Provincial Departments of Agriculture on Quarter 1 & 2 performance on grants; with Minister

Meeting report

Minister’s introduction

Ms Thoko Didiza, Minister of Agriculture, Land Reform and Rural Development, said the Committee wanted to reflect on the expenditure of conditional grants sent to provinces. As part of the support to agriculture, there were two conditional grants that were allocated to the provinces from the national government, and those were Comprehensive Agricultural Support Programme (CASP) and Ilima Letsema, which was directed towards food security. Provinces had been given enough funding to support farmers with the addition of these conditional grants. The target was to support farmers with infrastructure and production inputs and where necessary, to be able to target vulnerable producers in particular with Ilima Letsema, which ensured that the lands were utilised for food production services.

One of the realities was that through COVID-19, there had been a reduction in some of the resources that were needed, and the impact would be felt. The Members of the Executive Councils (MECs) would articulate what the challenges would be in relation to the long-term planning of these grants. At the national level, there was comfort in the way that these provinces had expended these resources directly for the requests made. Where there had been challenges, the national Department had been able to work with the provinces to resolve them. Interestingly, these grants had been able to assist farmers in communal areas, as their bankability was often a challenge among the normal financial institutions. They did not have security of tenure, which was not yet codified in terms of South Africa’s laws. The MECs would speak in detail on how the various provinces had expended these resources. 

Free State

Dr Takisi Masiteng, Head of Department, Free State Department of Agriculture and Rural Development, took the Committee through the presentation.  He commented that the country had been affected by Covid-19, so the first and second quarter had seen delays. He focused on the performance of the grants, including per district, challenges experienced and interventions to address the under expenditure. The presentation also addressed the projects supported by the grants.

[see presentation attached for further detail]

Discussion

Mr S du Toit (FF+, North West) said that Covid had affected the rollout of grants, but the agricultural sector and related industries were not seriously affected by the lockdown regulations, so why had the grants not been spent during this period? Reports indicated that funds were not spent, so the question was how many of these projects were profitable and how long would it take since the commencement of the projects for them to become successful? For how many more years would these projects be supported financially or otherwise? 

Mr W Aucamp (DA, Northern Cape) said that the speaker went quickly through slide four of the performance report on the CASP, which stated they were at 56% in quarter four, so there was a backlog. The speaker had said that R40 million was spent out of R143 million in quarter two, which translated to 10% of the figure, but this did not tally.

Mr D Ryder (DA, Gauteng) said that food security and agriculture had become more important under Covid, so it should not be an excuse for delayed implementation. Implementation should have been accelerated during the lockdown, and the fact was there was a need to keep food prices down. Government support to emerging farmers and people that supplied locally was imperative to keep prices down and to ensure consistency of supply. The reason the red flag was raised was shown in the presentation, because in quarter one only 1% was spent, and by then the impact of Covid had not been felt. The rollout delay pointed to a lack of planning in the province. Under budgetary uncertainty, provinces tended not to want to plan too far into the future because they did not know what size of the budget they would get, so they did not commit.  What had caused slow expenditure at the beginning of the year? There currently was a plan to accelerate expenditure in the current financial year, but what could they look forward to in the next financial year?  Would there be a quick rollout, because farming was volatile? A lot of money was spent and to get a return on investment one needed to wait, so farmers needed consistent support.  Building a fence was not impressive -- it’ was the bare minimum.

Mr Z Mkiva (ANC, Eastern Cape)) said he appreciated the initiative of the Department to come up with an intervention so swiftly in an unprecedented situation. It was good that they had even considered subsistence farmers, particularly those located in rural areas. As the Minister had mentioned, many of those farmers were not bankable and that posed serious challenges in terms of the requirements to access funding. What lessons had they learned from this exercise, and what would they do to mitigate factors that would affect people in rural areas, such as not being able to fill out a form or use a computer? Was there a plan to have a help desk which could help people to do what many may take for granted? It was very critical, because many could not access funding.

He said the country had traditional councils or authorities, and asked if the Department could find a way to empower and capacitate them so that it could assist people, even if it meant they had to second officials to go to those councils to assist them to cope with administrative difficulties. This could be achievable. He was suggesting solutions which could change the plight of such people for the better. They had moved away from tilling the fields, and this was forcing them to go back. There was a need to motivate them via a huge media campaign. The institution of traditional leadership wanted to support this programme and wanted to work with them.

Gauteng

Ms Matilda Gasela, HOD, Gauteng Department of Agriculture, Environment and Rural Development, said that the MEC was unavailable due to an emergency, and took the Committee through the presentation.

