Emerging livestock farmers concerns by National Emergent Red-meat Producers Organisation (NERPO); Committee Report on Department Strategic Plan 2013

Agriculture, Forestry and Fisheries

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

The Chairperson said it was important that NERPO members realise they were not less significant than their commercial counterparts. In South Africa everybody was equal, hence the Committee would give NERPO a hearing. A point had always been made to the Department of Agriculture, Forestry and Fisheries (DAFF) that it was difficult to measure the support it provided to smallholder farmers. The support programme – Comprehensive Agricultural Support Programme (CASP) – was a bottomless pit. The programme’s current budget amounted well over R2 billion and there had been a continuous growth in the funding and yet there was nothing to show for the money on the ground. There had not been a correlation between expenditure and the delivery.

NERPO indicated the visit to Parliament was a call for support in the implementation of development programmes for smallholder livestock farmers. NERPO would like to facilitate the empowerment of its membership and enable them to utilise market opportunities. The organisation would lobby for strong government legislation that would promote and support emerging red meat producers, cattle breeders and feeders. It also needed to facilitate commercialisation of the emerging sector by facilitating access to technical support, credit facilities and markets. Programmes of the organisation were three-pronged and included building the organisation, lobbying government, and farmer support and development. Training and mentoring was provided for the farmers. NERPO was Agri-Sector Education and Training Authority (SETA) accredited. The training involved basic record keeping, basic business planning, land and stock management. The biggest threat to smallholder farmer livestock, apart from theft, was health. Industry issues that needed to be discussed with Members included the utilisation and management of communal land, as a vast majority of NERPO’s membership farmed on communal land. Efforts and interventions to develop these farmers were impacted by poor management of communal land. NERPO was requesting the Committee to facilitate a discussion with all the key stakeholders in communal land management.

The Department said it was aware of the challenges and was taking the matter up within the Government wider structure. The challenges were not only limited to energy and water, but extended beyond. DAFF was looking into these challenges.

Members lamented the differential treatment accorded smallholder farmers when it came to subsidies. It would have been ideal if the session was treated more like a workshop. Issues raised in the briefing needed to be collectively attended to with sister Departments of Rural Development and Land Reform (DRDLR), Energy (DoE), Water (DWA), Public Enterprises (DPE) and entities such as Eskom. This was a challenge that needed to be dealt with jointly. However, Members laid the blame squarely at DAFF’s door and said the Committee had been receiving presentations on a number of schemes, whose results were not visible on the ground. Millions were spent on these different schemes. The Department only existed in name; South Africa did not have a department of agriculture. People knew nothing about the Department and the services it offered. A proposal was made for an agricultural pilot project, where energies would be focussed on one province. The current approach was too fragmented and was never likely to make an impact. There was a serious need for a pilot even if it was started at district level. Some Members had reservations, but the Department and NERPO were instructed to go and consult and craft a plan and the specifics of such a project. The Department indicated a month was too short a time for such a plan.

The Committee adopted its report on the Department of Agriculture, Forestry and Fisheries Strategic Plan.
 

Meeting report

The Chairperson said the Committee would receive a presentation from the National Emergent Red-Meat Producers Organisation (NERPO), who had requested a meeting. It would have been better if the other relevant committees from portfolios such as energy and water had been included in the meeting. If one looked at the input costs NERPO had raised, they required a multi-departmental hearing.

It was important that the members of NERPO realised they were not less significant than their commercial counterparts. In South Africa everybody was equal, hence the Committee would give NERPO a hearing. These were the kinds of issues that worried Members. A point had always been made to the Department that it was difficult to measure the support it provided to smallholder farmers. The support programme – Comprehensive Agricultural Support Programme (CASP) – was a bottomless pit; the Department of Agriculture, Forestry and Fisheries (DAFF) should be able to indicate successes and failures of the programme.

