ATC130520: Report of the Portfolio Committee on Agriculture, Forestry and Fisheries on the Oversight visit to Ncera Farms (PTY) Ltd in the Eastern Cape Province on 26 October and 27 November 2012

Agriculture, Forestry and Fisheries

REPORT OF THE PORTFOLIO COMMIITTEE ON AGRICULTURE, FORESTRY AND FISHERIES ON THE OVERSIGHT VISIT TO NCERA FARMS (PTY) LTD IN THE EASTERN CAPE PROVINCE ON 26 OCTOBER AND 27 NOVEMBER 2012

REPORT OF THE PORTFOLIO COMMIITTEE ON AGRICULTURE, FORESTRY AND FISHERIES ON THE OVERSIGHT VISIT TO NCERA FARMS (PTY) LTD IN THE EASTERN CAPE PROVINCE ON 26 OCTOBER AND 27 NOVEMBER 2012

The Portfolio Committee on Agriculture, Forestry and Fisheries, having undertaken an oversight visit to Ncera Farms (Pty) Ltd in the Eastern Cape Province on 26 October and 27 November 2012 reports as follows:

1. Background

Ncera Farms (Pty) Ltd is a public company listed under Schedule 3B of the Public Finance Management Act of 1999, with the Department of Agriculture, Forestry and Fisheries (the Department) as its sole shareholder. The primary function of the entity is to assist developing farmers and rural communities by providing a variety of services such as advice and training, agricultural extension services, the mechanisation of agricultural production, animal improvement schemes and marketing of agricultural products. The aim of Ncera Farms (Pty) Ltd as contained in the 2011/12 Strategic Plan and Annual Report is to contribute to an industry focused farm management training, farmer support services and the design of franchise-type agricultural business models for farmers and beneficiaries of land reform in the surrounding areas.

During the previous financial year, 2010/11, briefings on the Strategic Plan and Annual Report of Ncera Farms, the Committee raised concerns regarding the poor standard and quality of the report in terms of information provided and its overall performance. This has not been addressed and similar issues were still prevalent in the 2011/12 Annual Report of Ncera Farms. The Committee decided not to consider the Annual Report of Ncera Farms, which was not based on an approved Strategic Plan and the reported programmes in the Annual Report were also not based on the 2011/12 Strategic Plan that was presented but rejected by the Committee on 29 March 2011. The Committee rejected the 2011/12 Strategic Plan of Ncera Farms as it observed that the Plan lacked detail and did not address the challenges that were prevalent in the entity including those that were raised by the Committee after the oversight visit to the entity in 2010 and during the 2009/10 Annual Repot presentation.

It was then resolved on 29 March 2011 that the Department must inform the Ministry to provide the Committee with the following information:

  • Forensic Audit Report of Ncera Farms,
  • A detailed report on the operational and financial activities at Ncera Farms, and
  • That the Department as the caretaker of the entity should collaborate with other relevant government agencies and nearby academic institutions to redraft the Strategic Plan and re-present it to the Committee.

However the issues that were raised were never addressed and a reworked Strategic Plan for the 2011/12 financial year was never re-presented to the Committee.

1.1. Objective of the Visit

Based on the fact that the issues that were consistently raised by the Committee were not addressed and the new Strategic Plan of Ncera Farms (Pty) Ltd was also never presented to the Committee as requested, the Committee took a decision not to consider the Ncera Farms (Pty) Ltd Annual Report but to undertake a follow-up oversight visit to Ncera Farms. The objective of the oversight visit was to engage with the Ncera Farms (Pty) Ltd Management, the Department of Agriculture, Forestry and Fisheries and Ncera resettled Farmers to obtain information regarding the challenges facing the entity in order for the Committee to be able to make an informed decision when considering the entity’s Annual Report. It was also envisaged that the oversight visit will assist in determining the performance of the farms against the service delivery commitment made by the Department via the Minister to the people.

