Progess Report on Ncera Farms; Minister, Department of Agriculture, Forestry and Fisheries & Marine Living Resources Fund on their 2012/13 Annual Reports

Meeting report

Opening Remarks
The Chairperson noted that an official apology had been received from the Minister and Director-General. However, he felt that under no circumstances could there be an excuse for an accounting officer not being present to account for the Department’s Annual Report activities, as per both the Constitution and Public Finance Management Act (PFMA) prescripts.

The Chairperson therefore proposed that the meeting should not take place. He acknowledged that the Acting Deputy Director-General, Mr Mortimer (KCM) Mannya, was present and was involved in the drafting of the report, however the Director-General was employed as the accounting officer.

The Chairperson asked Members to make the call as to whether the meeting should proceed.

Ms A Steyn (DA) said that she was shocked that the Minister had broken her agreement with the Committee that she would be present at the meeting to discuss the Annual Report. The previous day she had attended the meeting between the Committee and the Auditor-General with the intention to intimidate the Committee and Auditor-General because of the poor performance of her own Department. It was unacceptable that she was not at the current meeting and also for the new Director-General not to be present to account to the Committee at her first very important meeting. With no disrespect to the officials present, she apologised upfront that the DA would not stay for the meeting. She proposed that both the Minister and Director-General should be responsible for all the officials’ travel and hotel expenses as they would have to return to Parliament to attend a future meeting that would still need to be scheduled.

Mr P Van Dalen (DA) supported Ms Steyn. He felt that the Committee was being treated with disrespect and that the Committee would be failing its duty if it did not have the opportunity to discuss serious issues arising from the Auditor-General’s report and find solutions to problems which persisted from the previous year. There could be nothing more important than the meeting with the Committee on the Annual Report.

Mr S Abram (ANC) expressed disappointment that the Annual Report was not important to the key role players. The officials present had been thrown into the deep end and would have to swim out, and this was unfair. “If they were prepared to take the trappings, they had to be prepared to draw the coach”. Accountability was key yet he had witnessed a gradual decline in accountability to the Committee and Parliament over the years and contributed to the people of the country losing faith and trust. 

The Chairperson said the practical situation confronting the Committee was that the following week was allocated to legislation - which had its own time line - and this meeting would be the last encounter for accountability before the next election. He wished to place on record that the Committee had been doing its best and was not appreciated. He added that it had become a custom that the Deputy Minister was not available for Committee work.

Mr Abram suggested that Members should take the benefit of having senior officials present and interrogate them on the issues relating to the running of the Department and repeat findings, and then schedule a subsequent meeting with the executive. There was much that could be discussed, but he would agree with the majority vote on whether the meeting should proceed. Currently there was a massive drought and if maize was not in the ground by 10 October, there would be no crop, contingency measures. Provisions, in terms of relief for disasters that had taken place two years earlier. He also suggested that the Deputy Minister should be sent an invitation.

Mr M Cele (ANC) supported the Chairperson’s view. He felt that the deliberations should not take place without the presence of the Director-General.

Ms N Twala (ANC) supported the Chairperson’s ruling that the meeting should not take place.
Mr Van Dalen added that legally, no other meetings could proceed until the meeting with the DAFF was concluded. Therefore, the meeting should happen fast.

The Chairperson proposed that the Director-General should be given the opportunity to attend the meeting at 2pm. The afternoon meeting scheduled would flow after that.

Mr Abram responded that this would not be entirely fair on Members who had to attend to other meetings in the afternoon. He asked if the Members would be informed if the person concerned would in fact be coming to the meeting and if the meeting would in fact be taking place, as alternative arrangements would have to be made.

The Chairperson responded that the Director-General’s attendance was an instruction of the meeting. The Members would receive confirmation.

The meeting was adjourned until 2pm that day.

Resumption of Meeting
The Chairperson said that the presentation by the Acting Deputy Director-General, Mr Mannya, on Ncera would be an update on the process to address issues at the entity prior to any legislative requirements from the Committee as per the Public Finance Management Act (PFMA). The presentations on the Annual Report of the Department on Agriculture, Forestry and Fisheries (DAFF) and Marine Living Resources Fund (MLRF) would follow the update on Ncera. Since the meeting was four hours behind schedule, dinner would be prepared and transport arranged for those requiring it. 

Since the ADDG had not arrived to make the presentation on Ncera and the Director-General (DG) was expected to arrive at 3:30 pm, the Chairperson suggested reconvening an hour later.

At 3:40pm, the meeting resumed and the Chairperson welcomed the Minister, Ms Tina Joemat-Pettersson and the DG, Prof Edith Vries. The Committee had taken serious note that the Deputy Minister did not attend Committee meetings. The Committee assumed that a message or invitation to the Department reached both the Minister and Deputy Minister. The Committee would need to be informed otherwise.

Comments by the Minister
The Minister said she had made it very clear the previous day that she reported to the Executive Council of government and the Committee was aware that on Wednesdays, Ministers were expected to be in Cabinet. The Committee had made her work extremely difficult. In the past five years, she was the only Minister of Cabinet expected to be in a Portfolio Committee meeting three times a week. She had asked to speak to the leader of the DA to explain her disappointment in the Committee, in the light of 20 pieces of unconstitutional pieces of legislation not going through the Committee, and in particular because of the actions of Hon Members Steyn and Van Dalen. Two pieces of legislation had been passed and a third piece of legislation was hopefully going to be passed before the end of this term of office. The core business of the Committee was to provide a legal framework within which the DAFF and government was supposed to operate, not to provide micro-management facilities to the DAFF. She believed that with only a few months left, the Committee would still not get it right. The Committee’s only obsession was to call for her dismissal. This call had had been a monumental failure. The Committee’s incompetence had rendered her Department inefficient and ineffective by expecting it to be in Parliament two to three days each week.

