Agri-Parks progress report

Agriculture, Land Reform and Rural Development

22 October 2019
Chairperson: Ms M Tlhape (ANC) (Acting)
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Meeting Summary

The concept of Agri-Parks has not been abandoned, but the mistake was on deviating from the systematic approach that was adopted when the Agri-Parks policy was developed.

This became clear during the engagement between the Department of Rural Development and Land Reform and the Portfolio Committee on Agriculture, Land Reform and Rural Development when the Department was presenting its progress report on the Agri-Parks Programme.

The Department admitted it went on a big scale to have one Agri-Park per district municipality even though at the initial start it was agreed there should be one Agri-Park per province. As a result, the Department spread itself thinly and forgot it did not have proper planning expertise. This compromised service delivery. This was the mistake of this big bang approach. Then a suggestion was made to reduce the Agri-Parks from 44 to 10 and to focus on one key component of the Agri-Parks such as the Farmer Production Support Unit (FPSU), so that there was enough production happening to be marketed.

That was why now the Department indicated its primary focus was on the implementation of the FPSU due to limited funds. The FPSUs were being operationalised as the first leg of the Agri-Parks Programme. The Department has established 27 FPSUs, with each province having at least two or three FPSUs. The main idea behind the FPSU Model was household mobilisation, profiling, participatory planning services, business planning services for rural farmers and enterprises, and production plans for farmers.

The purpose of profiling was to lead to more effective policy planning and service delivery. It consists of gathering information on living conditions of households and their members in the various communities. The focus is on the most deprived rural areas. Results from profiling allow the Department to understand the make-up of the communities; select businesses and farmers to participate in the economic opportunities; and identify individuals from the communities who have got relevant skills to participate in employment and skills development opportunities.

It was indicated the FPSUs were the convenience centres and the first line of service delivery to rural household, rural agricultural enterprises, and farmers in land reform and restitution. They would be the central service point where small-scale farmers and rural agri-enterprises in the catchment area of the FPSU could come for a variety of services from across all departmental programmes. They are for inter-branch collaboration and inter-departmental/stakeholder collaboration on the basis of evidence and reality on the ground.

The Department stated the FPSUs have been designed and developed to be aligned to the Agri-Parks Master Plans. The FPSUs business plans have to be aligned to the assets of the community / farmers. Huge progress, for example, has been made in developing red meat development (custom feedlots as FPSUs), wool improvement and shearing sheds as FPSUs, and goats improvement auctions and feedlots as FPSUs.

So far, the FPSU programme has had some impact. Between 2013 and 2018 a steady progress has been recorded on auctions held, cattle sold, and income generated. During the 2016/17 period, Eastern Cape participants generated a R9m income after selling 1 214 cattle, while the KZN participants had a revenue of R13.6m after selling 1 638 cattle during the 2017/18 period. Over the past six years, 2 350 beneficiaries have generated R109m income, and bulls have been sold for amounts ranging between R10 000 and R20 000. 16 community feedlots have been constructed during 2018.

Members remarked that when they visited the Agri-Parks they received many complaints from the farmers that the pack-houses were far from them; commented that what the Department presented was good but not practical; said they could not understand why there were FPSUs in KZN because there was a lack of monitoring of projects in that province; wanted to find out if the Rural Urban Marketing Centres were connected to bodies like the ARC; asked how the Department was measuring return on investments on these projects and enquired if it has got a model for these projects; asked if the success stories of the plan were in line with the 9 Point Plan and strategic objectives of the Department because the Agri-Parks programme was four years old; asked how the relationship was between DAFF and DRDLR on some of these projects; and wanted to understand if Agri-Parks would be linked to the CRDP.

Due to time constraints, the Department was asked to respond in writing to outstanding questions.
 

Meeting report

Briefing by Department of Rural Development and Land Reform
Mr Clinton Heimann, CD: Service Delivery Coordination (Rural Infrastructure Development), DRDLR, took the Committee through the three interrelated components of the Agri-Parks Programme: Farmer Production Support Unit (FPSU), Agri-hub (AH), and Rural Urban Market Centre (RUMC). The Agri-Parks programme was established, amongst other things, to resolve the energy challenge and revitalize agriculture and the agro-processing value chain. An Agri-Park was defined as a networked innovation system of agro-production, processing, logistics, marketing, training, and extension services located in the district municipality. Its intention is to enable a market-driven combination and integration of various agricultural activities and rural transformations services. The Department has been trying to ensure black producers have access to market share since 2015.

