Onderstepoort Biological Products and AgriSETA 2006 Annual Reports: briefings

Meeting report

AGRICULTURE AND LAND AFFAIRS PORTFOLIO COMMITTEE
7 November 2006
ONDERSTEPOORT BIOLOGICAL PRODUCTS AND AGRISETA 2006 ANNUAL REPORTS: BRIEFINGS

Chairperson: Ms D Hlengethwa (ANC)

Documents handed out:
AgriSETA presentation
AgriSETA Annual Report [available later at www.agriseta.co.za]
Onderstepoort Biological Products presentation
Onderstepoort Biological Products Annual Report [available later at www.obpvaccines.co.za]

SUMMARY
The committee was briefed on the annual reports of Onderstepoort Biological Products and the Agriculture Sector Education and Training Authority. Onderstepoort’s annual report dealt with latest developments and possibilities for future expansion. The Authority reported that it was making progress on skills development.

Members questioned the high administrative costs at Onderstepoort, its monitoring of outbreaks of diseases and adult basic education and training initiatives. Members questioned the Authority on its lack of performance and inability to spend its resources, and its ability to assist farmers in rural areas.

MINUTES
Onderstepoort Biological Products (OBP) Presentation
The Managing Director of OBP, Ms Linda Makuleni, gave the presentation. The presentation looked at the functions of the board which were mainly Research and Development, Strategic Policy Development and Intellectual Property Management. The presentation dealt with the financials of the company which were in good standing. However, emphasis was placed on the fact that its export business has decreased due to the loss of an international client. On the other hand, OBP products have increased their domestic market share to about 70% of the vaccines in the domestic market. Other activities included sponsoring the South African Veterinary Association national congress and the female farmer of the year award.

In terms of social development and skills development, OBP launched an adult basic education and training (ABET) programme. This programme was aimed at increasing skills at the lower staff levels. OBP also supported the ‘take a girl child to work’ initiative and supported crèches and non-governmental organisations financially and otherwise.

OBP management highlighted the fact that the company’s spending would increase in the next two to three years due to the fact that the company is scheduled for an upgrade of production facilities.

Discussion
Mr D Dlali (ANC) asked how OBP monitored outbreaks of disease in the provinces and in the remote areas of the country.

Ms Makuleni said OBP is currently talking to local and provincial government authorities to establish pilot sites that would assist in monitoring veterinary works. OBP maintained good working relations with the Farmers Weekly magazine and international disease monitoring bodies.

Mr B Radede (ANC) asked why there was an increase in administration costs while profits decreased.

Ms Makuleni responded that the profit margins where primarily affected by the loss of one international client. However, their domestic market share is increasing and therefore the profits would increase over time. OBP did a lot of marketing and they were confident that the newly-appointed Export Manager’s engagement with China and European Union affiliates would increase their exports in the next year or two.

Ms M Nkompe-Ngwenya (ANC) asked how accessible the ABET program was to non-employees of the company.

Ms Makuleni mentioned that because the program was in its initial stages they had no immediate plans to extend it to non-employees.

Mr A Nel (DA) asked about the content and aim of OBP’s internal Aids survey.

Ms Makuleni said the survey was aimed at informing a HIV/Aids program of action that the company would launch in the near future.

Agriculture Sector Education and Training Authority (AgriSETA) presentation
Mr M Van Niekerk, Chief Executive Officer, highlighted the employment profile of the organisation, which reflected a loss of 9364 employees in the primary sector and 250 000 employees from the secondary sector.

AgriSETA had a deficit of R36, 7 million and cash reserves of R68, 8 million. Its total revenue amounted to R135.4 million.

AgriSETA had spent R30 million on ABET training programs that catered for over 15000 learners. Their future initiatives would include establishing a discretionary fund that would mainly benefit AgriBEE and launching another fund that would mainly benefit special agricultural land reform beneficiaries. Their skills focus for the future would be concentrated on developing human capacity, management and agric-business skills, the readiness and responsiveness of local producers to global markets and capacitating artisans in the sector through bursaries and internships programs.   

Discussion
Mr Radebe questioned Mr Van Niekerk on the general underperformance of the SETA compared to other SETAs and the fact that they had a lot of unspent money available.

Mr Niekerk stated that they lacked skilled resources, hence their current move to increasing skills availability. He acknowledged their under-performance and reassured the committee that steps are being taken to improve performance.

Mr Radebe asked why their request for a grant from the National Treasury was rejected.

Mr Van Niekerk said he suspected that because the agricultural sector is not part of national priority programs like the Accelerated Shared Growth Initiative of SA (ASGISA), Treasury declined their request.

Mr Dlali questioned AgriSETA’s commitment to providing internships and bursaries because he felt that skills development was just rhetoric and nothing practical was being done.

Mr Van Niekerk shared the sentiments. However, his organization did not have sufficient support to help everyone. They had received close to 12 000 requests for internships and 2 000 requests for bursaries this year alone.

Ms Nkompe-Ngwenya questioned the role of AgriSETA in assisting rural farmers.

Mr Van Niekerk said the lack of rural offices and walking-in help centers continued to be an obstacle. It was therefore difficult to assist clients in remote areas.  

The meeting was adjourned.