AgriBEE fund disbursements: Department Agriculture, Forestry & Fisheries briefing; Poultry tariffs: ITAC briefing

Agriculture, Land Reform and Rural Development

12 February 2014
Chairperson: Mr M Johnson (ANC)
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Meeting Summary

The Department of Agriculture, Forestry and Fisheries (DAFF) briefed the Portfolio Committee on disbursement of funds from the AgriBEE funds, the balance in the AgriBEE funds, funded projects, criteria for proposal approval and challenges of the Charter. It was noted that this fund was supported through an annual allocation of R35 million from the National Revenue Fund. As at 8 November, the balance held was R231 million. The fund had been operational in 2006/2007 but was suspended in 2008/9, due to mismanagement. During the period of suspension, the annual allocation of R35 million continued to be paid, until it was reinstated in 2012, which explained the high balance. In October 2013, a directive from the National Treasury to the Land Bank stipulated that all unused funds must be returned to the National Revenue Fund, and about R229 million was returned. The criteria for project funding was set out, and it was noted that although 67 business proposals had undergone assessment in the 2012/13 year, only six were recommended for funding, but only one, a tropical mushroom project, was actually to receive funding, of R3 million. Many of the other applications were referred elsewhere. Any further transactions would be processed only in the 2014/15 financial year, although it was noted that National Treasury had not promised that the annual allocation would be made in this year. Once the payment for the tropical mushroom project was made, this would reduce the AgriBEE Fund to nil.

Members expressed several concerns. Firstly, they questioned why so few of the projects had been assessed as viable, and why only one of the six had received funding. Secondly, they shared the concerns of the Director General of DAFF when she said that the Fund had failed to achieve transformation as it was supposed to. Thirdly, they were concerned that the investigations into possible misuse or mismanagement of funding that had caused the shut-down in 2007/8 had still not been finalised and was still described as work in progress. Several Members expressed their dissatisfaction and concern that Land Bank was not present at the meeting (for the second time) because it needed to account for the way in which the Fund had been handled and the lack of assistance to those needing it. Members asked if an application to roll-over funds had been submitted to National Treasury, and if not, why not. They questioned again whether the AgriBEE Council members were being paid, and from where, and, on being told that they were not, wondered why they would continue to work, until it was explained that the whole situation was in limbo pending the appointment of a Chief Executive Officer for the Council. The national DAFF was asked if it was not monitoring the provinces and the support they were offering. They also asked what had happened to the idea of offering a one-stop shop. It was decided that another meeting must be called, at which Land Bank, National Treasury and DAFF would all be represented to give their viewpoint.

The International Trade Administration Commission (ITAC) then outlined the situation in regard to tariffs on poultry meat, after the South African Poultry Association had made application for a review. Tariff investigations were carried out on five poultry meat products, and all received an increase, with lower increases to the carcass and offal, which were an important protein source for the poor, than on whole birds, bone-in portions and bone cuts. The whole bird tariff rate increased from 27% to 82%. ITAC further recommended that the duties be reviewed after a period of five years to determine the impact on domestic production, investment and employment. Committee members expressed concern over the rising costs of production, including input costs of production like maize, soya, labour, fuel and energy, and asked whether ITAC or DAFF were addressing those. Low price imports from abroad raised concerns about dumping and ITAC confirmed that there were anti-dumping investigations ongoing. Suggestions were made on the need to encourage exportation of poultry meat by domestic producers, to reduce imports, which were largely around giving better support and incentives to farmers to help them address the demand.  

Meeting report

Chairperson’s Opening Remarks by the Chairperson of Portfolio Committee on Agriculture, Forestry and Fisheries
The Chairperson informed Members of the demise of Hon Ben Skosana (IFP), and the Committee observed a minute of silence in his honour.

The Chairperson expressed displeasure at the absence of Land Bank from the meeting. The Committee had a responsibility to summon any entity, irrespective of which Department that entity reported to, and this was the second time that Land Bank had failed to attend a meeting of this Portfolio Committee when matters relevant to it ere being discussed. He hoped that a strong message would be sent to the Minister and Deputy Minister of the Department of Finance about the lack of respect that it was showing. Many people applied for AgriBEE Funds which were not approved, and Land Bank, as fund manager for this Fund, should be present to account, not shy away from its responsibility to the people and to Parliament, who represented those people.

Ms A Steyn (DA) suggested that Land Bank be summoned to give an account.

Mr P Van Dalen (DA) stressed that the Committee had every right to summon Land Bank.