There was also no other department which expected a DG to be in Parliament three days a week. Furthermore, other Ministers concurred that it was wasteful expenditure, a monumental waste of time, and a huge embarrassment for a Committee to spend 99% of its time on 0.05% of the budget - on Ncera. The National Council of Provinces (NCOP) knew more about the Comprehensive Agriculture Support Package (CASP), which constituted 33% of the budget, than this Committee. CASP had only reported to the Committee twice in five years. The Committee did not know who the CASP officials were or what was happening with this programme. It did not make sense to expect the new DG, within two weeks of taking office, to respond to the Annual Report for 2012/13. She would ask the DG to read the report and the officials to respond to questions.

The Chairperson said the Committee was following a programme whereby the update on Ncera Farms would be presented first. Ncera was important as it derived its budget from the DAFF’s budget and the reality was that whatever went wrong with Ncera affected the DAFF’s budget. The Committee further expected to receive an Annual Report on Ncera, as it was a PFMA Schedule 3B public entity.

Progress report on Ncera Farms
Mr Mannya said that following the last report to the Committee, the disciplinary process had started and hearings were set for 25 - 27 November 2013. In terms of transformation, DAFF, the Department of Public Works (DPW), and the Eastern Cape Department of Rural Development and Agrarian Reform (RDA), led by the DAFF, had met and agreed that the Ncera PTY (Ltd) would be de-registered by the DAFF as a matter of urgency following due legal processes.

RDA, which was the department most suitably positioned to receive the assets through the transformation would propose a model on how the assets would be used. One component of Ncera was the centre, the public entity, and the other was the farms used for farming. Should the RDA come up with a suitable model, it would work with the Agricultural Research Council (ARC) to take over Ncera going forward.

The DAFF had requested the DPW to verify the title deeds of the farms and the vesting status of the properties and the Department of Rural Development and Land Reform (DRDLR) to deal with leasing of farms and settling of farmers on the property.

The DAFF’s proposed Operational Plan indicated the legal processes required for transformation to be completed by March 2014 (see attached document).

The Asset Register, which had been submitted to the Committee, would be updated and verified before transfer. The Human Resources Plan involved 36 employees, some of whom would be retired and others would be transferred after due consultation processes. If transferred to the RDA, they would work with the ARC and possibly use the farms for breeding livestock. Although the model would be provided by the RDA, the DAFF was open to debate with other interested parties.

Discussion
The Chairperson reminded Members that the last time they had met with the stakeholders and the Ncera Farms Centre Management, the Committee had promised to return to stakeholders with clear direction on what would happen next. The Operational Plan talked to the questions relating to ownership of land, whether there would be work on the farm and what would happen to the dwellers on the farm. Additionally, the Asset Register had been requested and received. Going forward, an Annual Performance Plan would assist the Committee with oversight on its compliance with the PFMA.

Ms Steyn asked if the Minister had ever been to Ncera and if she was prepared to go to Ncera to tell the people in those communities that she did not care about their needs. She also asked what the employees at the Ncera Centre had been doing over the past five years while being paid with tax payers’ money and what their core function would be once they had been transferred to RDA. Lastly, she asked how much money had been put into Ncera by government since its inception and what the entity could show for that money.

The Chairperson asked Members to focus on the two levels of the report. The plan stated exactly what would happen and Members would now be able to respond to the stakeholders on where Ncera was heading. Secondly, the report would need to be aligned with the Annual Report, as there were legal implications.

Mr Abram said that the Annual Report referred to the dates 1 April 2012 to 31 March 2013 and the report would need to be aligned with that time period. He cautioned the DAFF not to come up with transformation plans that were not in the interest of the stakeholders, as expectations had been created and had to be taken into account. He also said that there would need to be a verifiable database of the movable assets. He asked how many employees were of retirement age, if they had been consulted, how many actually wanted to retire, and what the general issues were for the employees. He suggested that the Committee should accept the Ncera report as it was and ensure that the time-lines were adhered to and regular updates were submitted to the Committee. He suggested visiting the communities close to the end of November 2013.

The Chairperson said that it was critical that the Committee reported back to the communities on the way forward. In lieu of the Ncera report and the Annual Report, the Committee’s recommendations would take cognisance of the Budgetary Review and Recommendations Report.

Ms Steyn said that discussions to close the Ncera public entity had been in process as far back as 2001, whereby the then National Department of Agriculture had been financing shortfalls of about R1.5 million to R2 million annually. She needed clarity on how much money had been put into Ncera since its inception, if the Minister had ever visited Ncera, and what would happen to the officials who were transferred from Ncera to the department.

The Chairperson said that Ms Steyn’s questions were very relevant but for purposes of the current exercise, the way forward for Ncera was now clear and her questions would be dealt with when discussing the Annual Report.

Ms Steyn said that she understood what the Chairperson was saying, but asked if her three questions on the Ncera could be dealt with before the Annual Report was presented, as there were no other questions.

The Chairperson consented to Ms Steyn’s request and asked the DAFF to respond.

The Minister replied that Ncera was governed by the Agriculture Produce Marketing Agency Act 12 of 1992, the Conservation of Agriculture Resources Act 43 of 1983, the Performing Animals Protection Bill 24 of 1955, the Animal Improvement Bill 62 of 1988 and the Animal Diseases Bill 35 of 1984.

Ms Steyn asked if the Minister could switch on her microphone as Members could not hear her.

The Minister said that the microphone was not working. After it was switched on, she continued. As legislators, the Committee would maybe have read those bills and would understand that when the DAFF had to prepare a plan for transformation of Ncera, it had to use a number of seriously out-dated bills. These bills were prepared and ready for transformation and hopefully would be taken to the next more competent Committee.

Mr Abram interrupted the Minister to raise a point of order. He asked if the Minister, by implication, was saying that the Committee was incompetent. He took strong exception to this.

The Minister continued. Besides the Ncera farmers, there were 8000 workers employed on the farms. The Committee had visited less than 80 of the 8000 workers on the farms over the five years. Hopefully before the end of the five year term, Members would have visited all 8000 workers. There were eight Community Forest Farms (CFFs) and four leased community farms. The Committee had not visited one CFF.

