Agricultural Product Standards Amendment Bill: DALRRD Briefing; with Ministry

Meeting report

Opening Remarks by the Chairperson

The Chairperson welcomed the Committee Members, the Minister and the Deputy Minister to the meeting. 

As the women's month drew to a close, He said that the Committee was cognisant of the role women have played and continue to play in shaping the destiny of the nation's democracy. He asked the attendants to spend a few minutes reflecting on the role of women in agriculture and development. He said that 75% of the world's poor live in rural areas and are mostly involved in farming, as confirmed by the World Bank in 2009. In the 21st century, agriculture remains a fundamental tool for economic growth, poverty alleviation and environmental sustainability.

According to the Agricultural Fund for Development 2009, three out of four people live in rural areas; most depend on agriculture for their livelihoods. In many parts of the world, women are the main farmers and producers; their role remains largely unrecognised. He asked the Committee to note that, despite women's significant contribution to agricultural production, women are significantly underrepresented in the area of decision making. On behalf of the Committee, he would like to make a call during this year's women's month to ensure gender equality in the country's agriculture, value chains and repository – particularly in decision making and management.

He stated that the Committee would be considering the Agricultural Products Standards Amendment Bill for consideration. The significant question was how big a portion of the people consulted in the process of bringing the Bill before the Committee were composite of female stakeholders.

He took the opportunity to recognise the leadership role taken by the Minister in advancing the agenda of women's development within the portfolio. He said it was important to build upon the many standing achievements, and take them to greater heights. The Agricultural Products Standards Act (Act No. 190 of 1990) provides control over the sale and export of certain agricultural products, the sale of certain imported agricultural products, control over the related products and for matters connected within. 

Consequent to the opinion of the Chief State Law Advisor regarding the concept of management control systems being ultra-averse, the Bill was drafted to address the legality of the concept of the management control system. This concept deals with the production method and its accompanying labelling claims. The current Act had to be reviewed to accommodate different inspection and auditing inspections to ensure proper application and enforcement of the Act. The Amendment Bill therefore aims to strengthen the regulatory framework for agricultural production, health and food safety of certain agricultural products. Such a regulatory framework promotes food safety, and provides an enabling environment for increased and sustainable production.

He said the Bill was certified by the Chief State Law Advisor in 2017 and 2020. The Bill had also been subject to the socio-economic impact assessment. He was pleased that, under the amendment, the communities that had been previously disadvantaged would benefit from quality and reliable products, as opposed to inferior products previously sold to them.

In addition, equal entry and access to market, as a result of harmonised legislation, removal of barriers to entry and a strengthened regulatory framework, were welcomed. The focus of the Bill, on the sale of organically produced products in growing markets internationally, will contribute to increasing the export revenue in the food and beverage sector. He expressed his pleasure that new entrants will be afforded an opportunity to enter into a market, which will recognise their method of food production, without the use of agro-chemicals – which was historically only limited to certain producers. The potential for job creation is significant, and the efforts of the Department of Agricultural, Land Reform and Rural Development (DALRRD) in this area are welcomed.

He said that the socio-economic environmental impact assessment system report sets out to examine the impact on social cohesion, food security, food safety, economic growth, investment and economic inclusion being job creation and equity as well as environmental sustainability. He explained that the Bill provides for the regulation of methods of production that will result in the adoption of methods, which will limit the use of agrochemicals – which will ensure environmental sustainability over a longer period.

He indicated that the minutes from the Committee's last meeting would be tabled for adoption before the meeting was concluded. A number of questions over the strategic importance of the Bill had been raised previously. He asked the Committee to revisit some of these questions and ensure that the issues are being adequately addressed before the minutes are adopted.

He invited the Minister to make opening remarks before she was excused, as she had other businesses to attend.

Minister's Opening Remarks

The Minister of Agriculture, Land Reform and Rural Development, Ms Thoko Didiza, said that the ministry appreciated the Committee's role in helping them navigate a number of policy and regulatory issues they have had to deal with from time to time. She noted that the Members had raised very incisive questions that they had asked the Department to go back and examine.

She appreciated the Committee Chairperson's opening remarks that asked the Department to always consider the interests of the most vulnerable people, particularly women farmers and agricultural entrepreneurs in their considerations. She said that the Chairperson had articulated what the Bill sought to achieve and given a brief recap of how the process started and where the parties were at the moment.

Briefing by DLRDD on the Agricultural Products Standards Amendment Bill [B15-2021]

Mr Dipepeneneng Serage, Acting Deputy Director-General: Agricultural Production, Biosecurity and Disaster Management, DALRRD, stated the three key reasons that necessitated the amendment of the current Act. He emphasised that this Bill may enable the country to export agricultural products. The Bill will go as far as scientifically determining the quality of food and agricultural products. It will also determine the quality of products imported into the country. The Bill had far reaching responsibilities, as it touches on everything agriculturally produced.

