Agriculture, Land Reform and Rural Development Budget: Committee Report

Agriculture, Land Reform and Rural Development

29 May 2020
Chairperson: Mr Z Mandela (ANC)
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Meeting Summary

Video: Portfolio Committee on Agriculture, Land Reform & Rural Development 29 May 2020

Tabled Committee Reports

The Committee considered and adopted its Committee Report on the Budget Vote for the Department of Agriculture, Land Reform and Rural Development (DALRRD ) and its entities, approving the five-year strategic plan and annual performance plan as required by the Money Bills Act of 2009.

The Committee Report noted the overall decrease in the budget over the Medium Term Expenditure Framework period and the budget reduction in key programmes, such as Food Security, Land Reform and Restitution, and Rural Development, which is contrary to the Department’s strategic focus for the medium term. This could threaten service delivery for its National Development Plan mandate. The decrease also affects transfers to entities, such as the Agricultural Research Council (ARC), which is not sufficiently funded considering its role in ensuring agricultural research and innovation.

Amongst the Committee’s many recommendations, it covered concerns about the Land Bank, which now has a junk credit rating.  Although it reports to National Treasury, it pays out funds to farmers in both Agriculture and Land Reform programmes. Therefore, accountability and a monitoring and evaluation framework need to be in place to monitor how the Land Bank utilises these funds and implements its programmes. The Committee proposed the withholding of funds allocated to the Ingonyama Trust for 2020/21 due to its lack of compliance.

Meeting report

Committee Report on Department Budget Vote
Committee Content Advisors, Ms Nokuzola Mgxashe (Agriculture) and Dr Tshililo  Manenzhe (Land Reform), took the Committee through the draft Committee Report on 2020/21 Budget Vote for the Department of Agriculture, Land Reform and Rural Development and budget projections for the Medium Term Expenditure Framework (MTEF) period ending 2022/23. This included the Annual Performance Plan of  Department and its public entities:
•    Commission on Restitution of Land Rights (CRLR).
•    KwaZulu-Natal Ingonyama Trust Board (ITB)
•    Office of the Valuer-General (OVG)
•    Agricultural Research Council (ARC)
•    Onderstepoort Biological Products (OBP)
•    National Agricultural Marketing Council (NAMC).

The overall decline in the Department’s budget over the MTEF period and the budget reduction in key departmental programmes were noted. This could undermine service delivery in respect of the Department’s National Development Plan mandate and strategic focus for the medium term. This reduction in the department’s budget impacts on transfers to entities, such as the Agricultural Research Council, which is not adequately funded given its essential role in ensuring up-to-date agricultural research and innovation.

Key observations:
•    The overall decline in the Department’s budget over the MTEF period and budget reduction in key departmental Programmes such as Food Security, Land Reform, Restitution, and Rural Development,
•    Uncertainty about the Department’s capacity to develop essential legislation and policies to address challenges in light of the prolonged period it takes to finalise and/or implement policies and legislation,
•    Lack of consideration of the complexities of some of the programmes that have now been combined into one due to the merger of the two Departments and the reconfiguration of the new structure.
•    The Department does not seem to have effectively used the opportunity presented by the structural reconfiguration to review its support programmes and their purposes.
•    Absence of a monitoring and evaluation framework as part of the Department Annual Plan may affect accountability on performance and service delivery as half of the budget goes to transfers and subsidies.
•    Poor oversight and support by the Department of its public entities to ensure that their Plans are well aligned to their legislative mandates and where there are challenges, such are speedily addressed.
•    Alignment of activities between the Department’s Programme 5 and the NAMC concerning producer training and support for market access and market efficiencies need to be clearly defined in the Plans to ensure better coordination and to avoid duplication of activities.

Committee Inputs on Observations
The Committee made some suggestions for input:

Ms B Tshwete (ANC) said that she did not hear anything about the Committee’s recommendations on the Land Bank, its role, and what is currently happening.

Ms T Mbabama (DA) said that she did not hear anything about the Drought strategy.

Mr N Masipa (DA) said the Land Bank matter was not captured properly in the report by not stating if the bank is under business rescue or if it is simply facing accountability issues. He asked for clarity about technical issues in the report specifically about the 450 farmers and the R8.7 billion.

Ms M Tlhape (ANC) said that the lack of leadership in the Office of the Valuer-General (OVG) should be highlighted in the report considering that there has been a vacancy for over a year as this creates uncertainty for this entity.

The Agriculture Research Council (ARC) should also be highlighted in the report because ARC was not being resuscitated to be merely an implementing agent for the Department.

