Small-Scale Fisheries Policy: Department briefing, with Deputy Minister; Hemp Research

Meeting report

The Chairperson welcomed the Committee to the New Year. She expected positive contribution to ensure food security and transformation of the Department. She welcomed Mr P van Dalen (DA), who replaced Ms Z Jongbloed on the Committee. As the previous year came to an end, engagements with small-holder farmers had been conducted and the Department (DAFF) had been requested to clarify and respond to the issues raised by the fishery stakeholders. Any outstanding issues would be addressed in the meeting.

She handed over to the Deputy Minister and announced that all Members were expected to stay in the meeting the whole day as was scheduled.

Remarks by Deputy Minister

Mr Bheki Cele, Deputy Minister, expressed sentiments that Miss Jongbloed would be missed from the Committee as she was a pleasure to work with. He commented on the rainfall patterns, although things were not rosy it was an improvement from the previous year. The Western Cape was an area of concern and he hoped that God would be on the side of the province and provide rain. The Department’s mandate to ensure food security and create jobs had not changed. He welcomed the Director General (DG) of the DAFF to present the report.

Comments by DG

Mr Mike Mlengana, Director General, DAFF, reported that the fisheries sector had been filled with issues and the small-scale fishers had raised grievances. The grievances fell under two main categories, legislative issues as well as operational and administrative issues.

He apologised that the issue of boreholes and their functionality was still pending; he preferred to present when the facts had been verified. The issue of drought resistant cultivation would be discussed once the full report was ready.

The Chairperson responded that the borehole issue had been pending for too long and the Committee worked on time pressures.

Mr Mlengana promised that by the next meeting the reports would be ready and all verification on ground would be complete. He called the DDG of DAFF to present the report.

Small-scale fisheries DAFF responses to grievances presented to Portfolio Committee on 25 November 2016

Mr Asanda Njobeni, Deputy Director General, briefed the Committee on DAFFs response to the grievances that had been put forward to the Committee on 25 November 2016. 17 grievances were brought forward in total he would identify each grievance offer DAFFs response and also a proposed course of action.

Issue 1: 10 years of fishing experience requirement was too high

According to DAFF In order to prevent the tragedy of the commons fishing given that fishing stocks were justifiably allocated limited rights to the most deserving communities

The fishers were expected to have a 10 years of fishing experience requirement in order to be granted rights and this was considered too long a time.

Fishing was a way of life that had been entrenched for many years in coastal communities. In order to prevent the tragedy of the commons fishing given that fishing stocks were justifiably allocated limited rights to the most deserving communities

Proposal

In order to deal with this grievance, it was proposed that people with less than 10 years fishing experience could work in co-ops in order to gain the needed experience that would enable them to join as members of the co- ops in the future

Issue 2: The minimum required age of 18 was considered too high

Mr Njobeni said fishing was considered to be one of the most dangerous professions and therefore the South African Labour law, regulations on Hazardous work by Children in South Africa, prohibited that people under 18 years’ work in such professions.

Most of the commercially harvested fish was found to come from the Western Cape, which was notorious for its rough seas as evidenced by a number of ship wrecks with names like Danger Point and the Cape of Good Hope. This was another reason why cage fish farming in South Africa was almost non-existent. According to the Constitution of the Republic of South Africa, children under 18 years therefore had a right to be protected from work that is exploitative, hazardous, inappropriate for their age, detrimental to their schooling, etc.

Proposal

The Small-Scale Fisheries (SSF) Regulations made provision for youth to join as members of the co-op after they had met all the SSF criteria, including minimum age. Child-headed households dependent on resources would be considered under the social responsibility of the co-operative in terms of the co-operative constitution. Youth under the age of 18 years could still be employed as casual workers for the co- operative as long as the work required was not considered dangerous.

Issue 3:  The duration of 3 years for the fishing rights was considered to be too short

The Small-Scale Fishers Policy (SSFP) recognised the customary fishing practices of traditional fishers and advocated for a life-long right. The MLRA provided a maximum duration of fishing right to be 15 years. DAFF announced that SSF rights would be valid for three years as a precautionary approach given that it was the first-time rights are to be allocated to coops.

Proposal:

Given that the short duration of fishing rights would not attract investment and economic growth of the co-operatives, it was proposed that small-scale fishing rights were to be given the maximum validity period under the MLRA of 15 years, the same duration given to the commercial sector. Furthermore, when the MLRA was reviewed the duration of fishing rights for SSF for a lengthier period was to be considered.

Issue 4: There was insufficient focus and representation of youth in the SSFP

The Department reported that the SSFP did not cover the training of people to become fishers; it only addressed existing fishers that were marginalised. The SSFP also did not advocate for quotas to be made specifically for youth, but for the community of traditional fishers.

Proposal:

Co-ops once established could be used to train youth in the community to become fishers, however Minor would be encouraged to complete schooling. The Government was also called to provide bursary programs to youth from coastal communities who wanted to pursue maritime related studies. These were to be made available from 2013 as part of bursary programs. DAFF was to also encourage partners to encourage the involvement of the youth.

Issue 5: There was no sufficient focus and effort in accommodating vulnerable groups

The Small-Scale Fishing Policy (SSFP) recognised vulnerable groups, including women, youth and people with disability. Although boat-based fishing was reported to be mainly conducted by abled-body men the SSFP acknowledged other forms of related fishing activity where vulnerable groups were associated, including net building, as well as the processing and marketing of fish caught by traditional methods.         

However, all people would still be required to meet the five SSF criteria irrespective of which activity they involved in. Hence, the SSP, the MLRA and the SSF Regulations did do not discriminate or exclude vulnerable groups if they were involved in traditional fishing or fishing related activities.