The Chairperson ruled that the discussion on the Ncera Farms was over. The Committee had accepted the report and agreed to revisit the communities. The Committee would also receive an Annual Report on Ncera and then address any issues raised in that report. Lastly, there would be periodic feedback on the progress on the Operational Plan.

Ms Steyn said that while she agreed with the Chairperson, the Committee had been waiting for hours and her three simple questions related to the presentation on Ncera Farms. She asked if the Minister would answer her questions later even if she did not have the opportunity to repeat the question later in the meeting.

The Chairperson asked the Minister if the questions would be answered later in the day.

The Minister answered that there were 36 people in Ncera and they would be treated as the other 8000 employees.

The Chairperson asked the Minister for a simple ‘Yes’ or ‘No’ reply to whether Ms Steyn’s questions would be answered later.

The Minister agreed to address the questions later.

The Chairperson said that the response to the question was ‘Yes’. He asked the DG and Minister to take the Committee through the DAFF Annual Report.

DAFF 2012/13 Annual Report briefing
Mr Mannya presented the overview, achievements, challenges and financial statements of the Department’s Annual Report for the 2012/13 financial year. The DAFF had achieved successive unqualified audit opinions, indicating good governance.

Another achievement highlight was enhanced cooperation within the BRICS formation. In addition to the office in China, the DAFF had opened offices in India and Russia and would soon be opening one in Brazil to attract alternative markets and move away from the traditional EU markets which were becoming difficult. Trade agreements were concluded with other emerging economies and trade into Africa had been accelerated, especially in the SADC region.

The Food and Nutrition Security Policy to address the incidence of acute hunger had been concluded. In cooperation with the DRDLR, the DAFF had launched an Integrated Food Production programme in seven provinces to alleviate hunger and poverty. This included 139 000 ha of agricultural land particular in communal and former homeland areas being cultivated for production, primarily of grain and potatoes. Other achievements included 54000 jobs created during the 1^st Quarter of 2013 where Food Security Intervention was implemented; and the Female Entrepreneur of the Year Award addressed equity issues, particularly the empowerment of women as contributors to food security.

Other highlights were that the Land Care and Working For Water Programmes had rehabilitated 92742 ha of land and the Small Scale Fisheries Policy had been approved to ensure that the small scale fisherman could benefit - the plan would be implemented once the Bill was passed; the mandate of the Fisheries Management now included the fresh water and inland fisheries and implementation of aquaculture; a Food Security Strategy was introduced for the Small Scale Fisheries sector; and implementation of the Experimental Abalone Fisheries Project in the Eastern Cape had created more than 1000 jobs.

Challenges observed in the sector were that high levels of unemployment, inequality and poverty persisted; there was insufficient finance for investment in production capacity for job creation; and low investment in research and technology limited access to new technology and beneficiation at the primary production level. Other challenges were that participation, particularly by small-holder farmers, needed to increase; uncompetitive behaviour and dominance affected the agro-industries; there were backlogs and shortages in agro-logistics and the energy infrastructure calling for SIP 11; and DAFF was exporting raw material rather than value-added product.

While the DAFF received an unqualified audit report, there were a number of issues reported by the Auditor-General (AG) around the weaknesses in the predetermined objectives: reasons for variances were not reported, nor supported by sufficient appropriate evidence; and reported performance information was not reliable on programmes 2 (Agricultural Production, Health and Food Safety), 3 (Food Security and Agrarian Reform) and 5 (Forestry and Natural Resources Management). Other matters raised were around laws on procurement (failure to disclose interest) and inefficiencies in the Audit Committee and the internal audit. In terms of spending, the DAFF had underspent R55 million.

In conclusion, the DAFF needed to strengthen interdepartmental collaboration for the development of production infrastructure and other support policies and programmes, while developing the plan for SIP 11; enhance governance and cooperation in the sector; and accelerate collaboration between national, province and local government and with stakeholders. The DAFF also needed to continue to collaborate for the development of market expansion strategies for priority international markets to the East and take advantage of South Africa’s BRICS family; and continue to collaborate on utilization of key policy instruments to enhance performance in the sector.

Comments on the AG findings on Performance information
Prof Vries explained that it was not her intention to disrespect the Committee by her absence from the morning meeting and she apologised unreservedly. This was not the way that she wanted to start her relationship with the Committee.

Members and the DAFF were present the previous day when the AG presented the Annual Report. More attention needed to be given to certain areas. From a sectoral perspective, the DAFF had to make corrective measures as reasons for variances were not supported with evidence and information was not reliable. The DAFF had technical indicators prescription in place, but it appeared that this was not followed strongly enough. The DAFF would strengthen that process.

The DAFF was days away from the 2^nd Quarter Review at which time it could test the integrity of its reporting systems. It was clear that to improve reporting, the DAFF had to strengthen capacity of the M&E Unit and to report to the Committee. The previous year, the reporting was less reliable than it was in the current year. The Committee could be assured that those aspects that could be corrected through leadership and accountability would be addressed.

Some of the targets and indicators contained in the 2012/13 Annual Performance Plan were also contained in the 2013/14 Annual Performance Plan and therefore would be repeated, no matter how good the reporting i.e. the targets would not change to smart targets.

Discussion
The Chairperson commented that it was apparent that much needed to be done. Twenty years down the line agriculture remained untransformed. He suggested that the DAFF should lead the Committee on how to transform input costs from being as high as 70% of a grant and how to address the agriculture sector through the AgriBEE Charter Council and AgriBEE Fund. The Department of Trade & Industry (DTI) had put out a moratorium that the BBEEE codes should be the guiding factor.
Mr Abram asked for clarification on where the plans were for financing of the One-Stop model; how many pieces of legislation the Department had brought before the Committee since 2009; what was the value of the total package paid to the DGs who had resigned between 2009 and 2012, and what the reasons were for their suspension.

