ATC130524: Report of the Portfolio Committee on Agriculture, Forestry and Fisheries on the Strategic Plans and the Budgets of the Department of Agriculture, Forestry and Fisheries (Vote 26) and its Entities, dated 23 May 2013.

Agriculture, Land Reform and Rural Development

Report of the Portfolio Committee on Agriculture, Forestry and Fisheries on the Strategic Plans and the Budgets of the Department of Agriculture, Forestry and Fisheries (Vote 26) and its Entities, dated 23 May 2013

Report of the Portfolio Committee on Agriculture, Forestry and Fisheries on the Strategic Plans and the Budgets of the Department of Agriculture, Forestry and Fisheries (Vote 26) and its Entities, dated 23 May 2013.

The Portfolio Committee on Agriculture, Forestry and Fisheries examined Budget Vote 26: Agriculture, Forestry and Fisheries and the Annual Performance Plan of the Department of Agriculture, Forestry and Fisheries for the 2013/14 financial year, along with the Strategic Plan for the period, 2013/14 to 2017/18 and budget projections for the Medium Term Expenditure Framework (MTEF) period. During the process, the Portfolio Committee also examined the Strategic Plans and associated Annual Performance Plans (APPs), as well as budgets of the Department’s six Entities for the 2013/14 financial year. Having considered the APPs and budgets of the Department and its entities, the Committee reports as follows:

1. Introduction

In terms of the Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999), Accounting Officers must provide Parliament or the relevant legislature with their respective institution’s Medium-Term Strategic Plan (MTSP) and, where applicable, with its Annual Performance Plan (APP). The Strategic Plans and Budgets of DAFF and its Entities were tabled in Parliament on 14 March 2013 and referred to the Portfolio Committee on Agriculture, Forestry and Fisheries for consideration and report. In performing its constitutional mandate, the Committee considered the Strategic Plans (2013-2014) of DAFF and its Entities taking into account their alignment with the following:

  • State-of-the-Nation Address;
  • Key Government Priority Outcomes;
  • The Department’s Integrated Growth and Development Plan (IGDP);
  • The Industrial Policy Action Plan 2 (IPAP2);
  • The New Growth Path (NGP);
  • The National Development Plan (NDP); and
  • The National Infrastructure Plan (2020).

The above serve as Government’s fundamental programmes of action for the medium term strategic period and in the long term. The Committee, in considering the Department and its Entities’ Strategic Plans and Budgets, wanted to determine whether the funds that are allocated to the Department and its entities through different programmes translate to actual service delivery within the borders of the country, particularly in rural and underserviced areas. In this regard, t he Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No. 9 of 2009), grants Parliament the power to reject, recommend or amend budgets of departments and entities.

2. The Department of Agriculture, Forestry and Fisheries (DAFF)

2. 1 The Mandate of DAFF

The mandate of the Department of Agriculture, Forestry and Fisheries is to ensure food security through sustainable production and management of natural resources and the development of all categories of producers in all three sectors under DAFF. The Department’s legislative mandate is reflected in a number of Acts, which include inter alia the Conservation of Agricultural Resources Act, 1983 (Act No. 43 of 1983), the Agricultural Product Standards Act, 1990 (Act No. 119 of 1990), the National Forests Act, 1998 (Act No. 84 of 1998) and the Marine Living Resources Act (MLRA), 1998 (Act No. 18 of 1998) (Certain Sections i.e. (i) Sections 5 to 7, 10 to 15, 17, 18 to 27 and 29 to 41, 44 to 50; (ii) Sections 1 to 4, 8, 9, 13, 16, 28, 42 and 51 to 83 in so far as they relate to the powers and functions transferred under item (i) above).

2.2 Strategic Goals of the Department

DAFF’s strategic goals over the medium term, which are organised around the key priority areas of food security, job creation, and rural and economic development, are to:

  • create employment by increasing the number of participants in the agricultural; forestry and fisheries sectors through support for smallholders and processors;
  • improve food security initiatives by coordinating production systems to increase the profitable production, handling and processing of food, fibre and timber products by all categories of producers;
  • improve the income and conditions of farm workers, foresters and fishers;
  • enhance exports by facilitating market access for agricultural, forestry and fisheries products;
  • ensure the sustainable use of natural resources by promoting environmentally sustainable production systems and the efficient use of natural resources; and to
  • manage the level of risks associated with food, diseases, pests, natural disasters and trade by establishing and maintaining effective early warning and mitigation systems.

2.3 The National Development Plan

Agriculture has been identified as one of the key job drivers in the New Growth Path (NGP); with the potential to create job opportunities for 300 000 households in agriculture smallholder schemes and 145 000 jobs in agroprocessing by 2020. The sector’s job creating potential has also been emphasised in the National Development Plan (NDP), where 643 000 direct jobs and 326 000 indirect jobs in the agriculture, agro-processing and related sectors are expected by 2030. The NDP recognises that the sector also has the potential to improve the living conditions of 660 000 farm workers and expects that by 2030; a third of the food surplus should be produced by small scale farmers or households.

To align with these objectives, the Department aims to continue developing and implementing various strategies that support labour intensive industries, particularly in rural areas and small towns, in order to increase the participation of agricultural communities in the economy of the country. These strategies include the agroprocessing strategy, the small, medium and micro enterprises (SMME) development strategy, and the Working for Fisheries programme. To support the NDP’s land reform objective, the Department’s Comprehensive Agriculture Support Programme (CASP) will provide post-settlement support to targeted land reform beneficiaries.

A key aspect of the NDP’s job creation objective is to increase the share of the national income of the lowest earning 40 per cent of the population from 6 per cent to 10 per cent by 2030. The Department aims to contribute to meeting this target by implementing various strategies to improve production efficiency for smallholder farmers. These include organising smallholder producers into commodity based organisations, increasing their collective bargaining power in negotiations for production inputs and markets, providing support and training to SMMEs, facilitating deals related to the Broad-Based Black Economic Empowerment for Agriculture ( AgriBEE) Sector Charter, and reviewing the allocation of commercial fishing rights. Two key programmes that are closely aligned with the priorities of the Plan are Ilima/Letsema, which is a campaign aimed at supporting sustainable agriculture and promoting rural development for smallholder farmers; and LandCare, which addresses land degradation problems and encourages sustainable conservation of natural resources through a community-based participatory approach.

