Department of Agriculture, Forestry and Fisheries on its Quarter 3 performance, with Deputy Minister

Agriculture, Forestry and Fisheries

07 March 2017
Chairperson: Ms M Semenya (ANC)
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Meeting Summary

The Department of Agriculture, Forestry and Fisheries (DAFF) tabled its third quarter expenditure report.

Since 2014, the main focus of the Department of Agriculture, Forestry and Fisheries is to provide food security to ensure the citizens of this country who are vulnerable to hunger and food insecurity have sufficient access to safe and nutritious food, and to transform the agricultural sector by empowering smallholder producers through targeted support measures to increase their competitive edge towards becoming sustainable producers. These efforts would continue up to 2019.

For the period under review, the Department reported to have achieved 67% of its set quarterly milestones. However, performance is expected to improve during the compilation of the Quarter 3 actual report after the validation process has been concluded.

On matters of governance and administration, the Department reviewed the Fraud Risk Register in terms of its relevance in creating awareness on prevention of fraud and corruption. The quarterly Human Resources plan implementation report has been developed to guide and assist the Department to set out how to identify skills, address supply and demand issues, and attract, develop and nurture the workforce so as to be responsive to service delivery challenges. The National Policy on Comprehensive Producer Development Support is, currently, undergoing approval processes after the internal and external consultation processes have been concluded. Interim financial statements and Estimates of National Expenditure regarding priorities for 2017/18 have been submitted to National Treasury for compliance.

Regarding drought interventions, National Treasury made an amount of R212 million available for the financial year 2016/17 to assist affected farmers across the country. Provinces made R198 million available through the equitable share funding. These funds were utilised to assist the affected farmers. All the affected provinces are implementing the allocated R212 million as part of assistance to the affected farmers. Deliveries and distributions of feeds are almost complete in the affected provinces.

The 2017/18 guiding framework for Comprehensive Agricultural Support Programme and ILIMA/Letsema conditional grants has undergone approval processes during December 2016. The guiding framework, amongst other things, captured the commercialisation of 50 black farmers per province and setting aside at least 20% of the project allocation for this purpose.

The Department also reported that Operation Phakisa Lab for Agriculture, Land Reform and Rural Development aims to enhance and transform the agricultural sector and to accelerate land reform to ensure an inclusive rural economy. The Lab further reviews existing producer support models and development finance models aimed at fast-tracking land reform to find workable solutions given the urgent need for government to make progress in land reform and food security.

Pertaining to internal audit and risk management, the Department indicated there is an improvement over monitoring and reporting of performance information at institutional level within the Department and it is committed to implement action plans that could improve the reporting of performance information as well as the possibility to obtain a clean audit during 2016/17 financial year.

Challenges that impacted on non-achievement of targets are attributed to the finalisation of submission and validation of evidence for reported period that is prescribed by DPME to be 90 days after the end of the quarter and the conclusion of operational plans which was done after the conclusion of APP reflected different time lines to what was initially thought of.

 

Members asked for clarity about the money taken from the Compensation of Employees; wanted to know if there are any new plans for making use of the 1 million hectares of unutilised land; enquired why the Department has not met the validation targets and who was supposed to do the validations; wanted clarity on why a research report on fish stock levels amounted to R185 million; asked why did the Department allowed Fisheries to overspend by R125 million; enquired why there are great plans about black farmers but the results are not visible; and also wanted to find out if it is the influence of the big fishing companies to discourage aquaculture fish production because half of the fish that is consumed in the world is produced through aquaculture.

Meeting report

DAFF Presentation

Mr Mike Mlengana, Director-General, DAFF, centred his presentation on the performance highlights against Quarter 3 targets, emerging issues, challenges that impacted on non-achievements, internal audit and risk management, and human resources and finances.

