Agriculture Research Council, Onderstepoort Biological Products; South African Veterinary Council Strategic Plans 2013

Agriculture, Forestry and Fisheries

22 April 2013
Chairperson: Mr M Johnson (ANC)
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Meeting Summary

The Agriculture Research Council’s strategic priorities included growth in agriculture – increased productivity; food security (Zero Hunger Campaign); bio-security; job creation; optimal technology platforms ; support government’s development agenda; SADC integration into the markets and resources; bio-economy (water, climate, carbon footprint, energy, sustainable and healthy production methods); the agrarian reform agenda; smallholder farmers; and research and development across the value chain. The CEO spoke about the potential impact of climate change on ARC strategy.

The strategic goals of ARC were:
▪ Improved productivity, production, competitiveness and sustainability of animal and crop based agriculture;
▪ National biodiversity and integrity of ecosystems through efficient use of agriculture natural resources;
▪ Enhanced mechanization technologies to improve performance of agriculture infrastructure;
▪ Improved quality and increased value of agriculture products;
▪ Increased number of farmers with access to ARC services, information and technologies;
▪ Facilitate access and use of ARC intellectual assets;
▪ Enhanced skills capacity in the agriculture sector; and
▪ An optimally functioning and sustainable organization.
 
ARC’s programmes were: Crop production, improvement and protection; Animal production, Improvement and Health; Natural Resource Management; Agriculture Engineering; Agro-Processing, Food Technology and Safety; Smallholder Agricultural Development; Agricultural Economics, Business Development and Commercialization; Training and Extension; and Administration and Corporate Affairs.

The CEO spoke about ARC’s key initiatives for 2013/14, the impact of sustained investments into agriculture research, strengthening of human resources, recent success stories, and its finance strategy. The key challenges for ARC included generating external income growth; limited funding for Capex; limited funding to fill critical vacancies; and ARC’s competitiveness for skills.

The Committee asked what percentage of its funds was spent on research; how ARC planned to achieve the mechanization process to help smallholder farmers, was it going to collaborate with the department, if not how the ARC programmes were going to be different from those of the department, what was ARC’s definition of smallholder farmer, and what the relationship was like between ARC and Onderstepoort Biological Products (OBP).

The OBP Corporate Plan 2013/14 – 2016/17 briefing looked at OBP’s background, governance, corporate plan, the review process, its alignment to government programmes, strategic objectives, key indicators, financials and performance monitoring. The mandate of OBP existed to prevent and control animal diseases that impact food security, human health and livelihoods. There had been significant declines in sales revenue in FY 2012/13. Revenue was well below budget of R120 million by 26% (R 31 million). The organization was a state owned company (SOC) of the Department of Agriculture, Forestry and Fisheries (DAFF). OBP had undergone a strategic review process. There was a need to introduce significant change in the organisational culture, mind set and performance of employees in the organisation to enable the organisation to adapt to changes in quality, production and industry trends and technology. The report concluded that at an operational level despite negative media reports and a decline in sales, business was projecting revenue achievement of R110 million for the 2013/14 financial year. It would invest profits in the development of new vaccines, and replace critical equipment to maintain manufacturing capacity. Skills development had been prioritised. The GMP (Good Manufacturing Practice) upgrade of the facility was high priority.

Members asked whether any research was happening within OBP, what was the relationship like between OBP and ARC, how many of the organization’s targets were reached in the previous year and how much of the budget was spent.
 
South African Veterinary Council (SAVC) said the veterinary team should be regarded as key to rural development, not only in food safety but also in managing rural development, management of animal health and production and veld and pasture management. SAVC was a representative organisation of the veterinary and para-veterinary professions, promoting the health and well-being of all South Africans through the promotion of animal health, production and well-being. The Veterinary and Para-Veterinary Professions Act, 1982 informed its strategic objectives.

Achievements included proactively amending certain rules (Rule 10) to improve the control of highly scheduled medicines. Challenges were: Trying to ensure veterinarians were exempted from compliance of onerous permits from the Department of Environmental Affairs to treat Threatened and Protected Species [TOPS]; chemical immobilisation and Wildlife Ranching South Africa [WRSA]; lay persons and unqualified persons employed by the state; loopholes created by medicines being governed by two Acts [Act 101 of 1965 and Act 36 of 1947] (autogenous vaccines control; food safety, indiscriminate use of medicines); reputation damage of the rhino saga; IT transformation; increasing interest among black youth; few specialists in the production animal field; and veterinary science not being considered a priority.

