Ncera Farms closure strategy & disciplinary action: Committee rebuke; Mechanisation; MAFISA; Veterinary Services: Department response

Agriculture, Forestry and Fisheries

17 June 2013
Chairperson: Ms N Twala (ANC)
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Meeting Summary

The Department of Agriculture, Forestry and Fisheries (DAFF) briefed the Portfolio Committee on how it was dealing with the Ncera Farms entity and on the disciplinary actions against the officials implicated in the forensic report. Officials implicated in terms of the forensic report had been identified and by August, DAFF would formalize appointment of an official within DAFF to represent DAFF in the investigation into the forensic report on Ncera Farms. DAFF would have to rely on the cooperation of outside institutions to finalise the closing of Ncera and was consulting with the Department of Public Services and representatives of the farm workers on how best to incorporate Ncera employees into DAFF. It was further engaging with the Department of Public Works, the Department of Rural Development and Land Reform, farmers and the various stakeholders on the challenge of transfer of land and assets.

The Committee was united in their opinion that DAFF should not be given the opportunity to respond to the Committee questions. The resolution taken at the 17 May 2013 meeting was that DAFF would return to the Committee with a clear strategy, yet the presentation did not show anything new. DAFF was requested to submit a proper document with a chronological table of events and a plan for the closing of Ncera.

Members asked how many employees were implicated by the Ncera Farms forensic report, how many employees in total were identified for disciplinary action, how many were currently working in state departments and in which department they were working; why there had been no disciplinary action taken against offenders to date and, if it had been taken, what disciplinary action had been taken; what the credentials of the person appointed to investigate the officials would be and why an independent person would not be appointed to lead the investigation team. Members also asked why the Ncera land would not be treated in isolation from other state land ‘issues’; how long engagement on leases would be; and if the entity would be closed down completely.

Members asked for clarification on exactly what was meant by: The leases (farmers) will be engaged on the modalities to take process forward amicably; Meanwhile, the maintenance of all assets, including farm land, will be ensured as prescribed by the PFMA; The Ncera issue is going to be tedious and protracted process, given wide-ranging implications; and Farms, once released, will have to be managed by the Entity in order to remain productive.

Lastly, Members asked what the R33 million given to Ncera had been spent on and then requested that no further money be transferred to Ncera at this stage.

DAFF presented the Mechanisation Report which included the status of the Mechanisation equipment in each province. The Mechanisation Programme was running well in all provinces, except for three provinces and DAFF was currently advising on three Mechanisation models: state-run, cooperative-run and privately-run models. This was followed by a presentation on DAFF’s responses to the Committee’s questions on Micro Agricultural Financial Services of South Africa (MAFISA) from the 25 March 2013 meeting.

Members asked for feedback on the equipment that was lying at the old show grounds in the Free State; how the province accounted for funds given to it by DAFF to run a particular programme which happened to have a concurrent function; when the Mechanisation Policy would be implemented; what training was offered on Mechanisation; and how many tractors were purchased for each province. Members asked how DAFF interrogated the province annual report; if DAFF was satisfied with this monitoring of the provinces; and how DAFF verified the outcomes of the report.

DAFF then presented its Action Plan for the Provincial Veterinary Services. In 2011, the Red Meat Industry Forum had taken DAFF to the Committee with a number of allegations which led to the World Organization for Animal Health (OIE) investigating the Provincial Veterinary Services the previous year.
The OIE indicated that the South African Veterinary Services generally operated at a moderate to high level of advancement against the recognised OIE standards. However, weaknesses were identified and needed to be addressed as a high priority to reduce the risk of further decline of the Vet Services. In its concluding remarks, the report stated:The Veterinary Services of South Africa, which are generally still of a very high standard, are at the cross-roads between a bright future or a rapid decline. DAFF would carry out a GAP Analysis, develop a strategic plan and estimate the additional resources required. Consultation with provinces would be an initial priority and the final report would be used to procure funds from Treasury for the implementation of the Veterinary Strategy. Three broadly constraining factors were centralisation of veterinary functions - a constitutional complication; resource constraints - ranging from veterinarians and veterinarian research capacity to infrastructure; and the need for recapitalisation.

Treasury had made some funds available over the MTEF for upgrade of the Onderstepoort Biological Products (OBP) facility for production of vaccines and rapid response to the market demand. OBP would participate in the action plan with the dates agreed with DAFF and the OIE and would present its perspective on the matters of vaccine production and availability. The Agriculture Research Council had received funding in terms of rehabilitating and revitalising the Foot and Mouth Disease (FMD) vaccine. There had been very good progress to date and the ARC would present an update report at the end of the year. The challenge around human resource was the ability to keep skilled staff employed by the public sector and not siphoned off elsewhere with their skills.