Mr Serage said that the key deficiencies under the Agricultural Products Standards Act that necessitate this Bill were the lack of management control systems, lack of clarity in the auditing systems, and the different methods for the appointment of additional assignees.

He said that the main objectives of the Bill were to strengthen the regulatory framework for agricultural production health and food safety, make provision for auditing of management control systems and the promotion of active participation by affected stakeholders in the determination of fees. He said that the current Act made no provision for transparency regarding the setting of fees. Therefore, the Department is making sure to involve key stakeholders to ensure that, for any assignee that charges inspection fee sets, the same are set in a cost recovery manner.

The Acting DDG stated that one of the proposed amendments was the substitution and insertion of new definitions. The better definition of certain terms such as 'assignees' would ensure that different role players get involved and provide a clear interpretation of the provisions of the Act. The substitution of the definitions will also help eliminate deceptive claims or labelling of agricultural products and harmonise the definition of certain terms with other legislation dealing with food such as the Foodstuffs, Cosmetics and Disinfectants Act of 1972.

The introduction of certain provisions ensured transparency and openness in the setting of fees by assignees. The Bill would also cater for alternative audit or inspection methods, reducing compliance costs.

[See presentation for further details]

Discussion

Ms M Tlhape (ANC) asked what the conclusion was on the issue of engaging traditional leadership on the Bill. She commented that the presentation was clear and straightforward.

Mr N Masipa (DA) sought to know the cost implications of the Bill, and what the Department was planning on doing to ensure that the cost is not too heavy on the emerging farmers while enabling them to access the market. He expressed concerns that, while the Bill was well intended, farmers unable to comply due to financial incapacity or logistical support will be excluded. He asked whether the Department had looked at the implementation of the Bill to ensure that the farmers that might be vulnerable, are well covered once the Bill comes into force.

Ms N Mahlo (ANC) wondered whether the Department planned on developing policies to help emerging farmers tackle logistical support issues to gain entry into the local and international market.

Ms T Breedt (FF+) asked the Department to indicate whether it has a budget, and the personnel capacity to carry out the additional responsibilities the proposed amendments will bring on. She also asked about the specific cost implications on the Perishable Products Export Control Board (PPECB) and the other assignees. Who will bear the cost that would arise as a result? She also asked whether there would be additional costs implications to the consumer and fees borne by producers of organic and free range agricultural products, in light of the socio-economic impact assessment study report.

Ms Breedt indicated an ongoing court case in the High Court in Johannesburg, on plant-based products, following the notice issued by the Department to plant-based producers, in June 2022. She sought to know whether this judgement would impact the Bill. She inquired if the Bill would address the issues arising from the recent European Union regulations on importing citrus produce.

Ms B Tshwete (ANC) sought to know how the Bill, once passed, would be monitored for compliance.

Inkosi R Cebekhulu (IFP) remarked that there was currently too much dependence on agrochemicals for food production. He commended the Department on its route in emphasising organic food production.

Mr N Capa (ANC) wondered whether there had been a common understanding between the different commodity groups. He asked if the Department had noted anything in the Bill that might cause future problems.

The Chairperson asked how the Department intended to verify the authenticity of imported organic or free range products. He queried the impact of the judgement that Ms Breedt highlighted on the seizure of fake meat products. Which legislation was responsible for the labelling of agricultural products?

Responses by the DLRDD

Mr Billy Makhafola, Director: Food Security and Quality Assurance, DALRRD, asked the Committee to bear in mind that the Bill was aimed at amending the Primary Act, which was still in force and being implemented at the moment. Therefore, the cost implications may not necessarily arise because all the activities pertaining to control of export and imported products are already being executed under the Act.

He said that the only cost implication they foresee would be in regulating products produced and sold with certain labels like organic and free range. He said private certification bodies are bearing the cost of certifying those products. Each of these bodies use different standards that are outside the Department's control. However, once the Bill is passed, it will assist in setting minimum standards against which these methods of production can actually be audited. This would afford small-scale farmers with the opportunity to easily obtain certification authenticating their products. This would mean that the Department applies and sets conditions that are generally known to everyone. He reminded the Committee that the geographical indications are not regulated. Therefore, once a minimum standard is set, the Department and producers can guarantee the product's authenticity.