Proposal

The Co-ops constitution would be encouraged to further emphasise co-ops social responsibilities to vulnerable groups.

Issue 6: Intra-Governmental Support

The SSFP had a wider scope which was far greater than that of the MLRA and DAFF. SSFP recognised the need of partnerships with other organs of state. DAFF was already engaging with NGOs, Institutes, Local Government, and other government departments including the Department of Trade and Industry (DTI), DSSBD, CIPC, Department of Environmental Affairs (DEA), DT, Department of Transport (DoT), South African Maritime Safety Authority (SAMSA), Department of Public works (DPW), etc.) to provide support programmes for the small-scale fishing sector. Was not able to match all these acronyms

Proposal

DAFF would continue to support and grow the partnership base for small-scale fisheries. Once Socio-economic baseline data and alternative livelihood study were assessed, DAFF would establish an Inter-Governmental Forum focused at consolidating possible support programmes for the SSF sector

Issue 7: There was need to provide rights of SFF rather that rights for Coops

The SSFP provided rights to be granted to a Community Based Legal Entity (CBLE). Cooperatives had an advantage in addressing socio–economic imperatives of the SSF communities and could be supported by a number of government interventions. The SSFP advocated for one CBLE per community, which acknowledged the limited resources. The MLRA had been amended to include co-ops as a right holding entity and SSF regulations prescribed rights to be allocated to coops that had followed the stipulated process. Cooperatives encouraged (regulation?) of the resources, which would lead to better protection of the limited resources.

Proposal

Any coastal community member who wanted an individual fishing right could do so through applying for a commercial fishing right.

Issue 8: Marine Protected Areas were a disadvantage to traditional fishers

South Africa was required in terms of international commitments to offer protection status to 15% of its Exclusive Economic Zone (EEZ). This mandate was the responsibility of the DEA.

DAFF has engaged with DEA regarding the implementation of the small-scale fishery sector and the negative implications the proposed near shore Marine Protected Areas (MPAs) would have on communities.

Proposal

Proper consultations were required between DEA and communities. DAFF was to continue engaging with DEA regarding the negative impact it would have on the coastal communities. DAFF Portfolio Committee was to also consider engaging with DEA portfolio committee on this issue.

Mr Njobeni reported on the implications of changing the set of SSF policy criteria.  DAFF would have to stop the SSF Rights Allocation Process. It would then draft and gazette a new SSF Policy and conduct public consultations in at least the 316 communities identified in the four coastal provinces. There was a possibility that there could be more communities due to the changes in the criteria.

The MLRA would then have to be amended to give legitimacy to the SSF rights allocation and this would take, optimistically, more than a year to accomplish and realistically about two and a half years to achieve.

DAFF would find it extremely difficult to justify in court a scenario where there are participants in the communities with less than 10 years fishing experience, as this would be contrary to the decision of the Equality Court, and DAFF might end up being instructed by the Court to start the process again.


8 Operational /Administrative Matters

Issue 1: There was a shortage of marine living resources to give to small-scale fishery

The DDG reported that Marine resources were limited and the prevailing trend was a decrease in resource abundance.

The near shore commercial fisheries, which were mainly SMMEs, were competing for the same resources that were required by the small-scale fishery sector. The commercial species which were of interest to both sectors were: line fish, west coast rock lobster, abalone, net fish, oysters, white mussel, squid, seaweed, hake hand line and the KZN beach seine.

A number of these resources were allocated in the commercial sector in terms of previous rights allocation processes including line fish, oysters, white mussels, squid and hake hand line. These rights would only expire in 2020.Furthermore, commercial rights have been allocated in net fish, seaweed, beach seine and expires in 2028.'Commercial rights were yet to be allocated for abalone and lobster.

Making resources available that were currently allocated to commercial right holders was a challenge. Commercial rights could not simply be revoked in order to make provision for the small-scale fishing sector, as that would invite legal challenges. The Department was also mandated to make allocations that are sustainable so as to prevent overfishing and to ensure that fisheries Sector as a whole would not collapse.

Proposal

Mr Njobeni stated that there was need to prioritise small-scale farmers in the remaining allocations of lobster and abalone the current year. Section 21 policy to prioritise transfer rights from commercial near-shore to small scale fishing cooperatives was also necessary. Commercial rights of right owners who were not effectively using their rights or were non-compliant were to be revoked and a mechanism was to be created to transfer these rights to small scale fishing cooperatives.

For the rights that were to expire in 2020, it was proposed that the TAE was to be reduced by imposing further effort limitations such as sea days in order to accommodate the small-scale fishing sector with the same imposed effort limitation. Preference should be given to the small-scale fishing sector when near shore commercial fishing rights would expire in 2020.

Issue 2: Some individuals were not aware of the registration process and therefore could not obtain rights

Mr Njobeni reported that during the registration process, DAFF had notified communities via local radio, newspapers, television, website, Facebook, calling representatives, contacting local traditional councils, district and local municipalities. Furthermore, a week before the registration, mobilisation was done through loud hailing, distribution of pamphlets, placing of posters in prominent venues.

Proposal

For Northern Cape, Western Cape and Eastern Cape Provinces, people who did not register can still work for the co-operatives and are encouraged to apply for future rights allocations. However, for KwaZulu-Natal (KZN), due to the incident that was reported, a specific intervention would be undertaken by the Department.

Issue 3: A number of fishers did not appear on the provisional lists

The Department had requested communities to nominate community panel members to assist with verifying the applicants according to the SSFP criteria. It is alleged that some community panel members used the opportunity to exclude some fishers from the list. Tip-off lines were available for communities to report people they suspected were not eligible for registration. No tip-offs were received for all four provinces.