The Chairperson thanked the members for their contributions, and fully agreed that Land Bank be summoned to this Committee, to give a briefing, to tie in with that to be presented by the Department of Agriculture, Forestry and Fisheries (DAFF or the Department) on the AgriBEE Fund.

AgriBEE Fund: Department of Agriculture, Forestry and Fisheries briefing by DAFF (with notes from the BEE Charter Council)
Ms Edith Vries, Director General, Department of Agriculture, Forestry and Fisheries, noted that the presentation would give an update on the status of applications to the AgriBEE Fund (the Fund), the current status of the privatisation of AgriBEE Fund, the budget, the funding returned to National Treasury (NT) and the impact of the Fund on the sector.

Ms Kwena Kamape, Chief Director: Cooperative and Rural Enterprise Development, DAFF, gave a background of the AgriBEE Fund, noting that it was managed by Land Bank. Land Bank was responsible for conducting economic and financial evaluations of, and conducting due diligence on proposals recommended by DAFF. The Fund was capitalised through an annual allocation of R35 million from the National Revenue Fund (NRF). The balance of this Fund, as at 8 November 2013, was R231 million, an accumulation of the annual allocation, because the Fund, having been operational during 2006 and 2007, was suspended in the 2008/9 financial year, due to mismanagement, yet the annual allocation continued to be paid to it. The Fund was reinstated to operations in 2012. However, in October 2013 a directive was given by National Treasury to Land Bank that all uncommitted money in the Fund be returned to the National Revenue Fund, and this was done in November, with approximately R229 million being returned.  

Ms Kamape set out the criteria and pre-requisites for funding (see attached presentation for details) and said that only proposals that met the criteria were recommended for funding. She then noted the following statistics for the 67 business proposals that had undergone assessment:
- 11 applications were passive investments, which were businesses outside the sector
- 6 applications were farm acquisitions, which had been directed to the Department of Rural Development and Land Reform, for the necessary farm acquisition
- 41 applications were in relation to production infrastructure, which fell under and were referred to the Comprehensive Agriculture Support Programme (CASP)
- 3 applications were 100% acquisition of equity, which were advised accordingly to provide 49% equity
- 6 applications were 49% equity and the remainder agro processing, and they had been recommended for funding.

She said that once the disbursement of R3 million for the approved Tropical Mushrooms project took place, the balance of the Fund would be zero for the financial year 2013/14. All other projects received and recommended for the Land Bank funding would wait until the 2014/15 financial year allocation. Without the further disbursement of the fund, this would mean that government had failed on its commitment to transform the sector, while industry had performed its part.

Ms Edith Vries commented on proposals that were not funded and were in fact excluded from funding by the AgriBEE Fund. She urged Committee Members to assist in explaining to the applicants that their applications had to meet the criteria, but had not. The criteria for funding were stipulated in the Act, and were set out on the application forms.

She commented on business proposals received in the current financial year, the recapitalisation of funds to National Treasury, and said that the annual allocation of R35 million did not in fact apply to 2014/15. She expressed concern on the six applications that were not processed by Land Bank, saying that these were reasonable applications that should have been processed. However, only the Tropical Mushrooms project had been finalised.

The Chairperson commented that in 2009, when the AgriBEE Charter Council was started, the need for a “one-stop shop” was mentioned. He expressed displeasure at the unstructured way of operation of the Council which continued unabated and added that the Committee’s Legacy Report at the end of term must highlight lapses of this nature. He complained about the cumbersome and bureaucratic mode of operation of Land Bank and questioned the essence of AgriBEE funds.

Mr Jacob Hlatshwayo: Chief Financial Officer, DAFF, replied that he would not want to give wrong information, but there were units who were trying to deal with the “one stop shop” concept.

Ms Steyn also expressed concern at the situation. She referred to the discussion, in the previous year, about the validity of AgriBEE Charter Council. She asked similar questions about the validity of the present Council, and asked how reappointment or re-election would be done when the tenure of the current board expired. She was concerned to hear that NT had called for the return of uncommitted funds, and asked if the Council had requested NT for a roll-over of any of the money and, if so, why this request was not considered.