Mr M Montwedi (EFF) raised the Communal Property Associations (CPAs) saying that currently lots of land have been allocated to CPAs, and yet they do not comply with the CPA Act. This ends up causing conflict and leaving lots of lands not being put to productive use. The Committee needs to come up with how to remedy this in the Recommendations.

On the Recapitalisation and Development Programme (RECAP), Mr Montwedi said that he has observed that if the farm was in production and it was given to a beneficiary, agricultural production is affected because people that formerly farmed the land take their mechanisation with them leaving the new occupants stranded with no mechanisation to work with. This puts food security at risk. He suggested that the recapitalisation should include land and farm machinery so as not to disrupt agricultural productivity.

Mr Montwedi said that there is duplication in the Department’s Programme 5 and what NAMC and PPECB do. He therefore suggested merging these two to avoid such duplication.

Ms Mgxashe replied that the Land Bank matter is reflected in previous engagements with the Bank and also in the last budgetary review meeting. The Department does not have an accountability framework for the money it transfers to the Land Bank. The Committee has been asking how the Land Bank's AgriBEE Fund and the Mafisa programme have used the funding they received. Secondly, the former Department of Rural Department transferred some money to the Land Bank and it is reported that the money was not utilised for what it was meant. Previously, the former Department of Agriculture suspended the transfer of money to the AgriBEE Fund of the Land Bank as a result of the lack of reporting accountability on how such funds were utilised. There were some disagreements between the Department and the Land Bank on how they were to use the money transferred to them. The Committee questioned the reason for the transfer of the money to the Land Bank given that previously the Department raised concern about the utilisation of the transferred money particularly with the implementation of the blended finance scheme. There is a report about the Land Bank being under business rescue and it is on junk status. It is therefore a concern that the Department should be transferring large sums of money to the bank that is facing financial problems.

The commercialisation of 450 farmers was mentioned in the State of the Nation Address (SONA) in 2017 and the Department has not received any progress on this. In the current Strategic Plan, they have 2 500 producer farmers that are going to be commercialised.

On the ARC being capacitated, she replied that it has received enough funding including the Department paying off all its debts so that the ARC can carry on its research mandate instead of being an implementing agent of some of the Department projects.

On the merging of entities, she replied that these two entities have completely different mandates. The Perishable Products Export Control Board (PPECB) is solely responsible for the exporting of perishable products and issuing of certificates for perishable products. However, in carrying out its duties, it is responsible for assisting farmers in accessing markets for perishable products. So, the alignment between these two entities can only be about assisting farmers with accessing export markets. NAMC  is an advisory body to the Minister and the Department. It carries additional activities such as coordinating the infrastructure projects and the agro-processing plans. So the question of alignment between the NAMC and the Department is specifically on training of agro-processors for market access. It also assists producers in accessing markets. Regarding programme 5, DALRRD  has that component and it is broader than that as it now also implements the component of rural development concerning the farmer production support units.

Dr Manenzhe replied that the final report for include recommendation about the OVG CEO appointment.

On the CPAs, he replied that it does not appear in the recommendations but it appears in the report where it is indicated that there are compliance challenges and DALRRD  is going to develop its capacities.

On the number of land claims to be finalised and settled, he replied that there are 450 land claims to be settled by 2021. However, for 2022, the number of claims is likely to increase.

On the RECAP programme, DALRRD  is not using recapitalisation as a programme as it used to be when it was still under DALRRD of Rural Development and Land Reform because it is now phased out.