2.4 Consideration of the Strategic Plan and the Budget of DAFF and the Marine

Living Resources Fund

Comments from the Executive Authority

The Minister of Agriculture, Forestry and Fisheries, Ms Tina Joemat-Pettersson, presented an overview of the Strategic Plan of DAFF for the 2013/14 financial year on 18 April 2013. In her presentation, the Minister mentioned that DAFF was making recommendations to government and to various structures as to how it would revitalise South Africa ’s agriculture with short and long term plans for sustainability. She emphasised that despite its declining share in the economy, agriculture is still a significantly important sector of the country’s economy. She commented that the recently implemented farm wage increases posed an additional threat to the sector across the value chain. New commercial farmers are more threatened by the burden of the wage increase and DAFF was assisting them with the structuring of their debt. She said further risks were exacerbated by natural economic factors, the credit crunch, international recession and exchange rates, and most importantly, the high cost of fuel and electricity. Other negative factors were the deregulation of the sector; discontinued institutional and marketing support structures left a significant void in the industry; limited uptake of the green revolution; and government support is miniscule compared to support given by other countries to their farmers.

The Minister commented that with the serious erosion of capital in the agricultural sector, job losses may be inevitable. She acknowledged that the job creation figures as cited in the NDP regarding agriculture have also not taken into account or anticipated the increase in salaries of farm workers. Due to these challenges, vulnerability to food insecurity was increasing and some farmers are consolidating and integrating their enterprises to maximise profits. She said DAFF was calling for urgent intervention mechanisms to cushion farmers and ensure that farm workers and communities were not left destitute. DAFF believed that the wage disputes were a reflection of structural shortcomings in the sector, such as the decline in the number of commercial farmers, the farmers consolidating enterprises to maximise profits, the ageing farm population, struggling smallholder farmers who are left out of the agricultural mainstream, limited support and diminishing agricultural skills.

She reported that the interventions requested by DAFF included the World Trade Organisation (WTO) green box subsidy and DAFF was working with the Minister of Finance to ring fence job funds for the sector. In addition, DAFF was also prioritising the Youth Employment Development Initiative to assist youth in agriculture; funding from the Land Bank to offer loans to small-scale farmers at interest rates of prime minus three and infrastructure funding to build warehouse facilities for commercial and large-scale farmers who are currently struggling. DAFF is responsible for the Presidential Strategic Infrastructure Programme (SIP) and the logistics on how Government should intervene to assist farmers. She said in the reporting financial year, Transnet had established a dedicated team which focuses on taking the transportation of agricultural products from road back to rail transport.

The Minister commented that while DAFF cannot build a successful agricultural sector on the back of cheap labour, the extent to which DAFF could assist and to what degree they could assist farmers was currently being debated. She mentioned that DAFF was in discussions with the Department of Labour regarding sectoral determinations to decide whether they are the most effective way to negotiate farm worker wages; and was also in negotiations with other industries, farm worker unions and large agricultural unions to explore whether collective bargaining might better assist the agricultural sector. In terms of Senior Management Service (SMS) level vacancies, the Minister announced the appointment of Mr Mannya as the Deputy Director-General (DDG) for Agricultural Production, Health and Food Safety and further reported that there is only one DDG position that still needs to be filled and shortlisting for the position of the Department’s Director-General (DG) is in progress and an appointment will be made within a month.

The Report of the Acting Accounting Officer

The Acting DG, Mr Sipho Ntombela, presented a detailed report of the 5-year Strategic Plan of the Department for the period, 2013/14 to 2017/18, as well as the Annual Performance Plan (APP) for the 2013/14 financial year. In his presentation, the Acting DG mentioned that the focus was on deliverables for the MTEF cycle for six budgetary programmes as allocated by the National Treasury and would also focus on the annual performance of the six departmental programmes. He mentioned challenges in the sector, which include increasing food prices, slower growth on the sector compared to other economies, increase in production costs in agriculture; inadequate extension services especially in Forestry and Fisheries; declining fish stocks; climate change and loss of agricultural land to mining, housing and industrial developments; increase in commercial farming resulted in smaller businesses being forced out of the sector; transformation having significant socio-economic impacts and lack of adequate resource management in the subsistence sector.

Policy and programme interventions were also presented. Some of the presented targets included: increasing smallholder farms from 200 000 to 250 000 by 2014; increasing the number of employees on commercial farms from 780 000 to 800 000; aiming to place 30 000 households in smallholder schemes by 2015; 145 000 jobs in agro-processing by 2020; 5 520 jobs through the Community Works Programme Plan; rehabilitating 32 280 hectares (ha) of rangeland and arable land, and clearing of weeds and invader plants; and recovery of targeted fish stocks (abalone, hake and West Coast Rock Lobster) by 10%. The DG reported that DAFF was in regular contact with the National Treasury to improve accountability for funds that are transferred to provinces and the Department was intensifying activities related to the way it works with the provincial departments as a significant portion of its Budget is transferred to Provinces. DAFF was also intensifying engagements with stakeholders and other government departments, as well as strengthening its oversight work in all district municipalities.

DAFF reported its planned contribution to job creation as follows:

Performance Indicators





Number of LandCare jobs created (874 000 opportunities = 3 800 Full Time Equivalents (FTEs)

1 100 FTEs

900 FTEs

900 FTEs

900 FTEs

Number of jobs created through refurbishment of Category B and C Forestry plantations

2 725 jobs

2 200 jobs

2 400 jobs

2 400 jobs

Increased the number of job opportunities (Working for Fisheries Programme)

1 100 jobs

1 150 jobs

1 200 jobs


The Department still has a high vacancy rate of 12% and plans to fill most of its vacant positions by the end of the 2013/14 financial year.