Mr Makhafola confirmed that the cost for farmers would be reduced because the different certification bodies that will be charging certification fees will be under control due to the minimum standards set. There will not be an increase in cost implications because the only thing that the Bill seeks to introduce is the management control system that brings with it auditing and setting of fees by assignees. He said that, if the Bill is passed, assignees would be required to send their proposed budget to the Department, which would be shared with all stakeholders through a gazette notice to invite comments. This would ensure transparency in terms of setting fees.

He said that the Department has a directory that will be going out to sensitise all stakeholders regarding the charges that will occur as a result of the Bill being passed.

He said they do not anticipate any cost implications to PPECB because it is already one of the assignees under the current Act. The only thing these assignees or bodies would be doing is authentication. He said that samples would be taken. So, if someone claims something is organic, they can test the sample and confirm such claims to ensure inorganic fertiliser has not been used.

In response to Ms Breedt's question on the court case, he said that the decision was not final and that they were due in Court on 17/11/2022 for final determination. For now, plant-based meat product producers have been issued compliance orders directing them to stop using names reserved for processed meat products. The seizure of these products had been held off until 17 November 2022, when the Court might rule otherwise. The Department has every intention of complying with the orders of the Court. He stated that the ruling did not stop an assignee from ensuring that the regulations on meat products are implemented. Any other plant-based products that still evoke the names reserved for processed meat products have been given the opportunity to change the label so that names appropriated for meat-based products are not used in selling plant-based products. This is done to ensure a level playing field regarding fair trade practices, while ensuring that consumers are not misled.

Mr Makhafola stated that this should be a positive thing for emerging farmers, as the focus on organic products and emphasis on non-use of agro-chemicals on their products would make selling them easier.

Mr Serage said, concerning traditional leaders, the Department was ready to make a similar presentation to them on the Bill and even simplify the same. He confirmed that the Bill, once passed into law, would make it easier for emerging farmers to compete on a level playing field. He emphasised that the Bill was aimed at assisting small-scale farmers. In response to Ms Breedt's question, he said that the Department has the capacity to ensure enforcement of the Bill once passed. It will not therefore necessitate a diversion of the funds rather time.

He said that the Department was aware that, with new legislation, there would be parties that might try to bypass the new guidelines. They are working on strengthening monitoring as well as the implementation of the Bill.

Mr Serage said that the Bill, once passed into law, will make it clear and much easier for consumers to choose whether they want to eat organic food or not. This organic food would be subject to inspection and auditing before certification.

In response to Mr Capa, Mr Serange confirmed that all the stakeholders had been consulted and had indicated that they would welcome any new changes brought on by the change in law. He said that the Department had even gone a step further and specified to the European Union and other countries who export their food into the country. These countries welcomed the move.

In response to the Chairperson, he clarified that food products, regardless of whether they are imported into the country or exported out of the country, are subjected to the same regulations. He added that the World Trade Organisation rules allow for countries' sovereignty on production. However, when these countries intend to export to other nations, they must certify that they have complied with the rules of that country to which their products are being exported. The Department therefore expects those importing into the country to comply with set food production standards requirements.

Mr Mooketsa Ramasodi, Director-General, DALRRD, clarified that anything imported and intended for sale within the country would be subjected to the local requirements. He said that the Bill would not impact the current assignee and their mandate but would also give the Department a way to bring in other assignees that are experts in other fields.

Mr Ramasodi clarified that the implementation of the recent court decision was supposed to be handled by an assignee. He said they had noted that the current model of inspection, end-product inspection, caused a lot of financial pressure on PPECB. With the passing of the Bill, they would be able to do audits ahead and deal with issues as they arise, as opposed to the current model.

He said that the system would also impact the different exports, while lowering the costs of compliance for small-scale farmers because end point inspection only addresses equity issues – to say that all products have been inspected, notwithstanding the method of production.

He expressed confidence that, once the Bill is passed, it would help lower the cost that PPECB had also been pining for.

Follow up Questions

Mr Masipa indicated that he was not against the Bill, but was of the opinion that Department had not sufficiently responded to how the small-scale farmers would receive the support in ensuring that their produce gets into the market – to ensure that farmers do not farm first and then later look for the market. Some small-scale farmers in rural areas, with the growth of big retailers, are struggling. These farmers end up destroying their goods because their products are not certified to meet the requirements of the big retailers. He therefore was seeking clarity on whether the Department has the capacity to assist the small-scale farmers.

On the issue of the recent case judgement, he said that he did not understand the Department's logic in removing the products that are using names reserved for processed meat products. He referenced Geographical Indicators, which are used to deter other countries from using product names such as Rooibos. He wanted to know whether there are agri-names indicators that protect names from being misappropriation.

Regarding the assignees and cost implications, he was of the opinion that the Department was not doing enough to ensure that international export standards were being met. He wanted to know how many new assignees would be appointed and assist in ensuring that the country is compliant.