Mr Abram also asked why there had been no report on mechanisation while implements continued to gather dust as shown to officials in 2009; what progress had been made on liability and recovery of an amount of R50 million for a Dr R.P. Mohlahlane and a Mr T Langa for R5 million; what progress had been made in respect of corrective measures for the existing inefficient leadership and governance (page 152 of the Annual Report) and to ensure that there were sufficient positions to do the work; and  what progress had been made to ensure that there was no recurrence of findings on addressing root causes and on internal controls.

Mr Abram then asked what the current status was of the management of debt in terms of the repealed Agricultural Debt Management of 2001, read together with Repeal Act of 2008 (page 145 of the Annual Report). The debt had resulted from loans to farmers granted by the Agricultural Credit Board until 1997 and was still secured by means of mortgage bonds over immovable property and memorandums of agreement where movable assets such as livestock, vehicles and farming implements were taken as collateral for loans granted.

Mr Van Dalen said that the Committee did not want to micro-manage the DAFF. It relied on the DG to give it information and on the AG to report on what had transpired over the year. Of great concern was that 100% of reported objectives and indicators were not consistent with planned objectives, 33% of reported indicators were not consistent with planned indicators, and 50% of reported targets not consistent with planned targets, and it went on. The previous day he had asked the AG if it was possible that something never existed if the AG could never find evidence for it and the AG had replied that “that was usually the case”. The real question was whether the Committee could trust the figures given by the DAFF. 

Mr Van Dalen noted that the Internal Audit Committee usually reported to the AG and the AG’s report said that the Internal Audit Committee did not have a three year rolling strategic plan in place or an annual Internal Audit Plan in place for the first year of the three year rolling strategic Internal Audit Plan. The Internal Audit Committee did not report directly to the accounting officer, did not evaluate the effectiveness and efficiency of controls, did not evaluate the reliability and integrity of financial and operational information, and it did not evaluate compliance with laws and regulations. This was worrying. The Committee would pursue anything raised by the AG and would not be told how to do its work. In the AG report, the AG also remarked that management did not exercise sufficient oversight over reporting and internal controls. Although action plans were implemented, limited or no progress was made to address root causes, with the result that repeat findings were raised. Management did not ensure that key functions by the various senior positions within the DAFF were properly resourced and skilled. He was not convinced that the DAFF should be commended for an unqualified audit report.

Mr Van Dalen noted that the Minister had accused the Committee of not processing legislation. He asked if there was a block in legislation coming to the Committee and if the Committee should beg for legislation to come to it. It appeared that the Minister was taking the route of “attack being the best line of defence”, but she had taken on the wrong people. Unfortunately, the reasons for the problems raised by the AG would not be revealed before the end of the term and perhaps the future Committee would be able to find out where the DAFF went wrong. The current Committee and/or Minister may not be returning in the following term.

Ms Steyn said that she needed to revert to the programmes in the presentation which were skipped by the presenter due to time constraints. In Programme 1: Administration, 12 of the 31 targets had been achieved. It was the Minister’s responsibility that Administration functioned correctly. Slide 17, on the Administration Programme, showed that the monitoring, evaluation and reporting guidelines for the DAFF were approved in 2012 to ensure development of the provincial chapters, but under the challenge to strengthening policy, planning, monitoring, evaluation, reporting and information for the sector, the report stated that this could not be done because the M&E units in the provincial departments were not fully functional. The Minister had said the previous day that the Committee did not ask questions, visit communities, did not know what the DAFF was doing, did not know what CASP was, and who the officials were, but DAFF’s failure to have a functioning M&E system would explain why the Committee had to continue asking questions about CASP, Micro Agriculture Finance Institutions of South Africa (MAFISA) and what the R2 billion was spent on.

Ms Steyn said that the Committee had asked specific questions so that it could visit projects to ensure that the Department spent its money correctly. The Committee could not visit projects when it did not know where the projects were. She hoped that the Committee could receive the information immediately and could visit the projects within the following few months. On the Administration indicators for alignment of legislation to the Constitution (slide 21), nine bills were in the process of being finalised by the directorate concerned and/or with the State Law Advisor and/or on their way to Parliament. She asked how many of those bills had come to Parliament and how many had been dealt with.

Ms Steyn highlighted that in Programme 2: Agricultural Production, Health and Food Safety, the DAFF achieved 12 of the 20 targets. The ADDG had mentioned in his presentation that the DAFF was moving exports to BRICS and new trade markets. She asked what the main reasons were for the EU market becoming increasingly more difficult. She wanted to know whether the statement in the World Organisation for Animal Health (OIE) report ‘that the competent veterinary authority in South Africa was defunct’, was perhaps the reason why South Africa’s current markets were struggling and why the country was no longer exporting to the EU.

Ms Steyn noted that one of the challenges stated in the report was that publishing of regulations for the Veterinary and Para-veterinary Professions Amendment Bill had been delayed because of the late approval by the South African Veterinary Council (SAVC). The SAVC granted approval in February 2013 and communicated feedback to the DAFF in March 2013. The Committee had not yet received this feedback. The Committee had also been asking the DAFF for a report on the status of all animal diseases in the country which were hampering trade and export and what progress had been made with regard to disease control measures.

Ms Steyn asked which structures were responsible for approving the Foot and Mouth Disease (FMD) surveillance dossier and Avian Influenza surveillance, what the outcomes of discussions in the relevant structures were, and what corrective measures were in place. She also asked what other commodity strategies, apart from the vegetable strategy, were implemented during the year; how much vegetable production had increased; if new markets were found for vegetable commodities; and what other progress had been made as a result of the vegetable strategy.

Ms Steyn asked if detection of Black Spot had also been included in the mitigation measures and if so, why it had not been reported on in the Annual Report, and why the Liquor Products Amendment Bill, which had been submitted to Cabinet for approval, had not come to Parliament. This was one of the bills that the Committee had requested to be fast-tracked at the beginning of the previous year so that it may deal with important issues in that bill.

