Department response to SONA, Presidential Stimulus Package & district-based model for service delivery
President Cyril Ramaphosa: 2020 State of the Nation Address (SONA)
District Model for Service Delivery
The Department of Agriculture, Land Reform and Rural Development (DALRRD) provided responses to comments and questions from the Portfolio Committee on aspects affecting the agriculture sector which had been highlighted in the President’s State of the Nation Address (SONA).
The Department explained the process to be followed on the compulsory training it was providing to potential land beneficiaries, as required in the beneficiary selection and land allocation policy. The training of youth would be informed by the Agricultural Master Plan and District Development Model, which identified specific commodity corridors. After the identification of the potential beneficiaries, a comprehensive skills assessment would be conducted to determine the skills gaps. Beneficiaries would be supported through various platforms, such as conventional training, incubation, farmer-to-farmer, and mentorship. Once the beneficiaries had completed their training and land had been allocated, further monitoring and support would be provided. Inexperienced youths who were aspiring to be farmers would be required to undergo compulsory training as part of their preparations before they were allocated land.
The Department gave details of the agricultural products that would form part of the 1 000 locally produced products that had to be procured from small, medium and micro enterprises (SMMEs), and the assistance that would be provided to small agribusinesses. The assistance to be provided to the SMMEs would be indirectly through encouraging the Agricultural Agents Council to establish a regulation that would enforce the agents to give preferential procurement to the small agribusinesses.
Natural resource degradation, mining activities and climate change had been taken into account in the development of the Agriculture Master Plan and Mapping. The analysis of commodity corridors took into account the degradation of natural resources and changing land use patterns due to mining activities and housing encroachments, to determine the exact quantity and capability of land still suitable and available for expanding production. Irrigation schemes and water use efficiencies were critical parts of production in the selected commodity corridors, and the Master Plan articulated how irrigated land would be improved.
Members wanted to know if there was an interface between the Department and other relevant departments on the legalisation of cannabis; what the Department was doing to ensure sugar farmers were supported, because sugar mills were closing down one by one; wanted to find out what the collaboration between the Department and the National Youth Development Agency (NYDA) was about; wanted to establish what bursary projects were in place for youths with matric, because there was a need to ensure that young people became experts in years to come; and asked why the Department was not deploying extension officers to farms before they were released to claimants, because the extension officers were seen to be doing not much work.
Department’s response to SONA
Mr Mdu Shabane, Director-General: Land Reform and Rural Development: Department of Agriculture, Land Reform and Rural Development (DALRRD), said the presentation would focus on the National Rural Youth Service Corps (NARYSEC) programme; the blended finance model; the cannabis industrialisation strategy; the agriculture master plan; information on the suitability and size of the land for agricultural production, and land redistributed to women and youth; and assistance to 100 000 young entrepreneurs.
He said details on the land -- such as location, size, commodity suitability and land condition -- and land distributed to women and youth, could be quantified once the land had been acquired. It was not yet possible to provide details on the agricultural commodity suitability and condition of the land, since that would publicly reveal the specific land parcels that may then become susceptible to organised evictions, which would defeat the purpose.
As far as the beneficiary selection and allocation policy was concerned, all vulnerable groups had been prioritised -- women, youth, people with disability, farmworkers and their families, and labour tenants and their families. The Department would acquire land in terms of Section 4 of the Extension of Security of Tenure Act (ESTA) for farm dwellers and occupiers, and thereafter transfer the land to legal entities of their choice in full title. The Special Master has been appointed to deal with the settlement of labour tenants’ claims.
The Department envisaged targeting two categories of youth to form part of the 100 000 young entrepreneurs that would be assisted to apply for grant funding and business support from the National Youth Development Agency (NYDA) and the Department of Small Business Development (DSBD) in the next three years. The first group would comprise new entrants who would be selected from a number of youths who would exit from the Department’s Agricultural Graduates Programme in August 2020. As part of the exit strategy, the graduates in various provinces were being assisted to develop bankable businesses in line with their identified needs. The second targeted group comprised the existing young entrepreneurs whose needs had already been identified. For the 2020/21 financial year, the Department was targeting support to 450 agricultural entrepreneurs, to apply and benefit from the grant funding and business support from the NYDA and the DSBD.
