Ncera Farms de-registration: briefing

Agriculture, Forestry and Fisheries

09 September 2014
Chairperson: Mr C Maxegwana (ANC)
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Meeting Summary

The Committee was briefed by its content advisor about the deregistration of Ncera Farms (Pty) Ltd in preparation for the Committee's oversight visit. The Department of Agriculture, Forestry and Fisheries (DAFF) was the sole shareholder of the Ncera Farms. It was developed in 2005 to provide extension services, contract ploughing, training and technical advice to the ten farmers settled on the farmland and surrounding communities. The Department of Agriculture advertised for interested individuals to apply for the occupation and leasing of the state farms. After a selection process, 10 of the 11 farms were allocated to 10 successful applicants in 2007/08. The 11th farm, Rocklands, was not allocated and was reportedly reserved for settling ex-farm workers/dwellers. The 10 successful applicants were given PTOs (permission to occupy) with intention to provide them with three-year leases within a year, and option to buy at the end of the lease. However, since occupation, no leases or any other official documents were signed by the farmers except the 12-month PTOs. The tenth farmer reported that he pulled out of the process in 2008 after the Department failed to provide leases. The Department of Agriculture never held any consultations with the former farm workers who lived on the farms before the farms were allocated to the new occupants. The farmers (10 successful applicants) were also never informed that the farms were occupied by former workers, who were making use of the farm resources. This created conflicts when the new farmers arrived to take occupation of the farms. The surrounding communities fell under two traditional authorities. They and other communities also laid claim to some of the farm land.

Challenges at Ncera Farms were identified as: conflicts among stakeholders – farmers and ex-farm workers; farm invasions; claims against Ncera from other stakeholders; lack of records for the establishment of entity; poor governance capacity at the entity; role of DAFF as caretaker and its lack of monitoring and evaluation; entity not fulfilling its mandate and its disregard for state farms; and lack of response by DAFF to parliamentary recommendations and resolutions.

Issues highlighted by the Fourth Parliament were around the forensic investigation that was conducted; the lack of records for Ncera, including criteria used to allocate the ten farms and how the funds were used since the entity’s inception; the need for re-submission of Strategic Plans according to National Treasury guidelines and frameworks; a turnaround strategy; the proposed closure and deregistration of the entity; a plan providing alternative proposals had been expected in July 2013 and a progress report on deregistration had been expected in January 2014 from Ncera Farms.

The content advisor  said that DAFF claimed that it was having discussions with the Agricultural Research Council (ARC), the national Department of Rural Development and Land Reform (DRDLR), the Eastern Cape provincial Department of Rural Development and Agrarian Reform and Buffalo City Metro. No effort had been made to resolve the conflict amongst stakeholders at Ncera. A reviewed turnaround strategy had not been submitted. The plan (and progress report) with alternative proposals on how to close or deregister Ncera had not been submitted. There had been no report-back on actions taken against government officials implicated in the forensic report.

Issues for consideration were:
▪ Progress in addressing matters highlighted in Forensic Investigation Report;
▪ Clarity and status of the 10th farm;
▪ Status of Rocklands Farm that was meant to settle ex-farm workers;
▪ Clarity and status of the unofficial arrangement between entity and Jongilanga Chieftaincy;
▪ Verification of claims against the entity;
▪ Detailed report of operations, staff complement and responsibilities, latest asset register
▪ Department to clarify its role as sole shareholder and caretaker.

The Committee expressed concern over the ex-farm workers that were relocated to Rocklands and asked if farming activities were taking place on the other farms apart from the Welcome Home farm. There should be an agreement document on the management of the farm where guidelines were stated and small scale farmers should be assisted to become big enterprise farmers. The roles of the traditional council and provincial legislation in settling the disputes were required. The Committee expressed concern over about officials that moved from one department to another. Lack of political will needed to be addressed and the deregistration of Ncera needed to materialise after the oversight visit.

The Committee would finalise its candidates for the National Marketing Council at a meeting the next day.
 

Meeting report

As the Committee Chairperson was unable to attend, the Committee  elected an Acting Chairperson, Mr C Maxegwana (ANC). He noted the written apologies from those members unable to attend.