Proposal

Unsuccessful fishers were to be encouraged to complete an appeals process, which would be assessed by DAFF alone. Fishers were encouraged to use the support provided by DAFF in the completion of the appeals form and are discouraged from using consultants who charged them a consultation fee. Grant of right letters would be drafted to reserve the right of DAFF to remove co-op members if found not to meet the SSF criteria at a later stage.

Issue 4: The Appeals Process was considered to be difficult                               

Provisional lists of successful fishers were announced for Northern Cape, Western Cape and Eastern Cape communities. Unsuccessful applicants who knew they met the criteria are encouraged to appeal. The Appeals form was made simple and was only a page and a half long and translated into the four coastal languages. DAFF also provided guidelines in the four coastal languages on how to complete the appeal form. Those wishing to appeal could go to any of our Fisheries offices to request assistance. All those who registered and were unsuccessful were sent SMSs with details of how to appeal and who they could contact for assistance.

Proposal

Unsuccessful applicants are encouraged to use DAFFs trained Fishery Community Development Workers for assistance with regard to the appeals process.

Issue 5: Appointment of Amagagasoshintsho (no match)

The Branch: Fisheries Management had no offices or capacity to carry out its mandate in KZN. Ezemvelo KZN Wildlife had been contracted by the Department over many years to carry out the Department's mandate in KZN including research, enforcement, permitting, catch data monitoring and implementation of small-scale fisheries. Individuals were sub-contracted by Ezemvelo under EPWP to address the latter two activities. These individuals were responsible for catch data monitoring and assisting communities in terms of the implementation of SSFP, however were not related in any way to law enforcement.

When the contract was terminated with Ezemvelo, Amagagasoshintsho was appointed under a three year EPWP contract to continue the mandate of catch data monitoring and implementation of SSFP. Amagagasoshintsho a 100% black owned company consists of the individuals that were previously unemployed when DAFF terminated the contract with Ezemvelo. The Deputy Minister insisted that the communities had no issues with Amagagasoshintsho.

Proposal

DAFF could consider prematurely terminating the contract with Amagagasoshintsho, which would imply that DAFF would be required to provide full compensation to the company for the remaining years of the contract. In doing so the implementation process of SSFP, which was already delayed in acquiring a service provider, would suffer another 8 months’ delay in acquiring a new service provider under open tender for KZN. Alternatively, Amagagasoshintsho could be allowed to complete the contract and then DAFF requests for a rotation of service provider, which is supported under EPWP. If the second option was preferred, DAFF would then develop a stakeholder Engagement and Communication plan to address the perceptions.

Issue 6: Depleted Marine stocks

The Department shared the same concern with stakeholders regarding depleted marine resources and apparent decreasing trend of resource availability for many species.

The current status was that there were insufficient marine resources to support all the current stakeholders let alone accommodate more fishers. This was clearly displayed with a number of commercial right holders and traditional fishers no longer involved in the fishing industry as they have found it to not be economically viable.


Proposal

Aquaculture, ranching and experimental fisheries were to be considered as supplementary activities for the small-scale fishing sector.

Alternative livelihood studies were also currently being conducted to see what other forms of economic activities were available for small-scale fishing communities.

Issue: 7 Fisher Security

Mr Njobeni reported that as previously stated the scope of the SSFP is broader than the MLRA and DAFF. And fisheries security was important as it also relates to the dignity of the fishers.

Proposal

Post the rights allocation process DAFF would facilitate various support programmes for small-scale fisheries co-operatives, including safety-at-sea and the possibility of sea accident fund. Furthermore, DAFF would increase engagements with other government departments including the Department of Labour, Social Development, and Transport

Issue 8: Determining if there is sufficient stock of the Eastern Cape abalone

The experimental abalone fishery in the Eastern Cape has been subject to much debacle, mainly due to the fact that the fishery was not managed in terms of any form of legal structure. Identification of Communities was a challenge, payment methods were not easy, there were allegations of ghost community members, communities were not physically involved in the harvesting of abalone, and reported catches were very low compared to the large number of community members that needed to be paid, and problems with poaching.

Proposal

The experimental abalone report once finalised would be submitted to the Committee. To address these challenges future experimental abalone fisheries should be conducted by the small-scale fishery co-operatives. The co-ops should be given the permit and should choose for themselves if they want to receive training to harvest the resource or whether they would like to contract divers to work on their behalf.

Discussion
The Chairperson thanked DAFF for the presentation and asked the members if they agreed with the 10-year rights issue.

Mr P Maloyi, (ANC) asked if the SSFP was a decision of the Equality Court or if it was determined by the Equality Court. He asked DAFF how they would prove that a fisher had the required 10 years’ experience.

He said there was need for variations in the experience levels. He did not understand how DAFF intended to reduce the number of people. He asked how a person with experience on ships on the seas experience level could be compared to someone with experience off the sea.  He did not consider boat building as experience

Mr P Van Dalen (DA) thought that 10 years fishing experience was a reasonable threshold. He asked why the Committee was being involved in deciding whether 10 years was a reasonable time frame as opposed to getting that response from the stakeholders actually involved. He did not believe that the Committee had the right to make that call.

The Chairperson responded that some small-scale fishers had been invited to address some of the issues raised by the communities’. The agreement on whether or not the members agreed did not legitimise the response. It was a question of whether the Department had responded in ways that were in line with legislation.

Mr Van Dalen asked what the ruling on the Equality Court issue was.
He requested a response on the issues related to the fishers where MK veterans had been given licenses.

