Perishable Products Export Control Board; Ingonyama Trust Board; Ncera Farms: Budget & Strategic Plan

AGRICULTURE AND LAND AFFAIRS PORTFOLIO COMMITTEE
7 March 2007
BUDGET AND STRATEGIC PLANS 2007/08: PERISHABLE PRODUCTS EXPORT CONTROL BOARD; INGONYAMA TRUST BOARD AND NCERA FARMS

Chairperson: Ms D Nhlengethwa (ANC)

Documents handed out:
Perishable Products Export Control Board Business Plan and Budget 2007/08
Indaba Newsletter (PPECB)
Ingonyama Trust Board Strategic Plan and Budget 2007/08
Ncera Farms (Pty) Ltd Strategic Plan and Budget

Audio recording of the meeting Part1 Part 2 & Part 3

SUMMARY
The Perishable Products Export Control Board presented its strategic plans for 2007/08. The Board had a dual function, one aspect involving the administration of its mandate under the empowering legislation and the second to advise the Minister of Agriculture. The Board was appointed by the Minister of Agriculture and Land Affairs for a period of one year. Its main strategy for the year involved the revision of the current legislation, and restructuring of the Board to expand into development and capacity building services. The challenges included uncertainty among stakeholders about the Board’s role, the insensitivity to the growing customer needs, and concern about the affordability of goods. A number of solutions were proposed, including a review of the mandate and the legislation. The budget showed a surplus of R25 000. The operational model divided the activities into statutory services, ancillary services and development services. The income was projected to increase 14% to R115 million. The levies would increase by 11%.
Members asked questions on how long the review of the Act would take, the activities of the Board’s Operation Gijima, the criteria for selecting students for the mentorship programme, source of the external funding, and whether the Board could assist in job creation for rural women.

The Ingonyama Trust Board set out a full schedule of the land owned by the Board. The strategic plan was informed by implementation of legislation relating to land and mineral resources. It aimed to facilitate optimal land usage for the material benefit and social well being of communities living on the Trust Land. It was not a development agency but was rather to manage the land to ensure that any commercial activity benefited the communities living on the land. Major targets involved the creation of an updated land tenure information system, allocation of land for housing infrastructure, identifying land on the outskirts of the townships, optimum usage of land, and adequate preparation for the implementation of the Communal Land Rights Act (CLRA). Once the commencement date for this Act had been announced the Board would be reconstituted as the Ingonyana Land Rights Board for Kwazulu Natal. This would complete the mapping exercise and identify the future role and functions of the Board. The budget totaled R18.2 million, made up of own fund income of R15. 8 million and an allocation of R2.3 million. Questions by members addressed the long lease agreements, and land management on consolidated title deeds.

Ncera Farms briefed the Committee on its status. A service centre had been approved during October 2004. The various stages to establish the security centre were described, with an indication of how far the targets had been reached. The strategic plan set out the services that would be rendered, ranging from advisory services on soil, crops and animal care through to computer training and providing a postal service. The budgets were detailed in the presentation and related to finalisation of the service centre. Questions by members related to the equipment for the workshop, the number of villages catered for, and what they were asked to pay.


MINUTES
Perishable Products Export Control Board (PPECB): Briefing
Mr Cornelius Hubinger ,CEO, PPECB stated that the Board had spoken to various industries involved in perishable exports and requested them to give their views on the current and future exports in terms of the PPECB Act, which was under review. The budget reflected a more strongly focused approach. The PPECB directed its capacity institutional ability towards development. Therefore they partnered with other institutions so that they transferred skills, statutory services and ancillary services in response to the customers’ needs. The CEO expressed the importance of obtaining the views of the Portfolio Committee also.

Mr A Hawes, Chairperson, PPECB outlined some of the important activities of PPECB which made an impact on the country. Firstly there was the food safety, followed by the issue of control. There was a major responsibility to ensure that South Africa complied with all the bilateral agreements with other countries. In this way the PPECB had an impact on the agricultural industry.