1.2. Delegation

The delegation of the Committee composed of Mr M Johnson, ANC (Chairperson and Leader of the delegation); Ms R Nyalungu , ANC; Mr A Trollip, DA; Mr N Bhanga , COPE and Mr L Gaehler, UDM. The delegation was supported by Ms A Kakaza , Committee Secretary, Ms N Mgxashe and Mr N Ginindza , Committee Researchers and Ms N Diya , Committee Assistant.

The Committee was joined by the members of the Provincial Standing Committee on Agriculture, Mr P Nkayi (Chairperson), MPL; Mr DS Neer , MPL and Mr A Pikinini , MPL. They were supported by Mr Q Mafuya , Committee Legal Advisor.

2. Engagements during oversight visit

2.1 Meeting with the Management of Ncera Farms (Pty) Ltd

The Committee was welcomed by the Chief Executive Officer (CEO), Mr Mziwamadoda Titimani . The following officials from the National Department of Agriculture, Forestry and Fisheries, Ncera Farms (Pty) Ltd Management and Ncera Farmers were in attendance: Dr S Mkhize (Director: Provincial State-owned enterprises ( SOEs ) and Performance Monitoring), Dr J Moeng (Director: Smallholder Development), Mr S Masemola, Mr S Nompozolo (Director: Sectoral Colleges) and Mr D Moeketsi (Parliamentary Liaison Officer) (DAFF); Ms Z Gana , Mr V Booi , Mr W Fourie , Mr PM Rubushe , Mr X Mlumbi ( Ncera Farms (Pty) Ltd); Mr M Qwabe , Mr Z Matinise , Mr E Makisi , Mr S Tshweli and Mr N Bhe ( Ncera Farmers).

During the meeting, the CEO informed members of the delegation that he agreed that Ncera Farms as an entity was currently not performing well. However, due to the fact that the entity has a new management and was also in the process of finalising the turnaround strategy for the entity, it must be given some time to improve its performance.

He reported that the Ncera area constitutes Welcome Home Farm, where Ncera Farms (Pty) Ltd is located, and surrounding farms and communities. The land area of Ncera Farms (Pty) Ltd (Welcome Home Farm) is approximately 1 500 hectares and the surrounding 10 farms that are ‘leased’ to 10 farmers are approximately 2 000 hectares. He mentioned that the office area at Welcome Home farm has four hectares that are planted with vegetables (spinach, carrots, beetroot and butternut) and two tunnels for tomatoes and green peppers. The vegetables are sold to the poor communities surrounding the entity at an affordable price and to the market in East London .

The entity also has a mechanisation workshop with tractors and planters, which are used to assist the surrounding communities. The workshop equipment is used to assist the communities in ploughing their lands at a fee of R744 per hectare. The entity also has a truck for transportation of animals from one area to another when there is a need. Currently there are nine tractors and they are not operational, which poses a challenge during the planting season. There were still some discussions with AgriSETA on the accreditation of the entity’s training programmes through Fort Cox College of Agriculture and Forestry.

Challenges

· The 10 farmers that have been given the surrounding farms by the former Department of Agriculture and Land Affairs still have no leases but Permissions to Occupy ( PTOs ), which need to be renewed on an annual basis. The farmers cannot use PTOs as collateral and without official leases; the farmers cannot even borrow production capital from financial institutions. Out of the 10 farmers that have been given the farms by the former Department of Agriculture and Land Affairs, only two reside in the farms, and some of the farms have been invaded by illegal occupants.

· The land where the entity’s dairy infrastructure is located, which is currently unused as the dairy cost centre was closed down and where the entity’s other cattle are grazing, does not belong to the entity but to Chief Jongilanga’s Tribal Authority. The former management of Ncera Farms (Pty) Ltd had an agreement with Chief Jongilanga to pay his electricity for the entity’s cattle to graze on his land.