Ms Steyn referred to Programme 3: Food Security and Agrarian Reform and said that the Committee had asked many questions about the Zero Hunger business case and now understood that it was only a campaign which had now been replaced by the Integrated Food Security Production Intervention programme. She asked how many hectares were planted, what the cost of planting was, whether crops were received from all the hectares planted and what other benefits were achieved. What progress had been made with development of the national extension policies which had been challenged by the long consultative processes with sector and sub-sector stakeholders and if the document had been finalised since it had been published?

Ms Steyn referred to Programme 4: Economic Development, Trade & Marketing and asked how many new international agreements had been signed in Africa specifically.

Ms Steyn referred to Programme 5: Forestry and Natural Resources Management and noted that the DAFF had achieved 5 of the 18 planned targets due to budgetary constraints and reprioritisation. Forestry protocols and strategies were supposed to be implemented to increase the level of public and private investment. The challenge was that the process for submitting the final bill (name of the bill not indicated in the report) for signing had been delayed as the Minister had raised issues that first needed to be attended to. She asked how far the process was and whether the bill had been finalised and signed. Another challenge was that the process for signing the bill had been moved to November 2013, as per the legal services schedule. She asked if the Committee would still receive the bill would within the year.

Ms Steyn mentioned that the previous day there was supposed to be a meeting on the natural disaster issue as there was a massive national drought particularly in the North West and Northern Cape. The drought had been the cause for the increase in fires and for communal land animals being found along the roadside owing to amongst other reasons, improper land care. Immediate assistance needed to be given to the drought-stricken areas. She asked what strategy was in place to address this.

Ms Steyn stated that only 114 of 1250 ha of irrigation schemes had been revitalised at Makhathini irrigation scheme. She asked what the reasons were for revitalisation not taking place in the North West Province and how the DAFF planned to finalise revitalisation in that region.

Mr R Cebekhulu (IFP) said that he expected that the DAFF would have ways to monitor the provinces since it transferred more than 30% of its budget to the provinces. When the Committee requested officials from provinces to account, the officials did not show up. He was concerned people working on the ground on Land Care projects were not being paid for up to four months. He asked if the DAFF had any method for follow up in the provinces on how these people were being paid and to prevent exploitation.

Mr Cebekhulu referred to Programme 2: Agricultural Production, Health and Food Safety Programme, and stated that veterinarians neglected to visit dipping tanks and monitor ticks on livestock. The majority of the diseases seen cropping up in the country could come from those areas where livestock was neglected.

Ms R Nyalungu (ANC) asked the DG how many of the senior managers received performance awards, which totalled R25 million in 2012/13.

The Chairperson said that there was a joint responsibility between the Forestry Department and Public Enterprise (DPE) on a matter relating to a transaction which took place in 2005, wherein among other agreements there was a commitment that 10% of transactions would be earmarked for community ownership. Today, those communities and industries continued to complain about implementation of this 10% share and in the midst of such wealth, those communities continued to live in squalor and poverty. They could not access the wealth of the land despite it being right in front of them. The Committee would like to have clarity on this commitment so that it can give the communities feedback on the situation.

The Chairperson further asked if South Africa realistically had the conditions in which aquaculture could thrive, given that the country was a water scarce country and the cost of energy supply was becoming more expensive. The DAFF had committed to 10 to 15 new aquaculture projects. A few projects had done well, but others had not. A case in point was one project in East London and another in Port Elizabeth. At a project in the Free State, the fish had not grown to size owing to energy supply. According to standards set as barriers to any trade, certain fish sizes would not be acceptable for trade.

The Chairperson asked if the Committee could be directed to the 10 000 ha afforested/planted. In the AG report, it was evident that it was difficult to monitor the hectares that had been planted. He asked how far the plantations had progressed over the 12 years and how the DAFF could be sure of the final number of hectares planted, as it was practically difficult to determine this when on visitations to the areas.

The Minister replied that it was sad that after five years, the Committee and the DAFF were further apart than when they started. The first sad reality was that instead of the DAFF focusing on core functions; it had allowed itself to be side-tracked by insignificant, irrelevant and very innocuous questions and information. At the start, the DAFF had realised that the legal and policy framework within which it operated was completely divided and needed to be brought in line with the Constitution, the National Growth Plan (NGP) and the National Development Plan (NDP). Unfortunately after the NDP, there was “howling about”, instead of internalising what the NDP meant for the growth of the sector. There were also different views on what food security was and the DAFF’s mandate. She had a radio recording with Hon Member Steyn challenging that subsistence farming and vegetable gardens were not the Minister’s mandate. This was how pathetic the understanding of the Minister’s core mandate was. Even though the country was food secure, there was no household food security. This was in the NDP and Millennium Development Goals (MDGs) and the United Nations commitment to food security to all families, especially in Sub-Saharan Africa, by 2020.

It took the DAFF one whole year to take one Bill on the compulsory veterinary services to communities, through Parliament and the Bill on feed and fertilizer took more than a year before being withdrawn. In the light of it being so difficult to pass one piece of legislation, it was not possible to bring another to such a hostile environment. This was why in five years, with all the acts prepared, only one Bill was passed. Now, finally, the DAFF had brought the second Bill, the Marine Living Resources Amendment Bill to the Committee. This Bill had been watered down to an extent so that it could be processed by the Committee. If the Committee wanted legislation, it could have brought their Private Members Bills through. It was surprising that the DA had not brought a single Private Members Bill. Still, the DAFF had 20 pieces of legislation ready, and if the Committee would pass the MLRA Bill, the Department would bring another. It would be great to pass three pieces of legislation before the end of October 2013. This would be a record.

