Agricultural Cooperatives & Post-Settlement Farmer Support (land reform projects such as RECAP) sustainability & economic impact: Department of Agriculture briefing

Meeting report

Opening remarks by Chairperson

The Chairperson said he hoped for a fruitful deliberation whose outcome would pave the way in addressing the challenges of unemployment and inequality facing the country, as agriculture had the potential to assist the country.

Apologies had been received from Mr L Gaehler (UDM, Eastern Cape) and Mr C Smit (DA, Limpopo)

The Minister, Mr Senzeni Zokwana, and Deputy Minister, Mr Bheki Cele were also absent as they were attending a Cabinet meeting.

Mr M Rayi (ANC,Eastern Cape) remarked that the reason many Members of the Select Committee were absent was that Cabinet meetings, which were usually held on Wednesdays, were being held on a Tuesday, and this coincided with the briefing. The second reason was some of the Members were not aware of the briefing, as it had not been communicated at the last meeting.

The Chairperson thanked those who were able to attend the meeting. Issues of communication would be handled differently to avoid such errors in the future.

Comprehensive Agricultural Support Programme impact evaluation: DAFF briefing

Mr Mortimer Mannya, Acting Director General (ADG), Department of Agriculture, Forestry and Fisheries (DAFF), briefed the Committee on the Comprehensive Agricultural Support Programme (CASP) impact evaluation. He said CASP had made progress in achieving some of its objectives, but not enough had been made in promoting commercialisation, market access, employment and achieving food security, as only 33% of all farms included in the evaluation had been considered to be commercial.

CASP was reaching most of the target groups, but few youths and disabled persons were involved. Agricultural production of crop and livestock had increased after CASP. The support programme had contributed to capacity building, but had made little contribution to helping the projects to be self-reliant. There was limited coordination of CASP within the DAFF and the provincial Departments of Agriculture, as the scope and coverage of CASP was too wide, resulting in resources being thinly spread. Some recommendations were that CASP should be institutionalised within the DAFF and the current CASP funding approach of a wholesale grant should be discontinued.

Sustainability and economic impact of agricultural cooperatives in South Africa

Ms Kwena Komape, Chief Director (CD), Community and Rural Enterprise Development (CRED): DAFF, briefed the Committee on the sustainability and economic impact of agricultural cooperatives in South Africa. She said that the International Fund for Agricultural Development of the United Nations (IFAD), estimated that there were about 500 million smallholder farmers in the world feeding more than 2 billion people, adding that these farmers accounted for the production of 80% of the food consumed in Asia and sub-Saharan Africa.

Factors which affected the sustainability of agricultural cooperatives included access to land, access to finance, markets and participation, training and capacity development, effective cooperative management and compliance with regulations.

She said that the nature of land ownership in cooperatives was made up of title deeds (23%), lease agreements (9%), Permission to Occupy (PTO) (28%) and non-specified land ownership (40%). Access to land was through grants (98%) and loans (2%).

Access to markets was difficult to access as a result of stringent conditions. Formal market opportunities for cooperatives in 2013/14 had come from 20 retail chains, 18 local supermarkets, six hospitals, six school feeding schemes, 11 fresh produce markets and 134 other formal markets. This had improved in 2014/15 to 30 retail chains, 45 local supermarkets, eight hospitals, eight school feeding schemes, 12 fresh produce markets and 142 other formal markets

There were 1 788 cooperatives, with 716 managers. Of these, 448 were men, 268 women, 13 youths and two people with disabilities. In 2012/13, there had been 2 885 permanent employees and 2 104 casuals. The numbers had grown to 6 759 permanent employees and 2 956 casuals in 2014/15.

The cumulative membership in cooperatives in 2012/13 had been 28 641. This had grown to 35 799 in 2013/14 and to 41 930 in 2014/15. She added that only 5% of cooperatives were involved in post-production activities.

Discussion

Ms E Prins (ANC, Western Cape) said she was concerned with how CASP money had been used in the last ten years, as it had benefited only a few people. A review of CASP was a positive development, as it would help channel the money to those who needed it. It was good to see small farmers going into commercial farming. She had hoped to see the outcomes of the key policy findings as they related to the provinces.

Mr Rayi said the presentation had been depressing, as the DAFF had had to wait on the Department of Performance Monitoring and Evaluation (DPME) to know the extent to which CASP was being implemented. He likened the CASP impact evaluation to an internal report, with recommendations to a higher structure for endorsement. The essence of reports should be to highlight performance and strategies, not only challenges, and that was what the Committee had expected from the DAFF.