2.2 Site Visits

Mr Qwabe’s Farm

Mr Qwabe informed the delegation that his farm is approximately 300 hectares and that half of the land has been invaded with alien species that left him with little land to farm. He mentioned that the livestock that he had could not graze in some of the areas due to the unfinished fencing. Another challenge that he was experiencing was the borehole in the farm that only works for six months at a time. The farmer also raised concerns with regard to their PTO contracts that had already expired in September 2012 and nothing has been done to ensure that the contracts were renewed.

The Department reported that the request for leases of the 10 farmers with the option to purchase was submitted to the Minister of Public Works for approval. The Department of Public Works is the owner of the land however, due to agricultural activities that are taking place on the land; the land is being administered by the Department of Agriculture, Forestry and Fisheries (DAFF). The Department also mentioned that approximately 6% of the total value of each farm would be the annual rental with 10% escalation. However, with the PTOs that they currently have, there was no rental.

Mr Matinise’s Farm

Mr Matinise informed the delegation that his farm is approximately 379 hectares and he resides at the farm with his family. He mentioned that since 2008 when he took over the farm, he had never farmed in the land due to a group of people led by a gentleman called Mr Albert, who invaded his farm and denied him access to farm the land. Whenever he tried to farm, his livestock was stabbed and others were killed. He currently rents land elsewhere for his livestock. The group invaded his farm since 2008 immediately after it was allocated to him. Mr Matinise reported that he had immediately reported the matter to DAFF, which was then the Department of Agriculture and Land Affairs. However, to date, nothing has been done. The group insist that Mr Matinise must leave as he had no right to the land and claim that the land belongs to their ancestors. They sometimes threaten him and his family; hold protests in the farm and on one occasion, killed two of his dogs and placed the corpses at his farm house gate. He further reported the case and the continuing invasions to the Police, the Provincial Authorities and to the State Attorney but nothing has been done.

Mr Makisi’s Farm

Mr Makisi’s farm is approximately 367 hectares. He explained that the farm was allocated to him after he applied and was interviewed following an advertisement that was placed in the Eastern Cape Herald and the Daily Dispatch newspapers. Mr Makisi mentioned that since 2008 when the farm was allocated to him, he had spent approximately R1 million on infrastructure development such as house renovations, fencing and road infrastructure. He also had a problem with people who invaded the farm and killed 12 of his cattle. He had stopped the process of land cultivation following an announcement that was made by Ms Xingwana , the former Minister of Agriculture and Land Affairs that the process of the allocation of the 10 farms was going to be reversed. As a result, approximately 50 employees from his farm lost their jobs. He also mentioned that the Government has never assisted the farmers since they were settled in the farms. This was, and is still a concern to the farmers as nothing gets addressed and they are at the mercy of illegal occupants.

3. Committee findings

During the discussion and site visits the Committee observed the following:

· That the Committee was fundamentally dealing with an entity that was not doing well at all as what was seen on the ground was not reflecting the 13 years of the entity’s existence.

· The workshop was not in a functioning state as the management of Ncera claimed.

· There was no significant investment from Government in the Ncera Farms that were allocated to farmers.

· There was no formal training or formal outreach programme in regard to agricultural activities that the entity was involved in to assist and to develop the communities around the area.

· Unlike in other provinces, no farming packages were given by the Eastern Cape Provincial Department to assist the farmers.

· There was no provincial or even local support that was given to the farmers in order for them to farm effectively.

· There were delays in the accreditation of the Ncera Farms (Pty) Ltd for the entity to provide training on agricultural activities, which is its mandate.

· There was no integrated approach and coordination of activities between the National Department of Agriculture, Forestry and Fisheries and the Provincial Department of Agriculture.

· Although the budget of Ncera Farms (Pty) Ltd was increased, there was no improvement in the performance of the entity as was observed during the site visit to the farms.

· The entity was busy operating as a sales business without much success instead of providing support and training to the farmers and communities around the area to improve agricultural production.

