Department of Agriculture, Forestry and Fisheries Quarter 4 performance, with Minister

Agriculture, Forestry and Fisheries

21 August 2018
Chairperson: Ms M Semenya (ANC)
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Meeting Summary

The Department of Agriculture, Forestry and Fisheries (DAFF) briefed the Portfolio Committee on its fourth quarter performance report for 2017/18. It covered the achievements and non-achievements of the six programmes, highlighting transformation in the sector, the implementation of the Agricultural Research Council’s (ARC’s) plan, and progress in dealing with the audit outcomes for the previous year.

The DAFF also briefed the Committee on the current status of the avian flu outbreak. South Africa had never experienced an outbreak of the disease in chickens or any domestic birds other than ostriches, which made the outbreak a very significant and serious one in South Africa’s animal health history. The Western Cape had had the highest outbreak, due to ostrich farming. The Ministers’ Committee on the Budget had approved R40 million in order to pay compensation, with guidelines for compensation for the culling of uninfected birds being approved. Work between the Department and industry to process claims was continuing.

The Department observed that the government could use many levers to advance black economic empowerment (BEE), but had not utilised them. It had been a major challenge to determine the BEE status level of the agriculture sector. As an intervention, the DAFF had embarked on a process to develop draft AgriBEE enforcement guidelines in terms of Section 10 of the Broad Based Black Economic Empowerment Act, which outlined the government’s leverage for the implementation of BBBEE in the economy. Enterprises which made use of these levers should contribute to the government’s programmes to address inequality in the economy. The levers were going to be invaluable in speeding up the implementation of radical socio-economic transformation in the agricultural sector, as they could be used to enforce compliance to the AgriBEE sector code.

The Agricultural Research Council (ARC) briefed the Committee on the implementation plan and progress on audit outcomes for the 2016/17 financial year. The irregular expenditure was not a result of non-compliance in supply chain processes, but was a result of expenditure that had exceeded the approved budget, and had previously not been identified as irregular expenditure. The Council had not sought approval to exceed the approved budget expenditure from the executive authority.

The audit improvement plan was aimed at eliminating root causes and findings, encouraged regular reporting to the ARC, and called for the retraining of staff. The Plan comprised a total of 332 treatment actions directly aligned to the total of 152 findings raised by the Auditor General (AG).

Members were concerned about AgriBEE, and the connection the DAFF had with the Department of Trade and Industry (DTI), because it had a massive impact on farmers. They also questioned the impact of changes in import taxes, and the possible effects of a trade war with the United States. The high rate of vacancies in the Department also came under scrutiny,

Meeting report

DAFF Presentation

Mr Mooketsa Ramasodi, Acting Director-General: DAFF, briefed the Committee on the achievements and non-achievements of the six programmes in the 2017/18 fourth quarter performance and expenditure report.

Mr Mike Mlengana, Director General, discussed food security and agrarian reform. Mr Mooketsa Ramasodi, Deputy Director General:  Agricultural Production, Health and Food Safety; Mr Balemane Semodi, Acting Deputy Director General: Fisheries, and Mr Jacob Hlatshwayo, Chief Financial Officer, all reported on their assigned programmes.

The Chairperson said the Department should respond to the issues raised in the audit report. He questioned the Chief Financial Officer (CFO) about the condoning of irregular expenditure.

Mr Senzeni Zokwane, Minister of Agriculture, Forestry and Fisheries, said the new CFO had come into the Department and he wanted him to focus on the key issues, but time was one of the key constraints he had. The CFO would review the entire audit report and would draft the final expenditure report to present in Parliament.

Mr Jacob Hlatshwayo, CFO: DAFF, referred to the condoning of the expenditure with regard to whose responsibility it was to account, and said that in terms of the Public Finance Management Act (PMFA) it was not the CFO’s responsibility to account on expenditure.

The Chairperson responded by asking whose responsibility it was.
 
Mr Hlatshwayo answered that they would be allocating responsibilities within the Department. The work would be done, but administratively the Department did not have the responsibility for the duties performed by the Minister and Deputy Minister in terms of the PFMA,.

The Chairperson asked why the work had not been done, mentioning that the Committee did not have time frames from the Department.

Mr Hlatshwayo responded that the work that was supposed to have been done would be done. In terms of the PFMA, the Department did not have the responsibility for expenditure of the Agricultural Research Council (ARC), as the ARC had its own structures that facilitated its work.

The Chairperson said she was worried about the performance of the Department, and the lack of finance it had currently approved. The Committee needed to find a way forward on how to engage on the matters presented, and would engage with the Appropriations Committee to look into issue of research.

Ms A Steyn (DA) asked the Department to report back on the “condonement” issue.