Mr Mlengana said the policy equality orders needed to be presented to the Committee. The principle of the order was to compensate exclusive rights to communities whose whole livelihoods depended on fishing. However, if others got involved this would lead to depletion. He called on the director of the SSF.

Mr Craig Smith, Director, SSF, replied that the Equality Court order was based on the fact that some stakeholders who had fishing as part of their communities had been excluded when rights were given and these practices were unfair.

The 10 years’ experience was established after extensive deliberations with communities around who agreed that this was a reasonable time frame. These communities consisted of a greater number of people than the people who complained on 25 November.

The Chairperson reiterated that the Equality Court was for traditional fishers who were excluded in the rights issue and then took the government to court.

Mr Maloyi said DAFF was incorrect in stating that the Equality Court had spoken of the 10 years’ experience as it was in fact a decision of DAFF that was made after extensive consultation with stake holders. DAFF was not to involve the court in this and make it seem as if it were the Courts decision.

Mr N Paulsen (EFF) asked in terms of Co-ops what would happen the (?) experience levels

Mr Njobeni responded that the co-ops would be established by the Department. Communities were requested to group themselves. The experience level was not to be based on the group but rather on the experience of individuals in the group.

The Chairperson asked if the Member agreed with the 18 years’ minimum age requirement.

Ms A Steyn (DA) asked if there were support from the Department to ensure that social services were provided for minors, if not the minors would be then forced to fish illegally.

Mr Mlengana called Mr Smith to answer.

Mr Smith admitted that there were issues of child headed families and the policy made provision for this. The Department had developed a template where the co-ops could provide social responsibility for these households. The Department would firstly identify the households and minors would be reimbursed for any work they conducted until they reached the required legal age.

The Chairperson asked if Members agreed with the lack of intra governmental support.

Mr Van Dalen suggested that if a community did not take up rights, these were to be given to someone else instead of being wasted. There was to be an avenue to revoke rights.

The Chairperson responded that the issue was to be approached differently as in this case the people in question were initially excluded from the rights and therefore were unlikely to not use the rights. Any possible failure of the programme was to be considered a failure of the Department and not the communities. 
It was vital to put in a support base. No one with 10 years’ experience was to be excluded and if any were this again was to be considered the Department’s fault.  

Ms Steyn asked how individuals working off shore were expected to obtain the 10 years working experience.           

The Chairperson responded that on the issue of addressing those that were excluded, most of those excluded were from older generations. The families with members who had the 10 years’ experience would qualify because of those members i.e. husbands, The Department was to also ensure the children would were educated.

The Chairperson asked Members for their opinions on the issue of lack of government support. There was need for the Department to report as they started implementing policy. They would then be required to give feedback on support mechanisms that were given to those communities. The DTI should be included in giving support on processing and implementation of the programme.

Mr Van Dalen agreed with the Chairperson in stating that if the co-ops fail it would be the fault of the Department. He raised concerns that the Department was not doing enough to protect the available fish stock as much of it was being poached. The fish stocks that were being poached were more than those that were being allocated. It was not right that the Department was failing to allocate rights due to stock shortages but were readily waiting to sell stocks of fish that they had confiscated from poachers.

The Deputy Minister responded that the Department was not responsible for taking over the process of guarding against the crime of poaching. Rather it had a role of standardising assistance. Poaching was a crime and the Department could not be solely held accountable for preventing crime. He urged Members to not narrow down all government departments mandates and expect DAFF to carry them out. DAFF needed to work as part of a security cluster together with other departments such as SAPS to counter poaching.

The Chairperson responded that DAFF needed to set processes to discourage theft and loopholes in order to reduce poaching. There was also a need to create a better environment for the security cluster to reduce poaching.

Mr Van Dalen proposed that public hearings be conducted to allow communities to speak on what was happening on the ground. There was a trial run with operation Phakisa, which was successful and well received by the public.

The Chairperson responded that this proposal and issue of Operation Phakisa was to be considered in another meeting, as it was not part of the agenda of the day.

Mr Maloyi asked if DAFF had already engaged with the Department of Environmental Affairs (DEA) and if this was the case he was going to request time lines. He asked for clarification on whether DAFF had engaged with DEA or not as he was not clear what proper consultations were. 

Mr Njobeni replied that in May 2016 there had been a meeting with DEA which was at the tail end of consultations. The meeting had also involved the public and DAFF had appealed as a sister department to engage the government. DEA had promised that it would have discussions with DAFF to discuss which MPAs it was most concerned with. So, the further engagements stated were that DEA had promised DAFF that there was still an open door to discuss.

Mr Maloyi requested that in future the Department use simpler clearer statements in their reports as the terminology used was not clearly understandable.

The Chairperson asked Members if they wanted to engage on the issue of the empty basket.

Mr Maloyi asked when the allocation of the abalone was to be finalised as this issue had been discussed even in the previous year.

Ms Steyn asked when the allocation of the West Coast rock lobster was to be decided. she had seen a statement from the WWF that the West Coast rock lobster had been put on red and asked for clarification on that matter.

Mr Van Dalen also commented on the issue of the West Coast rock lobster that had been on a recovery plan but was now red listed. This red listing had an impact on the country’ MSE classification, he asked how this would impact on the small-scale fishing allocation.

Mr Mlengana replied that on the allocation of abalone, fishing rights for the seaweed sector was completed and was published and entering the process of appeals were being completed. Another process was being started for West Coast rock lobster and abalone. Thousands of applications had been put in for rights that were being assessed by technical experts. It was vital to note that there was also an appeals process that was underway although it would not directly affect the allocation process as a different team was responsible for the appeals. Exemptions given for a year had been issued to individuals who had previously obtained rights for abalone. This was done in order to not disadvantage those whose livelihoods depended on the fishing of abalone.  The Department hoped to conclude this rights allocation by June in order to start preparing for rights allocations in 2020.