2.4.1 Financial Management

Over the medium term strategic framework (MTEF) period, DAFF reported its financial management according to the six programmes as follows:


2013/14 allocation

2014/15 allocation

2015/16 allocation

1. Administration

R663 949.00

R715 157.00

R749 942.00

2. Agricultural Production, Health and Food Safety

R2 066 145.00

R2 266 117.00

R2 303 754.00

3. Food Security and Agrarian Reform

R1 597 735.00

R1 708 705.00

R1 787 471.00

4. Economic Development, Trade and Marketing

R231 648.00

R236 033.00

R243 885.00

5. Forestry and Natural Resources Management

R1 184 474.00

R1 185 922.00

R1 246 517.00

6. Fisheries Management

R434 036.00

R446 932.00

R468 039.00


R6 177 800.00

R6 558 800.00

R6 799 600.00

There has been a general increase in the budget allocation to all the programmes of the Department except programmes 5 and 6 (Forestry and Fisheries, respectively) for the 2013/14 financial year when compared to the previous financial year, 2012/13. Key programmes such as Food Security and Agrarian Reform, Economic Development, Market Access and Agricultural Production, Health and Food Safety all received increased allocations of 13.24, 10.6 and 8.74 per cent, respectively. Significant allocations for the medium term are as follows:

  • The greatest MTEF allocation is R492.4 million to Onderstepoort Biological Products to build and modernise vaccine production facilities of which R54.6 million is earmarked for the current financial year;
  • R250 million for fences along South Africa ’s borders with Zimbabwe and Mozambique to manage stock theft and incidences of foot and mouth disease;
  • R200 million to drill and fit boreholes for agricultural purposes in rural communities across the country;
  • R45 million in 2013/14 for fencing under the LandCare programme grant;
  • R171 million for the 2013/14 financial year to expand the Working for Fisheries programme;
  • R129.8 million for improved conditions of service;
  • R323 million for the Agricultural Research Council to research crop production improvements, better animal vaccines, improving extension services and expand gene bank services; and
  • R197 million to improve provincial and rural agricultural colleges.

The spending focus of the Department over the medium term will be on providing agricultural support to smallholder farmers through conditional grants, such as CASP, LandCare and Ilima/Letsema programmes. The Department will spend over R6 billion on conditional grants to provinces to support 435 000 subsistence farmers and 54 500 smallholder producers, and to improve extension services and flood-damaged infrastructure over the medium term. The total cost of infrastructure projects funded by the Department is estimated at R751.5 million and will include the previously mentioned allocations for fencing, boreholes and upgrading of laboratories and other buildings. Additional allocations are also provided for Working for Fisheries projects, the modernisation and upgrading of vaccine production facilities at Onderstepoort Biological Products and the Stellenbosch plant quarantine station, respectively.

The Department had a funded establishment of 7 062 posts and 70 posts additional to the establishment; and as at 30 September 2012, a total of 6 146 posts were filled and 986 were vacant. The vacancies were reported to be mainly due to the difficulty in recruiting skilled personnel and the length of time involved in completing recruitment checks that form part of the national vetting strategy. The decentralisation of regional offices was also said to have contributed to the lengthy recruitment process. The vacant positions are expected to be filled in 2013/14.

2.4.2 Programme Plans and Budgets

The following core programmes including their strategic interventions were discussed:

Programme 1 - Administration

The purpose of the programme is to provide strategic leadership, management and support services to the Department. The aim of the programme is to lead, support and promote agricultural, forestry and fisheries resource management through policies, strategies and programmes to enhance sustainable use, and to achieve economic growth, job creation, food security, rural development and transformation. The programme comprises the Ministry, Office of the DG, Chief Financial Officer (CFO), Internal Audit, Corporate Services, Stakeholder Relations and Legal Services, Policy Planning, Monitoring and Evaluation and Office Accommodation.

The spending focus over the medium term for this programme would reportedly be on acquiring offices for the Forestry and Fisheries Branches and providing effective support services to the Department. An amount of R8.4 million was transferred from the Department of Water Affairs in the 2012/13 financial year and an additional R28.1 million has been allocated over the medium term to provide for the office accommodation needs of the Forestry Branch.

It was reported that the programme had a funded establishment of 1 115 posts and 7 posts were added to the establishment. As at 30 September 2012, a total of 929 were filled and there were 193 vacancies due to the lengthy recruitment process. It was reported that consultants are used mainly for research, external audit services and task teams appointed by the DG; and were only used as and when the need arises. Spending on consultants is expected to decrease over the medium term, as the Department fills its vacancies and becomes less reliant on consultants.

Budget Allocation


Medium-term expenditure estimate

R thousand








Department Management




Financial Administration




Internal Audit




Corporate Services




Stakeholder Relations, Communication and Legal Services




Policy, Planning, Monitoring and Evaluation




Office Accommodation








Programme 2 – Agricultural Production, Health and Food Safety

The purpose of the programme is to manage risks associated with animal diseases, plant pests, genetically modified organisms (GMOs) and registration of products used in agriculture. Its aim is to promote food safety and create an enabling environment for increased and sustainable agricultural production. The programme comprises three subprogrammes, namely, Plant Production and Health, Animal Production and Health and Inspection and Quarantine Services.

The spending focus of the programme over the medium term would reportedly be on increasing support to smallholder farmers and producers through the Ilima/Letsema programme, the sustainable plant production systems, and the maintenance of effective systems to manage risks associated with plant pests and diseases. Through the Ilima/Letsema programme, which is allocated R1.4 billion over the medium term for poverty alleviation, food security and job creation, the Department will develop plant related commodity strategies in 2013/14, with a focus on indigenous food crops. The strategies will guide the monitoring of the trends of genetic resources in food and agriculture by collecting and characterising indigenous landrace plant genetic resources. In addition, over the medium term, the Department will conduct 3 plant disease and pest surveillance programmes and manage risks associated with plant pests as part of its plant protection function.

In terms of animal production, over the medium term the programme will provide support to approximately 3 900 smallholder producers participating in animal improvement schemes. A significant increase in expenditure over the medium term was reported in the Animal Production and Health subprogramme due to an additional funding of R492.4 million for Onderstepoort Biological Products to build and modernise vaccine-producing facilities and equipment. An additional R54.6 million was allocated for the upgrade and maintenance of buildings and laboratories at the Stellenbosch Plant Quarantine Station.

The programme reportedly had a funded establishment of 1 516 posts and 8 posts in addition to the establishment. A total of 1 344 posts were filled and 177 were vacant as at 30 September 2012. The vacancies were due to the scarcity of skilled personnel and the extended recruitment procedure.

Budget Allocation


Medium-term expenditure estimate

R thousand








Inspection and Laboratory Services




Plant Production and Health




Animal Production and Health




Agricultural Research








Programme 3 – Food Security and Agrarian Reform

The purpose of the programme is to facilitate and promote household food security and agrarian reform programmes and initiatives targeting subsistence and smallholder producers. It comprises three subprogrammes, namely, Food Security, Sector Capacity Development and Extension Support Services.