The Chairperson asked for the report on the Mpumalanga veterinary service; for a copy of the outcome of the discussions with the OIE; a copy of the report on why South Africa did not receive FMD-free status; a vaccination programme for approval by the Committee as soon as possible and for the report that Dr Swanepoel had committed to submitting to the Committee at the previous meeting.

The Chairperson concluded that the Committee expected DAFF to submit the Ncera (Pty) Ltd report in writing on the 20 July 2013 and then to present the report to the Committee on 13 August 2013.
 

Meeting report

Ncera Farms strategy & disciplinary actions against officials implicated in forensic investigation
Mr Mortimer Mannya, DAFF Acting Director-General; said that DAFF had taken serious note of Committee concerns about closing Ncera Farms. DAFF was consulting with the Department of Public Service and Administration and with representatives of the farm workers on how best to bring employees into the DAFF. The staff members of Ncera were not all public servants. Disciplinary action for officials implicated in terms of the forensic report had been identified and this would be finalized within DAFF. The report would be used as a base only. Included in the disciplinary process would be investigation into those implicated who were not identified in the forensic report. DAFF would finalise and determine the process within the next two months. By August, DAFF would formalize appointment of an official within DAFF to represent DAFF on the investigation into the forensic report. Engagement had begun with Department of Public Works, the Department of Rural Development and Land Reform, farmers and the various stakeholders affected around the challenge of land and assets. DAFF would have to rely on the cooperation of outside institutions to finalise the closing of Ncera.

Discussion
Ms R Nyalungu (ANC) said that the presentation did not show anything new since the last meeting.

Ms A Steyn (DA) agreed with Ms Nyalungu. Each bullet point said nothing. She asked why the issue of Ncera land, over which DAFF was custodian, would not be treated in isolation from other state land ‘issues’. She asked how many employees were implicated by the forensic report, how many employees in total were identified for disciplinary action, how many were currently working in state departments and in which department they were working; why there had been no disciplinary action taken against offenders to date and, if it had been taken, what disciplinary action had been taken. She then asked how long engagement about leases would continue and what was meant by: ‘The leases (farmers) will be engaged on the modalities to take process forward amicably’. She asked what was meant by: ‘Meanwhile, the maintenance of all assets, including farm land, will be ensured as prescribed by the PFMA’.

Ms Steyn also asked how DAFF could be sure that the employees would be placed in state institutions; what the credentials of the person appointed to investigate the officials would be and why an independent person would not be appointed to lead the investigation team. She then asked what was meant by: ‘The Ncera issue is going to be tedious and protracted process, given wide-ranging implications’.

Ms Steyn asked for the background on exactly what the R33 million for Ncera had been spent on and requested that no further money be transferred to Ncera at this stage.

Mr S Abrams (ANC) agreed with previous Members. The presentation lacked detail and the Committee could not accept such a presentation from the top echelons of the country. The Acting DG, who was the 7th DG, which included five acting DGs, was the recipient of a poisoned chalice. DAFF was alienating people on the ground and letting them down. Therefore, it was important that the credentials and background of the official who would be appointed was disclosed to the Committee. He asked for an explanation on what the ‘other land issues’ on the surrounding state land were. DAFF had made promises to Ncera communities since 2008 and yet had not re-visited them. DAFF had called on people to apply for land and therefore created expectations. Therefore, DAFF should be big enough to tell the people occupying land what exactly would be ‘tedious’ and how protracted the process would be and exactly how wide the implications would be. DAFF could not remove people from land, even if their lease had expired, after they had put sweat equity into the land. Ncera had failed because DAFF had failed to support it.

Mr Abrams then asked what was meant by: ‘Farms, once released, will have to be managed by the Entity in order to remain productive’. DAFF was given a R6 billion budget to assist the (Permission to Occupy) PTO holders and yet could not produce a presentation which would have cost no more than R1000. During a Committee meeting on 12 March 2013, Dr Sizwe Mkhize (Deputy Director General for Food Security and Agrarian Reform,) had stated that once DAFF handed things over to the provinces, DAFF was not accountable. By the manner in which DAFF had dealt with the Ncera resolution, it was clear that DAFF did not take the Committee seriously. Furthermore, a senior official, of Director-General level, had never visited the areas where the Committee performed oversight visits.