The programme’s current budget amounted well over R2 billion and there had been a continuous growth of the funding and yet there was nothing to show for the money on the ground. There had not been correlation between expenditure and the delivery. When the Department transferred to provinces, programmes needed to be implemented. Provinces had too much leeway on the money disbursed to them; things could not continue on this trajectory especially if those meant to benefit from the programmes were not benefiting. Future reports from the Department needed to indicate the progression of small scale farmers who had made it as – or were still on the way to become – commercial farmers.

NERPO Presentation
Dr Langelihle Simela, NERPO Chief Executive Officer (CEO), said the visit to Parliament was a call for support with the implementation of development programmes for smallholder livestock farmers. NERPO started in 1997 as an association and as it, the organisation established a company called NERPO Financial Services, who provided credit facilities to smallholder farmers.

NERPO was a non profit organisation with a vision to create successful farmers out of its predominantly disadvantaged membership. NERPO would like to facilitate the empowerment of its membership and enable them to utilise market opportunities. The organisation would lobby for strong government legislation that would promote and support emerging red meat producers, cattle breeders and feeders. It also needed to facilitate commercialisation of the emerging sector by facilitating access to technical support, credit facilities and markets.

Programmes of the organisation were three pronged and included building the organisation, lobbying government, and farmer support and development. Training and mentoring was provided for the farmers. NERPO was Agri-Sector Education and Training Authority (SETA) accredited. The training involved basic record keeping, basic business plan, land and stock management. The biggest threat to smallholder farmers’ livestock, apart from theft, was health.

Membership to NERPO started at district level right through to national. Issues were dealt and resolved at district level, if not they were transferred to provinces and eventually through to national office. The provincial chairpersons formed the national executive council, and the organisation held annual general meetings (AGMs).

NERPO was part of the red meat industry forum, Agriculture Sector Unity Forum (ASUF) and African Farmers Association of SA (AFASA). Organised agriculture in the country was coming together. Things that could not be dealt with in the organisation could be addressed within the broader agricultural structures. NERPO had set itself a target of working with a 1000 farmers in a period of three to five years. Focus had been given on the kind of support these farmers required in order to achieve the targets that they set themselves.

Industry issues that needed to be discussed included the utilisation and management of communal land, as the vast majority of NERPO’s membership farmed on communal land. Efforts and interventions to develop these farmers were impacted by poor management of communal land. NERPO was requesting the Committee to facilitate a discussion with all key stakeholders in the communal land management. Recommendations from such discussions could be taken to relevant authorities. Cost of production increased by the day and smallholder farmers were badly affected. The major cost inputs were fuel, electricity and wages. Assistance was required for smallholder farmers to remain in business.

Possible interventions that could allow smallholder farmers to remain sustainable and in business included subsidies on fuel, electricity, use of alternative energy sources, and insurance. Smallholder farmers had limited entrepreneurial skills for viable agricultural production. Most of them were either retired professionals with little knowledge of agricultural production, especially livestock.

NERPO appreciated the draft extension policy that allowed for multiple role players in the provision of extension services. Government extension services were the only source of information that was readily available to smallholder farmers. The implementation of the vocational training institutions was therefore vital.

Departmental input
Mr Mortimer Mannya, Deputy Director General, Department of Agriculture, Forestry and Fisheries (DAFF), said the issues raised were genuine challenges the sector was faced with. DAFF was aware of the challenges and was taking the matter up within Government's wider structure. The challenges were not only limited to energy and water, but extended beyond. DAFF was looking into these challenges.

Regarding the Extension Policy, the Department was finalising the consideration of the inputs that had been received. Possibly by the end of the year, the policy would have been finalised. DAFF had been working on the issues raised by the industry last year, and was providing feedback on the progress made. The outstanding issues were being addressed. The role played NERPO was crucial and the work the organisation did needed to be supported.