The Chairperson said the Minister should account on the matter raised by the Member.

DAFF Presentation

Minister Zokwane said the relevant Deputy Directors General (DDGs) would be presenting on the various sections of the fourth quarter report. He said that in future, the DDGs should be allowed to interact with stakeholders and committees at a senior level, focusing on the basic issues encountered on the ground.

The Chairperson referred to the Parliamentary requirement that the Department had to account quarterly to the Committee, and if it was not able to respond to issues that had been postponed in previous Committee reports, this would result in the Department having to return to Parliament to report on the outstanding matters.

Minister Zokwane responded that the issue of high levels of vacancies in the Department, as well as the lack of implementation of programmes on the ground, would be discussed in follow-up reports.

Mr Mike Mlengana, Director General (DG), DAFF, said progress on the sector’s Medium Term Strategic Framework (MTSF) was generally, as 300 000 jobs had been created, which had had an impact on the reduction in the rural unemployment rate. One million hectares of previously unutilised land was under production, and this was benefiting previously disadvantaged individuals (PDIs). The report showed that 80 000 smallholder producers were supported over the MTSF period, which accounted for an increase in the ownership of productive land by PDIs. The Department’s overall performance during the quarter had resulted in 83% of targets being achieved.

The DG described some of the performance highlights from the quarter. In the area of governance and administration, the revised information communication technology (ICT) disaster recovery plan (DRP) had been approved.  The revised plan seeks to align the DRP to the DAFF’s current ICT systems. The Master System Plan (MSP) had also been reviewed. The MSP analyses the needs of internal and external stakeholders in order to develop funded and prioritised projects over a five-year period aimed at improving service delivery, while mitigating risks identified during this process.

Final Management Performance Assessment Tool (MPAT) scores had been released on 28 March by the DPME, and though there had been an increase in some of the challenges faced by the DAFF, the overall average score had fallen to 2.5 from 2.8 in the last year. All key performance areas -- strategic management, governance accountability and  financial management, with the exception of the human resource management key performance area (KPA), which retained from average of 3.7 last year -- had remained at a compliant score of 3.

With regard to stakeholder and inter-governmental relations, the Department had coordinated and facilitated the successful hosting of Ministers and Members of Executive Council (MINMEC) and Ministerial Technical Committee (MINTECH) meetings during the financial year. It had also successfully hosted chief executive officer (CEO) steering committee and forum meetings. The Department had mobilised 3 500 stakeholders to participate during Arbor Week held at Alfred Nzo district municipality.

Legislative changes involved the draft national policy on comprehensive producer development support, which included a section on the economic sectors, the Employment and Infrastructure Development Integrated Agricultural Development (ESEID) cluster, and the joint MINMEC and technical working group of the Social Protection, Community and Human Development (SPCHD) cluster held on 15 and 27 March 2018. The draft policy had been recommended and tabled in the Cabinet in the next financial year.

In February 2017, the DAFF confirmed the presence of Fall Armyworm in the Limpopo province. Armyworm is a quarantine pest for SA, and has now been detected in all provinces except the Northern Cape and Western Cape. The Department, together with key stakeholders, continued to implement the emergency plant pest response plan. Surveillance, the creation of awareness, improvements in diagnostics and management practices were key aspects of the implementation of the plan. Since Fall Armyworm was not only of domestic concern, the Department also continued to participate in South African Development Community (SADC) initiatives and those of the Food and Agriculture Organisation towards finding an appropriate regional response to the Fall Armyworm.

Programme 1

Mr Jacob Hlatshwayo, Chief Financial Officer (CFO): DAFF, said that the targets not achieved included the draft Integrated Development Finance (IDF) policy, which was to have been submitted to the social and economic clusters for approval and recommendation to Cabinet. The reason for non-achievement was due to a decision made by executive management to incorporate the IDF policy as a chapter in the policy on Comprehensive Producer Development Support (CPDS). Furthermore, two Bills -- the Aquaculture Development Bill and Agricultural Producer Agents Amendment Bill -- could not be submitted to the Minister due to delays in incorporation and inputs.

He advised the Committee on the current status of highly pathogenic avian influenza (HPAI) H5N8 in South Africa. The total number of outbreaks detected and reported to date (8 June 2018) was 190. These were detected in the following locations:

  • 10 outbreaks in backyard chickens;
  • 33 outbreaks on commercial chicken farms;
  • 23 outbreaks in birds kept as a hobby and in zoos;
  • 46 outbreaks on commercial ostrich farms; and
  • 78 outbreaks among wild birds.

Mr Hlatshwayo said that the status had not changed, adding that the province worst hit by the avian flu was the Western Cape, with a total of 144 reported outbreaks.