Mr Mlengana replied that on the issue of the red listing.  DAFF was working with WWF on the fisheries recovery plan. DAFF then was expected to meet pre-set scientific requirements; however, the WWF allege that that DAFF deviated from these requirements and felt that they were left with no option but to red list. The red listing had a de-marketing effect on whoever farmed or harvested red listed fish for commercial purposes.

The Chairperson asked if the red listing had anything to do with health concerns.

Mr Njobeni replied the red listing had to do with the level of sustainable fishing. The Department had gone against what science regulated an acceptable quota to harvest fish in a year and therefore was over harvesting.

Mr Van Dalen said the same issue had occurred previously with Crayfish. The Department had exceeded the quotas provided by scientists as sustainable. They had allocated rights they had been advised not to and cray fish had become red listed and therefore not viable commercially.

The Deputy Minister stated that he spoke as a politician in saying that the scientists may have been identifying black spots to de-market local produce. He was sceptical about the reports from the scientists about the deviation that they claimed the Department made. South African produce such as chickens, oranges, and wine had been de-marketed on the international market by scientists for political reasons despite the fact that they were of high quality. He suggested that the scientists be called in to present to the Department how it had deviated.

Mr Van Dalen informed the Deputy Minister that the scientists in question were South African scientists and not foreign scientists that allowed the red listing.

Mr Maloyi asked if the issue of the red listing was factual or just stories that were circulated in the media.

Mr Njobeni replied that what was factual was that there was a risk of over allocation. However, it was difficult to determine if the over allocation was due to the Department issuing too many rights or if it was due to poaching. The Department had scientists that advised on the stock levels annually and advised if it was necessary to close the season. The scientists’ decisions were based on the ecological facts only, however the management would make the decisions after also taking into consideration social and economic issues. Rights were allocated based on the consideration that people needed livelihoods and this could have given rise to the differences in the allocation between the scientists and the Department.

Mr Van Dalen said it was fact that the fish was red listed and therefore could not be sold and therefore was of no commercial value. It was therefore pointless to allocate rights on it as it would therefore only be used for consumption.

The Chairperson said that the Department needed to take cognisance that it could not fight with the scientists using legal opinion and instead should argue scientifically. It would not help to use legal opinion to fight scientific issues. There was also a chance that the scientists could have incorrect information and therefore the need for the Department to argue scientifically.

Mr Maloyi stated that he was not arguing with other Members of Parliament; however the Department needed to report to the Committee stating fish that had been red listed. And also, clarify that misunderstanding the Department had with the scientists.

The Deputy Minister said he fully concurred with the Member. He would have liked to be informed about the scientists who were trained to come up with this information. As well as the single professor who was paid four million rand annually

The Chairperson stated that there was need for reporting and that the department needed to have its own scientists instead of having to escalate the issue to a professor who they had to pay such a high annual salary.
 

Mr Maloyi asked when Amagagasoshintsho were appointed. It was not entirely true that communities were comfortable with the company as suggested by DAFFs report. This had been reported by the Deputy Minister to not be entirely true.

The Chairperson felt that the Department was playing with the emotions of the people as the EPWP programme was established to ensure that people obtained working experience. She expressed discontent that DAFF was taking government funds to finance people who were killing other people. She expected the Department to follow through with the decision to cancel the contract and to do so in line with legislation. The Department was expected to report before SCOPA as it was fruitless expenditure that they had conducted deliberately. She stated to be removed from government’s payroll.

Mr Van Dalen asked why the Department could not open offices in KZN and do the work itself.

The Chairperson responded that it was part of the outstanding issues the Department needed to report on.

Ms Steyn stated that whenever the Members travelled to the coastal towns people would constantly ask the what the department was doing about the the rights issue, and this needed urgent attention.

The Chairperson said the issue was to be addressed to the DG. When government officials have the wrong people the consequence fell on government and if she had her way the consequences were to be paid by the specific individuals who had decided to offer the job tender.  The Committee needed proper investigation and report presented on the issue.

Mr Mlengana replied that the issue would not be addressed informally in the meeting again until formally presented. He assured that access points would be provided.



ARC Hemp Presentation

Dr Nthabiseng Motete, Group Executive in Crop Sciences: ARC, informed the Committee the ARC began research on hemp more than 20 years ago, and the main focus has been on the production of hemp fibre (textiles and bio-composites). Imported varieties were evaluated for fibre production adaptability.

Agronomic and other studies were conducted, and the trials proved that the crop could be viably produced in South Africa. A Hemp Production Guideline was published in collaboration with Eastern Cape Department of Agriculture.

Considering that there are no registered hemp cultivars in South Africa, the objective was to develop South African hemp cultivars for fibre production that would perform on par or better than the best recommended imported varieties, with low content of tetrahydrocannabinol (THC – the primary ingredient in marijuana responsible for the high). While marijuana plants contain high levels of THC, hemp contains very little of the psychoactive chemical. This single difference is one of the most reliable factors to distinguish hemp from marijuana.

Hemp is sensitive to day-length (flowering is triggered during short day-length <14h), and as such, successful trials were located in the coastal areas and extreme latitudes such as in Eastern Cape and Western Cape Provinces. Additional research trials are undertaken in glasshouses under supplementary lighting at the ARC campus of Industrial Crops in Rustenburg.

A number of accessions and varieties were imported from various countries, and the ARC developed two (2) industrial hemp lines, named SA Hemp1 and SA Hemp2, both of which are suitable for fibre production.

