2005/06 Annual Report: Department briefing & Adoption of Committee Annual Report 2006

Meeting report

AGRICULTURE AND LAND AFFAIRS PORTFOLIO COMMITTEE
14 November 2006
2005/06 ANNUAL REPORT: DEPARTMENT BRIEFING & ADOPTION OF COMMITTEE ANNUAL REPORT 2006

Acting Chairperson: Mr S Holomisa (ANC)

Documents handed out
Overview and Analysis of the 2005-06 Annual Report of the Department of Agriculture
Summary of CASP Projects 2006/7 Powerpoint presentation
CASP background Powerpoint presentation
Annual Report of the Department of Agriculture Powerpoint presentation
Draft Annual Committee Report 2006 [Available once adopted at Committee Reports]

SUMMARY
The Department of Agriculture and his team took the committee through the Department's Annual Report. Statistics were tabled and it was noted that there was a decrease in the agricultural income. Some of the services provided by the Department include giving advice to small stock farmers, educating and training new farmers. The Director General also highlighted the importance of the Central Agricultural Support Programme. He tabled and described the activities of each of the programmes. The Agricultural Debt Account had received a qualified report from the Auditor-General, because of non compliance with International Accounting Standards. Steps had been taken to remedy the problem. The Audit committee was functioning and there had been compliance with the internal audit requirements. Members asked questions on the structure of the Department, the interaction with other Departments, disaster management plans, and problems with filling vacancies. Questions were also raised on the ostrich export ban, the communication about the Department, the bursary applications and procedures, the under-spending, cooperation with the sector training authorities, the CASP projects, and alleviation of poverty. The Department was reminded that it was expected to give quarterly reports, and a note to this effect was included in the Committee’s Annual Report.

The Committee considered and adopted the Committee Annual Report.

MINUTES
Briefing on Annual Report of the Department of Agriculture 2005/2006
Mr Masiphula Mbongwa Director-General, Department of Agriculture, (DOA), briefed the Committee on the Annual Report. He tabled the statistics relating to the economic overview of the Department and highlighted that the gross domestic agricultural income was R68.5 million, and had decreased due to a 10.7% decrease in horticulture. Animal products, horticulture and field crops had generally shown decrease in producer prices, with intermediate costs rising. Cash flow to farmers had decreased by 26% and there was a decreased of 4% in the agriculture input to the Gross Domestic Product (GDP), due mainly to the drop in maize area planted.

Mr Mbongwa summarised the changes to the Department structure, and summarised the vision and mission, and agriculture priority areas. Services provided by the Department included giving advice to small stock farmers, educating and training new farmers. The Departments of Agriculture and of Land Affairs intended to fast-track agrarian reform to achieve new growth leading to equitable and sustainable socio-economic development. Alignment between the two departments would take place through governance, priority setting, programmes, information and knowledge management and policy research and development. Some of the Department’s activities were summarised and in particular Mr Mbongwa highlighted the Central Agricultural Support Programme (CASP), which provided post settlement support to targeted beneficiaries of land reform, and other emerging farmers, and which had a 70% contribution to land reform and development. R210 million had been set aside in the initial rollout phase of CASP. During 2005/6 the spending had facilitated the establishment of 12 cooperatives in three rural nodes, and had benefited over 21 000 households. In the following years government planned to spend R250 million on CASP, aiming to reach over 50 000 beneficiaries in rural areas.

Other achievements included the completion of the AgriBEE consultative process and delivery of the report to the Minister, the completion of a National Land Summit, the establishment of the National Intergovernmental Forum of Agriculture and Land (NIFAL) and the Agricultural Chief Executives Forum, completion of the food insecurity and vulnerability information system, the development of 50% of the Land Care projects, benefiting 53 206 people, the launch of agri tourism that created 2500 jobs, the successful control of avian flu in the ostrich farming areas, training to 16 000 farm workers and development of 12 farming qualifications.

The objectives and indicators for the different programmes were fully tabled in the presentation, and Mr Mbongwa summarised that the Department was aiming to ensure political, strategic and management leadership, and to reach broad based black economic empowerment (BEE) and access to national and international markets can be reached.

The finances of the Department were presented and summarised, showing the spending per programme, and it was explained that the underspending was attributed to vacancies, the carry through on certain items, the late submission of invoices, and outstanding claims for Classical Swine Fever. Although the Department of Agriculture received an unqualified report, with an emphasis of matter, The Agricultural Debt Account (ADA) had received a qualified report, since the policy and procedures to efficiently and effectively manage revenue in the Department were not documented and had not complied with International Accounting Standards. Steps had been taken to remedy the problem. The Audit committee ensured that there was compliance with the internal audit charter, the Public Finance Management Act (PFMA), risk assessment and monitored internal controls. There were no problems identified with internal controls or PFMA compliance.

Discussion
Dr A Van Niekerk (DA) commented that this was the sixth time he had seen a restructuring programme for the Department. He wanted to know how long the decision making chain of the department would become and when the final structure would be in place. He also asked if any interaction took place between the Department of Agriculture and the Department of Trade and Industry.