She took the Committee through the presentation focusing on a summary of quarterly budget and expenditure and the individual grant performance.

The Department support was negatively affected by COVID19, especially food production, meat regulation, export certification, environment public employment programme (EPWP) and eco-tourism. Infrastructure Delivery Management System (IDMS) process remain a challenge towards implementation of agriculture infrastructure support – however a policy has been approved to exempt other infrastructure (hydroponics, tunnels, boreholes). Interventions on the implementation of the Department’s infrastructure programme are starting to show progress (i.e. Development Bank of SA (DBSA) Memorandum of Understanding (MOU) of Infrastructure procurement). This area of work will be closely monitored for continuous improvement. There is need to realign the conditional grant approval processes, to be concluded by the third quarter of each financial year, such that the start of a new financial year realises the commencement of grant implementation and spending, as opposed to initiating tender processes.

[see presentation attached for further detail]

Limpopo

Ms Jacqueline Maisela, HOD: Limpopo Department of Agriculture and Rural Development, took the Committee through the presentation, which centred on the expenditure of the three conditional grants, their challenges as well as the mitigating measures. The revised CASP budget was R174.5 million, of which R19.6 million was spent in the first quarter, and R22.4 million in the second quarter. Ilima Letsema had an allocated budget of R50.2 million, and R11.2 million had been spend during the two quarters. The budget allocation for Land Care was R12.8 million, but no expenditure had been realised because the business pan had been approved only in September by the Department of Agriculture, Land Reform and Rural Development (DALRRD).

[see presentation attached for further detail]

Mpumalanga

Dr Maanda Dagada, Chief Director: District Services, Mpumalanga Department of Agriculture, Rural Development, Land and Environmental Affairs, took the Committee through the presentation. He outlined the conditional grant expenditure for the second quarter. The total allocation was R199.5 million, while the actual expenditure as at 4 February 2021 was R76 million. He touched on the challenges for each grant, as well as the proposed interventions.

[see presentation attached for further detail]

North West

Mr Dipepeneneng Serage, Acting HOD, North West Department of Agriculture and Rural Development, took the Committee through the presentation.  The CASP allocation for the year was R141. 6 million, but only R5.2 million (4%) had been spent. For Ilima Letsema, the budget allocation was R52.5 million, of which only R 546 270 (1%) had been spent. Land Care had received R8.5 million, and expenditure had amounted to R4 675 000 (55%).

Challenges leading to low expenditure included:

-Late transfer of funds from National Department, Business plans were approved late July for Landcare and August for CASP & ILIMA/Letsema.

-Lack of internal capacity affected procurement processes and thus implementation of projects.

-Outbreak of Covid 19 negatively affected project implementation.

[see presentation attached for further detail]

Minister’s comments

The Minister said that there had been an uneven response on how the various provinces had approached their spending on the CASP. After the presentation of the budget last year, there had been Covid, and a question was raised as to how agriculture was affected, although they operated under level 5. That was true, but in respect of the allocation to the provinces, after Treasury had given an indication, the budget had to be revised. Part of the non-spending in quarter one had to do with administrative issues arising from the allocation and the impact of Covid-19.

The long term planning to ensure that farmers who got an allocation could get support, varied because some of the critical interventions through which they received support -- CASP and Ilima Letsema -- sometimes required other forms of support that were not necessarily from the Department. For instance, there was a project where a farmer from Limpopo was supported with a reservoir. That had added critical support in terms of that farmer being able to do irrigation, and he had been producing and exporting potatoes to Mozambique. He did not require any additional monetary or infrastructural support. It therefore ranged from project to project as to what required long term funding. CASP and Letsema would address the immediate challenges that farmers were facing at a point in time.

The Department provided training and capacity building, particularly on market information, and supported farmers to train their staff on food safety and quality so they could trade locally and internationally. Those programmes would be on a continuous basis, especially those on capacity building in production. The area of subsistence farming was not an area in which government had targeted interventions in the past.  CASP and Ilima Letsema had enabled the Department to intervene in the rural communities. Some of the non-financial support remained relevant, such as the proposal to have local offices to assist farmers with administrative support. The Department had developed a farmers’ register which enables it to know the scale of operations of farmers. During the Covid intervention, for instance, there were extension officers who worked in the traditional communities to assist farmers to fill forms and get verification letters on the lands they were using.