The CEO mentioned that the strategic theme for the next year focused on the revision of the legislation and that the Board had approved these developments for the next three years. The restructured PPECB would ensure that there would be split between statutory and ancillary services. The Board focused on expanding the development and capacity building.

The PPECB had three roles in terms of its legislative mandate. It had to conform to the Perishable Products Export Control Act No 9 of 1983 and acted as an assignee for the department of Agriculture.

The PPECB’s value proposition came from the services it performed. These services were the statutory services, ancillary services and the development and capacity building services. The mission statements of PPECB were about instilling confidence in people and confidence in the products.

The Board was also directed by the Minister of Agriculture and Land Affairs to do certain work. This was termed ‘Operation Gijima’. This resulted in the Board deciding to abandon the previous committee structure and adopt a new structure. The board had therefore consolidated its committees so as to enable the new board members to become more fully aware of what PPECB entailed.

The current business model, service categories, stakeholders and strategic focus areas were outlined.

The challenges that faced PPECB were highlighted. These included uncertainty among stakeholders about the role that was played by PPECB.. There was an issue of insensitivity to the growing customer needs. This was already addressed by the appointment of the new Board members because this was transparent and involved representatives from the industry. There was also concern about the affordability of goods, in terms of international competitiveness, as the costs involved presented a stumbling block. A number of solutions were proposed, including a review of the mandate and the legislation.

The Board was requested to create a budget which would not reflect a deficit. This led the board to ask management to cut down on expenses. The current budget showed that there was likely to be a surplus of R25 000. The operational model divided the activities into statutory services, ancillary services and development services. The income was projected to increase 14% to R115 million, the expenses 18% to R115 million. The levies would increase by 11%.

Discussion
Mr C Greyling (ANC) remarked that it seemed important to review the Act that was 24 years old as soon as possible. He asked how long the Board anticipated to review the Act, since it had only been appointed for a year.

Mr Hubinger replied that from a realistic point of view a year was too short. He hoped the Board could work to the satisfaction of the Minister so that the members could have their term extended. They would move as far as they could within a year in reviewing the Act. He believed that if they worked hard and gained support they could complete the process within two years.

A member asked the extent to which the Board interacted with the National Agricultural and Market Council (NAMC). He also enquired whether there were any problems in accessing the traditional markets due to liberalisation of markets.

Mr M Ngema (NADECO) remarked that the Committee wanted to qualify ‘Operation Gijima’ with efficiency. He further enquired why the question of an amendment came up so often and yet there had not been anything done yet to solve it.

Mr Hawes responded by stating that the PPECB had agreed with the Minister in a meeting on the priorities to be pursued. He shared his sentiments that ‘operation gijima’ was respected because it ensured that there was feedback.

Mr Hubinger added that in terms of ‘operation gijima’ there was no point in spending two years with no outcome. Therefore the board had expressed their desire to remain focused and increase confidence in people.

Ms C Nkuna asked what the criteria were for selecting students from previously disadvantaged communities.

Mr Hawes answered that the mentorship program had been embarked on after the Minister had enquired on the way forward in terms of scarce skills development.

A member asked about the source for the external funding.

Mr Hawes replied that there was external funding from the government, which embarked on a partnership two years ago.

Ms C Zikalala (ANC) asked what role the board played in job creation for rural women.

Mr Hawes stated that the board had certain policies that directed them as an organisation. Therefore it would be difficult to be directly involved with women empowerment in terms of job creation because they ensured that exports complied with the bilateral agreements.

Ingonyama Trust Board (ITB) Strategic Plan and Budget Briefing
Judge S Ngwenya, Chairperson, ITB set out the statistics showing land owned by the board and stated that Ingonyama was mandated to manage that land in terms of the Ingonyama Trust Act No 3 of 1994. In terms of the Act the government was required to provide the funds for administration of the board. The rest of the budget came from self-generated sources.

The strategic plan focused on issues over the next five years. It was informed by implementation of legislation relating to land and mineral resources. It aimed to facilitate optimal land usage for the material benefit and social well being of communities living on the Trust Land. The Trust legislation created a unique instrument of land management. The legal mandate was not a development agency, but a land management agency that must ensure that commercial activity on development land was developmental in nature and which resulted in direct and indirect benefits that flowed to the communities.