Mr Z Mandela (ANC) commented that the non-attendance of members for no concrete reason should be addressed.

The Acting Chairperson commented that this should be handled by the parties. The chief whip of a party must follow up. He then called for the briefing on the deregistration of Ncera Farms in preparation for the oversight visit scheduled for 23 September 2014.

De-registration of Ncera Farms (Pty) Ltd: briefing
Ms Nokuzola Kakaza, Committee Content Advisor, gave the background on Ncera Farm as one of the entities of DAFF .It was originally Ncera Agricultural Development Corporation under EC Provincial Department of Agriculture but due to financial constraints, it was transferred to the former National Department of Agriculture (DoA) in 2004/05.

The Department of Agriculture, Forestry and Fisheries (DAFF) was the sole shareholder of the entity, Ncera Farms, which covers 3 700 hectares. The mandate of Ncera Farms was to provide extension / mechanical services, training and agricultural support services to the farmers settled on Ncera farmland as well as the neighbouring communities.

Ncera Farms (Pty) Ltd constituted Welcome Home Farm, where the Service Centre was located, and eleven state farms. Welcome Home Farm, located near East London, hosts the entity’s Service Centre, office buildings, workshop and training rooms. It was approved in October 2004 and developed in 2005 to provide extension services, contract ploughing, training and technical advice to the ten farmers and surrounding communities. Agricultural activities include livestock and vegetable production. The eleven state farms covered approximately 2 200 of the 3 700 hectares. In 2005, the Department of Agriculture issued an advert looking for interested individuals to apply for the occupation and leasing of the state farms. After a selection process, 10 of the 11 farms were allocated to 10 successful applicants in 2007/08. The 11th farm, Rocklands, was not allocated and was reportedly reserved for settling ex-farm workers/dwellers. The 10 successful applicants were given PTOs (permission to occupy) with intention to provide them with three-year leases within a year, and option to buy at the end of the lease. However, since occupation, no leases or any other official documents were signed by the farmers except the 12-month PTOs. The tenth farmer reported that he pulled out of the process in 2008 after the Department failed to provide leases. Farmers reported that they never received any support from the Department and they lived on the farms with expired PTOs.

The stakeholders and role players included ex-farm workers and surrounding communities. The Department of Agriculture never held any consultations with the former farm workers who also lived on the farms before the farms were allocated to new occupants. The farmers (10 successful applicants) were also never informed that the farms were occupied by former workers, who were also making use of the farm resources which created conflicts when the new farmers arrived to take occupation of the farms. The surrounding communities that fell under the two traditional authorities, the Imidushane (Jongilanga) Chieftaincy and the Phato Chieftaincy and other communities also laid claim to some of the farm land.

The challenges at Ncera Farms were identified as: conflicts among stakeholders – farmers and ex-farm workers; farm invasions; claims against Ncera from other stakeholders; lack of records for the establishment of entity; poor governance capacity at the entity; role of the caretaker (DAFF) and lack of monitoring and evaluation; entity not fulfilling its mandate and disregard for state farms and lack of response by DAFF to parliamentary recommendations and resolutions.

Some of the issues highlighted by the Fourth Parliament were around the forensic investigation that was conducted; the lack of records for Ncera, including criteria used to allocate the ten farms and how the funds were used since the entity’s inception; the need for re-submission of Strategic Plans according to National Treasury guidelines and frameworks; a turnaround strategy; the proposed closure and deregistration of the entity; a plan providing alternative proposals had been expected in July 2013 and a progress report on deregistration had been expected in January 2014 from Ncera Farms.

The Department claimed that it was having discussions with the Agricultural Research Council (ARC), the national Department of Rural Development and Land Reform (DRDLR), the Eastern Cape provincial Department of Rural Development and Agrarian Reform and Buffalo City Metro. No effort was made to resolve the conflict amongst stakeholders at Ncera. A reviewed turnaround strategy had not been submitted. The plan (and progress report) with alternative proposals on how to close or deregister Ncera was not submitted. There was no report-back on actions taken against government officials implicated in the forensic report.