With regard to performance highlights against the MTSF, 1.6 million households were benefitting from food security and nutrition initiatives. 152 500 hectares of land is under rehabilitation and 1 million hectares of unutilised land would be under production by 2019. This has improved natural resources and improved food security due to additional land that could be considered for production. 80 000 smallholder producers would be already supported by 2019.

Concerning performance highlights against Quarter 3 targets, he reported on governance and administrative issues. The Fraud Risk Register was reviewed in terms of its relevance in creating awareness on prevention of fraud and corruption. The quarterly HR plan implementation report has been developed to guide and assist the Department to set out how to identify skills, address supply and demand issues, and attract, develop and nurture the workforce so as to be responsive to service delivery challenges.

Consultations on the Integrated Agricultural Development Finance Policy (IADFP) have been concluded as part of the IADFP conference which took place during November 2016 to discuss funding modalities on the development of financial services. The communication strategy was aligned to the Medium Term Strategic Framework (MTSF) and media plans were implemented for key events such as World Food Day. The Research and Technology Fund (RTF) half yearly report was tabled and accepted at the RTF MANCO meeting held during December 2016. 

The Department of Agriculture, Forestry and Fisheries hosted the Drought Financial Relief Mechanism Workshop in Pretoria to discuss financial relief strategies for drought alleviation.

Five Imbizos were held at the following areas in December:

 

  • Tshani Mankosi in Nyandeni Municipality

  • Ntelezi Msani Heritage Site in Umzumbe Local Municipality

  • Rharhabe Great Place in Amathole District Municipality

  • King Sabata Dalindyebo Local Municipality

  • Phokwane Local Municipality

An Intergovernmental Relations (IGR) Forum was held during November 2016 to interact with the representatives of the Provincial Department of Agriculture in KZN province.

In implementing the Primary Animal Health Care Programme, 32 light delivery vehicles have been procured. 15 of the 32 vehicles have been delivered to provinces to visit rural areas and educate them about animal diseases.186 animals were quarantined. 5 372 consignments of meat and products were inspected and 652 samples drawn, with 744 non-compliance.

Plant pest surveillance for exotic fruit flies continued in the quarter under review. Based on the current and previous surveillance information, the pest is absent in the Free State, Northern Cape, Eastern Cape and Western Cape. However, it is present and subject to official control in Limpopo, Mpumalanga, North West, Gauteng, and KZN.

With regard to forestry and land rehabilitation, consultations with the reference group and the internal stakeholders on the draft Agro-forestry Strategy Framework Implementation plan took place to ensure that relevant stakeholders’ inputs were incorporated before the strategy could be approved by departmental EXCO. Consultations with relevant stakeholders on the draft report on Draft REDD+ Strategy Assessment Report took place to ensure relevant stakeholders’ inputs are incorporated before the discussion report is finalised in Quarter 4.

On fisheries management, a recommendation on determination of TAC or TAE or a combination of both in respect of the Abalone and West Coast Rock Lobster (WCRL) fishing sectors has been approved. This would give fishing rights holders the total allowable catch and estimates for the two fishing sectors. A progress report on the continuous conditioning of brood stock was compiled. The conditioning of brood stock is based on 2 new research studies on genetics and nutrition for aquaculture species. The final rights allocations were made for the net fish sector and a draft rights register for the newly allocated net fish sector was finalised.

Pertaining to emerging issues, the Director-General reported that the main focus has been on drought intervention, Aquaculture Development Bill, Operation Phakisa, and the Armyworm. For drought intervention, funds have been requested for drought assistance from National Treasury through the National Disaster Management Centre (NDMC) in the Department of Cooperative Governance and Traditional Affairs (COGTA), following the verification of drought situation in the declared areas. National Treasury made an amount of R212 million available for the financial year 2016/17 to assist affected farmers across the country. Provinces have made R198 million available through the equitable share funding. These funds were utilised to assist the affected farmers. All the affected provinces are implementing the allocated R212 million as part of assistance to the affected farmers. Deliveries and distributions of feeds are almost complete in the affected provinces.