The biggest battle the DAFF had with the Committee was with transformation of the agricultural sector. The good thing was that the sector, as a unit, had bought into the transformation agenda of the DAFF. Even the Fisheries sector was committed to and supported the amendments to the Marine Living Resources Act (MLRA). The DAFF had discussed long term transactions with the Forestry Department, DPE, Treasury and the Land Bank, where the big companies such as Sappi Forests, Mondi Forest and Hans Merensky were able to receive 70 year lease agreements with forestry communities, paying those communities less than 1% rental, and resulting in the inability of any transformation of those communities out of poverty. The DAFF had been working with and improving the relationship with the big companies to improve the lives of the forestry communities. One of the disappointments was that the Committee had not engaged in forestry.

The Aquaculture projects had been supported by the DTI, the industry, agriculture colleges, and the Department of Economic Development and there was now an Integrated Aquaculture Policy for the country, which unfortunately was never presented to the Committee owing to the DAFF being confronted with interrogation. It was useless bringing anything to the Committee. There was also an Agro-processing policy for the country which, unfortunately, the Committee had also not seen.

The land care and livestock commitments and the compulsory veterinary services had led to the DAFF rolling out 27 mobile veterinary clinic units to communal land properties. Four big communal veterinary clinics would be launched on 16 October 2013.

The Minister replied that when it came to access to markets, again it seemed that the DAFF and the Committee lived in two different countries. During the 2012/13 financial year, the DAFF had developed a good relationship with the UN-based programmes: the World Food Programme (WFP), the Food and Agriculture Organization (FAO) and the Development Fund for Agricultural Infrastructure and Finance. The WFP was buying more than 30 000 metric tons of high quality maize from small-holder farmers for distribution to Lesotho. The WFP did the auditing for hectarage, quality of seed, GMO/non-GMO, and registered co-operatives which were expected to provide 5 metric tons per unit to the WFP. This market was available for small-holder farmers as long as they could produce good quality maize, beans and yellow potatoes. The WFP criteria were that 40% of what the Department procured had to come from small-holder farmers. The programme would benefit both commercial and small-holder farmers. If more food could be produced from small-holder farmers, the 60% procured from commercial farmers would also increase. The WFP also wanted to procure tinned fish and other commodities. If ever there had been a success story for South Africa, it was the WFP re-entry into South Africa as a market for commodities, not only for export to Africa but globally. Initially South Africa was one of the largest countries to act as a procurement hub for the WFP, but because the country could not produce good quality food, other countries such as Zambia (and another), overtook South Africa in supply to the WFP in Africa. The WFP built capacity with the co-operatives, in which a cluster would include one large commercial farmer and at least ten small subsistence farmers. The programmes had been lauded by Agri-SA and the African Farmers Association of South Africa (AFASA). The Committee would soon realise that it was far behind the reality of what was happening with agriculture in SA.

The AgriBEE would be supporting commercial farmers, where a commercial farmer could be funded by up to R100 million by bringing in small-holder farmers and giving permanent jobs to 400 people. The Integrated Growth Strategy in South Africa, which the new DG had been central in developing into the Agriculture Industrial Policy Action Plan, had passed through Cabinet. R1.3 billion had been set aside for the this plan to support commercial farmers’ relationships with small-holder farmers - to build their capacity, give access to finance and markets. The DA would never understand this.

The Integrated Food and Development Strategy had been accepted as a National Integrated Food and Nutrition Policy for the country. While the social services sector would have a social response to food security, the agriculture and other economic sectors would have a production response to food security. Already, 140 000 ha of maize, beans and potatoes had been produced. Hopefully this year, 400 000 ha would be produced.

The SIP 11 Irrigation Scheme was a strategic infrastructure programme of government to bring the irrigation schemes back into production, together with DRDLR, Agro-logistics and Agro-processing of DTI. There was already an Agro-processing Policy in the country.

There would be a BRICS meeting of Agricultural Ministers on 24 October 2013. Hopefully, the Committee could interact with the Ministers and commodity groups, including the fresh fruit and perishable food products groups and the citrus growers who were experiencing citrus black spot. The aim of the meeting was to enable the commodity groups to improve access to BRICS markets while fighting the challenges of sanitary and phytosanitary requirements for the EU countries. The DAFF was negotiating carefully with China and the US on quarantine of South Africa’s fresh fruit exports. A report on the tariff regime negotiated with Brazil could be shared with the Committee.

The Minister replied that the Zero Hunger Campaign, led by President Zuma, was a concept borrowed from Brazil. The President had customized it to a South African Campaign, Masibambisane. The campaign was no longer required and the Food and Nutrition Security Intervention would now be funded, managed and driven under the programme Fetsa Tlala, to be launched in the Northern Cape before the end of the month.

The DAFF did not expect a pat on the back, but it would be important that the DG brought the changes to Micro Agriculture Finance Institute of South Africa (MAFISA) and CASP to the Committee. CASP money was now being used for planting and to ensure food security in the provinces.

The North West Province had been able to follow the process for declaring a provincial disaster by using the provincial disaster management team together with the provincial premier. The national disaster management team then reported to the national Minister of Cooperative Governance and Traditional Affairs (CoGTA) who then recommended to the President to proclaim a disaster area through a President’s Minute and the Proclamation Act. Treasury then allocated money to the province. The DAFF was explaining to the Northern Cape how to follow that same process.

The Minister replied that Zimbabwe had become South Africa’s largest destination for export of processed agricultural products. The most unprocessed agricultural products were exported to the Netherlands. The exports and imports had changed dramatically. South Africa was a net exporter of unprocessed agricultural goods and a net importer of processed agricultural goods, but had to move intensively to become a net exporter of processed agricultural goods. This category would create more jobs. The R1.3 billion stimulus support package for Agriculture was aimed to be a game changer and would link to commercial farmers to retain jobs, to create jobs and to develop agro-processing.

The one-stop facility with the Land Bank was a one-stop finance package for small holder farmers at an interest rate of prime minus 3. At the Agri-SA conference the previous year, the Hon Member Abram had said that it would be ridiculous and impossible to give such a facility to the commercial farmers.