Other issues that had arisen in the financial year in question had been how other players who were important in the delivery of this work were affected under lockdown. ln Mpumalanga, construction was closed under level five and four, so even if there had been an allocation, it could not be spent at that moment. Similarly, some of the stakeholders could not give their invoices timeously, so there was a myriad of issues, particularly in the first and second quarter.

Discussion

Mr Aucamp said there had been a lot of talk regarding agriculture and land reform, and what needed to be done to make it possible. When one looked at the presentation, one of the worrying things was the fact that land reform could not be successful if they did not help whoever was receiving land. One simple explanation of this was the expenditure of quarters one and two, which was extremely low. Looking at the South African climate, it did not help the farmers if seeds were bought at the end of spring. The money needed to get spent, and even though people from Mpumalanga said they wanted to plant soya beans now, but beans needed to be planted at the end of November and they were now approaching the end of the rainy season, so any crops planted now would not be as productive. Mpumalanga in the second quarter had R163 million left of the R201million that had been allocated. The province was attributing the delays to the rainfall. Most northern provinces received rainfall only in November going onwards, so in those quarters the rainfall could not have had a huge impact.

Limpopo had spoken about seeds and fertilisers and contracts that could not be finalised because of the delays. There needed to be contracts for the provision of seeds and fertilisers. One could not plant just because there was no contract. The fact of the matter was that seasons come, and seasons go, and one needed to plant in the right season. That was simply an indication of an administrative failure. Could each province indicate what the total number of beneficiaries for CASP and Ilima Letsema were, as well as the expenditure per beneficiary for both grants in each province, to see whether the assistance was really across the board? Out of five provinces, only two of the MECs were in the meeting today. They should have been here, considering the Minister had made time to be here. They were failing the farmers and needed to do better.

The Chairperson said it was not acceptable that they were not in attendance. Had any of them written formally to explain why they were not here?

The Committee secretary said that by end of business yesterday they had confirmed their attendance, and some had joined the meeting earlier.

The Chairperson said the NCOP was part of Parliament, and it was debatable whether other commitments should take precedence over answering to the people via the NCOP or the National Assembly. They should have been here to answer to the people. He thanked the MECs that were in the meeting.

Mr Ryder said the presentation had been difficult to follow with the acronyms, as this was the Appropriations Committee and not the Agricultural Committee. He commented on the conclusion from Gauteng in the fourth bullet point. The Committee had asked for this meeting for a reason -- because they had noticed under-spending and wanted to intervene and evaluate the problems. Gauteng had said that late confirmation of the appropriation meant that spending had been delayed because there should be compliance with the Public Finance Management Act (PFMA), and that needed to be acknowledged and recognised. Treasury may have to come up with a strategy on how this could be improved going forward. People were held to a high standard, and then the money was dumped on them at the last minute. The Minister had also touched on this, commenting that some of the projects should have gone ahead and that Covid was being used as a scapegoat because realistically speaking, problems were highlighted before the lockdown.

The presentations today may not have been genuine enough about the failures and problems, and the provinces needed to evaluate themselves more deeply. The way that they dealt with the problems was important, and there needed to be agility because one was dealing with food security, so when the budget suddenly got cut and one found that projects were not being spent on, what could one do to make sure that money was being spent? “Had we been agile, or had we been the typical public servant?” he asked.

On Land Care, he was not familiar with that project so what did it entail? There was constant degradation of the country’s best agricultural resources, which was the land, because there was land erosion, spoilt water resources in places such as Emfuleni, and uncontrolled expansion of informal settlements. Did the project address those challenges, as this was something they needed to invest in?

Mr Du Toit asked Limpopo about the business plan approval. The Department might have issues with it getting approved, but it had an idea of what its budget might be in the next year.  Why did the departments not plan and only change the input figure which would affect the amount of seeds that must be bought for a portion of land? Departments should not only plan when the year kicked off. Farming was not a retail business -- seeds and seedlings were seasonal, so they had to reconsider their approach.

Referring to Gauteng, he said that in the first quarter salaries were paid at the cost of R 2.4 million, and R 5.5 million in the second quarter, so R 7.9 million went to employees who were not benefiting the community in those two quarters. What percentage of the CASP went to salaries and stipends? Were bonuses being paid out, and if so, what were the criteria? There had been under-spending for years, and the Committee had not heard about steps being taken against the people who were responsible for it.