The spending focus of the programme over the medium term would reportedly be on providing comprehensive support to subsistence and smallholder producers through the Food Security subprogramme. The spending focus would also be on providing infrastructure development, extension services, production interventions, and improved market access to attain food security. The latter will reportedly be achieved through CASP, which is allocated approximately R2.9 billion over the medium term to provide infrastructure needs to 220 000 existing, 80 000 new smallholder producers and 380 000 subsistence producers. Further focus will be on the upgrading and strengthening of 12 provincial and rural agricultural colleges through the Sector Capacity Development subprogramme.

The programme reportedly had a funded establishment of 474 posts and 15 posts are additional to the establishment. There were 80 funded vacancies in the programme as at 30 September 2012 owing to the scarcity of skilled personnel and the extended recruitment procedure.

Budget Allocation


Medium-term expenditure estimate

R thousand








Food Security




Sector Capacity Development




National Extension Support Services








Programme 4 – Economic Development, Trade and Marketing

The purpose of the programme is to promote economic development, trade and market access for agriculture, forestry and fisheries products and foster international relations for the sector. The programme comprises of three subprogrammes, namely, International Relations and Trade, Cooperatives and Rural Enterprise Development and Agroprocessing and Marketing.

The reported spending focus of the programme over the medium term would be on enhancing market access and trade for agricultural, forestry and fisheries products by extending trade, marketing and enterprise development support measures to producers and entrepreneurs across the industries’ value chains. The spending focus would also be on ensuring the establishment of and providing support to commodity groups and cooperatives by making transfers to the National Agricultural Marketing Council and the Land and Agricultural Development Bank of South Africa (Land Bank). The Department expected the transfers will establish 27 (1 per province per year) commodity based cooperatives over the medium term and support the establishment of 9 sustainable agribusiness deals (1 per province) over the medium term, in line with the AgriBEE Sector Charter. Over the medium term, the Department will through the programme, provide training on the basics of marketing and marketing information through specially designed websites and mobile phones to 300 farmers.

The programme reportedly had a funded establishment of 170 posts, 1 post that was additional to the establishment and 29 vacancies as at 30 September 2012 owing to the scarcity of skilled personnel and the lengthy recruitment process.


Medium-term expenditure estimate

R thousand








International Relations and Trade




Cooperatives and Rural Enterprise Development




Agro-processing and Marketing








Budget Allocation

Programme 5 – Forestry and Natural Resources Management

The purpose of the programme is to provide strategic direction and leadership to the Department with regard to the promotion of the sustainable management, use and protection of forests and natural resources to achieve social and economic benefits and to promote development. The programme comprises three subprogrammes, namely, Forestry Operations, Forestry Development and Regulation and Natural Resources Management.

The spending focus of the programme over the medium term will be on sustainable forestry management and implementing the LandCare programme, rehabilitating flood-damaged infrastructure, and preventing and mitigating disaster risks. The Department projects that 2 900 full-time jobs will be created through the LandCare programme. The implementation of the flood assistance scheme has begun in the 6 provinces that were affected by floods and R909 million will be spent over the medium term on repairing flood-damaged agricultural infrastructure. In addition, allocations to this programme over the medium term will be directed towards creating 7 325 jobs through the refurbishment of Category B and C plantations in Limpopo, KwaZulu-Natal (KZN), Mpumalanga and Eastern Cape. Furthermore, approximately 5 340 ha of temporarily unplanted areas in all provinces will be re-planted.

As at 30 September 2012, the programme reportedly had 3 184 posts, 17 additional posts and 395 vacancies. Vacancies were the result of difficulties in recruiting skilled personnel and the extended recruitment process. Consultants are used where specialised skills in forestry management are required.

Budget Allocation


Medium-term expenditure estimate

R thousand








Forestry Operations




Forestry Oversight and Regulation




Natural Resources Management








Programme 6 – Fisheries Management

The purpose of the programme is to promote the management, monitoring and sustainable use of marine living resources and the development of South Africa’s fisheries sector. The programme comprises five subprogrammes, namely, Aquaculture Management, Fisheries Research and Development, Marine Resources Management, Monitoring, Control and Surveillance and Fisheries Operations Support.

The spending focus of the programme over the medium term will be on the sustainable use of marine living resources and the Working for Fisheries programme. It is reported that over the medium term, R202.8 million has been allocated for the implementation of fisheries projects and over 3 000 job opportunities are expected to be created in coastal and rural communities. The spending focus will also be on performing annual fishery specific research to inform the process of setting the total allowable catches (TACs) in 22 fishing sectors per year until 2015/16. This will also include continuing with the finalisation and implementation of the small scale fisheries policy in 2013/14, as well as improving compliance with and enforcement of the MLRA by finalising the development and implementation of the integrated Fisheries Security Strategy from 2013/14 onwards. The programme also provides for personnel costs and a transfer payment to the Marine Living Resources Fund (MLRF).

The programme reportedly had a funded establishment of 603 posts and 22 posts in addition to the establishment. As at 30 September 2012, there were 112 vacancies owing to the difficulties in recruiting skilled personnel and the extended recruitment procedure.

Budget Allocation


Medium-term expenditure estimate

R thousand












Monitoring Control and Surveillance




Marine Resources Management




Fisheries Research and Development




Marine Living Resources Fund








3. Committee Observations on the APP and Budget of DAFF

§ The Committee welcomed the interventions that were mentioned by the Minister on the mechanisms to cushion farmers and ensuring that farm workers and other farming communities were not left in the dark. The Committee also welcomed the statement made by DAFF that 70% of new fishing rights allocation would go to black small-scale fishing communities. The Committee agreed that there was no need for the Department to make a specific presentation on the Marine Living Resources Fund (MLRF) as the activities relating to the MLRF were covered in the Department’s Programme 6: Fisheries Management. The Committee made further observations on the presentation and raised the following:

§ Concerns regarding the Auditor-General (AG)’s report that the Department had spent 99% of its allocated budget during the 2011/12 financial year whilst only 51% of their planned targets were achieved. Members were particularly concerned with value for money and the fact that the 99% of the budget that the Department used to only achieve half of its planned targets during 2011/12 is not even reflected on the ground. The Department was requested to comment on the findings by the AG and whether there was any willingness on its part to improve the situation where targets that are planned and budgeted for are not achieved but the full budget of the Department is spent. Members wanted to know what measures has the Department put in place to ensure that for the 2012/13 and the current financial year going forward, positive results and effective use of the allocated budget are realised.

