price fixing, as illustrated by the point that he had, several years ago, been asked questions about price fixing by the relevant Federal Bureau of USA. However, the South African government was not involved in these issues.

The meeting was adjourned.

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