These hemp varieties (SA Hemp1 & 2) were tested over a period of 7 years with Kompolti as control cultivar for these experiments. The project was co-funded by ARC and House of Hemp. SA Hemp1 & 2 have consistently outperformed or performed on par with Kompolti in all parameters that were measured with THC (tetrahydrocannabinol) content within the allowed limits from year to year.

Recent trials were planted in December 2016 for 4 sites, namely: (i) Rustenburg, NW (ARC property), (ii) Add, E. Cape (ARC property), (iii) George, W. Cape (Provincial Agric. Dept), and (iv) Robertson, W. Cape (ARC property)

Final stage of evaluation would be to plant these two lines on a commercial scale to determine their true potential in order to enable registration and commercialisation. This is dependent on approved legalisation of hemp.

Future breeding research would also need to focus on priorities that would lead to successful commercialisation, such as:

• Seed production of South African cultivars
• Evaluation and development of cultivars for seed production for oil extraction
• Evaluation and development of cultivars for Cannabidiol (CBD)
• Cannabinoids is one of over 60 compounds found in cannabis that is used for medicinal purposes.

Finalisation of the feasibility study under the auspices of DAFF is major dependency for commercialisation.

The ARC entered into an agreement with House of Hemp to assist in the mentoring of smallholder farmers in the Western Cape, Eastern Cape and Kwa-Zulu Natal. The mentoring programme was based on the cultivation of hemp for fibre production including the following:

• Soil preparation,
• Method of planting,
• Fertilisation
• Irrigation
• Weed control
• Harvesting

Although there were positives out of this mentoring, there were some challenges that still need to be addressed to ensure the crop can be successfully and sustainably produced by smallholder farmers.

The ARC research indicates that appropriate cultivars with low THC can be grown under certain agronomic conditions in various parts of the country. There is a potential to grow hemp as a commercial crop. To achieve agricultural development, DAFF and provincial departments of agriculture would need to set up and support small holder farmer development through the cultivation, harvesting and processing of hemp for income generation. There is potential to establish and develop small enterprises on various products of hemp. The establishment of a successful value chain is dependent on legalisation, which is the mandate of Department of Health, supported by the Department of Agriculture, Forestry and Fisheries.

Mr Bonani Nyhodo, Manager in Trade Research: National Agricultural Marketing Council (NAMC), explained to Members that Hemp (also called Industrial Hemp) is closely related to marijuana or dagga - they both belong to the same species called Cannabis Sativa. They differ from each other in terms of drug content tetrahydrocannabinol (THC) as well as the height. Dagga has a higher level of THC compared to hemp. Hemp grows taller than dagga. Hemp is a tall, herbaceous annual plant that grows to a height of up to five metres. Hemp usually has a single and slender stem of 4 to 20 mm in diameter for mature plants. Hemp is regarded as an agricultural commodity by most countries. It is produced in over forty countries world-wide. The NAMC looked at the economic feasibility of hemp production in South Africa - commissioned by the National Hemp Foundation (as part of research activities to finalise phase 2 research).

Industrial Hemp is grown for its:

• Stalk,
• Seed, and
• Leaves.

The three jointly make more than 25 000 different products within nine niche sub-markets as follows:

• Agriculture & textile,
• Recycling & automotive,
• Furniture & food/nutrition/beverage,
• Paper, construction and cosmetics.

Research into the potential of hemp as a bio-fuel suggests that it is not currently competitive compared to other sources of biomass.  Armscor has started a research program to investigate hemp biofuels for military heavy vehicles. High demand within the food market, limited production and low yields per acre make industrial hemp unattractive as a viable option for biodiesel production. In the last 20 years, various countries, mainly in developed nations, have legalised the production and processing of hemp products after recognising the distinction between the hemp and marijuana products.

Mr Nyhodo noted that six countries (Canada, USA, European Union, Ireland, India, and Britain) have international organisations that coordinate investments in hemp production. These non-profit organisations, amongst other things, are drivers for fair and equal treatment of industrial hemp with other industrial crops and drives policy changes in government to encourage global production of industrial hemp as a raw material for the industry. They are also focused on acquiring and joint venturing with companies across all sectors of the hemp and cannabis industries in order to promote investments in the hemp industry.

Top five producers of hemp are: China, Japan, Australia, Canada, and EU. Some countries such as France and Finland never abolished hemp production.

South Africa decided to explore hemp production following a need for the development of alternative fibre resources. South Africa has been on the trialling phase of hemp production. Only one entity has a license to produce it. The Department of Health issues licenses and regulates production. Trials were initiated in 1994 in the Rustenburg area – funded by the South African Bast Crop Consortium (SABCC). The founders of the SABCC include the ARC’s Tobacco and Cotton Research Institute (ARC/TCRI), PG Bison, Masonite Africa Ltd., and the Southern African Hemp Company (SAHC).

First findings by the SABCC suggested that there was a need to develop:

• Higher-yielding variety,
• Higher-fibre, and
• Lower-THC hemp cultivars.

Issues of adaptability of cultivars are to be addressed (SA conditions). In 1997, a research programme was initiated to address these findings. Then the CSIR conducted a feasibility study during this period and concluded that:

• Hemp can be economically viable only when its use is extended from the production of fibre into other potentially lucrative uses (i.e. textile)
• Indicated a need for extensive research and development
• CSIR estimated that production costs of hemp are more or less the same as maize and cotton

In 2007 The Premier of the Eastern Cape called for the NHF phase 2 research. To be able to achieve the NHF phase 2 objectives, the 4 technical working groups of Phase 1 were reconstituted into two working groups and given distinct mandates:

• The Public Sector Working Group led by DAFF and consisting of NAMC and IDC was tasked with determining the feasibility of commercialising hemp in South Africa and the related legislative implications
• The Private Sector Working Group led by House of Hemp (HoH) and consisting of ARC and CSIR was tasked with conducting commercial research trials to determine factors that would influence commercialisation of hemp cultivation and processing in rural areas and establish THC stability on farm for 3 consecutive years.