Report Recommendations on Agriculture
Ms Mgxashe took the Committee through the Agriculture recommendations which included:
•    Engaging with the Minister of Finance to discuss the Department’s funding needs for key programmes such as Food Security, Land Reform, Restitution and Rural Development that are central to its NDP mandate; as well as entities such as the ARC and OBP to ensure they fulfil their mandates.
•    Submitting to Parliament updated Legislation and Policy Review Programme with clear timelines and resources for finalisation and planned introduction to Parliament.
•    Ensuring that critical funded vacant positions at Senior Management level in DALRRD  and particularly OVG, NAMC, and ITB are filled as soon as possible to prevent instability and poor performance; and ensure that employment equity targets are prioritised.
•    Ensuring the development of an Action Plan to review and integrate existing support programmes and grants into an integrated Producer Support Programme/Scheme as envisaged by the National Policy on Comprehensive Producer Development Support to avoid duplication and resource wastage. The Action Plan should show the alignment to the Department’s new mandate and the Farmer Production Support Units that are expected to be central to the implementation of the Agriculture and Agro-processing Master Plan.
•    Ensuring that DALRRD  develops Guidelines and a Monitoring and Evaluation (M&E) Reporting Framework for conditional grants and all funds that have been transferred to third parties for programme implementation including those transferred to the Land Bank for developing farmers and transformation to ensure that the Land Bank reports on the utilisation of such funds including the AgriBEE Fund, regularly. The Department should report to Parliament on its M&E activities during each quarterly briefing.
•    Submitting to Parliament comprehensive progress reports on implementation of the Commercialisation of Black Producers through the Blended Finance Scheme, transformation activities through the AgriBEE Fund, and the support of land reform farms through the Land Development Support Programme.
•    Strengthening of oversight and support to the Department’s Entities to ensure implementation of their mandates as legislated and to address challenges that prevent effective implementation of their mandates. For example, underfunding of the ARC and the protracted construction of the FMD Facility; the OBP’s inability to secure additional funding for some of its activities despite being a National Key Point and challenges with securing Government market to ensure Provinces procure vaccines from OBP; and the OVG’s governance and human resource challenges that have compounded its ability to fulfill its mandate.
•    Ensuring that DALRRD collaborates with the NAMC to develop a Strategy for sourcing support for the continuation of the National Red Meat Development Programme (NRMDP), which has played a crucial role in improving communal livestock farmers’ profits by linking them to markets.
•    Enforcing the alignment of DALRRD and Entities’ activities through its Plans to ensure they work towards a common goal and impactful outcomes. For example, outlining the specific role of the Department, NAMC, and PPECB (perishable products only) on capacity building of smallholder farmers for market access, implementation of interventions to ensure that they access markets including export markets, identification of new markets and measuring the impact of interventions. For the development of communal livestock farmers through the NRMDP, the specific role of the Department, Provinces, NAMC, and ARC; and for Kaonafatso ya Dikgomo (KyD), the specific role of DALRRD and ARC.
•    Strengthening the Department’s contribution to the implementation of the National Policy on Food and Nutrition Security by streamlining food security initiatives within DALRRD to maximise food availability and stability and measuring the impact of interventions. Submit progress reports in Parliament that quantify primary production activities for both crop (yields) and livestock (reproductive capacity as represented by improvements in calving or lambing rates) production systems, funding instruments, and resource allocation for each activity.

Ms Mgxashe said that the drought issue was not included in the recommendations because there have been several recommendations on this subject for the past four years addressing drought strategy, climate change and its impact on the sector. Such recommendations were clearly stated in the 2019 Budgetary Review and Recommendations Report and they are waiting for DALRRD to respond to those recommendations.

Report Recommendations on Land Reform and Rural Development 
Mr Manenzhe said that the recommendations have been structured holistically and are aimed at building the capacities of DALRRD and all its entities such as the OVG and Ingonyama Trust. Legislation and policy have also been included in the recommendations.

On post-settlement support, he said that the recommendations talk about the Land Commission operations and resolutions by ensuring that the Chief Land Claims Commission submits a comprehensive plan that outlines its strategic focus for the next three years, outlining key performance indicators in addition to the two that were included in the APP of the Department.

Some of the Land Reform and Rural Development  recommendations he highlighted include:
•    Fast-tracking the process to ensure that the Commission on Restitution of Land Rights is restored to its status of a full commission not a sub-programme of the Department. Further, ensure that it is fully resourced with capable regional Land Claims. Commissioners located in each province with delegated authority to settle land claims within the available financial resources.
•    On tenure issues, DALRRD aims at developing clear protocols and standard operating procedures to guide the referral of matters to the Legal Aid Board, taking into consideration a need to build an internal capacity of alternative conflict resolution mechanisms in land tenure to avoid costly and lengthy court battles.
•    Presenting progress reports quarterly, detailing the work done with the Special Master, to settle labour tenants’ claims. Further indicate post-settlement support interventions for each settled claim and security of tenure for members of labour tenant communities in settled claims.
•    Ensuring that the Ingonyama Trust Board (ITB) officially tables its 2020/21 budget in Parliament by submitting an addendum to the APP it tabled earlier this year. The budget should reflect the purpose for which the ITB was established, that is to ensure that the administration of the Ingonyama Trust land is for the material benefit to the traditional communities residing on the land in question.
•    Investigating the underlying causes of the multiple labour disputes between ITB and many of its senior management, resulting in paralysis of the ITB Executive Management, which is undesirable and affects the efficiency of the ITB. The investigation and report, which must include proposed interventions, should be completed within three months and submitted to the Committee within a month of completion of the report.
•    Fast-tracking the clarification of the mandate of the OVG, where necessary, legislative amendments must be initiated without delay.
•    Creating capacity to speed up development policy, especially the review of existing land policy and rural development policy, including legislation envisaged in Section 25(5) and 25(6) of the Constitution.