The Director General replied that the structure included in the presentation was not a new structure. The previous structure, which was put in the initial presentation handed to members, was not the final one. He said that agriculture officers would be placed at the offices of the Department of Land Affairs in every province. This would make interaction easier between the Departments. He added that DOA interacted strongly with the Department of Trade and Industry (dti). Currently the two Departments were working on a document that dealt with the best way to enter the market.

Dr van Niekerk wondered if DOA had the capacity to transfer the 10 million hectares of land to black owners. He commented that no mention of this was made in the Annual Report.

Dr van Niekerk asked what disaster management plan had been put in place by the Department should there be a long drought.

Mr Mbongwa replied that the Department had proposed a disaster management plan, but was asked by National Treasury to use the Disaster Management Act as a basis for the relief programme.

Dr van Niekerk commented that care must be exercised in working with goat's milk as it could cause a severe skin allergy on the hands.

Mr A Nel (DA) wanted to know if anyone from the Department had attended the 'willing buyer willing seller' conference, which was held in Kwazulu-Natal.

Mr Mbongwa replied that he was not aware of the conference and therefore no one from his Department had attended.

Mr Nel also wanted to know what the problem was with the filling of vacancies in the Department.

Mr Tommie Marais, Chief Financial Officer, DOA, replied that the vacancy rate had decreased since the report was compiled. However many of the vacancies required scarce skills, which contributed to the difficulties in filling them. He said that one of the other problems was that staff would positions shortly after being appointed for positions paying a higher salary. He felt hat this could be remedied by implementing a policy that limited staff members from applying for higher positions until they had served for at least two years.

Mr E Lucas (IFP) wanted to know what the current situation was on the ostrich export ban. He also asked whether there should not be stronger border control measures in place now that the borders had been opened.

Ms Vangile Titi, Deputy Director-General: Planning, Monitoring, Evaluation and Communication, DOA, replied that the latest ban on exports of ostrich meat has been lifted. The quarantine systems that had been put in place had been updated. A directorate dealing with inspections at the border post had been established. A plan was in place to increase the number of inspectors at the border posts. A quarantine structure was to be set up in Durban so that all food being imported into the country could be tested.

Mr P Ditshetelo (UCDP) enquired how the national and provincial governments intended to alleviate poverty. He wanted to know how effective was the distribution of information pamphlets about the Department of Agriculture. He commented that the Department should bear in mind that people looked to government for delivery.

Ms Simone le Hane, Acting Chief Director, Communications, DOA, replied that the Department made use of multi purpose centres as well as pamphlets to promote services and activities rendered by the Department. Feedback had been given and recorded. The agricultural shows were also used as a means to distribute information

Ms B Thomson wanted to know when the problem of the skills shortage would be solved. She also asked if the Department responded to bursary applications when they were received and when the bursaries would be awarded.

Ms N Nduli, Deputy Director-General: Agricultural Production and Resources Management replied that the registration of bursaries would be finalised later this month. She said that the Department would notify those applicants who had not received a reply from the Department that their applications had been received.

Ms Thomson asked when the Committee could be assured that there had been proper spending on the budget by the Department.

Mr T Marais replied that as long as he was the CFO there would be no overspending, as this was not permitted by the PFMA. He assured the Committee that the Department was trying to spend all the money allocated.

Mr D Dlali (ANC) commented that the Department was supposed to meet with the Committee on a quarterly basis. He wanted to know if the Department had forgotten about this request from the Committee.

Mr Mbongwa replied that the commitment by the Department to present quarterly reports remained. He added that the reports were completed and had been seen by the Minister.

Mr Dlali asked when the Committee would be briefed on the Agri-BEE programme. He wanted to know if the Department was ensuring that small farmers were assisted to become large-scale farmers. He asked for a break down of the CASP expenditure. He further asked for details of the Department's relationship with the sector training authority (AgriSETA).

Ms Njabulo Nduli, Deputy Director-General: Agricultural Production and Resources Management, DOA, replied that the Department had two current projects with the Agri-Seta.

An official from the Department replied that small-scale farmers were given assistance through the different pillars of CASP. Various sectors were expected to produce a sector management plan. Each year a farmer who was seeking assistance from CASP would have to draw up a business plan.

The Acting Chairperson enquired whether the water atlas covered the entire country.

Mr V Mkhize, Chief Director, DOA, replied that the atlas covered the entire country, but was in the process of being updated, so that municipal managers would be able to zoom in on a particular area to see how deep they needed to drill for a borehole.

Ms Ntuli (ANC) commented that after twelve years of democracy there were still people in South Africa who were hungry because of lack of food. She wanted to know, in writing, exactly how agriculture was being used to alleviate poverty.

The Acting Chairperson commented that any other questions asked by the Members that had not yet received answers would need to be responded to in writing.

The Annual Report of the Committee on Agriculture and Land Affairs 2006
The Acting Chairperson told the members that the resolution to have the Department of Agriculture present quarterly reports to the committee needed to be added to the Committee’s Annual Report.

The Committee adopted its Annual Report, with that amendment.

The meeting was adjourned.