The presentation also dealt with: Promoting veterinary services to all communities; Addressing the shortage of all professionals; Engaging the educational institutions and encouraging bridging programmes for marginal students; Dealing with antibiotics freely available to members of the public; Help making small scale farming more productive, successful and self-sustaining; Safeguarding game animals and other wildlife against exploitation . It had ruled against Green hunting and veterinary safaris. Its finance report showed income from members’ maintenance fees with projected income of R9,5 million for 2013/4.

Members asked for more information on the challenge of unqualified veterinarians employed by the state, and where specifically they were employed. They asked about the loophole in the Medicine Acts. They commented on the importance of encouraging young black students to go in the veterinary field and questioned if the 2 896 registered was sufficient for the country.

 

Meeting report

Agriculture Research Council (ARC)
Mr Jonathan Godden, Chairperson of the Agriculture Research Council (ARC) said it was probably the last time that the current council appeared before the Committee as its term was coming to an end in June. They wanted to express their appreciation to the Committee for the opportunity of being given that function to perform over the period of three years. They did not know whether any of them would be back after June, but they hoped they had not disappointed the Committee in the way they had provided oversight and governance of the institution over the last three years

The business plan that the Chief Executive Officer would present at that meeting represented in real terms the first business plan that attempted to move towards implementation of the new five-year strategy that the council had adopted last year. They expected a phased implementation of the key components of that strategy. In addition to what the CEO would present, one of the key tasks that they would focus on would be the organizational restructuring to bring the organization into alignment with the requirements of the new strategy which was likely to be a big task for them in supporting management during 2013/14. There were some big challenges awaiting them in terms of the geographic footprint of the ARC. The footprint was developed along historic patterns and they were concerned that did not have any substantive research facilities or substantive programmes in key parts of the country that had been identified as future growth areas for agriculture, though not necessarily each province should have a detailed presence. They were looking in the distant future to establish some facilities in the three key provinces: Eastern Cape, KwaZulu-Natal, and Limpopo where currently they had no presence. Of course they did have some activities taking place in those provinces such as research farms and research stations but they wanted to establish stronger institutional frameworks in some of those provinces. That expansion and development was likely to be on the agenda probably from 2013/14/15 going forward.

Dr Shadrack Moephudi, ARC Chief Executive Officer, said that the Board and Management of ARC had requested him to remind the Committee about the invitation they had extended to the Committee to visit the ARC facility. They were still waiting expectantly for the Committee to visit the Council and see the kind of work they were doing and to be able to see the challenges ARC was faced with.

The CEO said that objective of ARC was to conduct research, development and technology transfer in order to promote agriculture and industry; contribute to a better quality of life; and facilitate natural resource conservation. Its policy considerations were aligned to Government’s National Priorities, the New Growth Path, the National Development Plan and the DAFF Strategic Plan for Agriculture. The ARC focus included job creation; food security; increased agricultural production; research and innovation; national biosecurity; climate change response and adaptation; and optimal resource use and sustainable growth.

ARC’s strategic priorities included growth in agriculture – increased productivity; food security (Zero Hunger Campaign); bio-security; job creation; optimal technology platforms ; support government’s development agenda; SADC integration into the markets and resources; bio-economy (water, climate, carbon footprint, energy, sustainable and healthy production methods); the agrarian reform agenda; smallholder farmers; and research and development across the value chain. The CEO spoke about the potential impact of climate change on ARC strategy.

The strategic goals of ARC included:
▪ Improved productivity, production, competitiveness and sustainability of animal and crop based agriculture;
▪ National biodiversity and integrity of ecosystems through efficient use of agriculture natural resources;
▪ Enhanced mechanization technologies to improve performance of agriculture infrastructure;
▪ Improved quality and increased value of agriculture products;
▪ Increased number of farmers with access to ARC services, information and technologies;
▪ Facilitate access and use of ARC intellectual assets;
▪ Enhanced skills capacity in the agriculture sector; and
▪ An optimally functioning and sustainable organization.
 
The ARC’s programmes were: Crop production, improvement and protection; Animal production, Improvement and Health; Natural Resource Management; Agriculture Engineering; Agro-Processing, Food Technology and Safety; Smallholder Agricultural Development; Agricultural Economics, Business Development and Commercialization; Training and Extension; and Administration and Corporate Affairs.

Key initiatives for 2013/14 was smallholder agricultural development through access to ARC IP for farmers in this category. They had initiated discussions in the previous year for citrus varieties to be licensed to a group of farmers in the Eastern Cape and Limpopo. They had also protected sweet potato varieties which would be transferred to SMME nurseries owned by smallholder farmers in Limpopo, North West, Eastern Cape and KZN. They had furthered SMME development of Devil’s Claw for a community in Ganyesa, North West. They had developed household gardens and an agro-processing initiative in Motherwell in the Nelson Mandela Bay municipality. This initiative was targeted specifically at people living with HIV.