Discussions on Recommendations
Ms Tlhape said that the recommendations are comprehensive and capture those made by the Committee members. One of the other recommendations that need to be included is about support programmes such as the Land Development Support (LDS). The Department should streamline all the former support programmes for the maximisation of resources and the enhancement of impacts.

Ms Mbabama agreed with the recommendations on the Ingonyama Trust. She highlighted several concerns about ITB. These include the reluctance of the Board to account for the funds allocated to it by government as to how communities have benefited through these funds more especially the R20 million government allocation.

There is also no budget submitted for the NCP for 2020/21. The government has withheld that allocation of R22 million pending the submission of the documentation. Further, there are serious HR problems within ITB. Over the years, there has been negative audits. It seems as if the ITB  is only expected to report for the R22 million government allocation without reporting on the revenues from the mining rights, leases, and levies either to DALRRD or Parliament. Therefore, she recommends that the Ingonyama Trust should be put under administration.

Mr S Matiase (EFF) said that the Committee must highlight that it is not happy about how the two departments have been merged to form Department of Agriculture, Land Reform and Rural Development citing that it lacks vision, strategic oversight by the Ministry as well as being unreasonably costly for the money spent on its merging and reconfiguration process.

Apart from this, the Committee must also raise the absence of the Monitoring and Evaluation framework in DALRRD which affects both the Committee and Parliament for effective accountability and service delivery.

The other recommendation should be about the lack of oversight mechanism on the Land Bank considering that it is now on junk status and in need of rescue. He recommended that the Committee must ask DALRRD to withhold all financial allocation and transfer of money to the Land Bank until there is a comprehensive report on its state of affairs. There is no detailed clarity on how the Bank is going to use the R1.2 million allocated to it for the Covid-19 pandemic. For example, there is no clarity on the R20 million allocated to the Bank for it to distribute to the traditional authorities for buying gloves and sanitisers for Covid-19.

The Department is the lead for food security in the country and yet there is no food bank that it can show as part of its strategic plan to feed the most vulnerable in the context of the Covid-19 pandemic.

There is an overlap between OVG and OBP with other institutions and government must realign them.

Mr N Masipa (DA) said that DALRRD needs to ensure that the M&E framework is in place at the Land Bank for accountability purposes for the funding it receives for various programmes. There is also a need to add some other entities that deal with funds that go to the Land Bank from other channels. This includes some funds that it receives directly from Treasury to support agriculture. If not, DALRRD must submit to the Committee comprehensive reports on all funds that Land Bank receives for supporting agriculture.

Ms T Breedt (FF+) said that it is important to see consolidation within the programmes specifically mentioned in the recommendations. In terms of the DALRRD entities, there is a need to see a plan forward in terms of how to handle both the DALRRD programmes and the entities. This is to ensure that it is not just a matter of renaming or a recap of programmes if it is something that does not assist the farmers.

She said that DALRRD is the custodian that deals with the core mandates on food security and drought. As such, it needs to come up with a holistic plan on how it assists both the small scale farmers and commercial farmers. Initially, DALRRD depended on the Land Bank to assist farmers but now the bank itself is bankrupt and downgraded to junk status. This will make it difficult to assist the farmers.

Ms Breedt suggested that the Committee should have a joint meeting with the Standing Committee on Finance to discuss the Land Bank as it falls under Treasury. It is worrying to see that the Land Bank receives a lot of funding from both DALRRD and Treasury and yet, there is not a satisfactory report that shows for what these sums of money are used.

Mr Montwedi said that the Commission on Restitution of Land Rights presentation did not give full financial disclosure as all other entities have. The OBP should be able to supply vaccines for all provinces without consideration of the market competitive process.  For this to be possible, there is a need for the Minister to meet with the Finance Minister to find ways to increase funding for the OBP for it to effectively fulfil its mandate of sector development and transformation.

He recommended that land allocation must be coupled with the land development support simply because it takes 125 days for the OVG to finalise valuation of properties. As a result of this, productive land is bought by private individuals and the government ends up buying unproductive land. With the support of land development, this can work out more beneficially and without interruption for production.

Mr Montwedi said that the lack of accountability by the ITB  should be a recommendation that should be dealt with as a matter of urgency. He recommended that DALRRD should consider assisting CPAs with litigation to help them deal with cases involving communal land issues.

The Chairperson made a recommendation that the debt owed to the ARC  by DALRRD needs to be prioritised and attended to for its full payment.