About the Aquaculture Development Bill, DAFF attended the second NEDLAC Aquaculture Task Team meeting on 17 October 2016 where the Socio-Economic Impact Assessment report for the Bill was thoroughly discussed. The resolution taken on the follow-up meeting held in January 2017 was that DAFF should have bilateral engagement with Black Business Council (BBC). Another legal opinion on the Aquaculture Development Bill from the Office of the Chief State Law Advisor was received on 12 December 2016. The next NEDLAC meeting is scheduled for March 2017 where constituencies would submit their respective positions on each clause of the draft Bill.

Concerning the Armyworm, it was reported this migratory pest invaded an area of approximately 6 million square km in southern Africa. It was detected in Limpopo, Gauteng, North West, Mpumalanga, KZN, Free State and Northern Cape. DAFF cooperates with all provinces to interact on operations with Grain SA, SANSOR, ARC, Northwest University, Croplife, Insecticide Resistance Action Committee (IRAC) and Cropwatch. A pheromone trapping network is planned to be implemented as soon as pheromones are permitted for importation. 31 products from 15 active ingredients are registered to be used.

On Operation Phakisa for Agriculture, Land Reform and Rural Development, DAFF and the Department of Rural Development and Land Reform (DRDLR) embarked on a six-month consultation process on the Operation Phakisa Lab, for Agriculture, Land Reform and Rural Development. The Lab, which constitutes representatives from government, academic and research institutions, business, organised labour, private sector, and non-governmental organisations, has finalised 27 initiatives across seven work streams, namely: Land Reform; Rural Development; Labour; Grains; Livestock; Horticulture and Producer Support. These work streams would assist in optimising the management of natural resources; developing skills and capacity in the agricultural sector; stimulate funding and finance; develop value chain and market access; provide coordination and knowledge management, and reconfiguring space and promoting functional rural settlement. The programme reviews existing producer support models and development finance models aimed at fast tracking land reform to find workable solutions given the urgent need for government to make progress in land reform and food security, and it also seeks to address constraints in ensuring the equitable access to land, both towards economic development and agrarian transformation.

Challenges that impacted on non-achievement of targets are attributed to two factors. One, the finalisation of submission and validation of evidence for reported period is prescribed by DPME to be 90 days after the end of the quarter. This has, amongst other things, affected 20 000 households benefiting from food production initiatives, 7000 smallholder producers receiving support, 8000 of hectares of agricultural land under rehabilitation, trade opportunity analysis report for the fresh and processed vegetable sector, and 80 000 hectares of under-utilised land in communal areas and land reform projects cultivated for production. The process of evidence submission and validation would be concluded in time for submission of Quarter 3 actual performance information to DPME on the 30 April 2017. The current report reflects performance at preliminary reporting phase. Two, the conclusion of operational plans which was done after the conclusion of APP reflected different time lines to what was initially thought of. This has affected the recommendation of commercial fishing rights on the determination of TAC and TAE or combination of both in respect of the 9 fishing sectors submitted for approval. It has further affected the submission of the draft of the AgriBEE Enforcement Regulations to Agriculture and Sustainable Rural Development Committee (ASRDC) and MANCO for inputs. Advice has been given to consider breaking down the APP targets into operational plans milestones before tabling them to get realistic time frames. The targets would be finalised during Quarter 4.

The Director-General further reported on internal audit and risk management. There is an improvement over monitoring and reporting of performance information at institutional level within the Department and it is committed to implementing action plans that could improve the reporting of performance information as well as the possibility to obtain a clean audit during 2016/17 financial year. There is a detailed action plan (audit matrix) in place containing the actions that management would implement to address the root causes of the audit findings. During the 2016/17 financial year, the internal audit would continue to assess the whole population of the actual organisational results of Quarter 3 of 2016/17 in order to establish whether management has made satisfactory implementation of the action plans put in place. This is to mitigate the risks identified by the internal audit in prior periods.