On the impact of sustained investments into agriculture research, the ARC’s wheat breeding programme had shown that from 1980 to 2007 the ARC wheat lines were planted on 58% of the area used for wheat production. This had a direct monetary value of R8.4 billion. However at present the area planted with ARC cultivars had decreased to 25% of the planted area. This trend in the decrease of ARC contribution would be reversed with the release of 7 new wheat cultivars for the Western Cape and eastern Free State. These cultivars were well adapted to the different regions, were high yielding as well as pest resistant.

The CEO said that in terms of strengthening human resources, the Pipeline development introduced higher numbers of students into research and science career through bursaries, internships, postdoctoral fellowships and professional development programmes.

Success stories for ARC included its funding strategy/models, ability to attract and retain high quality researchers and create critical mass. It had established a Performance and Monitoring system, a Knowledge and Information management system. There was effective and efficient use of resources (Asset Plan). There was support from Government (policy and resources). There was realignment of organizational structure to the strategy. The organization was successful in terms stakeholder interaction/management. Its communication channels and technology transfer was also effective and efficient.

The CEO said that he would not go through the finance strategy but safe to say that it looked at trend analysis; key budget assumptions; 2013/14 budget; key strategic issues; challenges; and key focus areas. All of these had been thoroughly explained in the presentation document under finance strategy. The purpose of the finance strategy was to ensure that the ARC’s business was maintained and sustained.

The CEO said key challenges for ARC included generating external income growth; limited funding for Capex; limited funding to fill critical vacancies; and the ARC competitiveness for skills.

The organization had to engage with other institutions for innovation. It needed to think out of the box, work within current Government and other stakeholder planning cycles. It needed to continually reassess its plan and check critical success factors yearly for five years to make its strategy sustainable.

Discussion
The Chairperson commented that research was key in ensuring sustainability of exploitation of one’s resources. He asked what the percentage was of the budget was spent on research as ARC had outlined a number of areas it wanted to be involved in, such as citrus in Limpopo, sweet potato in household gardening initiatives, and drought tolerance in the Kaonafatso ya Dikgomo (KyD) project. He also asked what percentage did the Department of Agriculture, Forestry and Fisheries (DAFF) spend on research.

Mr S Abram (ANC) thanked ARC for the presentation. He wanted to pay tribute to a great scientist, Prof. Arthur de Villiers, for the development of the Bonsmara breed which was the largest breed in the country in terms of numbers. He was responsible for the breed to be accepted in countries like Australia, Brazil, Argentina and Namibia. The department had stated last week that it might try and save the Afrikaner cattle.

The Chairperson welcomed the Deputy Minister of Agriculture, Dr Peter Mulder, who had just arrived. They had spoken at length the last time they met about a need for the presence of both the Deputy Minister and Minister. It assisted the Committee in really getting a sense of where they were going. Whatever answers were not forthcoming from the accounting officers at least with the Executive present, they would not be short for answers. They really appreciated the Executive’s presence.

Mr Abram noted that one of DAFF’s focus area in which questionable success had been realized was the mechanization support for smallholder farmers. The ARC was also planning to support smallholder farmers with mechanization. Firstly, millions of hundreds of rands worth of agricultural equipment bought last year was supposed to have been distributed for the ploughing and planting season, was still lying around various parts of the country. He asked how ARC planned to achieve this mechanization, was it going to collaborate with the department, if not how ARC programmes were going to be different from those of the department.

He said as a matter of interest the Committee had been trying for some years without success to get from the department the clear definition of the smallholder farmer. He asked if ARC had a definition after all its research of the smallholder farmer.

He noted that ARC in its 2013/14 business plan had put a lot of emphasis on smallholder farmers. He asked if that implied that ARC would revise the Sustainable Rural Livelihoods Programme which was currently defunct. Would it be responsible for the identification of challenges in transferring technology to the resource poor and communal farmers with provincially based coordinators? And if not, why was the programme discontinued and how was ARC going to promote smallholder farmers as per the current business plan?

He said that ARC as a research institution and a science council within the National System of Innovation was planning to become an agricultural development institution by contributing to employment and job creation. He asked how ARC was planning to achieve this.

He referred to predator problem which had been left up to the farmers to resolve themselves. He asked what ARC was doing in terms of research to collaborate with private sector institutions and organizations (which had for decades contributed to the development of research and scientific breeding) to come up with strategies to prevent the decimation of stock as a result of predators. There were people who were hell-bent on protecting these predators from being killed. What role was ARC playing in that regard?