Mr B Bhanga (COPE) commented that while DAFF should be the bread basket of the country, it appeared that DAFF had given up. The Committee had waited a month for a document - which said nothing. The Committee expected detail on how Ncera would be closed down. He suggested that the delegation should leave the meeting and submit a proper document with a chronological table of events for closing Ncera.

Mr R Cebekhulu (IFP) commented that he was mourning for the people who were promised a better life. The Ncera entity was created and now its staff members would be re-deployed. He asked if the entity would be closed down completely and if not, who would manage it. It appeared that DAFF was aware of those who were responsible for misappropriation of funds, yet was shifting goal posts instead of taking action. He questioned whether what happened to the Ncera entity in the Eastern Cape would also happen to entities in other provinces. The community in the Eastern Cape had lost faith in DAFF.

Ms N Phaliso (ANC) agreed with her colleagues. The violent conflict between the settler farmers and dwellers was the result of DAFF’s lack of resolutions on restitution of land and also because of hunger. This was DAFF’s administrative role. The Committee could not resolve those matters. She suggested naming and shaming the officials who had committed crime and asked for a report on who the officials were, how many of them were being investigated by the Hawks and how many of them DAFF would absorb.

Ms M Pilusa-Mosoane (ANC) said that her colleagues had covered most of her comments. The Committee was made up of civil servants and could not teach DAFF how to do its work. Everything in the presentation referred to what DAFF ‘would do’, but it was spending government money to fly back and forth to Parliament after doing nothing for the South African people.

The Acting Chairperson said that the resolution taken on 17 May 2013 meeting was that DAFF would return to the Committee with a clear strategy.
 
Mr Bhanga suggested that the Committee Secretary should make enquiries to invoice the Acting Director-General to pay for the flights for the DAFF delegation due to fruitless and wasteful expenditure.

The Committee was united on the opinion that DAFF should not be given the opportunity to respond to the Committee during the meeting as it had not performed according to its mandate.

Mr Mannya confirmed that DAFF had received the Committee’s directives and would refer back to the Committee.

DAFF responses on outstanding matters raised by the Committee
Mechanisation Report June 2013
Mr Bonga Msomi, Chief Director: National Extension Support, DAFF presented the status of Mechanisation equipment per province. The presentation touched briefly on: the provincial asset register, registration of agricultural cooperative beneficiaries in each district, challenges with distribution of equipment, services provided to beneficiaries, maintenance agreements and security tracking of tractors. DAFF was awaiting an annual report from each province on the outcomes of the Mechanisation Programme.

Mr Mannya added that DAFF had not overcome all the problems associated with Mechanisation. DAFF was mandated to run the Mechanisation Programme in each province when most of the provinces were already running Mechanisation units. The programme was running well in all provinces, except for three provinces. The scope was varied and therefore DAFF was currently advising on three Mechanisation models: state-run, cooperative-run and privately-run models. In preparation for the next farming season, DAFF had indicated to the three provinces that they had until June 2013 to finalize their use of the Mechanisation units supplied for the purpose intended, failing which, the units would be relocated to serve their intended purpose elsewhere.

DAFF’s response to the Committee questions on MAFISA
Mr Mannya presented the DAFF responses to the Committee’s questions on MAFISA. On 25 March 2013, the Committee had asked for: a comprehensive report defining what a MAFISA beneficiary was; whether CASP and MAFISA were using the same funds; why, in terms of MAFISA, all provinces were not mentioned; what kind of report DAFF received from the provinces; if DAFF conducted physical visits to the funded projects; and the relationship between MAFISA and CASP (see response document).

Discussion
Mr Abram said that on the 12 March 2013, when the Acting Director-General, Mr Ntombela, was present, he had asked for a feedback report on the equipment that was lying at the old showgrounds in the Free State. The Committee had been told that it would receive the report within two weeks, but that had never happened. The equipment was taken to the showground in October 2012, when the ploughing season was over and the planting season had started. The tractors were still there in May 2013 and all the implements had been transferred to a barn. It appeared that taxpayers’ money had bought equipment that was parked off unused somewhere other than its intended purpose. People on the ground should have benefited from the equipment the previous year. He could not accept Dr Mkhize’s statement - that DAFF did not account for what provinces spent money on once funds were handed over to provinces. Before DAFF decided to hand over funds, a policy and programme should be in place. The Committee wanted to receive the written arrangements with every province to which it was allocating money. A global amount was appropriated by parliament and given to DAFF and DAFF made allocations to the provinces. If DAFF didn’t know how that money was spent, it was treading on very dangerous ground. A particular province had decided to establish a massive dairy project and had spent an alleged R30 million on consultancies, when South Africa’s own Milk Producers Organization could have advised on that. The issue was far broader than a Mechanisation project. The question was how the province accounted for funds given to it by DAFF to run a particular programme which happened to have a concurrent function.