Risks that are likely to increase during the 2017/18 financial year are around the inadequate provision of comprehensive Micro Agricultural Financial Institutions of SA (MAFISA) services due to possible increase of bad debts because some of the beneficiaries might not be able to harvest and sell their commodities due to drought; and the limited implementation of the animal improvement scheme because budget constraints continue to exist and the implementation of the scheme requires financial resources. It was noted the ARC is assisting the Department to implement alternative measures.

In his conclusion, the Director-General stated for the period under review the Department managed to achieve 67% of its set quarterly milestones. However, the performance is expected to improve during the compilation of the Quarter 3 actual report after the validation process has been concluded. The Department would during Quarter 4 of this financial year focus largely on strengthening the control systems in order to achieve an unqualified audit opinion for 2016/17 performance. A series of meetings would be held with provincial departments to ensure timely reporting and submission of evidence because the Quarter 4 reporting period is one month shorter than the other quarters.

(Tables and graphs were shown to illustrate decreased staff turnover, vacancy rates, and budget expenditure per programme and economic classification)

.Discussion

Mr L Ntshayisa (AIC) asked for clarity on the money taken from Compensation of Employees. He also wanted to know if there are any new plans for making use of the 1 million hectares of unutilised land; and asked why there is a staff reduction within the Department because people need to be employed.

The Director-General, on unutilised land, said they are engaging the traditional leaders on the matter because that is communal land. There are areas where that land has been put to use in some of the Eastern Cape areas for the production of macadamia nuts, tea and other products. Some parts of this land are arable and the yield is not going to be that great. DAFF is looking at different models to see the quality of the grain that is produced for self-consumption and that which is produced for commercial reasons.

Ms Zoliswa Lufele, Chief Director, Financial Management: DAFF, pertaining to the R30 million taken from the Compensation of Employees, elaborated that National Treasury has imposed a ceiling on the Compensation of Employees. This means the Department is not going to have enough money to pay for filled posts and be able to hire more people. National Treasury took the money to fund its own needs.

Mr Sipho Ntombela, Deputy Director-General, Corporate Services: DAFF, concerning staff reduction, explained the situation is related to the Compensation of Employees budget which National Treasury has put a cap on. This is putting pressure on the staff establishment because the Department has to prioritise the positions it has and sometimes, abolish those it does not need.

Mr C Mathale (ANC) wanted to know if the Director-General understands he has to account to Parliament when he said he would like to be released after making a presentation. He further commented it is white commercial farmers who are benefiting from the drought relief fund while black farmers are seeing no difference from the interventions.

The Director-General explained that when he said he would like to be released, he did not mean it literally or in a bad way. What he meant was he has a burning desire to see that all the programmes he is reporting on are being implemented to ensure things are happening on the ground instead of spending more time talking about them in Parliament. He is burning inside to go out and make sure things are happening. On the drought relief fund, the selection of beneficiaries is done at provincial level because it is the provinces that are closer to the farmers.

Mr W Maphanga (ANC) enquired why the Department has not met the validation targets, and who was supposed to do the validations.

Mr M Mannya, Deputy Director-General in Food Security and Agrarian Reform: DAFF, explained that verifications are done by provinces. The only thing DAFF does is to provide conditional grants and provinces implement. The provinces then give the Department the reports and verifications. It was found that in some cases the ID numbers of the beneficiaries are wrong and some of the beneficiaries are dead. DAFF does this verification through the Department of Home Affairs to see if the provinces are giving the Department correct information of people involved in these projects. The provinces are audited by the Office of the Auditor General (AG), which, when it makes its own audit, comes up with information contrary to what DAFF has received from provinces. Now DAFF is looking for a better way of doing this and is asking National Treasury to relook the time of reporting on conditional grants.