The Farmer Production Support Unit (FPSU)

This is a rural small-holder farmer outreach and capacity building unit which provides primary production inputs, mechanisation support, extension services, storage facilities, and training to producers. These are centres of agricultural input supply control in terms of quality, quantity, and timeous deployment of inputs; extension support and training; mechanisation support; local logistics support which could entail the delivery of farming inputs, transportation post-harvest, and transportation to local markets; fuel (energy centre); and banking.

The Afri-Hubs (AHs)

They deal with agro-processing, packaging, and logistics. They are located in central places within a district municipality. They provide storage warehousing facilities, weighing facilities, agri-processing facilities, transport service workshops and spare parts for larger maintenance tasks of Agri-Hub and FPSU equipment, agricultural technology demonstration parks to train farmers in the AP catchment area on new technologies in terms of fertilizers, plants and seeds, irrigation, and energy uses and farm implements, soil testing laboratories, and accommodation for extension training and capacity building programmes.

The Rural Urban Market Centre (RUMC)

These centres are located on the periphery of large urban areas. They have three main purposes:

Linking and contracting rural, urban, and international markets through contracts
Acting as a holding-facility to release produce to urban markets based on seasonal trends
Provide market intelligence and information feedback to the AH and FPSUs, using the latest information and communication technologies

Some of the guiding principles for the Agri-Parks:

One Agri-Park per district ( there are 44 districts)
Agri-Parks must be farmer controlled
Agri-Parks must be the catalysts around which rural industrialization will take place
Agri-Parks must be supported by government for a period of 10 years to ensure economic sustainability
Agri-Parks must maximise access to all farmers, especially emerging farmers and rural communities.
Agri-Parks must maximise benefit to existing state land with agricultural potential in the provinces
Agri-Parks must support growing towns and revitalisation of growing rural towns in terms of high economic growth, high population growth over the past 10 years, and promote rural urban linkages.

Dr Moshe Swartz, Deputy Director-General: Rural Enterprise & Industrial Development, DRDLR, briefed the Committee on the FPSU concept. The FPSUs were the convenience centres and the first line of service delivery to rural household, enterprises and farmers in land reform and restitution. They would be the central service point where small-scale farmers and rural agri-enterprises in the catchment area of the FPSU could come for a variety of services from across all departmental programmes. They are for inter-branch collaboration and inter-departmental/stakeholder collaboration on the basis of evidence and reality on the ground.

Mr Swartz pointed out the main idea behind the FPSU Model was household mobilisation, profiling, participatory planning services, business planning services for rural farmers and enterprises, and production plans for farmers. With regard to profiling and farmer mobilisation, the purpose of profiling was to lead to more effective policy planning and service delivery. It consists of gathering information on living conditions of households and their members in the various communities. The focus is on the most deprived rural areas. The information on these deprived households allows policy makers and policy implementers to get a better understanding of the dynamics underlying poverty and deprivation.

Targeted profiling was focused on very specific data that is needed and depends on the outcome result of projects. Its focus is on community profiling, farmer profiling, asset base enterprise profiling, and targeted socio-economic profiling. Results from profiling allow the Department to understand the make-up of the communities; select businesses and farmers to participate in the economic opportunities; and identify individuals from the communities who have got relevant skills to participate in employment and skills development opportunities.

The FPSUs have been designed and developed to be aligned to the Agri-Parks Master Plans. The FPSUs business plans have to be aligned to the assets of the community / farmers. Huge progress, for example, has been made in developing red meat development (custom feedlots as FPSUs), wool improvement and shearing sheds as FPSUs, and goats improvement auctions and feedlots as FPSUs.

The FPSU programme has had some impact. Between 2013 and 2018 a steady progress has been recorded on auctions held, cattle sold, and income generated. During the 2016/17 period, Eastern Cape participants generated a R9m income after selling 1 214 cattle, while the KZN participants had a revenue of R13.6m after selling 1 638 cattle during the 2017/18 period. Over the past six years, 2 350 beneficiaries have generated R109m income, and bulls have been sold for amounts ranging between R10 000 and R20 000. 16 community feedlots have been constructed during 2018.