§ The high vacancy rate, which is still higher than 10% and the level of acting that, takes place at senior management service (SMS) level. This was also noted by the Committee as a root cause of lack of leadership and accountability, hence DAFF fails to meet its planned targets or achieve the food security objective in the country. The Committee was of the opinion that South Africa needs to protect its industry in order to create or save jobs rather than relying on cheap imports for food security.

§ Concern regarding the possibility of the areas that were declared as Marine Protected Areas (MPAs) shutting out communities who have been depending on those areas for their day-to-day survival.

§ A concern that in the 2012/13 financial year, DAFF suspended the Fisheries Charter with the intention of developing Fisheries Codes; however, no mention is made of the Codes in the current year’s APP or the Strategic Plan.

§ Concern regarding the country’s coast, which is still not protected and is open to abuse and poaching due to the unresolved status of fishing vessels; and the uncertainty regarding the time that it will take to get all the vessels back at sea.

  • The Committee noted with great concern that despite the available resources, agriculture, forestry and fisheries sectors’ contribution to food security in South Africa is minimal. It was cited that in the State of the Nation Address, the President highlighted the role of agriculture in transforming South African society in line with the National Development Plan (NDP); yet, DAFF was unable to implement funded programmes to make a positive and recognisable impact. The Committee concluded that not all was doom and gloom with regard to DAFF Strategic Plan, however, the Committee needs to be more robust in their oversight work to ensure that challenges are addressed and service delivery in the Department is improved.

4. Consideration of the Strategic Plans and Budgets of DAFF Public Entities

and other Agencies

4.1 Agricultural Research Council (ARC)

The Agricultural Research Council (ARC) was established by the Agricultural Research Act, 1990 (Act No. 86 of 1990) and is the main agricultural research institution in South Africa. The ARC’s mandate in terms of the Act is to conduct research and development and to effect the transfer of technology in order to promote agriculture and the industry, contribute to a better quality of life and facilitate and ensure natural resource conservation.

The ARC’s strategic goals over the medium term are to:

  • Undertake and promote research, development and technology transfer.
  • Use and share its technology expertise.
  • Publish information about its objectives and functions.
  • Establish and control facilities in the fields of research, development and technology transfer.
  • Promote cooperation between South Africa and other countries in relation to research and development and technology transfer in the sector.

The Chairperson of the Board of the ARC, Mr Jonathan Godden gave a brief overview of the strategic objectives of the ARC. He mentioned that it was probably the last time that the current Board appears before the Committee as its term of office is coming to an end in June 2013. He reported that one of the key tasks that the ARC is focused on is the organisational restructuring that would align the organisation with the requirements of its new strategy, a process which the Board embraces and in this regard, will be supporting the ARC management during 2013/14. Regarding the development of the entity’s footprint around the country, the ARC is looking at establishing some research facilities in three provinces, namely, the Eastern Cape, KwaZulu-Natal and Limpopo.

The Chief Executive Officer (CEO), Dr Shadrack Moephuli presented the strategic plan and budget of the ARC. He stated the ARC’s objective and mentioned that its policy considerations were aligned to Government’s National Priorities, the New Growth Path, the National Development Plan and the DAFF Strategic Plan for Agriculture. The ARC’s reported strategic priorities include growth in agriculture; increased productivity; food security (Zero Hunger Campaign); bio-security; job creation; optimal technology platforms; support to Government’s development agenda; Southern African Development Community (SADC) integration into markets and resources; bio-economy (water, climate, carbon footprint, energy, sustainable and healthy production methods); the agrarian reform agenda; smallholder farmers; and research and development across the value chain.

The ARC is funded mainly from government transfers (parliamentary grant) and income generated from applied research and other projects. Transfers received are expected to continue increasing as a result of the economic competitiveness and the support package allocation of R128 million in 2013/14 and R195 million in 2014/15 for research into crop production, the production of animal vaccines, extension services for smallholder farmers, university research and the maintenance of the national gene bank collections. The spending focus of the ARC over the medium term would be on crop production, animal production and health, and management of natural resources.

The total budget of the ARC for the 2013/14 financial year is R1.2 billion, of which R885 million is the Parliamentary Grant for operational and capital expenditure (R810 million and R75 million, respectively). The ARC expects to realise a surplus of R100 million in 2013/14.

4.2 Onderstepoort Biological Products (OBP)

The Onderstepoort Biological Products (OBP) was established by the Onderstepoort Biological Products Incorporation Act, 1999 (Act No. 19 of 1999). The mandate of the company is to prevent and control animal diseases that impact on food security, human health and livelihoods through sustainable veterinary vaccine manufacturing.

The company’s strategic goals over the medium term are to:

§ build a new manufacturing practice facility.

§ increase the production of viral and bacterial vaccines and introduce new ones.

§ improve manufacturing efficiency.

§ reduce the input costs of production.

§ ensure that vaccines remain affordable in the market.

§ form strategic partnerships to leverage funding and research and development capacity.

Dr PE Hanekom, one of the OBP Board’s non-executive Directors, gave a brief overview of the OBP’s strategic objectives for the current financial year. The presentation focused on the OBP’s background, governance, its Corporate Plan, the review process, its alignment to government programmes, its strategic objectives, key performance indicators, financial information and performance monitoring.

The Chief Operations Officer (COO), Dr Theresa Smit, presented the strategic plan of OBP on behalf of the Chief Executive Officer (CEO), Dr Steven Cornelius. He mentioned that O BP had conducted a strategic review process and there was a need to introduce significant changes in the organisational culture, mind set and performance of employees to enable the organisation to adapt to changes in quality, production, industry trends and technology. The changes would ensure that OBP reaps the benefits of an engaged and diverse workforce.

The OBP derives revenue mainly from the sale of animal vaccines. The company has received a grant from the Department of Agriculture, Forestry and Fisheries of R492.4 million over the medium term to modernise its aging infrastructure. The CEO acknowledged that the company’s revenue decreased between 2010/11 and 2012/13, mainly due to the negative perception around the Rift Valley Fever (RVF) clone 13 vaccine, which also affected sales of other related products. The decrease followed a significant increase in revenue in the previous year when the vaccine was first introduced. The spending focus over the medium term would be on modernising the vaccine production facility and building personnel capacity by filling vacant research and development posts.