Mr Joe Kgobokoe, Deputy Director-General in Policy Planning and Monitoring & Evaluation: DAFF, added that provinces report to their premiers’ offices. These reports are then directed to the Department of Performance, Monitoring and Evaluation (DPME), not to DAFF. These problems are caused by the disjuncture of reporting by provinces to premiers’ offices and DPME. The reports have to be submitted quarterly. After 90 days, it becomes difficult to speak of a validated report when there are so many lines of reporting. Previously, DAFF used to get embarrassed when the AG discovers all the ID numbers were wrong and some of the beneficiaries were dead. DAFF has now devised a new strategy that involves DHAHAd and the Department of Public Works.

Mr P Maloyi (ANC) asked for clarity on why the audit action plan is not indicated in the report and the only thing closest to it is the risk management report. He also wanted to know the identity of the lead stakeholder who delayed the review of the Strategic Risk Register. He further wanted to establish why some mobile clinics for primary animal health care were not delivered; and why there has been no spending on AgriBEE.

Mr Rossouw, Acting Chairperson of the DAFF Audit Committee, concerning the audit action plan indicated he has not seen the correct audit action plan in their last audit committee meeting. It was not presented. He said he is going to make sure it is presented regularly to the Committee.

Mr Maloyi asked if Mr Rossouw has really not seen the audit action plan report at all.

The Director-General stated Mr Rossouw is aware of the report but he was not sure who was going to report about it to the Committee. The fact that it was not discussed in the last audit committee meeting does not mean he knew nothing about it. With regard to no spending on AgriBEE, the initial amount was R300 million but now there is R100 million left. The intention was to buy equity for black producers, but the price got high and it was decided not to pursue the transaction because when the buyer is government, prices tend go up.

Mr Mannya, regarding the stakeholder who delayed the review of the Strategic Risk Register, said this includes the unit which is outside of the Department which contributes to the risk matters of the Department.

Mr M Ramasodi, Deputy Director-General in Agricultural Production, Health and Food Safety: DAFF, about the mobile clinics, stated that of the 32 ordered, 29 got delivered. The other 14 did not comply with specifications and were sent back. The ones retained have undergone DAFF branding and have been delivered to KZN, Western Cape, and Northern Cape.

Ms T Gasebonwe-Tongwane (ANC) wanted to confirm if the Eastern and Western Cape Provinces are not affected by the outbreak of the Fall Armyworm, and asked if the battle against it is winnable.

Mr Ramasodi indicated no reports on surveys carried out by the two provinces have been received regarding the Armyworm. He also said the worm is all over the country but DAFF would be able to limit the damage to plants and they are still observing the behaviour of the worm to determine if it is a summer or winter pest.

Mr R Cebekhulu (IFP) remarked that the reason why DAFF is struggling with land utilisation is because there is no coordination between the three departments regarding land rehabilitation. He wanted to know what the Department is doing with the mushrooming animal diseases in Northern KZN, especially in communal areas where people are told to buy medication from commercial farmers. Previously, veterinarians were dispatched to help in the dipping of animals, but now that is not the case.

Mr Ramasodi said the problem is worrying. The SA Veterinary Strategy seeks to have veterinarians at local areas. The matter would be taken up with the KZN Agriculture Department.

Mr P van Dalen (DA) asked if the Department has thought about the idea of giving the confiscated abalone to people with fishing quotas. He also asked for clarity on the threat facing the MSC certification. He further wanted clarity on why a research report on fish stock levels amounted to R185 million; enquired why did the Department allowed Fisheries to overspend by R125 million; and asked for clarity on the Hake court case. He remarked that the small-scale fishing sector needs to be strengthened and not destroy the markets.

Ms Siphokazi Ndudane, Deputy Director-General in Fisheries Management, on confiscated abalone, stated the rumour that is going around that abalone sales are funding the Department is not true. Right holders are brought on the production of abalone. Many tonnes are confiscated during the year. The Department is looking at better ways of restructuring the abalone problem through policy reviews and adaptive strategies.

The Deputy Minister added he does not know why the abalone money does not have a home. That money should be used to fight crime on abalone because there is a law that states that money derived from people stealing from the state resources should be used to fight crime.