Concerning the status of the NARYSEC programme and its impact on youth unemployment, the Department stated that evidence-based research conducted by the Human Sciences Research Council (HSRC) in 2018/19 had shown that the programme had very little impact in terms of the creation of sustainable employment and new entrepreneurs. The study indicated the largest majority of the NARYSEC graduates had reverted back into unemployment. To correct this situation, the Department was embarking on an initiative to repurpose/reorganise the NARYSEC programme, starting with a review of the policy, systems and procedures. Consultations on repurposing the programme had commenced late 2019 and it was hoped the schedule would be completed during March this year. The programme would now place a greater emphasis on recruiting and skilling the youth for workplace opportunities within and outside government, as well as entrepreneurship as part of a basket of services offered to the NARYSEC participants. The new NARYSEC approach would also be aligned to the District Delivery Model (DDM) so that recruitment was targeted around opportunities in the district.
The DG described how the Agriculture Master Plan was going to be implemented, particularly in terms of support and capacity building of farmers, since the Department has been highlighting challenges associated with agriculture being a concurrent function. Mr Shabane said the Master Plan was a partnership contract between stakeholders (business, labour, government and civil society) where each partner had responsibilities and commitments towards implementing the plan. Each intervention/reform proposed in the master plan would have commitments assigned to a specific stakeholder, with clear delivery timelines to ensure its effective implementation. The provincial departments of agriculture would also be central in the implementation plan of the Agriculture and Agro-Processing Master Plan (AAMP), which sought to integrate producer support programmes with the newly proposed financial models. This would ensure skills training, market access and financial support were packaged as a single product. The Agriculture Master Plan would be submitted upon its completion.
The Department gave details of the agricultural products that would form part of the 1 000 locally produced products that must be procured from small, medium and micro enterprises (SMMEs), and assistance that would be provided to small agribusinesses. It was anticipated each district would have fresh agricultural produce -- fruit, vegetables and meat -- contributing to its local economy. Currently, the marketing of agricultural produce in South Africa was undertaken mainly through the national fresh produce markets (NFPMs). These were being regulated through the Agricultural Produce Agents (APA) Act, administered by the Fresh Produce Agents Council and municipal by-laws. The assistance to be provided to the SMMEs would be indirectly through encouraging the Agricultural Agents’ Council to establish a regulation that would enforce the APA to give preferential procurement to the small agribusinesses. As for government’s preferential procurement, the APA Act did not provide for it, as it was National Treasury’s responsibility.
Indicating whether natural resource degradation, mining activities and climate change had been taken into account in the development of the Agriculture Master Plan and Mapping, the Department clarified the Agriculture and Agro-processing Master Plan (AAMP) had a chapter on natural resource management which dealt with climate change mitigation strategies. The analysis of commodity corridors took into account the degradation of natural resources and changing land use patterns due to mining activities and housing encroachments to determine the exact quantity and capability of land still suitable and available for expanding production. Irrigation schemes and water use efficiencies were critical parts of the production in the selected commodity corridors, and the Master Plan was articulating how irrigated land would be improved.
The Department said a detailed list of female entrepreneurs who had participated in the DAFF Female Entrepreneur Awards (FEA) would be sent to the Committee. It also provided clear indications of their needs, including market access, which would receive assistance through SheTradesZA.
With regard to how the Department was going to ensure subsistence and smallholder producers were prioritised and efficiently capacitated to benefit from the cannabis industry, the DG said the mandate for regulating hemp lay with the Department of Health in terms of the Medicines and Related Substances Act of 1965, as well as the Department of Justice and Constitutional Development in terms of the Drugs and Drugs Trafficking Act of 1992. The Department was coordinating an inter-departmental team that was developing a cannabis industrialisation strategy/masterplan. The team was made up of the following departments: DALRRD, Health, Trade and Industry, Small Business Development, Environmental Affairs, Justice and Correctional Services, together with the South African Police Service, the Agricultural Research Council (ARC) and the Council for Scientific and Industrial Research (CSIR). The pillar of the strategy was aimed at ensuring subsistence and small producers were supported to participate in the hemp industry value chain. The package, once fully developed, would include funding and infrastructure, as well as technical and advisory support. The government would make a pronouncement once the strategy or master plan had been concluded.