Ms Steyn noted that the ARC Strategic Plan that was presented was not signed by the Minister. She asked why the Minister had not signed it - which worried her because it was an official document. She asked how ARC research linked to job creation. She asked for clarity about ARC’s key organizational risks which had not been mentioned in the presentation. She asked about ARC’s lack of full utilization of its facilities, was it because of the lack of funding or a lack of personnel? She was concerned about the outbreak of animal diseases in the country but had noted that in terms of funding per programme, the bulk percentage of funding had gone to animal health production. She asked what the working relations were like between ARC and Onderstepoort Biological Products (OBP) to establish whether there was overlapping research and if there was support. They had asked about this last time and wanted to see if there was an improvement. She asked what the role and involvement of ARC was in SADC in strengthening and enhancing regional positioning on research on certain diseases or insects that had an impact in SADC but not currently in South Africa. What percentage was spent on funding research for the SADC area? She was also concerned about African horse sickness. She asked how far the research was on this disease.

Mr L Van Dalen (DA) noted that in terms of human resources and staff personnel, it had been mentioned in the strategic plan that they had lost highly qualified staff which was a risk. On page 117, it stated that there had been a gradual decline of staff since the 2005 – 2007 financial years. He asked if those were the highly qualified personnel that they were talking about that had left ARC. He noted that ARC had not been successful in filling those posts. He asked how BEE and the Employment Equity charter prohibited the Council from filling those posts or did the country not have enough skilled people. Where did those 500 people go?

Mr V Msimang (IFP) said that he would like to emphasise the support of smallholder farmers and subsistence farming as highlighted by Mr Abram. In these days of inequality, one did get many farmers, \
particularly subsistence farmers, who could put food on the table if they were assisted, especially with climate change. He asked how that help could reach those subsistence farmers. The Committee had been bombarded about world class research which of course they complimented, but he wondered how it would help the poorest of the poor. ARC had said that all the provinces were provided for by ARC but there were no details on how KwaZulu-Natal (the province he was coming from) was benefiting. He asked for more details on KZN so as to know where they were going. It was seriously important to support smallholder farmers these days because they were consistently losing their commercial farmers which would lead to a void in this country. The last time he had looked, the statistics stated that 100 000 farmers had decreased to 46 000 farmers which was critical. Therefore, while he emphasized the need for support to smallholder farmers and the subsistence farmer category, one also needed to do something about the decline in commercial farmers. He said that they had heard there would be help for those farmers who needed extension services to the tune of R17, 5m. He asked how that was going to differ from the previous policies on extension services because that sector had been in review for the past two years. He asked if ARC had given input to the National Policy on Extension and Advisory Services because that was one mode which would go a long way to assist smallholder and subsistence farmers.

Mr B Bhanga (COPE) said that an institution like ARC remained a think tank to agriculture and its challenges. He had seen a number of agricultural problems facing the country and had seen the strategic priorities of ARC. He asked if the research output of the institution did make an impact in resolving agricultural problems and finding solutions. He asked to what extent was the country in a crisis in terms of agriculture and was it value for money to give ARC the research capacity to solve that crisis.

Referring to international publications ARC was involved with, he asked to what extent the publications were helping in resolving the country’s problems in agriculture. To what extent was the ordinary smallholder farmer and subsistence farmer accessing these publications? He asked if the plans of ARC were in the right direction for addressing the aging of ARC personnel because if that was not addressed they were facing another crisis. He asked if there was corruption within ARC supply chain management because it received an unqualified audit report but with findings on its supply chain management.

Ms M Pilusa-Mosoane (ANC) asked what ARC could say about its supply management because the Auditor-General report stated that there was a cause for concern. She asked for the percentage of vacancies ARC wanted to be filled. She also asked for the percentage decline in wheat production in the country because a lot of wheat was being imported.

Ms Steyn asked what ARC was doing to ensure that it got more funding and assisted people in research to increase that amount, and how the publications helped to eradicate poverty.

The Chairperson spoke of the bulk of land that was not arable which would require a lot of research, especially in the Eastern Cape and with 46% in Mpumalanga. He asked what role ARC was playing in this because in Mpumalanga there was serious competition between agriculture and mining. Those issues could be at the Executive level since there were trade-offs to be made. It was a serious issue which dealt with the country’s ability to produce its own food. The department had a programme of livestock production for communal farmers but then again there was the challenge of importing beef and chicken. The Committee wanted to collaborate with the research institutions so that they could focus on what they wanted to do.