Mr Swartz wrapped up by saying FPSUs were being operationalised as the first leg of the Agri-Parks Programme. Work continued to progress on the 27 prioritised FPSUs and there were at least two FPSUs per district, and they were getting an integrated kind of support. Farmers and rural enterprises were registering at the FPSUs and were getting support.

(The Committee was taken through a pictorial presentation of the 27 FPSUs per province, budget allocation, farming activities, locations, mechanisation provided, and number of participating farmers per FPSU)

Discussion
Ms A Steyn (DA) remarked that when the Committee visited the Agri-Parks, they received many complaints from the farmers that the packhouses were situated far from them. She commented that what the Department presented was good but not practical on the ground. She not understand why there were FPSUs in KZN because there was a lack of monitoring of projects in that province. She requested the Committee be given a one-page document per province which states the list of projects and the money spent on each project, and that the Committee must be furnished with an implementation plan and costs. She wanted to know who was going to responsible for monitoring all these FPSUs projects.

Mr Mdu Shabane, Director-General, DRDLR, promised that a breakdown on budget for projects per province would be sent to the Committee. He said accountability was an important point, but acknowledged it has been a weakness. The Department had chief directors and district directors in provinces. It was unacceptable to say the Department did not have the capacity to monitor if it had chief directors and district directors. Unfortunately, it was difficult to exactly state who would be responsible for monitoring the projects in provinces.

Ms T Mbabama (DA) wanted to find out if the Rural Urban Marketing Centres were connected to bodies like the ARC. He further asked how the Department was measuring return on investments on these projects and enquired if the Department had a model for these projects. Finally, he wanted to understand if there were any synergies with the private sector.

Mr Shabane explained that not everything they did was for commercial purposes. ‘Retun on investment’ (ROI) is a business term, but in government they were talking of ‘success stories’. In government, ROI is not used as a measure. He said NAMC and ARC would continue to play a role in the projects of the Department. He further indicated they want to collaborate with the big players in the industry, including commercial farmers in order to improve the work of the Department on these projects.

Ms T Breedt (FF Plus) remarked she was hearing many intentions and plans from the presentation, but she was not seeing implementation on the ground. Timelines were different for implementation, and she wondered if the Department was geared up in terms of achieving the set targets. She asked what the rationale was for taking the Agri-Parks to district municipalities.
Mr Shabane stated the districts were the third sphere of government. The districts were going to be the centre points of service delivery. Hence the saying: one district, one plan, one budget. Even at MinMec, district municipal mangers were engaged with to try to develop this model.

Mr N Capa (ANC) remarked he was convinced the budget has been spent in all these activities because the Department secured the services of service providers. The rush was to benefit the service providers, but not the intended beneficiaries. He stated that the profiling of communities was a long process and wondered whether information from Stats SA could not be used instead. He observed the procurement of gadgets and buses for profiling had no meaning to the intended beneficiaries. He then wanted to know who initiated the FPSU idea or programme.

Mr Shabane explained the rationale behind the FPSU was to improve the work of small-scale farmers. But it was discovered there was something wrong with the FPSU model and that was why it was being revised.

Ms K Mahlatsi (ANC) asked if the success stories of the plan were in line with the 9 Point Plan and strategic objectives of the Department because the Agri-Parks programme was four years old.

Mr Shabane replied that there were success stories that could be told. It was unfortunate the success stories were not part of the presentation. He added that he accepted the positive criticism from the Committee.

Ms N Mahlo (ANC) voiced a concern about the presentation on FPSUs because it had no page numbers and table of contents, and figures on projects were not visible. Educated people were employed to do the work, but they were downgrading and undermining the work of the Ministry. She indicated the Agri-Park that was located at Seshego in Limpopo was not mentioned in the presentation.

Mr R Cebekhulu (IFP) observed the biggest challenge for the Department was on spending and not following up on the support it provided for mechanisation. There was no contract the Department has entered into with service providers in terms of fixing the tractors when they break down. He further indicated the Department seemed to gather a group of people and inform them to run the projects without first providing training to them. He added that the Department did not appear to want to spread the FPSU projects to other areas.

Ms B Tshwete (ANC) commented that she did not see in the presentation the practicality of the Agri-Parks 9 Point Plan which sought to revitalise agro-processing and value chain. She saw value chain in practicality when she visited Stellenbosch and surrounding areas where there was a farm and an abattoir in close proximity. If the Department was putting so much money on these kinds of projects, then the Committee needed to be told on the return on investments. The Committee, as a result, has not been told about the milestones, expenditure, and selection criteria on these Agri-Parks.