Issues for consideration were:
▪ Progress in addressing matters highlighted in Forensic Investigation Report;
▪ Clarity and status of the 10th farm;
▪ Status of Rocklands Farm that was meant to settle ex-farm workers;
▪ Clarity and status of the unofficial arrangement between entity and Jongilanga Chieftaincy;
▪ Verification of claims against the entity;
▪ Detailed report of operations, staff complement and responsibilities, latest asset register
▪ Department to clarify its role as sole shareholder and caretaker.

Discussion
Ms Z Jongbloed (DA) wondered if the Committee had a way of holding the Department of Agriculture, Forestry and Fisheries (DAFF) to account. The Committee had on several occasions requested reports from DAFF which were ignored. She asked if farming activities where taking place on the ten state farms apart from the Welcome Home farm. She asked for the situation report on the ex-farm workers/dwellers that were to be relocated to Rocklands. She commented that the arrangements with the Jongilanga community would be made known during the oversight visit.

Ms Nokozola Mgxoshe replied that there were activities on other occupied farms such as livestock rearing and cropping even though there was a continuous fight with the ex-farm workers. At the Welcome Home farm - the biggest part of the farm - the service centre was not in use. The ex-workers were currently still on the farm as they refused to move. Other dwellers had joined the invasion on the farm due to the  high level of unemployment in the area as some depended on grants or remittances from migrants.

Mr B Joseph (EFF) commented that the Department had failed the people of the Eastern Cape as he did not know there were additional farms until the first briefing that was received from DAFF. He said there should be an agreement document on the management of the farm where guidelines were stated. If another department or entity took over the farm, if those ground rules were not in place on the use of the farm, there would still be deterrents. Measures should be put in place to ensure the success of the farm as it would be beneficial to the people of the Eastern Cape and the country as a whole. Farmers should be assisted to become big enterprises that could meet or challenge the existing big farmers' association. He commented that the Committee must have its fact findings on its oversight visit to Ncera farms on what it intended to implement in terms of intervention.

Mr Ramokhoase commented that the good intention of setting up the farm should not be missed as it was set up to change the lives of people through empowerment. The oversight visit should inform the Committee on the way forward for the farm. At the time the entity was set up, the two departments involved were not yet separated to deal with different mandates. This was an issue of land provision and land distribution which was not dealt with from the beginning hence the problem with the exclusion of some communities. No thorough research was done to plan for a proper Ncera farm. New Acts came with new dispensations likewise new bills and amendments came with new developments but the Ncera farm was never catered for in any Acts of the country as it was established on a temporary ad hoc arrangement. The role of the Act and legislation should be addressed. The role of the provincial legislature or government should also be considered as the state had failed because it should have been proactive in dealing with this and should have changed the development. These problems were identified but left unchanged. He required clarification on the responsibility of the department. The provincial legislature was not playing a meaningful role as it was expected to take charge of the factions, fighting and theft. He felt the provincial or local government should play this role. There was need to look at how best to implement a unitary state system on this situation as South Africa should remain a unitary state. He also commented on the deregistration that never materialized. There was no focus or concentration on the farm and deregistration had to be dealt with on the Committee's  return from the oversight visit. The lack of political will should be addressed.

Ms Mgxashe replied that when Ncera was established, the Department of Agriculture and Department of Land Affairs were in one Ministry. Land Affairs acquired land while DAFF gave agricultural support. DAFF had always been involved with Ncera, including the allocation of the farm. However, Ncera was a national entity. The provincial legislature tried to intervene when they heard of the disputes amongst the people but the former CEO would not let them intervene, except the national department. The last Committee often involved the provincial legislature whenever it visited Ncera farms.

Mr Mandela expressed concern about the many officials that moved from the one department to the other and requested clarity. He asked for the role of the traditional councils and the reason for creating an arm's length between two traditional councils. Change should be effected on the land dispute between the two communities. The Committee should give direction and ascertain what the department was doing in bringing about change and stability to the communities. Clarification was required on the arrangement made on the use of tribal land for cattle rearing.