The Chairperson spoke about irrigation schemes. Water prices would have escalated by the year 2020 and South Africa had scarce water resources. There were a number of irrigation schemes in the country that were malfunctioning. They needed a dedicated team working only on irrigation schemes, rehabilitating them, getting them into full use. One should be able to see the impact of all those irrigation schemes. His last point was alien vegetation management which was found all over the country. This biomass could be converted into an energy source by means of new technology. This could add to job creation for the country.

Mr Godden thanked the Chairperson for the wealth of questions. He said that ARC was a large organization with an extensive footprint. They had 11 research institutes which were scattered all over the country. There were two in Stellenbosch, one in Nelspruit, one in Potchefstroom, one in Bethlehem, one in Zeerust Rustenburg, and five in Pretoria. These were huge specialized research institutions ranging from tropical and non-tropical fruits, deciduous fruits, grapes and wine, small grains, industrial crops, agricultural engineering climate and water, animal production, animal health and so on. In addition, they had literally hundreds if not thousands of research farms and research stations scattered all over the country. It was therefore a huge organization and in that context their challenge was the full utilization of those facilities as well as supply chain management that had been raised by Members and they needed to see that in that context.

Secondly, they were essentially a research and innovation agency. So where they had engaged with other agencies, it appeared that their functions overlapped but there was actually no overlapping. They were not duplicating neither were they competing with DAFF or any other provincial departments. So when they talked about mechanization for example as a strategic priority, their mechanization was not to supply tractors to smallholder farmers, their role was on research and technical assessment of imported mechanized machinery including tractors so as to determine whether they were suitable for South African conditions. Therefore, their engagement was technical. In addition to those assessments they were also engaged in research around irrigation equipment, water distribution systems, and so on. They did work on agriculture harvesting technologies and their work was basically research focused - working as part of a chain including DAFF and provincial departments.

Mr Godden said that they viewed innovation as a full chain. They were not just research scientists located in laboratories. They also had to focus on the expression of those laboratory-developed technologies in fields and farms.

Dr Shadrack Moephuli, ARC CEO, said that the Minister had approved the Business Plan document but they were waiting for the electronic version of the Minister’s signature so that they could put it in the document and print many copies.

The CEO said that there was no corruption within ARC in terms of supply management. When he arrived at ARC in 2007, it had a massive qualified audit and a whole range of problems. One of the fundamental things that they had done as the executive management was to put together a whole new supply management policy. They had also changed the delegation of authority which was now very stringent. With IT, it had taken them a painstakingly long time for everybody to comply with their policy. But of course with 3000 staff somebody forgot to note somewhere in the document that they had to file three quotations. The AG was not looking at what a person was saying but wanted the actual evidence even if it was a R100 or R1000 quotation. So it was those little things the AG had noted in the audit findings. They were putting together an audit improvement plan as a way forward to ensure the organization succeeded.

The CEO said that they had recently recruited a leading climate change scientist from Japan which would look at research on climate change.

The CEO said page 112 and 113 of the business plan gave a breakdown of the percentage of funds that were spent on administration and the rest was on research. They were spending less than 15% of total funds on administrative matters and the rest was on research which was quite an important achievement.

The CEO said ARC’s definition of smallholder farmer was based on the size of the farming enterprise. This included subsistence farmers who consumed whatever they produced on their farms and the rest was sold.

The CEO referred to the question on whether ARC was reviving the sustainable rural livelihood programme. This had been found to be a problem seven years ago and they had abolished it for a number of reasons which they had reported to the Committee. They were not trying to revive it because they were putting in place something completely different. That was part and parcel of the failure of the organization to deliver prior to 2007 and they could articulate the details of that later.

The CEO said that they were collaborating with many research institutions, both the universities as well as those in the private sector, in research and development. In fact, it also contributed to how they generated additional income in terms of the National Research Foundation (NRF).

The CEO said that they would get back to Mr Abram about the specific project on predator animals because they needed to get details from the scientists who were working on the project to give a proper response.

The CEO said that they had always conducted their research in order to assist the department to attain its priorities. They provided technical expertise and advice where possible whenever the department requested this. There was no new shift. They were simply re-emphasizing the mandate of the department. As management, it should be understood that in their planning processes, they took into consideration as many factors as possible that could affect the organization. They had to assess what the risks of the organization were, and figure out what action they needed to take to solve those risks. But some of those risks were external to the organization. As management, they should articulate those risks to the sector as a whole.

The CEO said that the working relationship between ARC and OBP was quite good, in fact, they were producing and supplying some blood vaccines for OBP. They were trying to procure a new kind of equipment that would help in packaging those blood vaccines. This would reduce the loss in packaging by more than 50%. This was an 18 month project.