Ms Steyn again expressed her displeasure at the absence of Land Bank, the custodian of the AgriBEE Fund, from this meeting. She asked why DAFF made the decision for Land Bank to administer the AgriBEE Fund, and who signed the Memorandum of Understanding between DAFF and Land Bank. She asked if DAFF could administer funds if Land Bank had failed to abide by its agreement, or what other course of action might follow if the agreement had failed. She requested a breakdown of the un-utilized funding that had to be returned to the NRF. She asked about the status and process of approved or unapproved AgriBEE Codes. She commented that people struggled with the registration process and incorporation of the business names and setting up a legal entity, which were criteria for funding, and asked if there was any unit within the AgriBEE Charter Council that assisted with registrations. She asked how awareness was done, in each province, on the requirements for AgriBEE funding for commodity organisations, in order to assist them. She requested an overview on the number of projects that were funded in the previous year. She said that one reason why there was no commitment from National Treasury for funding for the 2014/15 projects could be due to the fact that funding was not fully utilised in the past year.

Ms Vries noted that the Board was reappointed in December 2013.The Council had written to the industry to seek nominations, after which the AgriBEE Charter Board was appointed. She repeated that the Fund was operational in 2006/7, when it was managed for DAFF by Land Bank. At that time, however, there had been allegations of fraud against Land Bank (which were still under investigation). For this reason, the Fund was suspended in 2008/9, when it was realised that there had been mismanagement, and this state continued until July 2012. However, in those years, NT kept transferring the annual income of R35 million into the AgriBEE Funds, which was how the R231 million balance accrued.

Ms Vries noted that the process had been outlined in the presentation. Provinces assisted interested parties with their applications and gave registration support so that they could meet the criteria. The majority of the applications were rejected as they fell outside the category of matters that should go to Land Bank. The request to roll-over funding had to come from the Land Bank, once it had assessed the viability of proposals. In 2012/13 only one project was recommended and funded. AgriBEE Fund had been engaging with National Treasury itself, as a series of letters were written in order to request retention of the money. However, the Chief Executive Officer of Land Bank simply advised that there was a directive to return unutilized money to Treasury. She added that the Memorandum of Agreement between DAFF and Land Bank had only been active for a year when the Fund was reinstated in 2012, and unutilised funds were returned last year to National Treasury. She said that a one year period was not long enough to conclude whether the agreement was working or not. She noted that the AgriBEE Codes were gazetted in 2012.

Mr R Cebekhulu (IFP) expressed concerns about the class of applicants and projects that were considered for funding, and accused the Department of being biased to emerging farmers new to farming business. He asked why more funding could not be opened to experienced but emerging farmers. He referred to last year’s oversight visit by the Committee to some farms, where it was discovered that the majority of farms affected by funds mismanagement by the Department were restored to the communities and cooperatives, He asked why this class of farmers, who were looted by the previous owners or misled by strategic partners, were not among the beneficiaries of the AgriBEE Fund.

Ms Vries replied that it was important for Land Bank to conduct due diligence and assessment on the business viability of proposals, as it had the expertise to do so.

Ms R Nyalungu (ANC) asked why the AgriBEE Fund was stopped in 2007/8,and, if this happened to identified mismanagement, asked what had been the consequences against those involved in the mismanagement. She asked if the AgriBEE funding was a grant or loan, and if interest was charged. She asked how the national DAFF monitored the commitments of the provinces to the applicants, since the provincial departments worked closely with the applicants.

Ms Vries replied that the allegations of mismanagement were still under investigation. The AgriBEE funding was offered as a grant, and not a loan, and so no interest was payable. She said provinces evaluated the criteria of applications, and the applications were also screened by the AgriBEE Fund to check that they complied with the criteria before they were sent to Land Bank, which was to conduct the due diligence for business viability. She noted that prior to the date on which the unutilised funds were returned to National Treasury, only one project was funded, in 2012. She agreed that the national DAFF was accountable for monitoring the roles of the provinces, but said that at the moment there were no funded projects from the AgriBEE Fund, so no impact study on the provinces’ role had been done.

Ms M Pilusa-Mosoane (ANC) asked for a breakdown of projects disrupted when funds were suspended in 2008/9, and the fate of the beneficiaries of such projects .She too commented that it was unfortunate that Land Bank was absent from the meeting, as she would have wanted to question it.

Ms Vries reiterated that the matter of the suspension was under investigation.

Mr van Dalen referred to the previous year’s meeting when he had asked the AgriBEE Council about the mode and source of payment of Council members, as he suspected they were not paid salaries. He had specifically expressed concern, and asked if they were being paid as government employees, or out of the  AgriBEE investments, and he had also asked how much was actually invested for the benefit of the potential beneficiaries of the Fund. He had also asked if a board was in place to decide their salary structure and how much funding was made available to the Aquaculture and Fishing Industry. He had pointed out that many people in that sector held fishing rights and needed support. He asked who was in charge of the Aquaculture sector applications.