The estimated operational expenditure of the OBP for the 2013/14 financial year is approximately R81.88 million excluding capital expenditure of R96.5 million and personnel costs.

4.3 The South African Veterinary Council (SAVC)

The South African Veterinary Council (SAVC) is a representative organisation for the veterinary and para-veterinary professions, promoting the health and well-being of all people of South Africa through the promotion of animal health, production and well-being. It is self-funded through membership fees.

The objectives of the SAVC are to:

  • regulate the practicing of the veterinary professions.
  • determine the minimum standards of tuition and training.
  • register holders of prescribed qualifications.
  • exercise effective control over professional conduct.
  • determine the standards of professional conduct.

The Vice-President of SAVC, Dr Anne de Vos presented the strategic plan of SAVC. She mentioned that the veterinary team should be regarded as key to rural development, not only in terms of food safety but also in managing rural development, management of animal health and production and veld and pasture management . Its mission sought through the Veterinary and Para-Veterinary Professions Act, 1982 (Act No. 19 of 1982), is to promote competent, efficient, accessible and needs-driven service delivery in the animal health care sector; protect the health and well-being of animals and animal populations; regulate the professional conduct of the veterinary and para-veterinary professions; set and monitor standards of both education and practice for the veterinary and para-veterinary professions; and protect and represent the interests of the veterinary and para-veterinary professions.

Dr de Vos explained the objectives of Section 3 of the Veterinary and Para-veterinary Professions Act of 1982 that informs the strategic objectives of SAVC as an organisation. The organisation’s achievements from the 2010/11 period included proposed amendments to the newly amended Act on compulsory community service (CCS) for veterinary professionals; dealing with the inspectorate; effectively addressing appeals, suspensions and cost orders. The registration of members was reported to be up to date and the organisation has made visitations to the College of Agriculture and Environmental Sciences at the University of South Africa (UNISA) and the Faculty of Science and Technology: Animal Health at North West University (NWU). SAVC has accredited 457 Continuous Professional Development (CPD) activities and completed a pilot study on inspection of facilities; improved communication with the profession on matters relating to veterinary practice through short message services and newsletters; ensured complaints and enquiries were dealt with effectively and expeditiously, and had met and advised the Minister accordingly.

One of the challenges to the profession and disease prevention is that Threatened and Protected Species of animals require permits from the Department of Environmental Affairs (DEA) and from provinces. Additional challenges include: lay persons and unqualified persons that are employed by the state; loopholes created by medicines being governed by two Acts (
Medicines and Related Substances Control Act, 1965 (Act No. 101 of 1965) and Fertilisers, Farm Feeds, Agricultural Remedies and Stock Remedies Act, 1947 (Act No. 36 of 1947) ; damage to the reputation of the profession as a result of rhino poaching activities; information technology (IT) transformation; increasing interest among black youth (lack of resources to cater for them); few specialists in the animal production field; and that veterinary science was not being considered as a priority.

Dr de Vos also mentioned that in terms of the Strategic Plan 2013 – 2017, the organisation would further review the Veterinary and Para-Veterinary Professions Act; facilitate implementation of the Inspectorate; and revise the rules, scope of practice, advertising and touting. SAVC will also investigate lay persons, conduct routine inspections, investigations, enquiries determining and maintaining standards of training and practice, appoint relevant expertise, conduct investigations at training institutions, monitor subjects and conduct examinations. The organisation will further ensure that qualified and trained persons were registered and would run an annual registration examination for persons who seek competence-specific registration, which will be accredited by the South African Qualifications Authority (SAQA). Dr de Vos reported that there is an urgent need for infrastructure and facilities for veterinary services in rural areas; and also a need for a Veterinary Strategy for the country. SAVC will also develop a close co-operation with the Council on Higher Education and the Department of Higher Education and Training to address some of the challenges relating to qualifications.

4.4 The
Perishable Products Export Control Board (PPECB)

The Perishable Products Export Control Board (PPECB) is mandated by the Department of Agriculture, Forestry and Fisheries in terms of two Acts. The Perishable Products Export Control Act, 1983 (Act No. 9 of 1983) requires the Board to ensure the orderly export of perishable agricultural products and monitor the proper maintenance of a continuous cold chain for exports, while the Agricultural Product Standards Act, 1990 (Act No. 119 of 1990) required the Board to monitor minimum quality standards of perishable products for export.

The PPECB’s strategic goals over the medium term are to:

  • enhance the credibility of South Africa’s export certification.
  • contribute towards South Africa’s perishable product industries to become more competitive in terms of exports.
  • strengthen the PPECB’s capacity as a credible source of information.
  • support government in ensuring confidence in quality assurance and food safety systems for local perishable product markets.
  • support government in developing systems to ensure compliance with South African food safety and quality standards for imported perishable products.

The Chairperson of the Board, Mr Louis Vorster gave an overview of the strategic goals of the PPECB. He mentioned that country exports have not grown in the past 3 years, which had a significant impact on PPECB’s income. He reported that the biggest challenge for the PPECB was citrus black spot (CBS), which was a threat to the citrus industry. He mentioned that if exports to Europe had to stop that could lead to a R40 million deficit within the PPECB. He reported that the two Acts, the PPEC Act of 1983 and the Agricultural Product Standards (APS) Act of 1990 would be reviewed and presented to Parliament. This will reportedly have a significant impact on the modernisation of PPECB business and its financial model including future sustainability. He also mentioned that as electronic verification of information was vital for the industry, human capital development was also of importance to the organisation.

The Chief Executive Officer (CEO), Mr Stuart Symington, presented the challenges that are facing the organisation as well as progress going forward. He mentioned that the year 2012 was a tough year for the organisation with a great deal of pain for gain. Necessary changes were instituted with the support of the Department of Agriculture, Fisheries and Forestry (DAFF). While PPECB quality inspection was at the heart of the value chain, costs had increased and exports had not increased. PPECB had succeeded in cutting costs without compromising service delivery.