Mr K Montwedi (EFF) noted nothing was mentioned about the Taung FPSU even though it was listed in the presentation and that means there was an allocation made to it. He also indicated the Legacy Report was talking of agricultural schemes in Taung. He wanted to understand if NARYSEC could be expanded to suit the work of the Department because the Minister made a commitment to review it. He further enquired why the Department did not have a committed fund for one project because R2 billion for Recap has been shifted to Agri-Parks, yet a commitment was made to farmers on restitution and Recap. That was not fair to the farmers, and the Department was now facing litigation.

Mr Shabane said the NARYSEC budget has been redirected to the training of para-veterinarians and recruiting unemployed agriculture graduates. Not much has been done on the land that was used in the former homelands. He went on to say the DRDLR had its own Recap budget while DAFF had CASP, MAFISA, etc. But now the Minister has stated the budgets of these different projects have to be put under one fund.

The Chairperson observed the intention to establish Agri-Parks was to have something where there was nothing as part of rural development, in order to benefit the communities. But now it appeared the FPSUs were replacing Agri-Parks. More was being said about FPSUs. The term gets dropped when the project goes wrong, and then coin a new term. The Agri-hubs that have been mentioned in the presentation were not operational. She wanted to know if there was a policy in the first place for the Agri-Parks. She asked how the relationship was between DAFF and DRDLR on some of these projects; and she wanted to understand if Agri-Parks would be linked to the Comprehensive Rural Development Programme (CRDP).

Mr Shabane told the Committee Agri-Parks were not going to be synonymous with the CRDP because the Agri-Parks were established to look at opportunities within the agriculture value chain. He also indicated the relationship between DAFF and DRDLR was never strong. DAFF was giving its budget to provinces through DORA, while the DRDLR did not do that. There has been a mismatch between the two in terms of doing things, but the merger, it was hoped, would force the two departments to work together.

He enlightened the Committee the initial start was to have one Agri-Park per province. But as the policy was developed, the Department went on a big scale to have one Agri-Park per district municipality. The Department spread itself thinly and this compromised service delivery. This was the mistake of this big bang approach because they deviated from the systematic approach they had adopted in the development of the policy. The concept at high level was good, but the Department did not have proper planning expertise. He emphasised that Agri-Parks require a multi-disciplinary set of skills, and a rigorous oversight on implementation needed to be provided. That was why some of the FPSUs were far from where the farmers and communities were located. The provided infrastructure was far more sophisticated for some of the projects that were being done.

He reminded the Committee there was a lull in the implementation of Agri-Parks in 2018. Then a suggestion was made to reduce the Agri-Parks from 44 to 10 and to focus on one key component of the Agri-Parks such as the FPSU, so that there was enough production happening to be marketed.

It must be noted that due to time constraints the Department could not respond to all the questions from the Members. It was then agreed the Department should reply in writing and send its responses within two weeks. Questions that were from the Members were around: expenditure on the use of consultants and why the Department was not using internal capacity;  details of the expenditure on all 27 FPSUs; details on the optimal use of agricultural land; involvement of farmers in the business plans;  regional beneficiation of the  Keiskammahoek Project; monitoring of the Rural Urban Marketing Centres; explanation on why the decay of implements was left to happen in the Eastern Cape yet there is a provincial department of agriculture; the amount that was spent on the conceptualisation of the FPSU programme and what the expectations were; what the Department was striving to do in terms of Agri-Parks; empowerment that was going to be provided to extension officers to monitor service delivery; if the Agri-Park Management Council was going to be in all FPSUs; and if there would be an asset register for mechanisation bought for the FPSUs.

Mr Mashaba thanked the Members for the robustness in engaging with the presentation because the Department was not spending much time on the ground. The Committee has provided a critical evaluation because it was close to the people.

Adoption of Minutes

15 October 2019 Minutes

The Chairperson took the Members through the document, page by page.

Mr Capa moved for the adoption of the minutes.

Mr Masipa seconded the motion.

The minutes were adopted with no amendments.

16 October 2019 Minutes

The Chairperson took the Members through the document, page by page.

Ms Tshwete proposed for the adoption of the minutes.

Ms Breedt seconded the proposition.

The minutes were adopted with no amendments.

The meeting was adjourned.
 

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