Findings of NHF Phase 2 research study

THC analysis

• THC is stable and hemp is not dangerous and statistical significant evidence shows that only 3% had THC level variations over the limit which was rare and insignificant.
• Hemp also contains significant medical compound CBD.

Cultivar Adaptation

• 3 Exotic hemp cultivars are well adapted to South African conditions.

Seed breeding

• ARC bred SA hemp 1 and SA hemp 2 are at par or outperform international cultivars
.

Emerging farmer business case

• There are opportunities to use hemp for socio-economic development of rural and resource poor farmers and SMEs
• It is possible to control community based hemp commercial trials with permits
• Without resources and proper training emerging farmers would struggle

Hemp processing opportunities with existing technologies

• Extraction of hemp fibres (SFS and CSIR M&M Tech),
• Extraction of hemp medicines (Dube Port and CSIR BioChemTech) and
• Extraction hemp seed oil (Dohne Research, Innovation Hub and Chemin Incubators

Challenges facing hemp industry in SA

Legislative and regulatory constraints that hinder its viability, growth and development potential:

• It takes months before a permit is cleared (this affected the trials)
• Trials that were conducted revealed it is not a commercially viable way on the following grounds:
• bureaucratic processes
• Limited land size (influencing the effectiveness of economies of scale)
• Few varieties were explored

Hemp information is not easily accessible and inadequate (it appears to be restricted to those who actively research)

Current hemp market structure

• Monopoly (single buyer – no competitive pricing),
• Infant industry challenges (logistics costs and lack of economies of size)
• Few actors who are sceptical of each other),
• Lack of consolidation (industry unity)
• Lack of appropriate infrastructure

Financial feasibility of industrial hemp production in SA

• Farm trial information was used – argument that local hemp companies could be better-off when hemp is produced locally
• Hemp production stands to provide employment creation and farm income
• The aim of the financial analysis was/is to determine the financial implication (benefit-cost) of hemp production in South Africa (using the trial data as a typical farm).

The analysis included total estimated cost per hectare planted, and projected cash flow and profitability.


SA’s Hemp Trials

There were five (n=5) hemp trials in 2014/15 financial year in the Eastern Cape, Kwa-Zulu Natal, and Western Cape. Three products were produced from the hemp plant: seed, stalks, and leaves. It appears from the results that seed is more profitable relative to stalk and leaves. According to the results hemp trial A (HTA) commanded the top total income per hectare (R4 880) followed by hemp trial D (HTD) at R4 649 and hemp trial F (HTF) at R3 341. It is worth noting that two hemp trials, namely the HTB and HTE did not produce any harvest due to late arrival of hemp seed, delayed permit approval, and lack of infrastructure and climate.

On the other hand, the input costs such as labour, soil preparation, THC testing and seed are relatively higher compared to water, fertilizer, soil testing, and electricity. The results also indicate that only HTA made a profit and other hemp trials were operating at loss, with HTD’s loss. Positive observation - the trend of total hemp income all hemp products has been increasing over the five years. Therefore, South Africa should consider embarking on commercial hemp trials.

Challenges specific to emerging hemp farmers:

External factors include:

• permit access, permit fencing requirements
• delay in permit issue
• limit of 2ha
• insects and challenging weather

Internal factors, amongst others, include:

• bad soil preparation or off timing
• delays in planting or harvesting times
• wrong seed or plant spacing applications
• harvesting timing (too early or too late)
• failure to secure all required resources
• failure to secure needed extension support and afford expansive technical services from research institutes

Mr Nyhodo remarked that there are countries that have legalised hemp production for industrial use. Hemp products are traded globally. The tool used to calculate this information is programmed such that it is able to produce cash flow analysis, balance sheet as well as financial ratios. Based on lack of access to financial information required to calculate the above-mentioned ratios, the study could not calculate them and make a determination. In addition, a work of this nature would have determined the viability for each of the nodes of hemp value chain, but the available information was limited to the hemp trials.

The results reveal that globally, it is feasible to produce hemp for seed production as compared to fibre production. There was lack of access to financial information required to calculate the financial ratios in order to determine the financial viability of this enterprise.

The trials were conducted under challenging circumstances not enabling environment to prove the commercial viability of hemp enterprise (and the origin was not commercial),

Failure to address the challenges mentioned, industrial hemp production in South Africa would remain unfavourable.

He then made, amongst others, the following recommendations:

• Introduction or provisions for use of different varieties need to be monitored and encouraged.
• Development of locally adapted seeds for all uses need to be prioritised (and be driven by businesses not researchers’ fantasies). To include hemp for fibre, seed and CBD purposes.
• Development of industry norms and standards need to be prioritised
• R&D to address research gaps and reach sustainable beneficiation of agro-processing harvest will multiply jobs.
• Human Capacity development and Empowerment of Farmers and Resource poor SMEs.

Mr Nyhodo concluded by saying the integrated inter-departmental team can consider using both the economic feasibility report and the technical report from the ARC, CSIR, NAMC, IDC, DAFF and HoH and to make one final report. A submission proposed legal succession while exploring possible legislative amendments would be forwarded to all key departments (Health, Justice, SAPS and DEA). The economic feasibility study indicates that hemp can be a viable industry.

