Department of Agriculture Briefing on Integrated Economic Action Plan

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Trade and Industry

18 February 2003
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Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
19 February 2003
DEPARTMENT OF AGRICULTURE BRIEFING ON INTEGRATED ECONOMIC ACTION PLAN



Acting Chairperson: Prof Ben Turok (ANC)

Documents handed out:

Pushing back the frontiers of Poverty and Unemployment through Accelerated Growth

SUMMARY
The Committee was briefed by the Department of Agriculture and the meeting centred largely on growth and employment in that sector. The Committee was concerned that there should be a more equitable distribution of wealth to assist in poverty alleviation and economic development. The priorities identified by the Department included: producing more appropriately qualified people, enhancing the existing skills base through mentorships, learnerships and other mechanisms and deliberately recruiting suitably qualified persons where an immediate need exists.

Briefing by the Department of Agriculture
Ms Bongiwe Njobe: Director General, Department of Agriculture briefed the Committee on the Department's Integrated Economic Action Plan (IEAP). She was standing in for an official of the Department of Trade and Industry though her field of expertise is Agriculture and not specifically Trade and Industry. As a background to the presentation she explained that Extensive work had been done in 2001 to develop an action plan which included:
-The basic elements of de-regularisation of State assets and Industries, specifically parastatals such as Telkom.
-Recognition of local government in implementation.
-Long-term growth sectors such as Tourism, Minerals and Exports.
-This action plan was consolidated into a Microeconomic Strategy in 2002.
-In order to sharpen its focus in 2003, the various sector strategies focused on overall growth, employment, competitiveness, BEE (Black Economic Empowerment) and SMME (Small Medium Micro Enterprises). This would include the development of specific geographical areas/ zones.

An important factor under consideration was the positive growth of the restructured South African economy over the past eight years. This growth, however, had not been shared by other sectors of the economy and translated into shrinking employment in the formal sector. Therefore the challenge was to break the peak of unemployment by creating phenomenal growth. There is a definite need to recognise the informal sector and decrease the disparity of education in South Africa.

The IEAP is further hampered by the need for a supported gradual-implementation as well as generation of specific information via the National census.

Economic growth and employment
She said Limpopo province clearly shows that high economic growth does not necessarily result in an increase in employment. Currently it was not possible to give an accurate measure of employment in all sectors as the information is simply not available.

Education and Employment
Countries like South Korea and Finland have 11 to 25 engineers per 1000 citizens in South Africa the rate is closer to 2 engineers per 1000 citizens yet the number of engineering students are still not effectively decreasing this ratio.

2003/4 Priorities
Ms Njobe said the need to address critical skills shortages included the following;
- Produce more appropriately qualified people.
- Enhance the existing skills base through mentorships, learnerships and other mechanisms.
- Deliberately recruiting suitably qualified persons where an immediate need exists.

She said the Integrated Economic Action Plan is further hampered by the need for a supported gradual-implementation as well as generation of specific information via the national census.

Discussion
Ms F Hajaij (ANC) referred to the President's statement about inefficient management in the public service sector. She asked what mechanics are in place to monitor the efficiency and productivity of management.

Ms Njobe said that the Department has begun a concerted effort to improve efficiency and productivity. There are comprehensive training courses in place to improve management capacity: Project Management, Human Resources Management and other courses. Problems in middle management are mainly due to inadequate experience and different management approaches of managers. Many experienced managers are enticed to the corporate sector. She stressed the need for incentivisation in rural areas, to compete with urban and private sector competition for good managers.

Mr S Rasmeni (ANC) asked what is being done to ensure that the national strategy is implemented at the local level especially in the smaller rural municipalities. He questioned the ability of the IEAP to link various Departments with respect to implementation. How would the IEAP ensure that the strategy does practically occur? He also asked whether there was adequate support to ensure the success of policies like land restitution.

Ms Njobe said measurements of outcomes are obscured by the challenge to more articulate and specific outcomes. The Department is currently working to improve the articulation of such specific outcomes.
Land redistribution too is yielding better results. However, an entire meeting should be set aside to properly deal with this matter. She said the quality of Integrated Development Plans too has markedly improved over time. With respect to the continual linking of Departments, the question arose as to how the needs of the different Departments should be merged.

A Committee member asked what strategy would be put in place to ensure growth was shared with the masses. Would it take another eight years and what strategy is in place to face this enormous challenge?