The reported challenges included the conversion from a manual system to an electronic platform for handling of data; providing more cost-effective service so that customers could reduce their prices and be more competitive; and strengthening capacity in South Africa to reduce the number of customers using overseas laboratory testing of products. The PPECB and DAFF were working hard to stop the European Union (EU) market from putting a ban on South African citrus exports due to CBS. Legislation requires that 2% of a product should be sampled, which is a challenge for CBS as it may not be visible during sampling, and on occasion even a 10% sample can miss its presence. It was reported that despite the Australian, New Zealand, American and South African science having proved that CBS could not infest European orchards from exports, European scientists were not convinced.

The organisation was anxious for Parliament to process within the current financial year, the two Acts that are being amended. The Cold Chain Act (better known as the PPEC Act) was last promulgated in 1983 and was thus 30 years old. PPECB had spent the better part of 2012 revamping it and it was an important Act in that it covered the sterilisation cold treatment of the chain, equipment certification and temperature management, and the appointment of the Board and CEO. Shipping had been removed from the Act as PPECB no longer handled shipping. The APS Act was 23 years old and the Act covered food safety, maximum residue levels of chemicals allowed on products going overseas and end-point inspection standards. Through the amendments, PPECB was looking forward to have the right to audit customers who qualified for an audit rather than visiting them daily on an end-point inspection basis.

The CFO, Mr Johan Schwebus presented the budget of PPECB. PPECB generates revenue mainly from fees and levies for statutory services for the perishable products industry. The CFO reported that t hat PPECB experienced a loss of R16 million during 2012 but managed to break even in the current year as a result of increases in fees and levies (8.9%). The spending focus over the medium term will be on the delivery of statutory services and the mitigation of the main risk areas in PPECB’s service delivery priorities.

The estimated operational expenditure for PPECB for the 2013/14 financial year is R192.9 million and for capital expenditure (CAPEX), R5.3 million. The CAPEX amount of R5.3 million from accumulated reserves will be used to fund efficiency gain projects, i.e. IT rollout of tablet technology, office and laboratory equipment and vehicles. Efficiency gain projects are expected to yield more savings in the long term. PPECB revenue is expected to increase from R207.6 million in 2013/14 to R251.2 million by 2015/16 due to volume growth and tariff increases.

4.5 The
National Agricultural Marketing Council ( NAMC )

The National Agricultural Marketing Council (NAMC) was established in terms of the Marketing of Agricultural Products Act, 1996 (Act No. 47 of 1996) to provide strategic advice to the Minister of Agriculture, Forestry and Fisheries on all agricultural marketing issues, improve market efficiency and market access by all participants, optimise export earnings, and improve the viability of the agricultural sector.

The NAMC’s strategic goals over the medium term are to:

§ ensure increased market access for all markets participants.

§ promote efficiency in the marketing of agricultural products.

§ optimise export earnings from agricultural products.

§ enhance the viability of the agricultural sector.

The Chairperson of NAMC, Ms Ntombi Msimang gave an overview of the strategic objectives of NAMC for the current financial year. She mentioned that part of the objectives were to increase market access for all participants, promote efficiency in the marketing of agricultural products, optimise export earnings from agricultural products and enhance the viability of the agricultural sector.

The CEO, Mr Tshililo Ramabulana presented the strategic plan of NAMC. He reported that total statutory levy expenditure over the past four years was R1.2 billion. Of the amount, R142 million was spent on export market development, R134 million on local consumer education, R354 million on research, R131 million on information and R259 million on transformation. In the current year, NAMC would help industries collect over R400 million. Money spent on research went to the ARC and universities; and NAMC would be focusing more on transformation going forward. He mentioned that the NAMC still has a challenge with the 20% levies from the agricultural trusts; and market/export related challenges including infrastructure, logistics and water.

He reported the continuing support to the development of schemes to secure markets for small holder farmers. The schemes include the Vineyard Scheme, Maize and Sunflower Scheme, Livestock Improvement Scheme and Dairy Development Scheme. He mentioned the Supply Chain and Logistics Development Programme, whose objective is to integrate small agro-businesses into regional supply chains, increase market access and income earnings. It was reported that over the past two years, the programme had been implemented in the Western Cape and NAMC would be expanding the programme to other provincial departments.

The NAMC collaborated with Further Education and Training (FET) Colleges and Agricultural colleges to render services to small holder producers. The target in this regard is to capacitate 200 farmers during the current financial year; and to facilitate four training programmes. He also mentioned the Markets, Economic and Research Programme, which assists with the coordination of strategic integrated projects on behalf of DAFF for engagement of the private sector to identify projects that should be implemented in partnership with government. Criteria for selection of projects included sector growth and job creation, food security, Broad-Based Black Economic Empowerment (BBBEE) and private sector investment. The NAMC over the medium term will continue with the publication of markets, prices and industry related reports and providing support to black-owned agribusinesses to attend local and international trade shows.

The CFO, Ms Sarah Muvhulawa presented the budget for the MTEF period 2013-2016. She mentioned that NAMC had received the following allocations from DAFF: R33.8 million for 2013/14, R36 million for 2014/15 and R37.9 million for 2015/16 financial years. An additional funding request to the National Treasury resulted in an amount of R724 000, R972 000 and R1.2 million being allocated to the personnel budget for improvements in the conditions of services during the MTEF period. The total budget for the NAMC is R34.7 million. With the minimal budget at its disposal the Committee commended NAMC for the good work that it was doing; its clean audit and the high delivery against its goals and planned targets in the previous financial year.

4.6 Ncera Farms (Pty) Ltd

Ncera Farms (Pty) Ltd (Ncera) is listed in the PFMA as a Schedule 3B public company. It is wholly owned by the Department of Agriculture, Forestry and Fisheries (DAFF). Its mandate is to provide extension, mechanical services and training and agricultural support services to land reform beneficiaries and communities that are surrounding Ncera.

The entity’s strategic goals over the medium term are to:

  • Promote industry and occupation directed farm management training.
  • Create a one-stop shop farmer support centre through partnerships and mobilisation of resources.
  • Develop franchise type agricultural business models in support of entrepreneurs in the sector.
  • Pioneer sustainable agri-villages.
  • Ensure organisational growth and sustainability.