Secondly, he said that the struggle for liberation was about land and therefore all outstanding land claims need to be attended to immediately and settled by the Land Claims Commission. The Department needs to prioritise the land issue so that people have access to land.

On Land Bank, the Chairperson recommended that the Committee needs to have a full understanding of what has happened to the monies given to the Land Bank for the support of small scale farmers. This can help both DALRRD and the Committee to come up with a solution for helping out the bank if it is in financial distress so that much-needed support is given to small scale farmers.

On the Ingonyama Trust, the Chairperson said that in a South African constitutional democracy, the model of excellence should be duplicated and implemented in all other kingdoms of the country considering that all kingdoms contributed to the struggle for liberation. Such kingdoms include King Ramabulana of the Vendas, King Sekhukhune, Her Majesty Queen Modjadji and yet, they do not have trusts similar to Ingonyama Trust.

If the Ingonyama Trust is to be applauded and is doing exactly what it was intended to do, it would have been a model to be implemented with all other monarchs.

Therefore, for the failure of the ITB to account for the millions allocated to it by the Department and the lack of accountability for the levies from other entities such as mining rights on ITB  land, the Committee supports the suspension of its funds until a review is done on the responsibilities of the Ingonyama Trust Board.

Mr Matiase said that it is good that the contradictions among the different kingdoms within the country is now being discussed at the parliamentary level. What now needs to be done is to ensure that land that was taken forcefully from the people should be given back to the people.

Secondly, DALRRD must prioritise its role on the African Continental Free Trade Agreement saying that this will help the continent to integrate and unite through industrialisation and agricultural development. However, he cautioned that there is a need to protect local agricultural produce against hostile and foreign international markets by ensuring that we determine our prices as African countries.

The Chairperson said that African free trade is a priority particularly with President Ramaphosa being the African Union Chairperson. The initiative was scheduled to begin on 1 July 2020 but due to the Covid-19 challenges and the lockdown, this is not possible.

Mr Manenzhe said that all the recommendations suggested by the Committee will be included in the final report. These include streamlining post-development, farmer support, and all the entities.

Now that ITB funds have been suspended up until a clear review of its mandate, what will be the way forward by the Committee? Will the ITB be put under administration while waiting for the full report?

Secondly, DALRRD is still waiting for the ITB  report on its community programmes such as training and capacity building of the traditional councils. If the ITB is going to be placed under administration, then there is a need to consult legal advice on how to go about it.

On the CPAs, it is important that when the government allocates funds, such funds should be coupled with post-settlement support. This is the reason government introduced the recapitalisation and support programme. The only question to ask is if the financial support for this programme is adequate so that every farmer who acquires land gets financial support as well. However, DALRRD will try to strengthen and ensure support across the board.

On financial disclosure, the  APP does not allocate money to the Commission. It only allocates money to a sub-programme known as Restitution. It is that money that DALRRD takes from the APP to support the Commission.

Ms Mgxashe suggested that DALRRD should have an accountability framework, an M&E framework as well as a reporting structure rather than withholding funds transferred to the Land Bank until it has been rescued. This will disadvantage small scale farmers simply because it is not known how long it will take to sort out this problem. Meanwhile, since April, Treasury has already appropriated funds to the Land Bank for specific programmes. Such frameworks can be a quarterly account on how the Land Bank is utilising the funds and how it is implementing all its programmes. Apart from this, the recommendations on ARC, prioritisation of the African Continental Free Trade Area and others by the Committee will be added in the report.

The Committee Report does not say anything on Covid-19 simply because it requires a rapid response by DALRRD. However, the Committee Report on the subject was already forwarded to DALRRD for its response. The other reason is that the Covid-19 Relief Package did not come from the Department.

The Committee thereafter adopted the Committee Report.

The Committee adopted the minutes for the 18 February; 5, 8, 11 and 19 May 2020 meetings.

In matters arising from  19 May 2020 minutes, Ms Breedt (FF+) asked if the Committee secretaries have received a written response from DALRRD considering that during that meeting, the Department said that it would respond in writing to all questions that Members raised during the meeting.

The Chairperson asked the Committee Secretariat to write to the Minister, Deputy Minister, and the executives explaining that in all the previous meetings, Members have been raising questions that needed to be responded to in writing by the Department. As of 29 May 2020, the Committee has not received responses to those questions.

Members of the Committee were encouraged to keep on learning on how to use the virtual platform technology for better future interactions during virtual meetings. The Chairperson adjourned the meeting by asking those going to the mosques, synagogues, and churches over the weekend to pray about the global Covid-19 pandemic.


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