He also wanted to know whether the Department was anticipating any backlash from other countries regarding the subjection of imported goods to local standards, in terms of implementing the Bill once it has been passed.

The Chairperson asked for clarification on which body was responsible for labelling products. He was asking because, in the court case, it was mentioned that neither Consumer Goods Council, the Food Safety Agency nor the Department has regulatory powers over the naming of fake meat products.

Responses

Mr Makhafola first responded to the question about plant-based or meat-analogue products, and the reason behind prohibition of meat analogues using names reserved for processed meat products. He said that, in 2019, the Department published a regulation that talked to processed meat products, which included classes and standards for every product name associated with those standards and classes. The producers of plant-based meat products were consulted during the preparation of these regulations. The same regulations state that meat analogues are not regulated. However, it became an issue when such products that are not regulated are then going to be using names that are prescribed for processed meat products. This would invite the Inspector to use the same standards imposed on processed meat products, because the inspection is done based on labelling of the products.

He said as a Department, the case has not yet been finalised and that they would be returning to Court for hearing as to why they are seeking to stop plant-based farmers from using names reserved for processed meat products to advance the sale of their products. 

On the issue of backlash regarding implementation of the Bill once passed by the international community: He indicated that they were not expecting any because of international trends in management control systems. The Department was simply trying to harmonise the Act with international standards on regulating production methods. He said this was not the first time the Department had introduced management control system, as the same was done in the amendment Bill of 1998. However, the same was not captured properly because it was too wide. But this Bill would limit its area of focus to methods of production.

Mr Serage, in response to Mr Masipa, said that the Department might not offer much support to the emerging farmers, as that is not its mandate. However, other branches were in a better position to do so. He said that, as the Department regulates the standards, it would raise issues of conflict of interest if they start delving into issues of support.

Regardless, the Department was well aware that farmers needed to be supported to comply with the quality requirements for certifications. The Department was ready to simplify the law for these emerging farmers to help them understand how to comply.

He reiterated that they were not expecting any backlash from the international communities regarding the implementation of the Bill once it has been passed. He said that Europe had an even more stringent policy, and the Department was therefore not anticipating any backlash. He confirmed that the Department had the capacity to enforce the Bill once passed.

On the labelling issue, Mr Serage said that the law specifies that a producer must properly label their products and ensure compliance with the law so far as quality claims are made. He said that the Agricultural Products Standards Act regulates about 90% of food. Therefore, the Department is responsible for regulating the labelling of products.

Mr Ramasodi, in response to Mr Masipa's question on assignee-ship, stated that there was currently no assignee operating in the management control system space. Most assignees are involved in the end-point inspection that include PPECB. The new system would be opened up to assignees who are qualifying service providers, and PPECB is welcome to participate if it has the capability. He added that government was quite strict in ensuring that assignees are capable of doing tasks that were given to them. If an assignee fails to do a task given by the Minister, the Minister can take up the delegation.

Mr Ramasodi said that the Department was doing its best to ensure that small-scale farmers have a base understanding of the market in terms of products sold before they are planted. He said that the Department has a unit called promotion and awareness, which is in contact with the farmers and indicating the requirements to them. There is also a marketing unit and a small horticulture empowerment programme that was launched by the Minister, which the Department hoped to expand to other areas. The Department was focused on ensuring that the localisation of food systems is entrenched in terms of farming in the country so that farmers produce what can be consumed locally and reduce reliance on exports. He said the same concept was in the current system on the Department's poultry master plan, agriculture and agro-processing master plan.

On the issue of labelling, Mr Ramasodi said that labelling was a multi-dimensional issue depending on the Act under which the labelling was being implemented. The Agricultural Products Standard Act was not the only Act dealing with labelling agricultural products. He confirmed that there was work being done around food control systems, which would impact issues of food labelling.

The Chairperson thanked the Department for the presentation and responses. He indicated that the Bill would be taken to the Committee's management meeting for further processing. The Committee would then revert back on what needs to happen, moving forward.

Committee Minutes

The Committee considered minutes of the virtual meeting that was held on 07 June 2022.

The Chairperson went through the minutes page by page, inviting comments from the Members.

Mr Masipa directed the attention of the Committee to page three of the minutes, pointing out that a number of questions regarding implementation of the Bill had been raised, of which he was of the opinion they had not been addressed sufficiently.

The Chairperson assured the Members that the Committee would follow up. He recounted that the Department had been asked to furnish the Committee with written responses to the issues raised. He said that once the responses are received, he would ensure to circulate them among the Members.

Ms Mahlo proposed adoption of the minutes.

Mr Masipa seconded the motion.

The meeting was adjourned.