North West was a big concern, because there had been allocation cuts yearly and yet there had been under-spending every year. It had been the worst spender of funds for the past five years, so it was an internal issue. Covid could not be the scapegoat, as it was not the cause for people not benefiting from the available funds. It had been discussed last year in the Division of Revenue Bill, where drought relief funds were paid to the provinces that were used to drill boreholes in communities that had not necessarily benefited farmers. They had been sitting with these grants. In effect, some farmers did not get drought relief because there was no spending. Someone had to take responsibility for that, because it was to the detriment of the people.

Mr Mkiva said that in the rural areas, communities appeal to the departments for infrastructural investment. They had major challenges of water in communities, so departments should prioritise the building of dams and boreholes and fixing windmills. It pained him that money was sent back to Treasury when there was no infrastructure built. The Eastern Cape accounted for more than 35% of livestock in the country, but there was no water. Rather than return funds to the Treasury, could another strategy be employed so that money was spent, and circumvent the return of resources to the Treasury when there were glaring matters that needed those resources to change the lives of people in the rural areas?

Minister’s response

Minister Didiza responded that Members had raised critical issues that the provinces and national government needed to reflect on. How they dealt with procurement and aligned to the planning cycle was very important, as well as how provinces took into consideration the agricultural charts in terms of the agricultural calendar. It could not be that there were regions where it was not known at what stage to plant which commodities, therefore the way procurement was planned should consider that. They needed to engage with provinces to resolve this.

Regarding attendance, the MECs had to appreciate their responsibility to attend these meetings, because of their responsibility in terms of oversight as members of the executive. The administrative teams were supposed to attend as well, but the political overview in terms of what the thinking of the executive was regarding the concerns raised by the legislative leaders, was important.

She said Land Care was about conserving natural resources dealing with erosion, removing invasive and alien plants that encroached on grazing land, and conserving water. That linked very well with the issue of water harvesting which had been raised by Mr Mkiva. It was difficult to appreciate why these resources were not spent when there was such degradation of land in our communities, and this was the area where the Expanded Public Works Programme (EPWP) could be used with communities to take care of their environment. One could teach communities how they could manage their natural resources for the benefit of recouping better yields. As part of the work of the team at the national level, provinces should come back and indicate if they wanted to change projects, and this contributed to the delays in the spending of conditional grants.

North West’s response

Mr Desbo Mohono, North West MEC: Agriculture and Rural Development, responded that Members raised critical issues that were factual.  The Department had tried to show how many beneficiaries there were per district in terms of demographics, but not the amount of money that each got. The province in the past five years had been the worst spender, which was correct, but it begged the question of whether there was value for money in that spending. These were some of the considerations that had put the province under section 100 intervention, because a lot of money had been spent but there had been no value, and this was being corrected. One of the challenges faced by the province was capacity, which mostly affects procurement within the Department. The province was trying to bring the Department back on track. A Member had raised the issue of infrastructure, and that was something that had been dealt with during the fourth administration. The Department accepted that spending was low, but there must be value for money and not spending just for the sake of it. There would be an improvement.

Free State’s response

Mr William Bulwane, Free State MEC: Agriculture and Rural Development, said that the province had noted the questions and where it needed to strengthen its expenditure on CASP. It would spend where the money should go. The province appreciates what Mr Mkiva had said about turning the small-scale farmers into commercial farmers, but this would not be done in one day. The Committee was invited to visit the project and guide the province with the plight of Covid. The market this morning indicated that the fresh produce commodity prices would go up, and this would be a challenge for the people.

Discussion

Ms D Mahlangu (ANC, Mpumalanga) said that there was a programme called the Comprehensive Rural Development Programme (CRDP) which targeted the socioeconomic status of municipalities, and it was a good programme. What had happened to it, and why it was discontinued? At all costs, they had to try to avoid fiscal dumping at the end of the year.

The reason why the Committee had requested them (MECs) to be here was that it was responsible to the public and it approved the allocation of funds. The Committee needed to assist the Minister and share the disappointment that the MECs were not present, which was very bad. How could an MEC not be in Parliament when requested? The picture that had been painted about their capacity as oversight bodies had been very disappointing. None of them had communicated with her (as Chairperson). In the Committee’s reports to the NCOP, they always had resolutions concerning agriculture and land reform and those reports had been adopted, but no follow-up was ever made. There had to be a political will to do that. She had reported to Committee last year that they should write to Members on taken resolutions, and where they were regarding implementation. Conditional grants required there to be planning. Problems were informed by poor planning.  There should be repercussions for non-expenditure because people were not doing their work. The consequences must be seen and felt by the public. There should be follow-ups and there should be value for money.

The Chairperson said that Ms Mahlangu should write to the MECs.