Mr Mannya said he believed the CASP report had created some confusion by not giving adequate clarity on evaluation. The government had said that evaluation could not be done by the DAFF as it would not be objective, so the issues that had been presented were an objective view, even if they appeared embarrassing. Those were recommendations by the DAFF to the government. Not all the programmes were those of the DAFF, since there were other departments involved. That was the reason for the approach. As soon as Cabinet approved the final report and recommendations, DAFF would report to Cabinet on a regular basis.

Mr Rayi asked for a breakdown of employment in cooperatives for each province. He said the report had not given the reason for inadequate capacity building, and there were no recommendations by DAFF on how to increase the percentage of farms that had easy access to markets.

Mr Mannya replied that the DAFF was working at the market axis to enable smallholders’ farmers to become market ready. It was working in collaboration with the National Treasury, the Department of Small Business Development and the Department of Trade and Industry. Although there had been a lot of capacity building, this did not mean the producers were self-reliant, as the capacity building effort had not gone far enough.

Mr Rayi asked what the report meant when it said beneficiaries had found support services inadequate. He questioned if there had been any feasibilities studies when the CASP programme was conceptualised. He was excited about the IFAD estimates of 500 million smallholder farmers feeding more than two billion people, and he wished the DAFF had given the percentage in terms of the products and the specific countries. He questioned how the 1 788 cooperatives captured on the cooperative data analysis system (CODAS) got there, and if their training was accredited.

Ms Komape replied that there had been workshops on training and data had been collected. Participants had been trained at the basic level in simple and practical steps. She added that the Department would like the Committee to become involved in it.

Mr Rayi asked if the DAFF had a strategy to enhance productivity and commercialisation regarding access to markets, and if there was a monitoring mechanism in the Department on the sustainability of the cooperatives.

Ms C Labuschagne (DA, Western Cape) asked if there was evidence that those farmers in cooperatives were better off than those who were not. How were individual farmers faring as opposed to those in cooperatives?

Ms Komape replied that unity was strength, and the farmers who did not want to join a cooperative were those who could stand on their own.

Ms Labuschagne asked if a feasibility study had been done on the implementation of CASP.

She had questions about the new implementation plan, and was concerned that the DAFF would come in the future to say that CASP had failed.

Mr Mannya replied that a study had been done on the institutionalisation and implementation of CASP. All the components of DAFF had been told to work together, as it had been observed that while some were working on it, others were prioritising other matters. There had therefore been a recommendation to institutionalise CASP and integrate other components.

Mr E Mlambo (ANC, Gauteng) asked what measures or assistance had been given by the DAFF to make sure the challenges of access to land by the cooperatives did not continue. It was very disappointing that the report had shown no encouragement for the youth and people with disabilities. There should be workshops to enhance more participation from these two categories of people.

Mr Mannya replied that there was mobilisation of stakeholders on a weekly basis and the level of awareness had increased. The Department was in collaboration with the Department of Rural Development and Land Reform (DRDLR) on this issue.

Ms Elaine Alexander, Deputy Director General (DDG), Economic Development, Trade and Marketing (EDTM), commented that the DAFF was involved in revitalising the national produce market, adding that the Department had a good relationship with local government. She said that as a result of the successes in some sectors, other sectors were opening up.

The Chairperson said agriculture played an important role in rural areas, as the majority of the unemployed were there. Water also played an important role, and people who benefited from irrigation were those who had historically done so, and there had been no re-direction to emerging small scale farmers.

He questioned how the rural people would have awareness of the Micro Agricultural Financial Institutions of South Africa (MAFISA) in order to enjoy its support. He questioned if the Communal Property Associations (CPAs) were a blessing or a curse, as there was serious infighting in the cooperatives. He asked if the DAFF and DRDLR had plans to counteract what was happening in the CPAs to ensure such land became productive and people worked cordially as CPAs had become private entities and no longer reported to the community.

Mr Mannya replied that an external review had also been done on MAFISA, as the DAFF was working on support from the DRDLR so that there would be a holistic approach to development funding. The DAFF had made progress on CPAs, but any solution had its own unintended issues. There had to be a common purpose for a cooperative to succeed, as not everyone who owned land wanted to farm on it. Some cooperatives could not sustain a manager because of the low level of their activities. He added that he would work on the other questions and provide feedback to the Members.

The Chairperson said there was a high rate of illiteracy in rural areas, and asked how the DAFF intended to close the gap and bring in expertise in management.

The meeting was adjourned.