The CEO said that they had only received R3 million in terms of their annual allocation for their research work on the SADC region which was highly insufficient given the size of the15 countries in the SADC region. It did not talk to attending meetings but talked only to projects around the SADC region. One of those was the Limpopo River Basin Water Project which looked at the purification of water in the Limpopo River basin.

The CEO said that they were indeed doing research on African horse sickness and would come back with the details on what stage was the project so far.

The CEO said that ARC was not at all impacted by BEE and was not prohibit from employing people, whether white or black. They did adhere to employment equity requirements and their transformation plans, and tried to promote the best skills as possible in filling posts. That was what they had done in the last five years and what they would continue to do and it had no impact in realizing their goals.

The Deputy Minister said that what was important and key to infrastructure, agriculture and mining was the coordination which was one of the big problems he had experienced in Government. Theoretically the National Development Plan (NDP) and the Presidential Infrastructure Coordinating Commission (PICC) aimed to correct this. Whether these would work, that they would know in the next five years but it was a step in the right direction to try and coordinate so as not to fight one another.

The Chairperson thanked the ARC delegation for the presentation and responses. However, due to time constraints, they should deal with the next presentation.

Onderstepoort Biological Products (OBP)
Dr Theresa Smit, OBP Chief Operations Officer, said the briefing would look at OBP’s background, governance, corporate plan, the review process, its alignment to government programmes, strategic objectives, key indicators, financials and performance monitoring.

In terms of historical background, in 1908 the Onderstepoort Veterinary Research Institute was establised. In 1968 the dedicated vaccine facility was established. In 1981 the vaccine facility operated with a trade account and was able to begin funding operations from the sale of vaccines. In 1992 OBP was separated from OVI, which became part of ARC. In 2000, OBP incorporated on 6th September (OBP Incorporation Act, 1999). In 2001 OBP received funding of R9 million. In 2005, state owned land and buildings were officially transferred to OBP. In 2010, OBP achieved the revenue milestone of R100 million. In 2011, it achieved the revenue milestone of R160 million. And in 2013, was allocated funding from Treasury to refurbish its manufacturing plant.

OBP’s mandate was to prevent and control animal diseases that impacted on food security, human health and livelihoods. Its vision was to be a global biotechnology manufacturer of animal health products. Its primary objective was to manufacture/produce quality vaccines for the prevention and control of livestock diseases in South Africa, Africa and globally.

The OBP product portfolio of bacterial and viral vaccines was listed as was its structure, board and management staff.

Dr Smit said the workforce profile was an executive management of 7 executive managers, 17 at management level, 67 in skilled/advance operation, 67 in semi-skilled level, 29 in basic skills with an overall total permanent staff of 187.

In terms of business performance the organization received unqualified audits from period of 2000/1 to 2009/10 FYs. It received a qualified audit for 2010/11 FY, and an unqualified audit for 2012/13 FY. There were significant declines in sales revenue in FY 2012/13. Revenue was well below the budget of R120 million by 26% (R 31 million).

OBP was a state owned company (SOC) of the Department of Agriculture, Forestry and Fisheries (DAFF). It was a Schedule 3B public entity and was incorporated under the OBP Act No 19, 1999. The organization was a National Key Point. The current Board of Directors was appointed on 1 March 2011 and had three sub-committees. The sub-committees and board were scheduled to meet four times per annum. Dr JH Adams was Board Chairperson and

Dr Steven Cornelius was CEO.

OBP had conducted a strategic review process. There was a need to introduce significant change in the organisational culture, mind set and performance of employees in the organisation to enable the organisation to adapt to changes in quality, production and industry trends and technology. This would ensure that it reaps the benefits of an engaged and diverse workforce.

Dr Smit concluded that at an operational level despite negative media reports and a decline in sales, business was projecting revenue achievement of R110 million for the 2013/14 financial year. It would invest profits in the development of new vaccines, and replacing critical equipment to maintain manufacturing capacity. In the emerging sector, there was support through provincial governments and there were rural vaccine distribution opportunities. Skills development had been prioritised through learnerships and internship programmes, bursaries and development programme, and the training budget had increased. The GMP (Good Manufacturing Practice) upgrade of the facility was high priority.

Discussion
Ms Steyn thanked the OBP delegation for the presentation. She asked if OBP Strategic Plan had received approval from the Minister and why their Strategic Plan was not signed by the Minister. She asked for more clarity on pages 13 and 14 of the Strategic Plan where there was a long list of scientific achievements in terms of the research that had happened, but the last research that came out of OBP was in 1992. She noted that on page 15 it stated that in 1992 the OBP was separated from OVI, which became part of ARC. She asked if there was any research that was happening within OBP itself, and if yes, why there was nothing listed under the scientific research achievements.