The total budget requirement for the year 2007/08 was R18.2 million, which included a transfer payment of Grant in Aid of R2.3 million.

A major target was an updated land tenure information system. It was difficult for the Board to travel daily to check what was on the land. Hence the land tenure information was vital for updates on the land. A further target was the facilitation of Kwazulu towns to local authorities. The facilitation of transfer of State domestic properties, meant that all state institutions built on trust land had to be identified and registered. This would include police stations, hospitals and clinics. It was important to identify when the state domestic property was constructed. A further matter involved the allocation of land for housing infrastructure. The process of land identification on the outskirts of the townships was another of the outputs expected. The Board proposed to introduce a service provider for the identification process of the land and to advise them on the potential developments. The four major towns identified were Umlazi, KwaMashu, Ezakheni and Osizweni.
There remained the problem that low cost housing benefited only the urban areas falling under the municipalities at present.

Judge Ngwenya summarised that the major targets of the Board resulted in the optimum usage of land which benefited the communities, municipalities and the State. This ensured there was adequate preparation for the implementation of the Communal Land Rights Act (CLRA). Once the commencement date had been announced the Board would be reconstituted as the Ingonyana Land Rights Board for Kwazulu Natal. This would complete the mapping exercise and identify the future role and functions of the Board.

Adv R Raubenheimer (Board Member, Ingonyama Trust) mentioned that the Board had obtained permission from the Minister of Agriculture and Land Affairs to acquire office accommodation. The property purchased became an asset of the trust. There were also lease agreements on some of the trust land. The budget was presented, which in summary totaled R18.2 million, made up of own fund income of R15. 8 million and an allocation of R2.3 million.

Discussion
The Chairperson asked how many years were contained in the lease agreements.

Judge Ngwenya replied that the leases that were made under the old proclamation were 99 years old but that the leases entered into later were 40 year leases.

A member asked why under the land identification on the outskirts the years 2010, 2011 and 2012 appeared, yet there was no budget for that.

Judge Ngwenya replied that in the strict sense there could not be a budget because the money for those years could not be available yet.

Mr D Dlali (ANC) asked the Board to comment on the trust policy not to sell land but to grant 40 year leases.

Judge Ngwenya replied that CLRA would not do away with 40-year leases.

Mr Dlali requested the Board to address the issue of the land management over consolidated title deeds.

Judge Ngwenya responded that they relied on the Deeds Office regarding the information on land. Any lease agreement for more than ten years had to be registered. He stated that some of the leases had been entered into in the 1920’s.

Ncera Farms (Pty) Ltd Budget and Strategic Plan Briefing
Mr Tommie Marais, Chairperson, Ncera Farms briefed the Committee on the status of Ncera Farms. A service centre had been approved during October 2004. He set out the various stages to establish the security centre and reported that the security fence, water sources, security, workshop, livestock handling facilities and administration and service centre had all been finalised. The strategic plan also set out the services that would be rendered which included the advisory services on soil conservation, suitable crops, land preparation, animal husbandry, training on basic principles of communication budgeting and banking and assistance with preparation of business plans. In brief, the service centre ensured that extension services would be made available to the farmers that were settled on the Ncera land. The training was geared to practicalities to ensure that people were taught the basic principals to ensure that they could run their farms well. Among the services would be included the postal services and legal administrative services. The mail from all the villages would be delivered through the Company’s postal boxes. There was legal assistance also provided, including notarising documents. .

The budget was detailed. It showed that there would be a transfer from the Department and own revenue of R900 000. The operating budget was set out, as were the expenses to finalise the service centre. A full breakdown was given of the costs under each heading.

Discussion
The Chairperson asked about the equipment for the workshop.

Mr T Marais replied that the equipment was already in place and that it just had to be relocated to the current workshop.

Ms Zikalala asked how many villages were being catered for and whether they paid anything for the advisory service since the budget had not given an indication of that.

Mr Marais replied that Ncera did not charge anything except for the contract of ploughing.

The meeting was adjourned.