Mr Shabane indicated most of the factors that had led to the suspension of the Blended Finance Model have been addressed. A decision had been taken to start processing applications that were already in the pipeline. Pertaining to the 450 black farmers that were supposed to be commercialised within five years from 2018/19, and if they featured in the stimulus package and Khawuleza programme, he reported that the DALRRD has secured financial resources from the Jobs Fund for the support of 108 smallholders towards their commercialisation. Other commercialisation work was currently being undertaken by provincial departments of agriculture. The commercialisation project was being implemented by the Land Bank. The stimulus package involved farmers being supported through blended funding in an attempt to commercialise them. To this end, DALRRD had secured Jobs Fund financing to blend with the Department’s grants for the provision of loans and grants to commercialise the 108 smallholder producers. This was building towards the 450 target. This project had started in October 2019, and an advertisement had been issued in December 2019. The Department and Land Bank were currently assessing qualifying applicants.
Mr Shabane further made it clear there was a difference between the blended finance model and the stimulus package. The blended finance model had been envisaged to support farmers in terms of both land acquisition and development support. The stimulus package was a response to the President’s call to ignite the economy through agricultural interventions. Therefore, its objective was to provide comprehensive support to black farmers on land that had the potential to contribute to the economy.
Explaining what the impediments were in concluding tripartite agreements with commodity organisations, he said the operational tripartite agreement was taking its cue from the national agricultural marketing guidelines, which stipulated that all affiliated commodity organisations were bound by the transformation guidelines. It had become clear during the final engagement that those organisations that did not collect a statutory levy were not bound to adhere to some of the clauses in the National Agricultural Marketing Council (NAMC) transformation guidelines, such as changes in management. Lastly, there was a dispute with the financial institutions around the interpretation of sections 66 and 70 of the Public Finance Management Act (PFMA) concerning indemnity in the case of project funds being disbursed to the wrong suppliers. To resolve the challenge, the DRDLR, through the Minister, had had to approach the Minister of Finance for concurrence to indemnify the banks.
Mr N Capa (ANC) remarked it appeared that a number of projects that were still to be done would no longer be part of Land Reform, but would belong to Agriculture in the long run.
Ms T Mbabama (DA) commented that the revival of programmes appeared to be a money-wasting exercise, because now there was a plan to revive nine million hectares of land that had been acquired in 1994 as part of the restitution. The Land Bank had been given money some time ago under recapitalisation, and farms had been identified for revival.
Mr M Montwedi (EFF) maintained there were questions he had asked that had not been answered by the Department. He wondered whether section 25, which dealt with land expropriation, should not reside in Land Reform and Rural Development. He wanted to know what the Department was doing to ensure sugar farmers were supported, because sugar mills were closing down, one by one. Was the Department in talks with the Departments of Trade and Industry and Justice regarding the development of a strategy to develop hemp? What was being done to ensure section 66 of the PFMA was corrected, because it appeared it was impacting negatively on the Department? Lastly, he wanted to establish what phase 1 of NARYSEC was about.
Mr Shabane explained the Department of Trade and Industry (dti) was dealing with the issues of the sugar industry. The sugar industry master plan would be finalised soon, and the Department was also looking at interventions that would be made. The matter of section 66 of the PFMA had been resolved. He further indicated the Department would report back to the Committee on NARYSEC, especially on the issue dealing with the NYDA. He felt it was better for the NYDA to present its story of collaboration with the Department to the Committee.
Mr S Matiase (EFF) enquired if there was an interface between the Department and other relevant departments on the legalisation of dagga. There was no legislative framework in place to legalise cannabis, except the Concourt judgement.
