Comprehensive Producer Support draft policy: DAFF briefing; DAFF Budget: Committee Report

Agriculture, Land Reform and Rural Development

08 May 2018
Chairperson: Ms M Semenya (ANC)
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Meeting Summary

The Portfolio Committee on Agriculture, Forestry and Fisheries did not entertain the presentation from the Department of Agriculture, Forestry and Fisheries on the Draft Policy on Comprehensive Producer Support.

The Committee raised a number of concerns. It voiced disappointment with the policy document because the Department did not consult the fishing communities, except the South African Underwater Fishing Federation. The policy said nothing about fisheries, and aquaculture was not defined properly in the policy document and it was not clear if those practicing aquaculture would be classified as farmers. They asked that fisheries and aquaculture be included in the policy document before it goes out to consultation again. The Committee maintained it interacted with the fishing communities, but now it appears the Department never consulted them.

Members pointed out that red tape is the biggest problem for small business owners. It is visible in the policy document, and there is no way that rural business owners would benefit from the policy. They indicated the objective of the policy is not clear. Its interventions are not clear on poverty eradication. They said the policy is not developmental in its approach because it is not clear on how ordinary people would access it and how people would be assisted. It does not have clear mechanisms for execution and did not provide figures on women targeted for assistance.

Members further said the policy document is silent on how the programmes are going to be implemented in the cities, and there is no mention of the involvement of municipalities in its implementation. It did not indicate another form of support that is going to be provided to beneficiaries besides money. The Committee also felt the 50% that would be allocated for household producers is going to consume a lot of the budget of smallholder farmers, and they doubted if the Department would have the capacity to deal with food security in the country. The Committee argued that most people in the household producers’ category should be under the SA State Security Agency. Members said the policy is meant to support people who want to pursue agriculture, not to cater for people who are supposed to be looked after by the Department of Social Development. The policy should rather look at ways of off-loading the burden from the Department of Social Development. In addition, the Committee stated the policy document is very theoretical. It is far from addressing the critical issues and fails to include critical departments, and it does not capture the contribution of people who are going to be assisted. Issues that people have raised during the oversight visits were not reflected in the policy document and it excluded forestry. It did not even mention how it would help smallholder farmers to access the markets.

Furthermore, the Committee maintained the policy document looks like an administrative document rather than a political statement. It does not capture most things that were agreed upon like food security and integrated agricultural development programmes. It is not clear on the exit strategy where the government starts to pull out financial support in an enterprise but continues to provide the required technical support to ensure business continuity and sustainability. The policy does not give indications of whether the supported business would be able to run without government support or how it would do away with perpetual dependency on government support.

The Committee suggested the Department should start looking at the White Papers on Agriculture, Forestry and Fisheries because those papers provide guidelines on what should happen. The policy should be the best because it comes after the White Papers. They also pointed out the casual response from the Department must come to an end. Lots of documents have been requested, but they have not been received by the Committee. There is no need for the Committee to request the documents. They should rather be given to the Committee.

The Department was told to go and revise the policy document.

Meeting report

Briefing by Department of Agriculture, Forestry and Fisheries (DAFF)
Mr Mike Mlengana, Director-General, DAFF, in his introductory remarks said there has been a broad consultative process regarding the National Policy on Comprehensive Producer Support since 2015. There has been consultation with national and provincial departments, private and public financial institutions, and the industry in order to get maximum impact. The purpose of the briefing was to inform the Committee that once the policy is approved by Cabinet, a Bill and an Act would be enacted to ensure compliance. The policy is there to guide and regulate support provided to the various categories of producers by government and other sector stakeholders.

There is low agricultural, forestry and fisheries productivity. Productive potential of farms is low due to skills shortages and limited resources. Agro-climatic conditions also have an impact on this since it is estimated that only a third of SA receives sufficient rain for crop production. The unsustainable agricultural, forestry and fisheries practices coupled with the sector’s vulnerability to climate change are another challenge. Climate change has become a major threat to the sector development and is associated with increased incidents of extreme weather events (e.g. droughts, floods, and fires).  In addition, there is a lack of coordination and non-alignment of producer support at various levels, often leading to the limited resources of government being thinly spread and this resulting in a limited impact.

Mr Bonga Msomi, Deputy Director-General: Food Security and Agrarian Reform, DAFF, took the Members through the definitions of the categories of producers. Three types of producers were identified.