She asked what the interaction was between the OBP and ARC because she was not sure of the very good relationship as stated by the CEO of ARC. They needed to get to this point because it was a year later and she was not convinced and the public out there, that needed to buy the products, was not convinced. So she had been really hoping that by this time around they would have some progress and there would be something that would indicate that they were moving in the right direction. She asked who was responsible for looking at drug resistance - was it OBP, ARC or the department because it was one of the things that people say could be a problem? What kind of research had been done on this and where did the responsibility lie? She asked about the number of staff who had PhDs and Masters in the organization, where they declining or making progress in that regard?

Mr Van Dalen asked how many of the organization’s targets were reached in the previous year and how much of the budget was spent. He noted that OBP spent about R3.6m on animal experiments every year and tested its vaccines on them and obviously not all of them died. He asked what OBP was doing with the animals that it had finished with. He noted that OBP was a National Key Point. They had spent about R2m a year on security which was very low if they had Board fees of about R1m spent on five Board Members. He asked how safe that was if they spent R2m on security of a National Key Point and R1m on five Board Members.

Mr Abram said that he was pleased to know that funding was available for the upgrading of facilities because he had been at the OBP facilities a year ago and he felt they should had been upgraded a long time ago. He referred to the allocation of R96.5m and asked for a breakdown of what that entailed in anticipated costs for the repainting upgrade, the repackaging and production equipment. He noted that in the 2014/15 financial year, as far as the Phase 1 facility was concerned, they had a projected expenditure of R94m plus the R33.5m which he took as a sort of a rollover for something that would not be done this year. He asked OBP to explain that.

He asked if the organization had the research capacity to develop a vaccine to combat the new strain of bird flu experienced in the ostrich industry as well as the African horse sickness and so on. And if not, what had they done to beef up their research capacity?

The Chairperson said that some of the vaccines that were manufactured by industry were illegally using the existing gap between OBP and some health regulatory frameworks. He asked what resolution was expected out of that situation.

Dr P Hanekom, Non-Executive Director: OBP, said that the most important thing that they needed to do was to reposition OBP as a business company that produced vaccines for commercial use while also playing a good public role. The CEO had referred to the orphan vaccines which only the public sector was producing because they were not cash cows for commercial companies. And that did mean OBP was a company that was never going to position itself in the market the same way as a commercial vaccine company.

Dr Hanekom said that the reality was that the facility had run down over the decades because the same equipment was there as when she had still been a student. They were working in a facility that was not modernized in order to allow it to be a competitive player in the domestic market - let alone in the international market. One of the things the board was determined to do was to ensure that when they hand over to a new board, work had been done to ensure that the refurbishment allocation was used with a proper understanding what was the business implications were.

Dr Hanekom said that they were soliciting support and were engaged in the business plan and financial plan exercise, confident that it would reposition OBP both as a domestic and a global player because it was an important facility, especially for the continent. But it was early days to say that would be exactly what they would achieve yet there were something they could do in the short term such as repackaging vaccines.

The board had sat with the audit committee which had indicated that every single issue raised during the internal and external audit last year, had been addressed, and that was not a small achievement. They had three findings from the internal audit and nine from the external audit which were partially addressed and still needed some work. The other findings were fully addressed.

Dr Hanekom said they were responsible for the corporate plan which had been signed by the Minister and apologized that the Committee had received a version of the document that had not been signed. She said that the questions were invaluable. They had a board meeting coming up and they would ensure they address all the matters that had been identified.

The Chairperson thanked the OBP delegation for coming in and presenting to the Committee.

South African Veterinary Council (SAVC)
Ms Lynette Havinga, SAVC Registrar, said the veterinary team should be regarded as key to rural development, not only in food safety but also in managing rural development, management of animal health and production and veld and pasture management. SAVC was a representative organisation of the veterinary and para-veterinary professions, promoting the health and well-being of all South Africans through the promotion of animal health, production and well-being. Its mission sought through the Veterinary and Para-Veterinary Professions Act, 1982 to promote competent, efficient, accessible and needs-driven service delivery in the animal health care sector; protect the health and well-being of animals and animal populations; regulate the professional conduct of the veterinary and para-veterinary professions; set and monitor standards of both education and practice for the veterinary and para-veterinary professions; and protect and represent the interests of the veterinary and para-veterinary professions.