Ms Njobe said more people are getting into the mainstream economy, however there are insufficient statistics on all previously disadvantaged communities, especially black people in the agricultural sector. The big challenge is the level of confidence in statistical measurements.

The Chairman said there appears to be an assumption that economic growth leads to development. The Department should distinguish what kind of growth leads to poverty alleviation and focus on that.

Ms Njobe said that the challenge was implementation of the IEAP, which would allow the various Departments to contribute to attaining the stated objectives. The construction and improvement of rural roads results in improved access to markets, increased tourism, and the creation of new markets for goods and services. For instance, the roads in the Port St John area have been improved and this could lead to an increase in the agricultural output in that area.

The phenomenal growth in the South African nut industry and the subsequent mixed packaging of nuts like cashew and macadamia nuts have averted competition for shared markets. The government is providing more regulatory assistance to this industry to assist in international marketing.

Ms B Ntuli (ANC) asked what was being done to train the unskilled and the unemployed and whether poverty alleviation is at all possible without land redistribution. The Sector Education and Training Authorities (SETAs) are not able to train the unskilled. How would the IEAP integrate the unemployed and untrained?

Ms Njobe said much is being done to address these matters: the Department of Labour and the Department of Education are co-operating on a Human Resources Development programme, there are bursaries that target students from rural areas. She agreed to arrange a presentation to the Committee on this matter with a more appropriately qualified person.

Mr Rasmeni said training of the employed via the various SETAs did not include those that were unemployed. This lack of government involvement has lead to exploitation by profit-making training institutions. Thought should be given to involving local government in regulating this type of training.

Ms Njobe said the Department encourages programs of learnerships and mentorships to assist in this regard. Also the mineral sector provides retraining to the retrenched.

Ms Ntuli asked what was being done about 'fly by night' training institutions.
At this point the Chairperson intervened and said Members have to be fair to Ms Njobe and arrange a special meeting to address these matters with the people responsible for them.

Mr H Bekker (IFP) commented on the need to display figures in ratio to the discussed population. This would more adequately reflect the weaknesses and the strengths of the Integrated Economic Action Plan.

Adv Madasa (ACDP) asked what was being done to create food security and prevent excessive price fluctuations, thereby protecting the poor.

Ms Njobe said the Department of Agriculture is not solely responsible for food security in South Africa. Speculators in the market created the recent maize price fluctuation. The food balance sheet is currently being revisited to add alternative staples. An early warning system and balance sheet enquiry has been put in place to combat future fluctuations. At a local level the land use decisions by local government are the most critical threat to food security. In addition, the price of maize is coming down.

Mr D Lockey (ANC) said the mohair wool project in the Eastern Cape demonstrated practically that employment leads to training and development opportunities and not the other way around. A state agency is needed to facilitate business and economic development for entrepreneurs.

Ms Njobe said the success of the mohair project was due to investment in 'best practice' training of the farmers. Products are tailored to the needs of the market. Success in the market created growth opportunities that demanded more labour and thus more skilled workers.

Mr J Nefolovhodwe (AZAPO) said to ensure the success of small farmers they must have easy access to markets. He referred to the Taiwanese example where the state acts as a central marketing agency for small farmers. He asked if a similar system could be instituted in South Africa.

Ms Njobe said the South African government can no longer act as a marketing agency like the one in Taiwan, as a result of previous deregulation. The Department is encouraging markets such as the ones in Durban and Umtata, to improve access to markets for small farmers.

Ms Hajaij (ANC) asked about the role South Africa plays in the African Union and New Economic Policy for African Development (NEPAD) with regard to maintaining food security. She also asked what was South Africa's view on the capping of Swaziland's sugar exports.

Ms Njobe said that they are currently looking at creating new staple foods for Africa. The Cassava Biotechnology Research Programme is geared to make cassava less prone to disease; this will significantly add to African food production, thereby increasing food security. Swaziland and Mauritius have always had difficulty with the SADC stand on sugar exports. However, open dialogue on this and other matters is ongoing.

The Chairperson said it was refreshing to hear a perspective from outside the Department of Trade and Industry. Many issues raised should be followed up in future meetings with the appropriate officials. The Committee has gained greater insight into the economy of South Africa as a holistic unit. He thanked Ms Njobe for her contribution to the discussion.

The meeting was adjourned.

 

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