The Chairperson said that after reading a letter from Treasury, the DDGs responsible for evaluating programmes must be in Parliament to present their programmes, which the audit committee chairperson must also present his/her own report.

Programme 2

Mr Mooketsa Ramasodi, Deputy Director General (DDG): Agricultural Production, Health and Food Safety, said that Programme 2’s Kaonafatso ya Dikgomo scheme to facilitate access of small-holder farmers to the mainstream agricultural economy of the country, and the poultry improvement scheme, were not completed due the data collection being conducted after the end of the quarter. The deployment of 130 compulsory community service (CCS) veterinarians to resource poor communities had not been achieved, although 124 had been actually deployed.

Issues surrounding the influenza outbreak were limited in the winter months, and the foot-and-mouth disease (FMD) facility of the Department had reported no current outbreaks in the country, but vaccines from Botswana had been delivered to South Africa. The Department was to restart a programme to produce their own vaccines in the country through the Agricultural Research Council (ARC).

Mr Ramasodi reported on the FMD outbreak in the protection zone of South Africa. On 21 August 2017, three cattle with lesions suspected for FMD had been detected during the weekly routine inspection at the dip tank in the Giyani local municipality. The cattle had been clinically inspected by the animal health technician at Onderstepooort Veterinary Research. In February 2018, the outbreak had been confirmed as a SAT 1 outbreak, and FMD was also confirmed at the two other dip-tanks with clinical symptoms such as profuse salivation. Thereafter there had been no further spread and no further dip-tanks had been affected, and the outbreak was officially closed on 8 February 2018, and reported as closed to the Office International des Epirzooties (OIE) 

Discussion

Ms A Steyn (DA) asked questions about the compulsory service for veterinarians; requested a full report on national food security; expressed concern about AgriBEE, the offshoot of Broad-based Black Economic Empowerment (BBBEE); asked what connection the DAFF had with the Department of Trade and Industry (DTI), as this had a massive impact on the farmers, and asked about the effect of the recent reduction in wheat import tariffs.

Mr M Filtane (UDM) expressed dismay at the high rate of vacancies, which stood at 14% and for which no reasons were given. Referring to inadequate performance he questioned whether the Department would have the audacity to ask the National Treasury for more money when nowhere in the report was it evident that the high vacancy rate was seen as the reason for non-performance. Lack of effective monitoring was another concern and has been evident in this Department for the past three years. The Department was asked about the impact of the African Growth and Opportunity Act (AGOA) on the import of chickens from the US and its effect on the local poultry industry. 

Mr S Mcwabe (NFP) commented that the high vacancy rate in the Department had not been highlighted, so how would Members have known what was needed to address this issue. What steps had been taken to address this? He also criticised the lack of implementation of DAFF projects.  

Mr H Kruger (DA) focused on Programme 6 where the Minister had said that he was going to accelerate the small scale fishing policy. He asked how the Committee could assist here so that the matter could be resolved as it had been dragging on for a long time. He also asked for a progress report on it. The Minister had also said that Green Courts were going to be reinstituted. The concern here was that opening these courts without the specialised backup of investigators and background information which were an essential part of the process, these Green Courts would not amount to much. He asked the Department what the timelines for this process was. Mr Frederick and Mr Stevens

Mr Kruger asked how Members could assist in the development of small-scale fisheries, and what the timeline was for the Fishing Rights Allocation Process for 2020. He asked if the two people who were previously in charge of the process Mr Fredericks and Mr Stevens, were part of the process again because they were the reason why the process lapsed and the court case against the Department was won. He asked if the Department could allay some fears that these people would not be involved in the process again. How much abalone was stolen and what was the DAFF doing about protecting its assets? This smacked of being an ‘inside job’. How far had investigations into fraud cases in the Department progressed?

Mr P Maloyi (ANC) said that the progress report for this quarter indicated that nearly nothing had been done, but the next report should include comprehensive updates. He questioned the performance highlights against the Q4 targets, commenting that Programme Six’s target had not been achieved due to litigation in the hake inshore trawl sector, and changes in the composition of the appeals team having delayed the finalising of appeals in the newly allocated fishing sectors. He said all the DAFF’s programmes should have fully used the available budget, and the Ministry had to ensure that all vacancies were filled to make sure that the Department’s work was done.

Mr Maloyi referred to Slide 9 where it was recommended that the DAFF policy would be tabled in Cabinet in the next financial year. He asked if this was informed by the programme of Cabinet because why would one have to wait for the next financial year to table before Cabinet.

Mr Maloyi referred to slide 55 and asked for progress and status of the court matters.