The Chief Executive Officer (CEO), Mr Titimani, presented the Strategic Plan of Ncera Farms (Pty) Ltd. In his presentation, he mentioned that the aim of Ncera Farms was to contribute towards an industry focused farm management training, farmer support services and the design of franchise type agricultural business models for farmers in general and beneficiaries of land and agrarian reform in particular within the immediate catchment area of Ncera. Accordingly, Ncera’s interventions were targeted at human capacity development, skills upgrading and income generation in a practical and hands-on way. He mentioned that the entity has agreed with DAFF that in future, Ncera will focus on the development of the Nguni cattle breed.

The budget for Ncera for the 2013/14 financial year was R3.4 million from DAFF and the CEO reported a R2.2 million deficit, which will not even cover personnel costs. However, he emphasised that if sufficiently funded, Ncera has potential to develop agriculture in the area and the region. Ncera also generates minimal revenue from the sale of livestock and vegetables.

5. Committee Observations on the APPs and Budgets of DAFF Entities

Having examined and made observations on the APPs and budgets of the entities, the Committee raised the following concerns and comments:

5.1 Agricultural Research Council (ARC)

§ Concern regarding human resource capacity as it was noted that the ARC has not been successful in filling vacancies. In this regard, Members also raised concerns regarding the credibility of the information presented to the Committee as staff positions and vacancies in the ARC’s Business Plan differ from those in the 2013 Estimates of National Expenditure (ENE).

5.2 Onderstepoort Biological Products (OBP)

§ Concern regarding the sufficiency of the R2 million that has been allocated for security, given that OBP is a National Key Point.

5.3 South African Veterinarian Council (SAVC)

§ Committee required more information and the list of unqualified veterinarians that are employed by the State and where they are placed.

§ Concern regarding the sufficiency of 3 000 registered veterinarians to service the country’s livestock and game numbers.

5.4 Perishable Products Export Control Board (PPECB)

§ Commended the PPECB for the good work that they are doing with limited resources and for achieving clean audits for their financial performance.

§ Concern regarding CBS, its impact on exports and research activities to prevent and address challenges associated with the disease .

5.5 National Agricultural Marketing Council (NAMC)

§ Commended the NAMC for the good work and for consistently achieving clean audits for their financial performance.

§ Concerns on the lack of synergies and overlaps in the work of the Department’s entities and other state-owned enterprises (SOEs), for example, NAMC, ARC and OBP.

5.6 Ncera Farms (Pty) Ltd (Ncera)

§ Concerned that Ncera has since 2009 not been complying with Corporate Government requirements in relation to the appointment of a Board of Directors and an Audit Committee.

§ The Committee raised serious concerns with the consistent budget allocations by the Department to the entity that has not submitted an APP in terms of the PFMA and National Treasury Guidelines. The Committee questioned the expenditure of tax payers’ money on an entity whose existence was not justifiable as it was not fulfilling its mandate and not beneficial to the Ncera communities that live around the entity and those occupying Ncera state farms. This was despite numerous requests and recommendations by the Committee to DAFF to address issues that were raised regarding Ncera and to develop a Turn-around Strategy.

§ Given the administrative and institutional matters that have been raised and the poor quality of the document that was submitted as a Strategic Plan for Ncera, the Committee resolved not to consider the contents of the document and resolved that the entity has not submitted the APP for 2013/14. In this regard, DAFF, which is the sole shareholder and Caretaker of the entity, was questioned on its responsibilities and oversight over the entity.

6. Recommendations

The Committee therefore recommends that the Minister of Agriculture, Forestry and Fisheries ensures that the Department of Agriculture, Forestry and Fisheries:

  • provides the Committee with a plan or strategy on how the Department plans to address vacancies in the Department.

  • liaises with the Land Reform cluster, as well as the Department of Mineral Resources to address the challenge of losing agricultural land to mining.

  • considers continued and significant budget allocation to OBP, which is a National Key Point that plays a very important role in the country’s food safety, the prevention and management of livestock diseases.

  • considers a budgetary allocation to PPECB for transformation activities and capacity building of the emerging sector and for the organisation to continue carrying out its mandate .

  • considers funding the SAVC to assist its activities in encouraging young black students to enroll for veterinary and para-veterinary studies/qualifications.

  • ensures that agriculture, as a subject is included in learning programmes as early as Basic Education stage.

  • ring fences infrastructure development funds while identifying a lead authority (e.g. Department of Public Works) for the implementation of infrastructure projects to avoid duplication and wasteful expenditure.

  • considers establishing a non-profit entity that will include relevant government departments, South African Maritime Safety Authority (SAMSA) as the lead agency and the fishing industry to collectively manage the fleet of fishing vessels.

  • considers establishing a monitoring and evaluation (M & E) team within the Department that will focus on monitoring and evaluating the set targets against delivery for the conditional grants that are transferred to provinces (e.g. CASP, Ilima/Letsema, LandCare) including the Disaster Management Funds. The Department must report on these to the Committee on a quarterly basis.

  • considers dissolving Ncera Farms (Pty) Ltd (the entity), taking into account all the labour-related and legal implications. The Minister should also note that this entity, for the past four years, has failed to submit a professionally prepared Strategic Plan, APP and Annual Report as required by the PFMA and the National Treasury.

  • provides pre-settlement support for targeted land reform beneficiaries instead of focusing only post-settlement support and ensure that interventions are measurable in support of the NDP’s land reform objective.

  • collaborates with the Department of Trade and Industry on the development of aquaculture programmes.

  • considers improvements in the development and expansion of aquaculture by removing red tape as aquaculture can be beneficial in removing pressure off the dwindling natural resources.

  • ensures that there is collaboration between the ARC and the NAMC on livestock development programme such as Kaonafatso ya Dikgomo and the National Red Meat Production Project; and other agricultural development programmes.

  • provides a report regarding the 10% shareholding in South African Forestry Company (Ltd) (SAFCOL)’s privatisation transaction by previously disadvantaged communities and plans regarding reforestation of areas that were transferred since 1999.

7 . Conclusion

The Committee was not satisfied with DAFF’s APP for the 2013/14 financial year, citing a number of issues that were previously raised by the Committee, including issues that were also raised by the Auditor-General in previous fi nancial years that the Department has not effectively addressed or responded to.

However, the Portfolio Committee on Agriculture, Forestry and Fisheries supports the budget allocation of the Department of Agriculture, Forestry and Fisheries (Vote 26) for the 2013/14 financial year, noting the recommendation on Ncera Farms (Pty) Ltd, and further recommends that Budget Vote 26 be adopted.

Report to be considered.


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