Ms Vries replied that the fishing industry was one of the areas considered for funding, provided the proposals fell within the criteria of the Fund.

Ms Kamape said that the AgriBEE Charter Council was meant to form a legal entity on its own, as it consisted of government and industry members, so it was different from a government body. She said that, due to the delay in the nomination of Council members which must be endorsed by the Minister, a discussion would be held on 14 February on formation of a legal entity. That legal entity would be funded partly by government and partly by industry. There was no provision in the AgriBEE Fund to pay Council members. However, Council members were reimbursed according to their traveling distance to the meetings. None of those members was paid a salary.

Ms Noncedo Vutula, Acting Deputy Director General, DAFF, replied that for in legal entity, members of the Board would usually be paid by that board, but this did not apply in this case, and she repeated that Council members of the AgriBEE Charter Council were remunerated for distance covered to meetings.

Ms Vries asked if there was a previous Council, and whether the previous Council was paid.

Ms Kamape replied that when this Council was formed no one was paid any remuneration, as both government and industry contributed money to setting up the Charter Council. A Chief Executive Officer had yet to be appointed, although this process was happening, and in the absence of such person, no salaries could be paid. The Directorate in the DAFF that dealt with the Charter presently organised the Secretariat meetings, and paid for the lunches.

Ms Kamape added that that there had been a previous Council whose responsibility was to set up the AgriBEE Charter, but this was not in the process of formulating into a legal body.

Mr van Dalen said he did not understand why people would work if they were not getting any salary but only remuneration for distance covered.

Ms Steyn asked if the travel fee paid to the Council members was sourced from DAFF or AgriBEE funds.

The Chairperson said he was concerned that the investigation had been pending since 2007.

Ms Steyn expressed concerned on the unutilised funding returned to Treasury and wondered what the purpose of AgriBEE Charter Council was, if it had no funding. She also asked what was involved in forming a new legal entity. She added that Land Bank should be asked to explain why unutilised funds were returned to National Treasury and why there was no budget for this financial year. The purpose of the AgriBEE Fund in transforming the agricultural sector had not been achieved. She requested that the Committee must invite National Treasury, Land Bank and DAFF to another meeting, to give a briefing on how to revive and review the role of AgriBEE, as it was clear that no transformation had actually taken place since 2005/6,  in addition to the possibility of fund mismanagement.

Ms Vries replied that the payment for Council members should not in fact be an issue, repeating that this Council was constituted of industry representatives and other forums, which were paid by industry. She said there were more pressing matters, like the issue of finances and growth projections and measures to be put in place. Agriculture had been recognised as a growth sector and the budget allocation for agriculture should be increased. The Charter was a contract between government and industry, hence there was an operational infrastructure that had to be complied with. She thought that the establishment of a Council without the funding was not so much of an issue.

The Chairperson commented that the main challenge with the Department was that there were no action plans on how the Fund should be run to move to the end product of transformation. It seemed the DAFF was simply moving through trial and error, without any clear picture of the role and scope of the Fund. The investigation on mismanagement was said to be still ongoing. There had been no proper response to questions on the one stop shop, and both of these points were essential to give an idea of what transformation was being done. The DAFF had been “in planning mode” since the beginning of the term. He suggested strongly that it must immediately go back to the planning stage, to specifically link the aims of the AgriBEE Fund to project growth. DAFF had only been implementing plans from 2004, and instead it should have forward planning to a specific goal. He reiterated that only six applications had eventually been approved, and one funded, so the AgriBEE Fund was not actually transforming.

Ms Pilusa-Mosoane commented that until Land Bank was invited to give a briefing, there was not much to discuss.

Mr van Dalen commented that many people in the communities who needed assistance had been let down, and government should reconsider the way it was doing business. He now understood why Land Bank had not attended this meeting, as it had been responsible for denying funding to several deserving projects. He reiterated that it must be summoned to a future meeting. R3 million was not much to invest to help the people. Farms were failing because the small scale farmers were not being assisted in getting into the large-scale markets.

Ms Nyalungu also reiterated that Land Bank must be summoned for questioning.

Ms Vries commented that DAFF had identified the need to look at development finance to enable integration at a one-stop shop. She said the Charter’s action plans would be reflected in DAFF’s strategic planning that would be presented to the Committee in a few weeks.