Ms Ndudane, regarding the MSC certification, indicated it is not under any threat. Hake is the only one MSC certified, not the other species. Pertaining to the R185 million fishing report, she said what informs the cash is the data contained in the report. The country has to make sure it fishes for the future. To get the data, the Department uses fishing vessels that carry medical doctors, engineers, scientists, and many other people that are needed. When they go to sea, they go there to gather data to inform what fish to fish. The vessels use a lot of fuel and they go to sea during April and November. Government is not making money from fishing but subsidises the gathering of data.

Concerning overspending by R125 million, she pointed out the Fisheries budget is far less when compared to the other programmes of DAFF. It is not true that Fisheries is causing overspending at DAFF. With regard to the Hake court case, she said it is before the court of laws and in answering the question, she made an analogy of a 5 bed-roomed house where the court tells the occupier to use only three rooms and the other two are given to other people. The occupier has not been kicked out of the house but still has a shelter. Regarding small-scale fisheries, she said for the first time in SA the Buffeljags community has been given fishing rights by the state. The fishing company that has been operating there before did not get the rights. The company was told to partner with the community. The only challenge is that the cooperatives are not yet ready.

Mr H Kruger (DA) wanted to know if the Department is ready to plant in rural areas where there have been rains. He further asked if the 20% mentioned under Programme Administration finances stands for the total percentage of the budget or the actual achievement of the programme.

Mr Mannya agreed some provinces had good rains until recently, but the predictions have not been reliable. Mpumalanga is the only province that received many tractors though some are not working. Other provinces have limitations on their budgets for maintaining the mechanisation. The seeds, including the drought resistant maize seed, have been ordered or bought through ILIMA/Letsema by provinces and that is an indication provinces are ready to plant.

Ms Lufele, concerning the 20%, indicated the figure represents the total for the achievement against the target of 70%.

Mr N Paulsen (EFF) wanted to establish what the Department is doing to revitalise the shrinking poultry industry because the South African Poultry Association enlightened the Committee in its previous engagement the industry needs many small-scale farmers. He also wanted to find out if it is the influence of the big fishing companies to discourage aquaculture fish production because half of the fish that is consumed in the world is produced through aquaculture. Aquaculture production provides many opportunities to end poverty and the Department has to let people produce food.

Ms Ndudane agreed with Mr Paulsen. However, it is important to note if there is a high production of aquaculture, there is a high consumption of fish. In SA when we talk of production, we need to be mindful of consumption.

The Chairperson, on the revitalisation of the poultry industry, advised the matter not to be discussed because there is still going to be a discussion with the other stakeholders on the report the SAPA tabled before the Committee.

Mr M Filtane (UDM) enquired why there are great plans about black farmers but the results are not visible. He also asked if the Department is doing enough to make use of land that is in the former homeland areas.

The Director-General stated that black farmers are going to be commercial farmers as there are strategies in place and funding that is provided so that food security could be achieved. On land in former homelands, more work is being done and this includes the digging of boreholes, rehabilitation of dipping tanks, provision of each household with a hectare of land, etc.

The Chairperson wanted to know why there is always non-achievement on Programme 5 (Forestry and Natural Resources Management) and the same reason for the failure is being advanced every year.

Mr Kgobokoe asked the Committee to give them a chance to do a follow-up on why the same excuse is given all the time.

The Deputy Minister commented that validation reports should be received straight from the sister departments instead of other departments because that is making things difficult for the Department. DAFF is beginning to do its work although not much work has been done on transformational matters, especially on the fisheries section. There is so much resistance from the white players. The Department needs to push harder in order to see things happening.

The Chairperson added that as we transform the fishing industry, we need to change negative perceptions about fish consumption that eating too much fish makes you lose your front teeth, and start to educate people that eating fish is good because it has a necessary protein that is good for developing your mind and body.

The meeting was adjourned.

 

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