Mr Abram interrupted and said that the Minister was twisting what he had said at the Agri-SA conference, which was that prime minus 5% was impossible.

The Chairperson asked Mr Abram to be orderly.

The Abram argued that the Minister had misrepresented him.

The Chairperson said that he would need to speak in an orderly fashion.

Mr Abram said that he could not sit and listen to lies and insults. Every delegate at the Agri-SA conference would testify that he had never spoken of prime minus 3.

The Chairperson asked Mr Abram to leave the meeting.

Mr Abram thanked the Chairperson, adding that he was not a ‘yes’ man or ‘a creeper’ and was not prepared to take insults.

Mr Van Dalen said that he too was not prepared to continue to listen to lies. He would also leave the meeting.

The Minister continued. The global conference on Agriculture, Climate Change, Food and Nutrition Security to be held on the 3-5 December 2013 in South Africa would be funded by the World Bank and the Netherlands. Ministers of Agriculture from the G20 and all the BRICS countries would be attending. She was hoping that before Parliament rose on 7 November 2013 South Africa had a strong position on Climate Change, as the country had been leading the debate on how climate change was influencing agriculture and food security.

The Minister concluded by saying that all the questions on the in-depth technical detail in the Annual Report had been noted by the DG. She asked that the team assist the DG in preparing the technical responses.

The DG requested that the team be given time to respond to the very detailed technical questions.

The Chairperson agreed to the request.

The meeting was adjourned for dinner.

Dr Motseki Hlatshwayo, Chief Director, Aquaculture and Economic Development responded to some of the finance questions. [PMG was not present and was unable to record the responses ]

The Chairperson asked if the DAFF would like to share success stories.

The Minister said that the AgriBEE Fund, just like the Poverty Relief Fund, MAFISA and Ilema-Letsema funds all contained DAFF money administered by the Land Bank. However, the Land Bank made it extremely difficult for the DAFF to spend that money. The Poverty Relief Fund had been there for ten years and the previous year was the first time that some of that money could be sent. The problem with MAFISA money was that it was in the form of loans. Black farmers no longer wanted loans. They wanted recapitalisation funds for Land Reform, which was in the form of a grant. Besides recap money, they could also receive a number of other grants that offered far more than the CASP grant. The DRDLR grants made the DAFF money look like ‘spaza’ shop money. What the DAFF wanted to do with the AgriBEE Fund, the DRDLR was doing with its Equity Scheme.

In the past five years, the Land Bank had not approved a single AgriBEE project due to criteria not being met. Treasury and the Land Bank gave different instructions as to the way in which the money had to be spent and the goal posts shifted constantly. Mr Mannya had given up. The previous Monday she had called in the DG, Land Bank and Treasury to request approval of the money before the end of the term of office.

The Chairperson asked what criteria was set for the AgriBEE Fund. Only one project had been supported and people who were looking for support reported that the reasons for their decline from the Land Bank were vague.

Prof Vries replied that at the meeting with the Land Bank the previous week, the officials had said that they were observers and that Treasury made the decisions. She had challenged this and reminded them that they were a Schedule 2 entity, with a Board and a fair degree of autonomy. The Land Bank had approved money for emerging farmers to be paid back after three years, but Treasury’s conditions were that the money would need to be paid back after one year. The conditions were such that farmers did not want to accept the money.

The Minister added that for small holder farmers, it was easier to get money from DRDLR than the DAFF. The CASP money was R10 000 here and R20 000 there. It was very little.

Mr Mannya summarised that the DAFF would respond in writing on the packages paid to the former DG; the mechanisation units; and the agreements signed in Africa.

The Minister said that the packages were worked out by the DPSA and the State Law Advisors

Mr Sipho Ntombela, Deputy Director-General, DAFF added that he would submit the prescribed formula used by DPSA to work out the package. It was on a sliding scale, depending on the number of years still outstanding on the fixed term of the contract.

The Chairperson concluded that the Committee would need to get the responses by the end of the following week. On 30 October 2013 the Committee would receive an update on animal diseases and on 5 November 2013, a briefing on the AgriBEE Charter and Fund. A number of questions would be answered at those meetings.

Marine Living Resources Fund Annual Report 2012/13
Mr Dennis Fredericks, Acting DDG: MLRF, DAFF, said that the MLRF was responsible for the operational costs of four Chief Directorates: Aquaculture and Economic Development, Fisheries Research and Development, Marine Resource Management, and Monitoring, Control and Surveillance. The MLRF also covered the operational and administrative costs of the Chief Director: Fisheries Operations Support, the Chief Directorate Financial Management for the MLRF and the support components of Communications, Human Resources, Information Technology and Legal Services; International Relations; Stakeholder Relations; and Customer Services. It was very trying covering all the above costs and operations.

One of MLRF’s great achievements in the year was approval of the Small Scale Fisheries Policy by Cabinet after many years of public consultation. The policy provided a dispensation that would contribute to efforts to eradicate poverty, ensure food security and promote equity while promoting the sustainability of marine living resources.

Another major milestone was finalisation of the Aquaculture Development and Enhancement Programme (ADEP) in collaboration with the DTI. Implementation of 11 projects under the Working for Fisheries Programme (WFFP), a sub-programme of the National Extended Public Works Programme, had created 1343 jobs. The WFFP included the Western Cape Marine Anti-poaching project; fishing harbour facilities management; three Catch Data Monitors projects in KZN, Eastern Cape and Western Cape; the Doringbaai Fish Farm; the development of Fish Processing Facilities in the Cederberg and other parts of the Western Cape; and the development of harbour facilities in Port Nolloth and Hondeklip Bay. MLRF was also assisting Port Nolloth with refurbishment of a fish processing facility to assist the Small Scale Fishers in that part of the country. The Marine Stewardship Council annual surveillance report for trawl-caught hake had confirmed that it performed in line with the world’s most rigorous certification requirements.