Mr Abrams said that it was not clear what was meant by: (Free State) ‘…the equipment is still on the asset register of the province. All the tractors are fitted with tracking systems. The maintenance agreement and warranty of the equipment serviced satisfactory’. He expected a copy of a black and white agreement between DAFF and provinces so that the Committee could know how the equipment would be used and how things should function.

Mr Abram asked how many tractors were purchased for each province. He advised the Acting Director-General, as the accounting officer, to present documents which were beyond reproach.

Mr Abram asked how DAFF monitored and verified that 20 000 ha were ploughed in KZN. The lines of accountability were blurred.

Mr Mannya replied that information on the number of hectares ploughed was verified with data from the Food Production Programme and other private units.

Mr Abram said that a couple of years ago, on a visit to the Driefontein project in the North West province, Members found that brand new equipment, including two Massey Ferguson tractors, could not be used. Whether true or not, the farmers said that they had not been given money to buy diesel, fertiliser, or seed. People on the ground complained that they did not receive assistance and support - another example being the Pongola community in KZN, which was promised funding for land reform. He asked if assistance was partial or if DAFF assisted the communities at large.

Mr Abram concluded that the scant report was equally as worrisome as the Ncera report. It said nothing. The provinces did their own thing and were unaccountable. The national department had to keep track of how funds allocated to provinces were spent, so that the buck stopped at the national department.

Ms Steyn said that the DA would vote against the Agriculture Budget that afternoon, the reason being that the role of the Portfolio Committee was to monitor the work of DAFF. When not in parliament, the Committee went out to check on, whether taxpayers’ money was benefiting the people and was being spent according to implementation described by DAFF. However, the presentations to the Committee that day had made it impossible to perform oversight. Ms Steyn added that the previous week, she had asked the same question - on disaster management - that she had asked the previous year: How many disasters had been declared, where they had occurred, where they had been declared, how much money was allocated, if it was spent and where was it spent.

Ms Phaliso echoed the other Members’ comments. The presentation was too general. Without anything specific, the Committee could not perform oversight.

The Acting Chairperson said that during the upcoming meeting on 21 June 2013, the Committee would share inputs on the proposed programme for Mechanisation oversight visits scheduled for 27 July to 11 August 2013.

Mr C Msimang (IFP/Alt) said that the last sentence of the report on Mechanisation read: ‘DAFF is awaiting an annual report from each province on the Mechanisation programme and the outcomes realized’. He asked if DAFF was satisfied with this type of monitoring; how DAFF interrogated the report; and how DAFF verified the outcomes of the report.

Mr Msimang added that in his experience, the programme had totally failed. He was from the Nkandla region and in the past four years, while the programme had been operating in that region, it had failed to succeed in ploughing maize, the staple food for Africans. Each year, tractors arrived too late to plough maize.

Mr Cebekhulu (inaudible)

Ms Nyalungu asked what DAFF was doing to train people on maintenance of tractors to save cost on paying service providers to do so.

Mr Bhanga asked when the Mechanisation Policy would be implemented as a national guiding framework.

Mr Mannya replied that the plan was to finalise the draft plan and have it approved by the end of August 2013.

Mr Mannya said that he appreciated that the Committee required a more detailed report on Mechanisation and that this would be provided. The Mechanisation Programme was a means to an end – to support food production. Confusion seemed to be around how many tractors there were, how they were distributed and whether they were purchased privately, provided by DAFF or bought by the province. DAFF was adding tractors to units that already had tractors as provinces were already running Mechanisation programmes. DAFF wanted to assist them with tractors and in-house capacity. Arrangements for Mechanisation for private, cooperative or state-owned farms were different and this information would be provided.

Mr Msomi added that he understood that the Committee had received copies of the annual report which provided detail on the funding allocations and would enable oversight by both DAFF and the Committee. DAFF would resubmit this to the Committee.

