SONA 2018: Department of Agriculture, Forestry and Fisheries inputs

Meeting report

Briefing by the Department of Agriculture, Forestry and Fisheries (DAFF) on its inputs to the 2018 State of the Nation Address (SONA)

Ms Rowena Joemat, Director, DAFF, undertook the briefing and emphasised the key messages for the 2018 State of the Nation Address (SONA).

Revitalisation of the Agriculture and Agro-Processing Value Chain (RAAVC)
The intention was to fast track restitution claims to expedite the settlement of 7 419 outstanding claims within the next two to three years through a delegation of authority to the regions whilst simultaneously ensuring better post-settlement performance and governance of restitution projects. There would also be the establishment of a Rural Development Agency to mobilise, coordinate and manage resources; to finance rural development projects and to coach and train participating cooperatives in business and managerial skills. For horticulture, initiatives were focussed on expanding for instance the potential for trade in both domestic and export markets. There were three horticulture initiatives one of which was the Trade Promotion, Retention and Optimisation Initiative. The initiative aimed to increase SA’s horticultural trade potential from an estimated R54.4bn in 2015 to R90bn by 2030. The greatest challenge raised by farmers was poor financial support within the sector for small business including smallholder farmers. The re-engineering of development finance would develop blended financial products from public and private funds to lessen the current reliance on grant funding. The financial products would cover both long and medium term loans for buying farms, equipment and machinery as well as short term loans for production inputs. The new blended financial products would consist of a grant component from government and a loan component from commercial banks, development finance institutions and other financiers.

Economic Development, Trade and Marketing
The DAFF had completed two studies in 2015/16 and in 2016/17 on international priority market opportunities for fruit and nuts as well as on the vegetable industry. The meat industry study was close to finalisation ie 2017/18 and the fish industry study was expected to be completed in 2018/19. The key message for the 2018 SONA was that the purpose of an export-led development approach was to focus on industry with a high job multiplier such as for instance the fruit industry. The National Development Plan (NDP) called for the prioritisation of high growth and labour intensive industries.

Phytosanitary Priorities/Action Plan on Fruit Market
Market access opportunities existed in many countries. In China there was a market access opportunity for pears but there was also a need to change the protocol for citrus. In South Korea there was a market access opportunity for table grapes whilst in Japan and Thailand respectively opportunities existed for avocados and apples. In India there were opportunities for cold treatment and in Russia for pest lists.

Forestry and Natural Resources Management
Agroforestry promoted multiple land use and addressed the issue of competing land use between agriculture and forestry. A total of 5552.7 hectares of land had been rehabilitated through the Land Care Programme which subsequently created 429 jobs. DAFF was also developing a Climate Smart Agricultural Strategic Framework for the sector for the implementation of climate smart agriculture practices. The framework would enhance the resilience of agricultural and food production systems to reduce risk and vulnerability. One such initiative was an irrigation project to be revitalised at Vaalharts Irrigation Scheme in the Northern Cape Province.

Agricultural Graduate Placement Programme
DAFF had developed an Agricultural Graduate Placement Programme which would commence with implementation during the 2018/19 financial year. It was envisaged that 1000 unemployed agricultural graduates would benefit from the initiative.

Biosecurity
With the opening of international markets in 1994 there was a huge increase in the import and export of agricultural products as well as an increase in the movement of goods and people. There was therefore a need for effective biosecurity and biosafety measures which would contribute to the reduction and prevention as appropriate of pest and disease incidences. Henceforth capacity at ports of entry ie land borders, airports and sea ports would be improved to ensure that SA was bio-secured against diseases and that pests be quarantined. The DAFF in partnership with the Department of Health would conduct pesticide residue monitoring and testing to ensure food safety. Business processes in the application and issuance of permits for agricultural products would be streamlined by implementing an electronic certification system. 

Fisheries Management
Aquaculture had been included in the Oceans Economy Operation Phakisa. A total of eight initiatives in aquaculture had been identified to spur the growth of the sector. There was the development of an Aquaculture Bill which was identified as an enabler for the Oceans Economy Operation Phakisa. The Bill was thoroughly consulted through the relevant structures and would be submitted to parliament for approval in 2018/19. The DAFF was also developing an inland fisheries policy that was due to go through stakeholder consultation in March/April 2018. 