The Chairperson suggested that there should be a platform that put all the agricultural funding together, for optimisation and maximization of impact. Consideration had to be given to how the funding would improve the lives of the masses. If the funding could not be measured, then management would be impossible. In future, proper models and formulas must be put in place.

Ms Steyn suggested that further discussion was needed on action plans and how the AgriBEE Charter Council and its work would be funded again. She said the Minister of Agriculture should take responsibility for the lapses of Land Bank. She asked that the Director General be given a specific time frame for giving another presentation on the way forward for the AgriBEE Fund and Charter, as it should not be left in this state.

The Chairperson asked the Department to prioritise its action plans in order to work optimally.

Ms Vries agreed that the workplans and outcomes of the AgriBEE Fund should be accounted for, so research, plans and negotiations would be done between NT, the Charter Council and DAFF.

Poultry Tariffs in South Africa: International Trade Administration Commission (ITAC) briefing
Mr Siyabulela Tsengiwe, Chief Commissioner, International Trade Administration Commission (ITAC), said that an application to increase tariffs on Poultry meat was brought by the South Africa Poultry Association (SAPA).Tariff investigations were conducted, an evaluation was done, and there was a recommendation for increase. Five chicken products were investigated and the recommendations were as follows:

- For poultry carcasses, ITAC recommended only a small increase from 27% to 31%, given that they were important source of protein for the poor.
- For the whole bird, ITAC recommended a significant increase from the current duty of 27% to one of 82% bound rate
- For boneless cuts, ITAC recommended an increase from the current duty of 5% to 12%
- For poultry offal, ITAC recommended a small increase from the current duty of 27% to 30%m given that this was an important source of protein for the poor
- For bone-in-portions, ITAC recommended an increase from the current duty of 18% to 37%, given that they constituted about 70% of the subject volume of production by the domestic industry, in the form of individually quick frozen (IQF) portions.

The price impact analysis showed 8% profit margin on whole meat, boneless cuts and bone-in portions, but none for offal and carcasses.

ITAC further recommended that duties be reviewed after a period of five years to determine the impact on government policies, domestic production, investment and employment. It was noted that currently there were anti-dumping duties on bone-in chickens imported from USA, Netherlands, United Kingdom and Germany, based on an application by SAPA.

The Chairperson asked if South Africa was eating what it produced, or producing what it ate.

Ms Steyn expressed concerns about the rising input costs and their impact on the sector. She asked who was responsible for reviewing the rising costs and if role players were consulted during tariff investigations. The relatively high input cost of feed and energy was a concern that the Minister should address. She asked if ITAC had any recommendations for the Minister on feed cost and their impact in the agricultural sector.

Mr Tsengiwe replied that the tariff investigations were highly contested, as the outcome impacted on the bottom line. There had been an attempt to strike a balance between production and importation, while at the same time considering the impact on consumers, especially the low-income earners. He reiterated that there would be a five-year review to evaluate cost over time, and a periodic review of two years after the implemented tariff was in place. Role players were extensively consulted, and these included the primary and secondary producers, meat importers, retailers, and National Agriculture Marketing Council, Departments of Economic Development, Trade and Industry, and DAFF. A wide spectrum of interested parties were allowed to speak before ITAC. The feed cost was an industrial policy question, and he agreed that it did pose a competitive disadvantage when compared to countries like Brazil, which was outside the scope of ITAC.

Mr Etienne Vlok, ITAC representative, added that the high input cost was being addressed and that several initiatives by government agencies were in progress to help establish additional manufacturing facilities that would be part of the value chain, and which would bring more competition in the sector. Initiatives by the Industrial Development Commission (IDC) included the setting-up of some soya crushing plants in Mpumalanga, and sunflower crushing plants in the Free State.

Mr Billy Morokolo, Chief Director, DAFF, noted that amongst the key cost drivers that affected maize-based products was the price of maize, which had increased drastically to above R3 000 per tonne. Local producers had little control over this cost. The interventions put in place had included increasing the supply base of soya cake by the soya bean industry, in order to reduce the input cost. Soya was an ingredient imported in large quantities for the poultry industry. The price of labour and electricity had impacted negatively on the cost profile of the poultry industry as well, and the collective effects of these inputs placed farmers in a difficult situation, considering the cost: price ratio. Soya investment would be a great relief to ease the pressure placed on farmers on input costs. South Africa had, for the past ten years, imported poultry products. Statistics showed that per capita consumption of poultry meat had increased since 2002, from 22 kg per person to about 36 kg, so this showed that consumption was still increasing against weak production. In order to close the gap between demand and supply, a recently launched policy action plan had been put in place by DAFF, in collaboration with other departments and stake holders. Factors highlighted as needing attention include the soya and maize prices, and measures to meet the challenges would be brought in over time.