· There was a concern regarding the manner in which the 10 farms were allocated to the now struggling farmers, which created tensions within the community and invasion of some of the farms by some community members.

4. Conclusion

Members of the Committee, having interacted with the Department of Agriculture, Forestry and Fisheries, the Management of Ncera Farms (Pty) Ltd and the Ncera settled farmers recognised that after 13 years of existence, the Ncera entity was not implementing its mandate and that there was a need for an urgent intervention by Government.

5. Recommendations

The Minister should ensure that:

· The Department fast tracks the drafting of the Turnaround Strategy of Ncera Farms (Pty) Ltd in order to assist the entity in its current situation. The Turnaround Strategy should include a monitoring, reporting and evaluation framework of the funds that are transferred to the entity - to be submitted within three months of the tabling of this report.

· The current nine old tractors should be replaced with three new tractors that would be in a good condition to assist the communities around Ncera .

· The Agreement between Chief Jongilanga and the Ncera Farms (Pty) Ltd Management must be in writing with clear terms and conditions.

· The Department should ensure that there is an integrated approach between the National and the Provincial Departments on tractors and that Ncera Farms could also request some assistance from the Province in this regard.

· The Provincial Standing Committee should also assist in fast tracking and finalising the accreditation process through Fort Cox College so that Ncera Farms (Pty) Ltd can provide agricultural training through this College.

· The Department should provide the Portfolio Committee with a detailed report on why the Provinces were receiving different assistance with regard to farm packages.

· The Department must present a detailed report to the Portfolio Committee on what informed the decision to increase the budget of Ncera Farms (Pty) Ltd for 2011/12.

· The Department should ensure that Ncera Farms (Pty) Ltd operates as a government entity not a business entity that focuses on selling its produce. According to the mandate of the entity, it should provide agricultural extension services support the mechanisation of agricultural production, trains and advises farmers on crop, vegetable and animal production, markets agricultural products and supports animal improvement schemes targeting nearby farmers and communities.

· The Department should present to the Portfolio Committee the Forensic Audit Report on Ncera Farms (Pty) Ltd within one month of the tabling of this report.

· The Department must provide the Committee with the state of the 10 ‘leased’ farms at Ncera , with details on how these farms were allocated to the farmers.

6. Follow up Oversight Visit to Ncera Farms (Pty) Ltd on 27 November 2012

During the Committee oversight visit to Ncera Farms on 26 October 2012 it was resolved that a follow up oversight need to be arranged in order to engage with the Minister of Agriculture, Forestry and Fisheries, MEC for Rural Development and Agrarian Reform in the Eastern Cape Province on how to take Ncera Farms (Pty) Ltd forward. The Committee, therefore, undertook a follow up visit to Ncera Farms (Pty) Ltd on the 27 November 2012 to meet with the relevant stakeholders.

6.1 Delegation

The delegation of the Committee composed of Mr M Johnson, ANC (Chairperson and Leader of the delegation); Ms R Nyalungu , ANC; Ms M Pilusa-Mosoane , ANC, Mr S Abram, ANC, Ms N Twala , ANC, Mr A Trollip, DA; Mr N Bhanga , COPE, Mr RN Cebekhulu , IFP and Mr L Gaehler, UDM. The delegation was supported by Ms A Kakaza , Committee Secretary, Ms N Mgxashe and Mr N Ginindza , Committee Researchers and Ms N Diya , Committee Assistant.