Discussion
Ms A Steyn (DA) said that she had previously raised concerns about DAFF officials sitting in offices when they were supposed to be out there doing work that was needed. The problem was that there was no budget for those officials to go out there and do the work. It was all good and well to have graduate programmes in place but what was the point if no budgets existed for them to go out there and do work that was needed. This lack of budget was a huge concern. Once the 2018 SONA was over she wished the DAFF to brief the Committee on what it had done about implementing announcements from the 2017 SONA which pertained to DAFF. In addition members should be briefed about the practicality of implementing the graduates programme. She was pleased that the DAFF was fast tracking the certification of exports.  The World Organisation for Animal Health’s (OIE’s) Report the day before had given SA a damning report. The European Union wished to ban some of SA’s products. The budget was lacking for what needed to be done. She pointed out that there was a huge backlog on the registration of pesticides. What had been implemented from the announcements made in the 2017 SONA?

The Chairperson responded that the progress made by the DAFF would be reflected in its Annual Performance Plans (APPs).

Mr Jakob Hlatswayo Chief Financial Officer (CFO) said that in as much as members’ questions would be answered, the Department would provide written responses to the Committee as well. On the certification of exports and imports, he said that DAFF’s systems and processes were not there yet. National Treasury had allocated funds to DAFF. For the current year there R25m was allocated. DAFF needed to come up with a system for imports and exports. The DAFF was working closely with the organisation FoodSA. 

Mr Belamane Semoli Acting Deputy Director General: Fisheries Management, DAFF, said that SA also worked with countries that had expertise on animal diseases. There were training programmes with countries like China and Norway. There were a number of initiatives embarked on in respect of Operation Phakisa.

Mr H Kruger (DA) pointed out that small business development and small scale farming development was important. In 2017, he had asked the Small Business Development Department (SBDD) about whether there were transversal agreements between it and the DAFF. To date there were no transversal agreements. Why were these agreements not in place? President Jacob Zuma could in the SONA speak to the role of the SBDD but if there were no transversal agreements then it was difficult for progress to be made.

Mr Joe Kgobokoe Deputy Director General: Policy, Planning, Monitoring and Evaluation, DAFF, conceded that there was no formal agreement between the DAFF and the SBDD. He did point out that there was optimism on the work that departments did as a cluster.

Mr S Mncwabe (NFP) was pleased about the Agricultural Graduate Placement Programme. Efforts should be made to get the young into agriculture. He said that DAFF needed to have a marketing strategy aimed at attracting the youth to the sector. He asked DAFF if it worked hand in hand with the Departments of Basic Education and of Higher Education. What marketing/advertising strategy did the DAFF have in place?

Mr Kgobokoe replied that DAFF had not advertised the Graduate Programme through print media. The marketing of the Programme had been discussed at a Ministerial Technical Committee (MINTEC) meeting. This was the only marketing exercise that DAFF had done. The input by the member was noted. He was aware that going forward there was a need to publicise the information as broadly as possible.  

Mr N Paulsen (EFF) asked why should members get excited about the prospect of a 1000 jobs being created when 109 000 jobs had been shed. What about those individuals who had lost their jobs? He stated that agriculture in SA was very primitive and asked what new agricultural methods were being introduced or used. What about permaculture? The agricultural sector needed to be revolutionised. If modern technology was used in agriculture then the youth would be attracted to the sector. SA agricultural sector was far too primitive hence its dependence on heavy rainfall to get good crops. If SA did not improve on its methods then there was no way for it to become competitive. Job losses in the sector would continue. There was a need to modernise agriculture and to subsidise it. No mention was made in the briefing about subsidisation. He was concerned that the amount of land transferred to emerging black farmers was still well below 10% of the total amount of agricultural land. There was also a total of 7419 outstanding claims which had to be finalised. He asked what percentage of the total agricultural land the outstanding claims would comprise of. He felt that the DAFF was doing nothing for black people on the ground. If 5552 hectares of land was revitalised he asked whether the jobs that had been created were jobs to maintain the land or was it temporary jobs. He was pleased to hear that there was a focus on aquaculture. He was yet to see a successful aquaculture project in SA. He pointed out that 50% of the world’s consumed fish was sourced through aquaculture. In SA aquaculture only made up 1% of consumed fish. Aquaculture held huge export potential opportunities for SA. China could not cope with the demand for fish. SA needed to look at international best practises on aquaculture and bring such practises to SA.

Mr Semoli did not agree with the statement that there was not a single successful aquaculture project in SA. There were successful projects. It was accurate that SA’s figure on aquaculture was 1% whereas the rest of the world’s figure was 50%. He however explained that the 50% was made up of 70% from China or that Asia made up 90% of it. He emphasised that Africa was the next area for growth in aquaculture development. The African Union had commissioned a study to look into how best aquaculture could be developed. The Southern Africa Development Community (SADC) was also looking at developing aquaculture. He noted that aquaculture was about economies of scale. SA had looked at international best practise on aquaculture and the legal regimes that were in place on it. Some of the countries looked at was China, Norway, Scotland and Chile. SA’s aquaculture strategy was based on the study into these countries. 