Ms Nyalungu asked who was responsible for importing and exporting, and asked about the status of investigations about meat products imported from Germany.

Mr Tsengiwe replied that imports were done by members of the Association of Meat Importers and Exporters (AMIE) At the moment, the South African local producers did not export as the domestic industry was not export-oriented. Anti-dumping investigations had been initiated officially, and investigations of the core operating parties abroad would be done. There would be a preliminary determination where ITAC would impose provisional duties, and these would remain in place until the final determination was made.

Mr van Dalen asked if the agricultural sector market was free, and if other aspects of the economy like fisheries were considered rather than the poultry industry.

Mr Tsengiwe replied that the agricultural sector market was globally disrupted and not free, and, if this was not addressed, the domestic producers would be disadvantaged.

Mr Morokolo replied that the wheat industry and a range of applications covering other sectors received by ITAC were considered.

Ms Pilusa-Mosoane expressed concerns about the low-price imports from abroad and asked if this was due to shortage of chickens in South Africa .She asked if more poultry companies were needed in order to stop chicken importation, especially from Brazil, and what measures were put in place to prevent dumping of chicken by importation.

Mr Vlok replied that there was a need to set up more poultry companies, which would also create more jobs. There were initiatives by IDC, with a company in Free state called VKV, to set up a facility with 500 jobs.

Mr Morokolo added that the challenge of low price imports from abroad would be overcome over time when the high input cost constraints had been tackled. ITAC had initiated an anti-dumping investigation on chicken portions imported from some countries, in response to a SAPA request. DAFF had just released the proposed labels to importers and exporters on branding regulations.

The Chairperson asked about the rising levels of import into Southern African Customs Union (SACU) and the expected decisions of SACU members on tariffs. He asked about the processes in place to close the space between poultry consumption demand and production supply, and asked if a win-win situation was possible between the producers, importers and exporters. He also questioned the impact of all input costs as raised by producers, and how best to provide incentives for meat production in order to keep the local production going. The input cost variables like labour, feed, crops, fertiliser and their impact on local production should all be addressed and the raised tariff had to be reviewed. He asked about the role of ITAC in reducing input cost.

Mr Tsengiwe said tariff determinations in South Africa applied to all members of SACU. ITAC was mandated to carry out investigations in such a way that this catered for all SACU members. He said a win-win situation was not practicable, as inevitably there would be winners and losers in the short term. He commented that the question of lowering tariffs be would be addressed by the Departments of Trade and Industry and DAFF and other stake holders, in order to tackle competitiveness challenges.

Mr Vlok said the overall strategy put in place included the extensive programmes of the Department of Rural Development and Land Reform, which was working with small scale producers, the broader industry plan supported by commitments from the industry, and the IDC’s involvement with VKV, and the branding regulations.

The Chairperson commented that each MP must service their constituency and protect the economy, which included the producers, importers and exporters. He agreed that a win-win situation between the roleplayers may not be practicable at the economic level, hence all other variables like input cost should be considered in order to promote local producers primarily, and to encourage meat exportation. He said local production needed to be strengthened, by working on all input costs. In future, a balance between the producers, importers and exporters should be reached.

Ms Steyn commented that the working situation of all South African farmers should be considered. She added that some farmers received less than 5% assistance from Government, whilst others received up to 25% assistance, making for unfair competition. She suggested that a  meeting be held with importers and exporters on how to achieve exportation of poultry meat. She expressed concerns that there were many applications for assistance, and that farmers should be assisted with meat production. Rising food costs were a massive problem in South Africa, and farmers had to be supported by government, so that industry in turn could make food as cheap to the consumer as possible.

The Chairperson suggested that there was a need to map a way forward. He suggested that the poultry Industry and DAFF should work together on a solution to the rising food prices which were affected by high input costs, such as maize, energy, petrol and diesel prices. He commented that some industry players had taken the easy route out, and perhaps decided to buy into feed manufacturing plants, since feed was an important ingredient of the poultry input costs. He was keen to have further engagement with the industry, with ITAC as observer, to try to reach a win-win situation. There was no need for importers and producers to fight each other, as Parliament could assist with negotiations and dialogue.

The Chairperson thanked ITAC and DAFF for this job, and commented that the incoming Committee would look at the five-year tariff review.

The meeting was adjourned.

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