6.2 Meeting with the relevant stakeholders at Ncera Farms (Pty) Ltd

The Committee was welcomed by the Chief Executive Officer (CEO), Mr Mziwamadoda Titimani . The following officials from the National Department of Agriculture, Forestry and Fisheries, Ncera Farms (Pty) Ltd Management and Ncera Farmers were in attendance: Mr S Ntombela (Acting Director-General) , Dr S Mkhize (Director: Provincial SOEs and Performance Monitoring) , Dr J Moeng , Mr S Masemola, Mr S Nompozolo and Mr D Moeketsi (DAFF); Ms Z Gana , Mr V Booi , Mr W Fourie , Mr PM Rubushe , Mr X Mlumbi ( Ncera Farms (Pty) Ltd); Mr M Qwabe , Mr Z Matinise , Mr E Makisi , Mr S Tshweli and Mr N Bhe ( Ncera Farmers).

During the meeting the Chairperson reported that the Minister and the provincial MEC had sent apologies and therefore, were not going to be part of the meeting as per the resolution of the Committee. The Committee was disappointed with the absence of the Executive authorities as it was planning to effectively address the numerous challenges at Ncera Farms (Pty) Ltd. The Chairperson also mentioned that the Committee had finally, officially received the forensic report on Ncera Farms (Pty) Ltd from the Department. However, the Committee had not yet been briefed by the Department on the report.

The Acting Director-General of the Department of Agriculture, Forestry and Fisheries, Mr S Ntombela , in his opening remarks, informed the Committee that an invitation was sent to the provincial department. However, there was no provincial official present in the meeting. He mentioned that he only heard about the Ncera Farms Forensic Report for the first time when it was mentioned by the Committee during the Annual Report briefings in October 2012; as the report was never mentioned or discussed in any of the departmental management forums he attended. He mentioned that it was only then after his enquiry, that the report was sourced and subsequently tabled for discussion at the management level. He mentioned that key issues that he observed from the report were lack of governance and misconduct of departmental officials. He had instructed the relevant officials in the Department to look at the issues and on who was at fault in the process and come up with solutions. In this regard, the Department was also doing a feasibility study on what needs to be done. Currently, Ncera Farms (Pty) Ltd had no Board of Directors and the National Treasury’s opinion on Ncera Farms (Pty) Ltd was that it was running at a loss. However, the long-term future of the entity will need a political decision.

Mr Titimani reported, for the first time since the Committee has been dealing with Ncera , a dispute about ownership of land around Ncera between the Phatho and the Jongilanga Chieftaincies. However, the community representatives from both Chieftaincies disputed the fact and said there was no dispute on land ownership. They mentioned that their concern is the rights of farm dwellers who have been residing in the Ncera farms all their lives and farming in these farms were their only way to survive.

Representatives from the Jongilanga Chieftaincy ( Imidushane ) reported that they have nothing against the developments at Ncera as their land falls outside the entity and the 10 state farms. However, they want to make sure that everybody in the area including farm dwellers benefit from developments at Ncera . Representatives of the Phatho Chieftaincy from Tsholomnqa had conflicting statements regarding claims they have lodged or not lodged against some of the state farms. Some acknowledged that the farms were bought from white commercial farmers by the former Ciskeian government and have since been classified as state farms. The Phatho Chieftaincy representatives were also concerned by the well-being of the farm dwellers and the surrounding communities and how they will benefit from what is taking place at Ncera .

7. Committee observations

The Committee observed that the communities surrounding the entity, Ncera Farms (Pty) Ltd were not confused about what is happening at Ncera and were not necessarily against agricultural development to produce food for the people of the Eastern Cape . However, they were concerned that whatever development that was taking place at Ncera was not benefitting them but taking away their rights as citizens.

The Committee also observed that the entity was not doing what it was mandated to do, i.e. providing extension support, mechanical services, training and agricultural support services to the farmers that were settled on Ncera Farms and the neighbouring communities. In addition, the Department as the Caretaker never addressed the plight of farm dwellers and the ongoing conflict between different stakeholders and the resettled farmers.

8. Recommendations

The Committee recommends that the Department investigates what would be the best path to follow in ensuring that all the affected stakeholders of the Ncera farms benefit from the operations of the entity and the conflict among stakeholders is resolved.

Report to be considered.

Documents

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