The Chairperson asked the Department to comment on the reliability of current research, issues involving security, and the latest situation on FRAP. She said the lack of policy was hampering progress in the land rehabilitation programme, and policy issues related to the poultry industry were still outstanding. The Committee had been told that the Department was approving business plans. She asked if the Committee could have those provincial business plans. Other matters needing attention were food security, farm issues in the Western Cape, and the high vacancy rate in the Department.

DAFF’s response

Minister Zokwana referred to the tax on sugar imports, and the implications for the local sugar industry which were being dealt with. He explained why vacancies were not being filled, saying that senior staff members  on level 12 were getting paid at level 13 and 14, with performance appraisals affecting the budget of the Department. On security of harbours, the officials were the scape goats in some of the areas but the matter was being dealt with. Some of the veterans in the area were providing assistance. The fishing quotas had given rise to the Hout Bay service delivery protests, and two individuals had since been arrested. The protests had occurred after a suspected poacher had been shot with his fish on board. The first batch of the small scale fishing rights was supposed to have been allocated in the Northern Cape on the first of this month.

The Minister said that the Department of Trade and Industry had reported on how a trade war with the United States would that affect what South Africa exported to the U.S. The Fishing Rights Allocation Process for 2020 was awaiting a forensic audit on fisheries, which should include armed response security for DAFF’s storerooms, a report on the availability of fish stock before allocation, and the date that it should be implemented. The policy around trade and market access needed to be improved, and the role of the department’s internal audit teams should be prioritised. He agreed with the Chairperson of the Committee that accessibility to DAFF systems without valid identification should be looked into. With regard to the allocation of funds, the North West and the Free State would not be getting any money until they made it clear what the money was going to be used for. The Internal Audit team in the Free State was working on the matter.

The Chairperson bemoaned the fact that the outcomes of the forensic audits were never implemented. She advised that the Department should crack down on fraud committed by senior employees, and suggested that the CFO of Fisheries should be suspended, and any appeals to the Deputy Minister and Minister should be dealt with in accordance with the Act. Regarding consequence management, she said that there should not be a “pick and choose” approach to who should be delegated to deal with the issues that arose in the Department.

Mr Ramasodi apologised to the Chairperson for any confusion arising from the report on disciplinary action, mentioning that the previous report had been submitted to the Minister on time. He said that in the disciplinary process, the Department interacted with those involved in crimes related to the Department, because it helped with the implementation of internal and external audits to identify challenges. However, he did not know what was required from him to report to the Committee.

Chairperson countered that she had not received any reports, and the Committee should not be ignored. The secretary should be notified of the release of the report.

Mr Ramasodi apologised and committed the Department to submitting all the required reports to the Committee on time. The CASP allocations had been done for each province.

Mr Mayoli mentioned that the Minister should see reports before they were presented in Parliament.

The Ramasodi said that the Comprehensive Agricultural Support Programme (CASP) allocations per province were being implemented now. The Department was in the process of appointing people to follow through on all instructions from the CASP.

The Chief Financial Officer (CFO) Mr J.B. Hlatshwayo referred to the on slide 67 where it was indicated that the total budget was R907 million and in terms of percentage  was 12%. In the first quarter the total actual expenditure was R37 million with the budget around R266 million, and that accounted for the14%. In terms of actual expenditure, for the whole year it was R827 999; but for the budget there was R104 million and in total it accounted for 13%

Another comment about targets missing in the office of the CFO; target on Integrated Development Finance policy and it was agreed that it would be included as part of the Comprehensive Development Producer Policy, so it has been moved out of the office of the CFO

Someone from the Audit Committee said that the Committee was well aware of the mandate of the Audit Committee. The main issues of concern were management control, oversight, monitoring transfers to provinces and accountability. These have been highlighted in the report.  Risk Management was an area that the Department had to pay special attention to.  

The Minister and the Department’s officials acknowledged the input provided by the Committee, and said priority would be given to the filling of vacancies, supporting the commercialisation and mechanisation of black farmers, and dealing with the challenges in the fishing industry.

The Chairperson said that too many corrupt individuals were being given second chances to redeem themselves, and the Department should speak to the Minister of Police and ensure people who had and vetted and had the right credentials were assigned to perform the roles they were appointed for. The Minister had appealed for intervention to secure state assets from criminals, noting that South Africa’s ports of entry ports currently being used to traffic children because they were not secured by the government. She asked the Minister and his Department to assist in resolving the matter

She also strongly urged the Department to implement the audit outcomes that had not been dealt with thus far. Her closing remarks were that the DAFF needed to fix the systemic problems experienced in the Department.

The meeting was adjourned.
 
 

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