Discussion
The Chairperson said he wished DAFF could indicate work was done way beyond plans and policies. A great amount of work had been done, but there were critical areas that had to be looked at, especially the one being discussed. It would have been ideal if the session was treated more like a workshop. Issues raised in the presentation were straight forward and pointed, and needed to be collectively attended with sister Departments as Rural Development and Land Reform (DRDLR), Energy (DoE), Water (DWA), Public Enterprises (DPE) and entities like Eskom. This was a kind of a challenge that needed to be dealt with jointly.

The Chairperson cited one challenge as the issue of electricity subsidy. Commercial farmers were in an advantageous position in that over half of their cost was subsidies and yet emerging farmers got not even close to a quarter of the price subsidised. These were issues that required a good discussion with the counterparts in the energy sector. But the big question ought to be: was this doable?

The Chairperson said that Members were only interested in solutions and not long drawn-out discussions. The issues were simple and required coordination and implementation; this could be done by DAFF’s training unit.

Mr L Gaehler (UDM) commented the Committee had been receiving presentations on a number of schemes, but their results were not visible on the ground. Millions were spent on these different schemes. Could the NERPO delegation explain what a communal farmer was, and if they could indicate the kind of livestock such farmers had. What assistance could the organisation give to such farmers to improve the quality of their breed.

Mr Gaehler commented that the Department only existed in name. The country did not have a department of agriculture. The term of this administration was coming to an end, and despite having these different schemes there was nothing on the ground. People knew nothing about the Department and the services it offered.

Nkosi R Cebekhulu (IFP) agreed with the concerns of the UDM Member about DAFF being a failure. NERPO needed to come out clear, and indicate if it supported individual owners of livestock in rural areas, and not smallholder farmers. These were people who were challenged with issues as proper dipping facilities, and absence of veterinarians. He sought clarity on the membership of NERPO, and asked if the organisation was encouraging its members to focus on a certain breed of cattle.

Nkosi Cebekhulu asked if NERPO held sessions with traditional leadership on the kind of programmes that were there to assist people. People in rural areas had an idea of how livestock should be looked after. Engaging these people could give a general sense of the kind of assistance that was required on the ground.

Mr S Abram (ANC) commented that the Committee was aware there were issues because little had been done by DAFF, otherwise NERPO would not have been in Parliament. Society depended on the state, and without society there were no state institutions. The state was duty bound to disburse services, if that did not happen, members of the public were indeed correct to approach Parliament for redress. The question was would the redress come?

Mr Abram congratulated NERPO by successfully organising people interested in producing red meat. That NERPO was here was because they did not get assistance from DAFF. He sought clarity on the effectiveness and presence of extension officers and queried the statement that extension officers were the only source of information to smallholder farmers.

Mr Abram said besides the cost factors – fuel, electricity and wages – smallholder farmers were faced with too many taxes and levy charges; farmers were expected to provide houses for employees and pertinent benefits. The Committee wanted tangible action on these challenges. The Department would not be resolving any of these because it was challenged for capacity. The officials operating in acting capacities hampered the work of the Department. It was necessary to look at what the farmers went through otherwise farming would be destroyed and, in the worst case scenario, SA would end up depending on imports to feed its people.

Mr Abram asked if animal health was prioritised. This was an aspect of farming that resulted in numerous challenges. He asked if farmers had access to veterinary services. DAFF was not only sacrificing the health of the animals but also that of the nation.

Overall replies
Dr Simela agreed with Members. The training provided to farmers was just not well coordinated. There was just too little coordination in the sector so no impact was made. Too many people remained without the necessary skills required to make a successful farmer. She cited CASP, and said the infrastructure had to be improved, but money had to be provided through the programme.

The issues that NERPO raised came from the resolutions of an AGM last year. It was important that skills and money were imparted to farmers through the support programmes. A similar complaint among the smallholder farmers had been that systems were there in the past and in working order, but not any longer.

Membership to NERPO was not only for those farming on communal land, there were farmers from leased land. But also those people who had purchased land for themselves. The "source of information" comment was indeed correct; the extension officers were there but were not as knowledgeable. The livestock farmers knew a lot more than the extension officers did about the sector. The challenge was about how people were trained at universities; people were not trained to be business minded, but only to be employed. Until one had exposure to the sector, he or she could not have intricate knowledge of the field.