Mpumalanga’s response

Mr Vusi Shongwe, Mpumalanga MEC: Agriculture, Rural Development, Land and Environmental Affairs, said that he noted the concerns that had been raised. Mpumalanga did not enjoy under-spending, and any allocation was meant for the service of the people. Some colleagues had raised Covid as one of the issues. Although agriculture had been declared an essential service, some companies that the Department worked with were closed at that time. The province was taking note of the issues and would look at everything. This insight would help it to address some of the issues. This was a province at work, and it would serve the farmers.

Gauteng’s response

Ms Gasela (HOD) said the total number of beneficiaries in CASP and Ilima was 180, but they had not been broken down into various categories. However, a report on this would be submitted.  Information on expenditure would be included in the report. The farmers were different, so the support that went to them would differ. On the percentage of CASP spent on salaries, this had referred to the salaries of contract workers and graduates, and was 8% of the total allocation. As of now, 88% of that money had been spent, and the whole amount would be spent by end of the year. Bonuses had not been paid because the current financial year had not ended, and the criteria were rigorous, so employees who did not deserve bonuses would not get them. For the current year, the province had built 47 boreholes and was equipping 11 of them. Water harvesting was being done. Where there was an indication that money was not being utilised, the province was doing everything to make sure it was spent. Where there had been low spending on training, it had partnered with tertiary institutions for help.

Limpopo’s response

Ms Nandi Ndalane, Limpopo MEC: Agriculture and Rural Development, apologised for the disconnection and said that she had been there since the morning. She thanked the Committee for the oversight, and said Limpopo appreciated it. Although there was Covid, Limpopo never stopped with food production and expenditure would be fast-tracked efficiently.

Ms Maisela (HOD) gave the breakdown of CASP beneficiaries. There were 326 in total, and women made up 137 of them. There were also 52 youths and nine people with disabilities. The Department was running a programme for people with disabilities in agriculture. The current support numbers were low, but through the programme, they would increase

Ilima Letsema had 6 590 beneficiaries in total, of which 3 308 were women. There were also 558 youths, 2 072 males and 29 people with disabilities. The information on the cost per beneficiary was not available, but what was there was the cost per project. On the late approval of Land Care business plans, the province appreciated the input of Members, as it was critical. The province could not start with the implementation. The contracts that province envisaged had there not been delays could have been concluded on time and assisted the farmers. Some contracts had expired, and the presentation had focused on the ones that came after them. In future, the Department would minimise acronyms or explain them to help Members.

Mpumalanga’s response

Dr Dagada said he had made a mistake when he said that soya beans were being planted now. The province was done with soya and grains, and was now busy with dry beans. It followed the planting calendar diligently. The province had noted all the advice and would send a report to the Committee regarding the number of beneficiaries.

North West’s response

MEC Serage (Acting HOD) said slides 4 and 8 of the presentation would answer the questions on beneficiaries.

Further discussion

The Chairperson said that the Human Sciences Research Council (HSRC) were present, and asked if they wished to add something.

Minister Didiza said the CRDP had been designed as an approach in the fourth administration to respond to rural development, because there had been no overarching policy framework at the time. Currently, the merged Department was looking to see how to align the policy framework on rural development that would guide the whole government on how to intervene in rural communities. Some elements were still in action, such as the training of youth, and the elements of the CRDP, CASP and Ilima Letsema would overlap. Therefore, part of the reconfiguration of the Department was about how to realign programmes. It would not move away from rural development. It could be that in this current year, there would be no specific programme that related to the CRDP per se.

The conditional grants had conditions attached to them, and that was why provinces could not move the resources allocated to any of the programmes that were not applied for.  Even on approval of the grants, there were conditions on what criteria should be met. As part of the consequence management, the Department engaged with provinces which under-spend and withhold funds if the reasons were not cogent.

Committee matters

The acting Chairperson said consideration of the Committee’s minutes should be deferred to when the Chairperson was back. If the HSRC wanted to speak, it should offer solutions and not speak just for the sake of it.

KwaZulu-Natal (KZN) was not in the meeting because it was doing well. The criteria were that the Committee invite provinces that had not spent 50% by the end of the second quarter. He urged all the provinces to spend the budget allocated to them.

There was a need to speak less and act more. Covid had slowed them down, but it was also true that politicians and Departments had not performed, and they must take responsibility. Not all the challenges could be attributed to Covid 19. They needed to find the right balance.

Mr Ryder said he supported the resolution that letters be sent to MECs.

The meeting was adjourned.