Ms Havinga said that the objectives of Section 3 of the Veterinary and Para-veterinary Professions Act of 1982 informed its strategic objectives which included regulating the practising of the veterinary professions; determining the minimum standards of tuition and training; registering holders of the prescribed qualifications; exercise effective control over professional conduct; determining the standards of professional conduct; encouraging and promoting efficiency in and responsibility in veterinary practice; protecting the interests of the veterinary professions ; maintaining the integrity of the veterinary professions; and advising the Minister on any matter affecting the veterinary professions.

Achievements for the period 2010 onwards included the organisation proposing amendments to the Act on compulsory community service [CCS]; the inspectorate; appeals; and suspension and cost orders. Its registration of members was up to date. It had made visitations to University of South Africa, College of Agricultural and Environmental Sciences and North Western University: Faculty of Science and Technology: Animal Health. It had accredited Continuous Professional Development [CPD] activities [457]. It had determined a fines guideline for inquiry bodies. It had proactively amended certain rules (Rule 10) to improve the control of highly scheduled medicines. It completed a pilot on inspection of facilities; improved communication with the profession on matters pertaining to practice through sms and newsletter; ensured complaints and inquiries were dealt with effectively and expeditiously, and had met and advised the Minister accordingly.

Challenges were that Threatened and Protected Species [TOPS] required permits from the Department of Environmental Affairs (DEA), and from provinces. Another challenge was chemical immobilisation and Wildlife Ranching South Africa [WRSA]; lay persons and unqualified persons employed by the state; loopholes created by medicines being governed by two Acts [Act 101 of 1965 and Act 36 of 1947] (autogenous vaccines control; food safety, indiscriminate use of medicines); reputation damage of the rhino saga; IT transformation; increasing interest among black youth; few specialists in the production animal field; and veterinary science was not being considered a priority.

Ms Havinga said that in terms of the Strategic Plan 2013 – 2017, they would review the Act, facilitate implementation of the Inspectorate, revise the rules, scope of practice, advertising and touting. They would investigate lay persons, conduct routine inspections, investigations and inquiries. They would determine and maintain standards of training and standards of practice. They would conduct investigations at training institutions, monitor subjects and conduct examinations. They would ensure that qualified and trained persons were registered. They would run an annual registration examination for persons who seek competence-specific registration, and be accredited by the South African Qualifications Authority. There would be close co-operation between SAVC and Council on Higher Education and the Department of Higher Education and Training.

The presentation also dealt with:
- Registration statistics
- Communication both regionally and internationally
- Promote veterinary services to all communities
- Addressing the shortage of all professionals
- Engage the educational institutions and encourage bridging programmes for marginal students
- Dealing with antibiotics freely available to members of the public
- Help making small scale farming more productive, successful and self-sustaining
- Safeguard game animals and other wildlife against exploitation
- Ensure veterinarians are exempted from the compliance of onerous permits to treat Threatened and Protected Species [TOPS].
- It noted it had ruled against Green hunting and veterinary safaris.
- Its finance report showed income from members’ maintenance fees with projected income of R9,5 million.
 
Discussion
Ms Steyn asked for more information on the challenge of unqualified veterinarians employed by the state. This was a massive concern. Where specifically were they employed? She asked if there was a loophole in the Veterinary Acts which made people sell illegal animal vaccines. If it had something to do with the two Acts, they needed to come in to close all the loopholes from outside.

Ms Pilusa-Molosoane said that since the Deputy Minister was there it was important for them to encourage young black students to go into the veterinary field because most young people were not interested in it.

Mr Abram said that there were 2 896 registered vets. He asked how many of those vets were engaged in activities which were veterinary related but were not in actual practice. He asked if the number of vets which was fewer than 3000 was sufficient compared to the animals species of the country.

Dr Moerane said that as an organization they would forward a report on unqualified veterinarians. But what they had done was that they had discovered that there were people who had not qualified as veterinarians who were employed. They had communicated with the relevant department to indicate their concerns and that it should be rectified within a certain period. The particular province had responded, confirming it knew about the problem and systems were put in place to solve the problem. One of the corrective measures was that those employed should write their examinations.

Dr Moerane said there were four institutions that trained professional and para-professional veterinarians in the country. The University of Pretoria the only one in the country that trained veterinarians, then there was the University of South Africa and North West University that trained animal health professionals. Then there was the Tswane University of Technology which trained veterinary technologists.

Dr Moerane agreed that they were concerned about the use and control of medicines in the country because there were products that were controlled by Act 36 and others controlled by Act 101 which created a loophole.

The Chairperson thanked the SAVC delegation and requested that they respond to the other questions in writing because the Committee had to attend a plenary sitting in the National Assembly.

The meeting was adjourned.



 

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