Mr Shabane made it clear the matter of cannabis had been discussed at the National Economic Development and Labour Council (Nedlac). The Department was busy working with the Departments of Health and Police. The Ministers of these departments had provided the road map. An announcement would be made in due course.
The Chairperson added that a presentation on hemp and cannabis had already been made to the Committee. The strategy would be finalised on 20 June 2020.
Ms K Mahlatsi (ANC) wanted to establish what the collaboration between the Department and the NYDA was about, and asked for clarity on the NARYSEC exit strategy which had been mentioned by the Department last year.
Mr Shabane said the Department would report back to the Committee on the details of NARYSEC, especially on the issue dealing with NYDA, but emphasized the NYDA would be asked to make a presentation to the Committee to detail its side of the collaboration.
Mr R Cebekhulu (IFP) remarked he had observed that very few projects were progressing during the Sixth Administration. Nothing had been happening to properties on state-owned farms. He wanted to know why the Department was not deploying extension officers to farms before they were released to claimants, because the extension officers were seen to be doing not much work.
Mr Shabane said the matter of extension officers would need to be discussed with the Committee at a later date.
Mr N Masipa (DA) asked for clarity on the blended finance model, and projects related to it. He wondered whether it should be continued or discontinued.
Mr Shabane explained that the Minister had instructed the Department to reinstate the blended finance model with the Land Bank. The Department was working on a sustainable development model, and the model it was looking at was like the old Agricultural Board. The Department was not showing the interconnection between the stimulus package and blended finance model. There was a need for a structured model to show how these were connected. More details would be forwarded to the Committee.
Dr Jemina Moeng, Chief Director for Food Security: DALRRD, added that R370m had been committed over the medium term expenditure framework (MTEF) period. R150m had been allocated for now. There had been a review of the concept in terms of the roll out. Documents had been reviewed to improve in certain areas, in order to support beneficiaries that were not initially targeted.
Ms T Breedt (FF+) asked what the deadlines on the NARYSEC programmes were. The Committee needed to be given details about the kind of training offered and the duration of the programmes. It was a good idea not to focus only on matriculated young people, because many young people were unemployed. She further suggested that the Committee and the Department should have a session on the district development model to determine how the agriparks and agri-villages were impacting on it.
Ms N Mahlo (ANC) remarked that the Department should start looking seriously at the issue of the 3 140 extension officers that were in the employ of the provincial Departments of Agriculture. It had to find new ways of employing young people in the extension services.
Ms M Tlhape (ANC) commended the Department for taking into consideration the matter of agricultural entrepreneurs, especially female entrepreneurs. The Committee would welcome the list of these female entrepreneurs. She indicated that some of the conditions set, like producing tax clearance certificates, would be a hindrance to rural women. The Department should find a better way of helping those located in rural areas.
The Chairperson remarked he would like to see a focus on the utilisation of the 44 000 ha of land under restitution, and wanted to know what the challenges would be in terms of implementation. With regard to NARYSEC, he asked what bursary projects were in place for those with matric, because there was a need to ensure that young people became experts in years to come, seeing that 54% of them had got no matric in the King Sabatha Dalindyebo area. He further proposed the Department should start thinking about a university exclusively for agriculture.
Ms Lebo Botsheleng, Chief Director: Sector Education, DALRRD, said the Department was pleased with the input on NARYSEC in order to build on skills beyond matric. The country had 11 colleges of agriculture to provide skills for matriculants, and some of these colleges were collaborating with the universities offering agriculture. Degrees and diplomas in agriculture were being offered at some universities in SA. The focus was on scarce critical skills.
Mr Shabane indicated questions that had not been answered would be responded to in writing.
The Chairperson remarked these colleges and universities should be feeders to the agricultural university of SA. The matter should be discussed with the Minister of Higher Education and Technology. The development of legislation for hemp and cannabis required a stand-alone presentation, and the Kuyasa project would be presented to the Committee on 17 March 2020.
Adoption of Minutes
The Committee’s minutes of its meetings on 25 and 26 February were adopted with no amendments.
The meeting was adjourned.
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