The first category of producers is referred to as household producers. This category comprises two sub-categories - vulnerable and subsistence producers. Vulnerable producers produce primarily for household consumption to meet the daily dietary needs and have limited resources and skills to operate a market-led production system. This category includes child headed households and households producing in communal land and commonages that are registered as indigents or they meet the criteria for registration as indigents with their municipality. Subsistence producers are producers that produce primarily for household consumption to meet the daily dietary needs. These producers are not classified as indigents by their municipalities. They market limited surplus production with an annual turnover of less than R50 000.

The second category is called smallholder producers. These are ventures undertaken by an individual or individuals or business entities for the purpose of household consumption and deriving a source of income from agricultural, forestry and fisheries activities along the value chain. These are usually the new entrants with an annual turnover ranging from R50 000 - R5 million per annum.

The third category is referred to as a medium scale commercial producer. This is a venture undertaken by an individual or business entity for the purpose of deriving a source of income from agricultural, forestry and fisheries activities along the value chain. These are established enterprises with an annual turnover ranging from R5 million – R20 million.

Regarding mainstreaming youth, women, and persons with disabilities in the sector, he reported that government would develop and implement a strategy to attract the participation of youth, women and persons with disabilities along the agriculture, forestry and fisheries value chain. In terms of producer support, 50% of the total value of support should be to youth owned enterprises with 50% of these being agricultural, forestry and fisheries graduates. Adult women and men who are less than 35 years should equally share 44% of the total value of producer support while persons with disabilities should be allocated 6%.

Government is going to introduce and roll-out a Graduate Placement Programme coordinated with the Department of Rural Development and Land Affairs (DRDLA) and other departments in key agricultural fields as a way of exposing agriculture, fisheries and forestry graduates to the working environment; and government would partner with institutions of higher learning to support graduates to have practical experience and start their own enterprises.

On sustainable utilisation of natural resources, DAFF is going to invest in research and promote the adoption of sustainable and environmental friendly production practices including rain water harvesting technologies. Measures would be put in place to support and commercialise indigenous products in the sector; and DAFF would ensure equitable and sustainable ecosystem services through the development and application of conservation agricultural technologies and practices.

Schemes would be designed to incentivise land owners and producers who practise conservation agriculture. Producers would qualify for up to 15% subsidy for smallholder and commercial producers involved in conservation practices, labour intensive farming, and promotion of local economy i.e. procuring and selling locally. DAFF is going to develop and regularly update land use suitability maps to increase efficiencies per commodity and thereby reducing risks and vulnerability of the sector to climate change.

The Department has also established the e-Voucher System, which is a voucher in an electronic form (debit card or sms) which has a stored value which could be redeemed by beneficiaries via Point of Sale (POS) or on-line. This is would be used for easy distribution of inputs and mechanisation services (which could be supplied using state-led processes or through Small Medium and Micro Enterprises (SMMEs).A Producer Support Bill would be drafted following the approval of the NPCPDS (National Policy on Comprehensive Producer Development Support) to provide mechanisms for enforcement of policy proposals.

Mr Msomi stated the consultation process with the forestry and fisheries sub-sectors, third consultative workshop with national government departments, provincial workshops, and national stakeholder consultative workshop would be finalised towards the end of May 2018 until mid-June 2018. The drafting of the final socio-economic impact assessment would be finalised by mid July 2018. The tabling of the policy to MINMEC and Clusters for recommendations to cabinet would happen between July and August 2018, and it is hoped it would tabled to Cabinet for approval end of August 2018.

(Tables and graphs were shown to illustrate general support thresholds; current support measures and institutions; commodity specific support thresholds; institutional mechanisms; and implementation guidelines)

Adoption of Report on 2018/19 APPs and Budget Vote 24
Ms Nokuzola Mgxashe, Committee Content Advisor, took the Members through the report, page by page.

Ms A Steyn (DA) wanted to know if the extension programme was allocated R1.6 billion or R1.6 million. She also wanted to find out if Ncera is still getting a budget from DAFF.

The Chairperson indicated it is R1.6 million as was mentioned by the then Acting DG, Mr R Ramasodi. There was also a discussion on whether the extension offices would remain a provincial or National Department issue because the extension programme gets funding through the grants. On Ncera, the entity has been transferred to the Agricultural Research Council (ARC), and the only people who would be joining the Department are the CFO and CEO of Ncera.

Mr N Paulsen (EFF) said his concern is that the draft is dealing with commercial farming and rural areas, but not with urban agriculture. The Department should also focus on urban and peri-urban interest on agriculture.