Discussion

Answers to questions on Fisheries

Regarding the progress on measures taken to ensure the training small-scale fishermen:

Mr Mlengana stated that the implementation plan that is done provides answers on the training of small-scale fishermen. Currently, the Department is busy with the allocation of fishing rights first. Training would be provided later. The Department is busy engaging with potential partners who are going to conduct workshops for training.

On allegations that MK veterans have been allocated fishing rights:

The Director-General said it was not true. The MK veterans are involved in the security. They have been given chances to work as security officers by a service provider appointed by DAFF. The DG noted that the Department is going to hold a fishermen indaba to involve all stakeholders and to share with them the vision of DAFF regarding fisheries, transformation that has taken place, and DAFF would produce a document on how Fisheries is going to be taken forward.

Mr Paulsen insisted that if military veterans are employed as security officials, that means they have access to fishing rights.

The Director-General maintained that the military veterans have experience in security and that is why they were employed in that role. They do not have fishing rights, but only help in securing the coasts and harbours. They had received relevant training from a service provider appointed by the Department.

Mr Van Dalen wanted to know what the status is on the abalone cases that are sub judice.

Mr Maloyi asked the Committee not to ask the Department about cases that are still before the courts and advised the Department not to answer questions that are still with the courts. He wanted to know if the military veterans programme was the design of the Department or that of a service provider. But if it’s a design of a service provider, the Department must leave matters related to military veterans to the service provider. He further asked the Department to submit a plan with timeframes regarding the training of small-scale fishermen so that it could be studied by the Committee.

The Director-General, on the issue of military veterans, pointed out there are service providers that train the military veterans to man the harbours and coasts. The military veterans are getting the kind of training that suits the work they do.

The Chairperson asked why the military veterans are not employed directly by or get contracts from the state instead of using service providers.

The Director-General replied that some military veterans have their own registered cooperatives and the Department does award them contracts.

The Director-General also took the Members through the 9 issues that were outstanding:

-Business continuity, induction and training

80 000 smallholder farmers are to be supported by 2019. That means 16 000 per annum. The 2020 target would be reached when the 281 target is added. A target of 250 has been achieved.

-Alignment of Land Care Programme

The Department made a collaborative programme with Treasury to avoid duplication of roles between DAFF and DRDLR. These duplicated programmes are going to collapse into one programme under DAFF.

-Preservation and Development Agricultural Land Framework Bill

There has been slow progress reported to the Department. Public consultations in nine provinces have been completed. The Bill is waiting for the Socio-Economic Impact Assessment and certification from the Office of the State Law Advisor. The Bill has been presented to the structures of Nedlac. The Nedlac structures had raised concerns. By the end of April, the Bill would be presented to Parliament for cabinet processes.

-Acts on the establishment of state-owned entities

This required revision of the alignment of the Acts of the entities – ARC Act, OBP Act, NAMC Act, etc. – in order to see their impacts.

-Ncera Farms

The entity would be transferred to the ARC. The National Treasury has agreed to deregister Ncera and this would be finalised in April 2017. Talks between the ARC and DAF are being finalised. The CEO of Ncera has raised his salary by 51% and that matter is under investigation.

-Comprehensive Producer Support Policy

It was reported that Policy Draft 3 has been produced and Policy Draft 4 would be finalised in 2017.

-Funding Model

The Department would continue with the current approach option. There is also the Public Private Partnership option. The Department plans to come up with a blended policy to make sure smallholding farmers are productive. Full details would be given in the next engagement with the Committee.

-Mechanisation Policy

The Director General admitted that lots of money has been wasted on this process. The policy has been consulted with provincial departments of DAFF, including the House of Traditional Leaders. It would be compiled for presentation to the Committee in the next engagement.

- Investment Plan  

It was reported the plan has been approved by the DG cluster. The National Treasury and DAFF’s Director-General are going to unify the plan because it represents many views. Not much progress has been done so far.

Ms Steyn wanted to know why one person increased his salary by 51% when Ncera is being registered.

The Director-General said the money is going to be recovered and the Department has written to the CEO. The Department is waiting for the final report from HR and steps have been taken already.

The Chairperson wanted clarity on Outcomes 4 and 7. She wanted to know if Outcome 4, which is about job creation, is to produce 3400 producers to access markets in 2019 and on Outcome 7 the additional 80 000 producers would receive support for production efficiency.

The Director-General said 3000 producers have been given support through ILIMA/CASP based on their inputs and that would continue up to 2019. The 80 000 would be supported through the 30% set aside. The Director-General said he would provide the Committee with details regarding Outcomes 4 and 7.

Hemp Presentation

Members only asked questions but they agreed the entities should not answer questions instead they should focus on what they are doing and then engage with the Committee when the other departments or entities they work with have concluded their work on Hemp.

Ms Steyn, to the ARC, asked if the Committee or DAFF was responsible for the legislation because the entity states it is in the final stage of production to plant but that depends on the legislation; and she asked how far the feasibility study is. To the NAMC, she enquired if there were any medicinal trials done in SA or if it was just working on international best practices. She wanted to know if there is a specific place one can visit to see where the trials are taking place.

Mr Maloyi wanted to establish why the exercise had taken 25 years to take place; if the feasibility study is concluded or awaiting finalisation; and he asked which entity had a licence to produce Hemp and on what basis because the plant is illegal and he asked if it is the Department of Health or NAMC.

The Chairperson asked who is going to be responsible for the recommendations suggested by the NAMC in its conclusions.

Mr Paulsen asked why the country is not importing finished hemp products if it is illegal to plant and produce it locally.

The Committee further could not adopt the minutes because there was no quorum.

The meeting was adjourned.