The only weakness with smallholder farmers, that also was a difference with the commercial farmers, was knowledge. Something should be done about the skills gap in the sector otherwise one would not make any difference. No amount of resources would change the situation, but only knowledgeable farmers. Indications from the recent AFSA report had been that 80% of productive land beyond 2050 would be in Africa.

She quipped that she had never heard of Arabs showing interest in agriculture but there was a growing number of that happening and the Chinese were lying in wait. If skills were not addressed, beyond 2050 a lot of the land would be worked by foreign nationals, only to import the food. All that was needed was a coordination system. NERPO supported the policy and hopefully it would address some of the challenges that were there.

Bishop Dingaan Mahlangu, NERPO Vice Chairperson, said the issue was being approached on two fronts. Policy interventions and subsequent implementation by Government were necessary. NERPO did not only complain, but it worked hard on the ground. In its efforts the organisation also involved chiefs in provinces like the Eastern Cape and Mpumalanga.

Bishop Mahlangu said a challenge faced by smallholder farmers was castration, as some people refused to castrate their cattle. This compromised the quality of the breed that the organisation encouraged people to have. This was addressed with the chiefs. Although to some extent the challenge was land, another major challenge was with the provincial agricultural departments. Officials at provinces were doing nothing, and provincial departments were also affected by high staff turnover. Whoever came to occupy the positions, did not know what to do.

Bishop also identified another challenge as giving funding to NERPO on loan basis, while conditional grant money lay unused at the provinces. The organisation was operating at a loss. The Committee needed to provide support to the organisation, especially with regards to policy implementation. Veterinarians had an attitude challenge, as they refused to work with or for smallholder farmers. This had nothing to do with DAFF.

Follow up discussion
The Chairperson commented it would be ideal to focus energies and all the programmes in a certain province. The view would be to wanting to make agriculture work. The current approach was too fragmented and was never likely to make an impact. There was a serious need for a pilot even if it was started at a district level.

Mr Gaehler said the manner in which DAFF and entities functioned needed to be coordinated. All coordination plans should involve DWA. The needs of communal farmers were simple. The route of cooperatives needed to be examined. Allocations by some provinces did not follow a fair process, and were open for manipulation. The finance challenge faced by smallholder farmers needed to be sorted out.

Mr Gaehler mentioned the challenges which included boreholes; lack of quality bulls, training and soft loans. The statement that the system benefitted commercial farmers was indeed correct. Finance institutions lent money to smallholder farmers at a rate of prime plus 5%, while with commercial farmers it was prime plus 1%. These were the kind of challenges that had to be changed. He cautioned that agriculture would soon be owned by foreigners, just as was the case with the informal trading sector.

Mr Gaehler reiterated that as long as DAFF was operated by people in an acting capaciy, the challenges at the Department would continue. He rejected the proposition that focus be given to a particular province, as that would disadvantage a lot of people. The problem lay with the Department; DAFF was letting the people down. Prior to 1994, agriculture had boomed in the country and had benefited a lot of people.

The Chairperson said three implementable things needed to be identified and carried out. If the Department looked to do too many projects at once, it would end up not achieving anything.

Mr Abram said if the root causes of the challenges were not addressed, not much would be achieved. The proposal of targeting a province or a district would not work. If one did not address the capacity at DAFF there would be a crisis. In fact, the crisis was developing because provinces were unable to bring services to the people. Government should be improving the lives of the people by improving the livestock.

Mr Abram had reservations about adopting a collective approach. The idea sounded okay, but Government departments did not work well together. The question was whether departments had the will to implement. Without committed implementing agents, Government was setting people up for failure.