Mr P Maloyi (ANC) asked whether the issues that had been presented to the Committee were those that had been agreed to at the cabinet legotla the previous week. He noted that the Committee had exhaustively discussed the challenge of duplication of functions that the DAFF experienced with other departments like the Department of Trade and Industry. This was especially important given budgetary limitations. Was it possible for the President in his 2018 SONA to give a directive to prevent duplication by departments? He noted that when the Committee had made inputs to the Presidency about issues to be included in the SONA such inputs should have budgets attached to them. He hoped that there was a budget attached to the things that the DAFF had highlighted in its briefing. He suggested that in the future the Committee needed to be briefed by the DAFF well in advance on what it wished to include in the SONA. In this way members could make inputs on what was to be included.

Mr Hlatswayo said that government had identified agriculture as a growth sector in SA’s economy. The issue of duplication and lack of budget needed to be dealt with. He pointed out that there were funds for agriculture but it was scattered all over. He assured the Committee that the DAFF took the inputs of members seriously. He confirmed that what the Committee had been briefed on was what had come out of the cabinet legotla.

Ms Joemat assured members that what DAFF had spoken to in the briefing would have budgets attached to them. National Treasury had come on board. There was collaboration with other departments. On preferential procurement the SBDD was responsible for implementation. The DAFF worked with the DTI on the Agro Processing Programme. It dealt with the commercialisation of black farmers. 

The Chairperson said a while back the Committee had already identified what needed to be done through Operation Phakisa. Challenges were also highlighted. She noted that the intention was to have a cluster report but the biggest problem was a lack of coordination and the duplication of functions. It was an issue which needed to be addressed by the cluster. National Treasury had allocated an extra R60m for issues like bio-security. She pointed out many things would be unfoldered in the APPs of the DAFF. The cluster report and the input by the DAFF were welcomed by the Committee. Issues that had been identified would be looked at in the APPs and in the budget of the DAFF. She wished Committee Staff to note the importance of climate smart agriculture and that a strategy was needed in the sector. The strategy should be covered in the APP of the DAFF and had to be implemented. Lack of coordination and duplication of functions had to be dealt with. She felt the issue of the Recapitalisation and Development Programme (RADP/RECAP) should also be addressed.

Mr Hlatswayo, on coordination and duplication, stated that there was engagement with National Treasury, the DTI and with the Department of Rural Development and Land Reform (DRDLR). Even though there was engagement between departments the problem came in on what to agree upon. For example there was agreement that RADP/RECAP would sit with the DAFF. DAFF however could not take on the RADP/RECAP without funding. 
 
Mr Kgobokoe added that at cluster level issues of collaboration, duplication and coordination was being discussed. There was however no formal agreement between departments. Only the previous week the DAFF had indicated Operation Phakisa commitments in its APPs. There were budgets that went along with those commitments.

Ms Joemat, on climate smart agriculture, stated that DAFF could expand on it. She added that a great deal was being done. She reiterated that what members were briefed on was approved at the cabinet legotla. 

Mr Hlatswayo said that perhaps not all questions had been answered but reiterated that written responses would be forwarded to the Committee. On what was presented to the Committee he said that implementation and budgets had to go along with it. The written responses would be forwarded to the Committee by 13 February 2018.

The Chairperson said that issues raised by members would be covered in the APPs of the DAFF. On the statement that agricultural funds were all over she felt that DAFF needed to contain the funds. There needed to be a framework in place. An integrated funding model and support to small farmers would guide how funds were to be used.

Mr Maloyi brought it to the Committee’s attention that there was an urgent matter around poultry dumping into SA from countries like the USA and the UK. There was a planned march to Parliament led by Poultry SA taking place in this regard. He asked DAFF to brief the Committee on the issue.

Both Mr Hlatswayo and Mr Semoli bore no knowledge on the matter.

Ms Joemat did venture to shed light on the matter but stated that it was not the official position of the DAFF per se. She explained that negotiations on poultry had taken place through DTI. The response should therefore be led by DTI with DAFF in support. The DAFF dealt with the production side of poultry. 

The Chairperson stated that the task team dealing with the issue should be invited to the Committee to shed light on the issues raised by Poultry SA. It was best not to speculate. The issue would be dealt with before the march took place.

The meeting was adjourned.