The Chairperson stated the Committee would deal with that issue when it tackles the policy on comprehensive producer development. She said DAFF has adopted the Integrated Agriculture Development Framework and Agricultural Policy Action Plan (APAP) which paint a way forward for agriculture. What Mr Paulsen is raising is in the policy framework already. It does not need a policy.

Ms Steyn insisted the Ncera issue be included in the report together with the idea from Mr Paulsen.

Mr H Kruger (DA) proposed that DAFF should develop a plan on how it plans to work with the Department of Small Business Development, especially on areas of developing technical skills for farmers.

Mr Paulsen said the Department should address the concerns affecting the fishing communities because allocations are given to former military veterans who know nothing about fishing. The issue is part of transformation and should be included in the report.

The Chairperson replied that DAFF has taken the Committee through the 2020 Fishing Rights Allocation Process (FRAPP) allocation and on how it has managed the process by appointing the Transformation Council. The policy on small-scale fisheries has been adopted. The draft policy on comprehensive producer development support would address fishing rights allocation matters.

Ms T Tongwane (ANC) moved for the adoption of the report with amendments.

Ms Steyn seconded the motion.

Mr Paulsen raised an objection that was noted.

The report was adopted with minor amendments.

DAFF Presentation
Mr P Van Delan (DA) said he was disappointed by the presentation even though the DG made great efforts to explain the consultative process. He said the report has said nothing about fisheries in the document. The fishing communities were not consulted, except SAUFF. The concerns of fishing communities should be included in the Department. He further said aquaculture is not defined properly in the policy document and it is not clear whether they would be classified as farmers.

Mr H Kruger (DA) remarked that red tape is the biggest problem for small business owners, and it is going to play a major role because it is visible in the document. There is no way that rural business people would benefit from the policy and its processes.

Ms P Chueu (ANC) commented that the interventions of the policy are not clear on poverty eradication, and it is not clear how ordinary people are going to access the policy. The policy document does not provide clear mechanisms and figures on women to be assisted. Therefore, she could not support the policy.

Mr N Paulsen (EFF) stated it is not clear how the Department would involve municipalities in this programme, and it there is no clarity on who would implement the project. The policy document is saying nothing about the other kind of support, besides money, that would be offered to beneficiaries.

Ms Steyn said she was concerned about the timeframes to implement the policy and was seeing a lot of red tape. She doubted whether the Department had the capacity to deal with food security in the country. She said the 50% budget allocated to household producers would consume a lot of the budget meant for smallholders. Most people in the household producers’ category should be under the SA State Security Agency.

Mr W Maphanga (ANC) asked if there is space in the exit strategy that ensures that the supported business owner would be able to run the business without government support. He wanted to know when the government would start partnering with higher education institutions and for how long.

The Chairperson stated the policy is meant to support people who want to pursue agriculture, not to cater for people who are supposed to be looked after by the Department of Social Development. The policy should rather look at ways of off-loading the burden from the Department of Social Development. She further indicated the policy document is very theoretical. The current situation on the ground should be incorporated in the document. It is far from addressing the critical issues and does not include critical departments. She went on to say the policy document excludes small-scale fisheries and forestry, and that issues raised during oversight visits are not reflected in the document. It also does not mention how smallholder farmers are going to be helped to access markets. The policy document looks like an administrative document rather than a political statement. It does not capture the most things agreed upon like food security and integrated agriculture development programme. She pointed out the casual response and approach of the Department should come to an end. Lots of documents have been requested from the Department, but they have not yet been received. Documents should not be requested, but rather be brought to the Committee.

Mr Mlengana admitted they have somehow failed to distinguish between operational issues and policy development. Aquaculture was taken out of the policy with the hope it would support small-scale fisheries.
DAFF has not done a good job on that area whereas the information is available. Various stakeholders gave input on the development of the policy, especially when you consider where it comes from. They did not know how much to bring in areas like monitoring and implementation. The Department is trying to develop a uniform policy. He noted the Committee has been raising issues with DAFF for a long time. Unfortunately, those concerns have not been taken into consideration, even in the development of the policy document. If the Committee feels the document is not operational, then DAFF would have to correct it. The extent of the depth is what the Committee needed. The Department was treading on a sensitive line between policy and operations.

Everything raised by the Committee has been noted and would be incorporated in the draft document that would be presented to the Committee later.

The meeting was adjourned.

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