Ms M Pilusa-Mosoane (ANC) said people were suffering on the ground, and such a situation required listening executive leadership. The challenge was that national government was non-responsive to the challenges of the people. Responsive leadership was mainly found at provinces where community challenges were addressed within hours. Provinces were much better, and communication happened on the ground. Why was it so difficult to work with national departments?

The Chairperson suggested the idea of targeting a province be done as a rotating pilot project. Talking and criticising the Department would not achieve anything; results on the ground was the critical point. The issue was food security, given that prices rose regularly. Very soon the country could be net importers of food; the margin between the export/import ratio was so small.

Mr L Van Dalen (DA) said the Western Cape would accept the challenge of being used as a pilot project.

The Chairperson (ANC) teasingly asked if the Member wanted the ANC to come and take the Western Cape.

Mr Van Dalen replied all he said was the Western Cape would accept the challenge.

Mr Abram commented he liked the idea, but still it fell short of addressing the capacity of the implementers. The committee secretary should compile all the resolutions of the Committee and instruct the Department to implement those first.

Mr Mahlangu said a possible solution that could assist was for NERPO to meet with DAFF.

Dr Simela agreed with the proposal of a pilot, and requested that NERPO work with DAFF as to where the project would be located. Such an arrangement would require an oversight body because invariably one would find the issues raised were beyond DAFF and DRDLR.

The Chairperson requested that the Department comment on the suggestion.

Mr Mannya commented that NERPO filled a gap in the industry. The Department supported the plan, but it ought to be remembered there were quite a few other role players that DAFF worked with. The work that NERPO was doing was supported.

Mr Van Dalen recommended that a plan be brought in a month’s time where all departments concerned, under the stewardship of NERPO drew up a plan, and presented it to the Committee.

Mr Mannya commented DAFF would work with NERPO on developing the plan, but a month was too little. The plan had to be implemented in the provinces and the chosen province needed to be involved in the plan. The danger of developing a plan without the provinces was that it would only work when the National Department was involved, but yet the villages and communal land was in the provinces.

The Chairperson commented that the plan could well be taken further down to districts. DAFF needed to take into account that it also had to involve DRDRL, DoE, DPE and the Department of Higher Education and Training (DHET). The aim was to create this structure solely to implement a programme. This was not a permanent structure.

Committee Report on Department of Agriculture, Forestry and Fisheries Strategic Plan 2013
The Chairperson commented that the recommendations were straightforward. It was agreed that there was no need for the discussions to be reflected on the report. So it was just a matter of looking at the recommendations. The rest of the report was straightforward presentations by the Department.

The Chairperson read out the recommendations.

Mr Van Dalen pointed out that the Committee had made a recommendation about doing away with red tape on aqua culture, and that was not included in the document. This was a separate recommendation. He also suggested that the word “gradually” be taken out in the recommendation regarding Ncera Farms. Why should the farm be dissolved gradually; it should just be dissolved.

The change to the recommendation was agreed to. The report was adopted.

Mr Van Dalen raised an objection, as he felt it was not appropriate to adopt the report, as adoption of the budget vote would be done only in the National Assembly.

The Chairperson said the Committee was required by legislation to adopt the report.

Mr Van Dalen said his objection could be recorded.

The Chairperson asked what he objected to.

Mr Van Dalen replied the report talked about adopting the budget vote and he was not comfortable with that idea. The Committee would still debate the budget vote in Parliament.

Mr P Ngwenya-Mabila (ANC) explained that the report pertained to the strategic plan and the annual performance plan (APP) which informed the direction the Department would take this financial year. What the Minister, Richard Baloyi, would present in the House would be related to the report. The budget vote would be in line with this report on the APP that had been presented. The report contained the activities that the Department would perform in this financial year. This was the reason the Committee adopted the report.

Mr Van Dalen replied this was not how he understood the last paragraph of the report, especially where it read “recommend that Budget Vote 26 be adopted”. He said this was the part that troubled him, and could not support that as he would be opposing the budget in Parliament.

The Chairperson said the objection was recorded and the Committee had adopted the report.

The meeting was adjourned.
 

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