Ms Mgxashe replied that it was formerly called the Ministry of Agriculture and Land Affairs and when it separated in 2009, many of the DAFF officials applied to the Department of Rural Development and Land Reform. She added that the Committee should find out about the role of the traditional council as the farms were previously commercial farms and the traditional councils were in the vicinity of the farms which had villages that fell under one traditional council. The Committee should find out about the arrangement and the use of Chief Jonjilanga’s land for the entity’s livestock to graze on it and the electricity bill. She commented on the instability in department management as the department had not had a permanent Director General / accounting officer since 2009 as they had all been in an acting position. The lack of records had contributed to the problems in the department as acting officials had no continuity to act upon.

Mr C Maxegwana (ANC), the Acting Chairperson, commented that an oversight visit was made to Ncera Farms by the Fourth Parliament and that oversight report would be useful to inform the Committee about what they did. No action could be taken without an oversight visit to the people. They needed to identify all the stakeholders involved in this dispute in order to effect immediate change. The Committee's decision would be informed by the findings from the visit on deregistration of the farm and what to do with the farm afterwards.

Ms Mgxashe replied that the stakeholders had increased since the first visit by the Committee as the issue had been left unattended for too long by the Department and there was conflict among the stakeholders themselves, hence the Committee must find the stakeholders. She added that the main issue was the failure of the department to perform its duties and the capacity to work effectively.

Ms T Gasebonwe-Tongwane (ANC) commented that the intention for the formation of Ncera farms was a good one which was to develop and train people in agriculture but the farm was not used for the intended purpose. She felt the department officials contributed to the failure for not following up and wondered why no steps were taken even when advice was given to the department.

The Acting Chairperson commented that there was need to communicate with the Portfolio Committee on Agriculture in the Eastern Cape as they also performed oversight. There should be an interaction with Portfolio Committees on Agriculture and Rural Reform in the Eastern Cape and other stakeholders.

Mr Ramokhoase commented that parliamentary law advisors be tasked with the responsibility of locating a space for the establishment of an Act within the spectrum of legislation.

The Acting Chairperson noted the stakeholders that had been identified including the Eastern Cape legislature committee. The Committee needed an extra day at Ncera Farms in order to maximize the 22 September which was the day assigned for the oversight. The invasion of the area would have to be tracked.

Committee Minutes: adoption
The minutes of the 2 September 2014 were adopted. It was agreed that the delegates sent to represent the Committee at the Land Tenure Summit, would give a report on the Summit at the next meeting.

Nomination of candidates to serve on National Marketing Council (NAMC)
Ms Mgxashe reminded the Committee that the board of NAMC had two vacancies. The Portfolio Committee had received an invitation to nominate two candidates to serve on the board who had specific experience on the commercial production of agricultural products. Members were expected to encourage people with such a background to submit their curriculum vitae. The Committee would decide on two candidates or more then send the names to the Minister. The extended deadline for submission of CVs to the Minister was 12 September.

The Acting Chairperson commented that the requirements for the candidates were clearly stated in the Act. The Committee had no curriculum vitae for that specification at the moment.

Mr Ramokhoase suggested that members should try to get curriculum vitae.

The Chairperson commented that a quorum was needed for the nomination and asked members to suggest a suitable time to select the candidates. After discussion, it was agreed that a meeting be held at 1.30pm on Thursday, 11 September, for the finalisation of NAMC candidate nominations.

Mr Ntshayisa asked for the category of people to apply for the post.

The Chairperson replied that people with the specified expertise within the country should be encouraged to apply.

The Secretary announced that the Joint Policy Workshop with the Rural Development / Water and Sanitation would be held in Johannesburg. The Committee was in the process of submitting an application for political approval for 25-26 September.If approved it would be communicated to the committee members and the Select Committee on Land and Mineral Resources.

The Chairperson thanked the members for their support and contribution.

The meeting was adjourned.

Apologies: Received from the Chairperson, Ms A Steyn (DA), Mr M Hlengwa (IFP) and Mr M Filtane (UDM) who had a committee meeting clash. There was no apology from Mr P Mabe (ANC).

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