Action Plan Performance of Veterinary Services Report
Dr Mpho Maja, DAFF Director of Animal Health, said that in 2011, the RMIF had taken DAFF to the Committee with a number of allegations which led to the World Organization for Animal Health (OIE) investigation into the provincial veterinary services the previous year.
The OIE indicated that the South African Veterinary Services generally operated at a moderate to high level of advancement against the recognised OIE standards. However, weaknesses were identified and needed to be addressed as a high priority to reduce as a high priority to reduce the risk of further decline of the Vet Services to meet international expectations and to allow increased trade in animals and animal products”.

They further said, in the conclusion remarks in the report: “The VS of South Africa, which are generally still of a very high standard, are at the cross-roads between a bright future or a rapid decline.

The “bright future” requires restoration of the chain of command with unity of the different veterinary domains and the development of a comprehensive VS system including official delegation to private veterinarians. It will be necessary to develop improved interaction with all stakeholders and consumers, with priority given to addressing public good.
The “rapid decline” will result from continued fragmentation of the VS by local authorities or by function, activities will be market-driven by private interests, double standards will persist in animal and veterinary public health, and there will be a failure to address public good
”.

Action by DAFF was to carry out a GAP Analysis to analyse the weaknesses identified in the report and find solutions to provide cost of compliance. The OIE indicated however that a standard GAP Analysis was not necessary. Only some methodology and tools of gap analysis would be helpful in the process of developing strategic plan and to estimate the additional resources required. A formal letter would be sent to the OIE requesting for the mission to be carried out. Consultation with provinces would be an initial priority and the report of the consultations shared with the Committee and stakeholders. Thereafter countrywide consultations would take place with all stakeholders and possibly the OIE team and the final proposal presented to the Committee. The final report would be used to procure funds from Treasury for the implementation of the Veterinary Strategy.

Mr Mannya said that there were three broadly constraining factors which required attention: centralisation of veterinary functions - a constitutional complication; resource constraints, ranging veterinarians and veterinarian research capacity to infrastructure; and the need for recapitalisation.

Dr Steven Cornelius, Chief Executive Officer: Onderstepoort Biological Products (OBP) added that OBP was working closely with DAFF on the matter as it related to some of the work of the OBP. Treasury had made some funds available over the MTEF for upgrade of the OBP facility for production of vaccines and rapid response to the market demand. OBP would participate in the action plan with the dates agreed and present its perspective on the matters of vaccine production, availability and in terms of DAFFs ability to deliver service.

Dr Sadrack Raleheno Moephuli, Agriculture Research Council CEO, said that the ARC supported the above interventions. ARC ran the major laboratories used by DAFF for animal diseases and provided some of the free vaccines. The ARC had reported to the Committee that it had received funding in terms of rehabilitating and revitalising the Foot and Mouth Disease (FMD) vaccine. There had been very good progress to date and the ARC would present an update report at the end of the year. The investments needed to be sustained over several years for lasting effect. The challenge around human resource was the ability to keep skilled staff employed by the public sector and not siphoned off elsewhere with their skills.

Discussion
Mr Abrams said that the reports were encouraging. South Africans did not realise that the livestock industry was the single largest contributor to GDP and people were getting more involved. The OBP and ARC had been left to their own devices for a long time and their recent funding was still not enough. The state was not spending enough on veterinary services and basic requirements to nurture the entire agricultural value chain. The Committee needed an update on the state of veterinary services in each province. If provinces could not provide key basic services, the sector would suffer.  Livestock was the quickest way to ensure wealth for the rural people. Many were diseased and of poor genetic quality. One of the surest ways to advance the genetic quality of rural livestock was to train the youth and employ them to perform artificial insemination. This should be subsidized by the state and not taken from the meagre budget allocated to the ARC. All that would be required was a scooter, a cell phone, a flask of liquid nitrogen and a straw. The disadvantaged would be able to compete with the best of the best.

Ms Steyn asked for the report on the Mpumalanga veterinary service. She also asked for a copy of the outcome of the discussions with the OIE; a copy of the report on why South Africa did not receive FMD-free status; and a vaccination programme for approval by the Committee as soon as possible. The farming community had been calling for assistance and the Committee was keen to work together with DAFF to improve animal health. She also asked for the report that Dr Swanepoel had said would be made available.

The Chairperson concluded that the Committee expected DAFF to submit the Ncera (Pty) Ltd report in writing on the 20 July 2013 and then to present the report to the Committee on 13 August 2013. She asked Members for input on the draft progress report on Mechanisation before they undertook their upcoming oversight visits.

Meeting adjourned.
 

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