The Audit Committee was satisfied that the internal audit function operated effectively during the year under review and had assisted the MLRF in addressing the issues raised in its audits. The MLRF had received an unqualified audit for its fifth successive year.

One of the challenges was the status of the fleet of research and patrol vessels. There were several investigations underway. Poaching, particularly in the lobster and abalone sectors, remained a problem and available resources would be stepped up to curb poaching. Over the past months, the MLRF had achieved success in this regard. Another challenge was capacity constraints, but with the limited human, financial and infrastructure resources, the MLRF had delivered by keeping the fishing industry alive. With implementation of the Small Scale Policy, the MLRF hoped to improve on the assistance offered to the Small Scale Fishers.

In terms of MLRF’s performance, fish farms were established in Koffiefontein, Springfontein and Behulie; a dusky kob pilot project was 90% complete in Hamburg, Eastern Cape; a producer organisation was established and two aquaculture management programmes completed; two harbours had been revitalised; and recovery plans for abalone, hake, West Coast rock lobster and linefish were approved (refer to attached document for TACs).

Compliance and enforcement efforts were achieved in spite of fleet challenges: Inspection of 940 vessel landings was conducted in key fisheries; sea-based inspection of vessels was conducted in five priority fisheries - hake (154), small pelagic (44), squid (183), line fish (154) and rock lobster (140); 21942 fishing vessels observations were completed through MLRF’s Vessel Monitoring System in Cape Town; 79 land and air border inspections were conducted; 232 land-based fish processing establishments were inspected and notices were issued to those that were non-compliant, and 44 sea-based fish processing establishments with fish factories on board were inspected; and 556 rights holders were investigated.

In 2013, MLRF had a surplus of R4.2 million which MLRF had requested for rollover.

Discussion
Mr Cebekhulu asked what the DAFF envisaged for the future of the Gariep Dam project building, which was not meant for breeding of local fish, if foreign fish would continue to be brought in, how people would benefit from the project and the effect of foreign fish on the environment.

Mr Fredericks replied that the MLRF had a plan to utilise the facility in the appropriate manner but this still had to be approved. It was not only for Tilapia but for other species as well. The plan would deal with the issues raised by the Member.

Mr Cebekhulu asked if the two vessels which were on the water covered research and patrols, or if they covered one of those fields only.

Mr Fredericks clarified that two patrol vessels were on the water and the MLRF was still working on the repairs of the research vessel, the Afrikaner. The MLRF had everything in place for the vessel to be back in operation and hoped to have it at sea in the foreseeable future. The final prepare work was being completed. As previously explained to the Committee, the “Afrikaner” would only be functional for five more years, at best. There was a need to replace this vessel for research purposes. Research had been conducted through use of an industry vessel for TACs, and the DECC vessel would continue with surveys of the offshore sector.

The Chairperson said that on page 15 of the AG report, material underspending on the budget spoke directly to the vessels. R194 million (61%) would have been underspent and as a result, the entity was not able to achieve its intended objectives of conducting deep sea research which promoted sustainable development. He asked if this related to some private sector companies assisting by volunteering their boats.

Mr Fredericks replied that the AG had noted that underspending was incurred particularly because the MLRF had a problem with the vessels. Therefore it was not able to spend the money. The funds had been earmarked and the MLRF was waiting on Treasury to approve that.

The Chairperson asked what the status was of the Ernst & Young report on the investigation on Smit-Amandla, which spoke to some of the issues within the DAFF as they pertained to the vessels and their operation.

Mr Fredericks replied that there were currently three investigations underway and the MLRF was still awaiting the final outcome of the investigations.

The Chairperson asked for clarity on the AG report of page 16 of the Annual Report: whether the Treasury Regulation 31.1.3(g) applied to objectives (100%), indicators (77%) and targets (43%) not being consistent with those planned as per the annual performance plan.

Mr Fredericks replied that this was a matter of being aligned with the Regulation 31.1.3 (g) - the different components of reporting. A M&E specialist was assisting with reporting accurately in terms of Treasury regulations. The MLRF had taken note of the AG report and was applying corrective measures going forward. Interaction with the AG had taken place and the MLRF would again engage with the AG in the second quarter to ensure that the MLRF was on the right track.

The Chairperson asked if the military veterans project of assisting with anti-poaching was continuing and what role seals played in poaching fishing stock.

Mr Fredericks replied that the military veterans were used to assist with anti-poaching in the Overberg. The project had come to an end and the MLRF had engaged the Department of Defence and Military Veterans to accommodate them in their anti-poaching programmes going forward. The MLRF scientists would submit a report to the Committee on the seals.

Ms Nyalungu asked if the agreement had already been signed between the China and South Africa on the Gariep project.

Mr Mannya replied that the DAFF had made the necessary preparations for the Minister to sign the agreement during the ministerial meeting with the BRICS at the end of October.

The Chairperson said that there were two or three issues he wanted to be addressed. The MLRF received funds through levies from the industry which supported the operations of fishing branch of the DAFF and the MLRF had another budget outside of the fund. It operated semi-autonomously within the DAFF, with offices and communication, legal, admin and CFO units in Cape Town. He asked if it was problematic having offices in Cape Town and Pretoria rather than having one department. The issue had been raised several times.

Mr Mannya replied that the MLRF operated from Cape Town but was overseen by Pretoria. However, there was one director in CT and one in Pretoria, who both reported to the Chief Director. All issues would be totally eliminated in the next review. Under the leadership with the DG, all issues would be addressed.

Prof Vries said that she would prioritise the MLRF as there was lack of coherence between Cape Town and Pretoria and the structure was clumsy. However, structure followed content, and therefore the mandate had to be reaffirmed and clarified. The DAFF had not cohered as an integrated DAFF and moreover, 80% of fisheries was still with the Department of Environment Affairs.

The Chairperson thanked the DAFF for its time. The Committee would reconvene the following morning for the briefing by Onderstepoort Biological Products (OBP) and South African Veterinary Council (SAVC).

The meeting was adjourned.