ATC141020: 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 23 September 2014
Agriculture
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
23 SEPTEMBER 2014
The Portfolio Committee on Agriculture, Forestry and
Fisheries, having undertaken an oversight visit to
Ncera
Farms (Pty) Ltd in the Eastern Cape Province on 23 September 2014 reports as
follows:
1.
Background
Ncera
Farms (Pty) Ltd is a public company listed
under Schedule 3B of the Public Finance Management Act (Act No. 29 of 1999),
with the Department of Agriculture, Forestry and Fisheries (hereinafter
referred to as 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 (hereinafter referred to
as
Ncera
) is to contribute to the 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.
The
Portfolio
Committee on Agriculture, Forestry and Fisheries of the Fourth Parliament
has since 2010 been having challenges
regarding engagement with the entity, which never submitted a proper Strategic
Plan or an Annual Performance Plan (APP) as required by the National Treasury
and the Public Finance Management Act (PFMA). Additionally, despite the
Committee not approving the entitys Strategic Plans, which never submitted an
APP, the Department continued to allocate funding to the entity. The entity
also failed to submit a well-prepared Turn-around Strategy as was recommended
by the Committee during the 2010/11 financial year. In addition, there were
long-standing conflicts among the stakeholders that were never addressed by the
Department, which involved the land reform farmers and the farm dwellers. The former
Portfolio Committee during its 2013/14 Budget Report, recommended that the
Ncera
, which has been running at a loss for the previous 7
years and not fulfilling its primary function and intended purpose, be deregistered.
1.1.
Objective of the
Visit
During deliberations on the 2014/15 Strategic Plans and Budgets of
the Department and its entities on 11 July 2014, the new Portfolio Committee of
the Fifth Parliament, having interacted with some of the previous Committee
reports on
Ncera
including its current Strategic Plan,
the majority
of Members of the
current Portfolio Committee
supported in principle, the decision that was taken by the previous Portfolio
Committee. However, the Committee decided to
first undertake an oversight visit to
Ncera
to get a better understanding of the situation, to
interact with some of the stakeholders and to also determine the Departments
progress regarding deregistration of the entity and stakeholder engagements.
The Committee agreed to undertake the visit to
Ncera
Farms (Pty) Ltd
on
Tuesday, 23 September 2014 to meet and engage with the communities and other
affected stakeholders.
1.2.
Delegation
The
delegation of the Committee composed of Ms MR
Semenya
,
ANC (Chairperson and Leader of the delegation); Mr CHM
Maxegwana
,
ANC; Mr ZMD Mandela, ANC; Mrs TMA
Tongwane
, ANC; Mr
TRJE
Ramokhoase
; ANC; Ms Z
Jongbloed
,
DA; Mr BD Joseph, EFF and Mr MLW
Filtane
, UDM. The
delegation was supported by Ms
A
Kakaza, Committee Secretary,
Ms N
Mgxashe
, Content Advisor, Ms N
Qwabe
, Committee Researcher and Ms N
Diya
,
Committee Assistant.
The
delegation was joined by the following Members from the Eastern Cape Provincial
Legislature of the
Portfolio Committee
on Agriculture and Rural Development:
Ms N
Gqiba
,
ANC (Chairperson); Mr T
Wele
, EFF; Mr
Tsengwa
, UDM. The delegation was supported by Mr M
Makeleni
, Committee Researcher and Mr QN
Mafuya
, Legal Advisor.
1.3
In attendance
The
following officials were in attendance:
National
Department of Agriculture, Forestry and Fisheries:
Mr MJ
Kgobokoe
, Deputy Director-General (DDG) for Food Security
& Agrarian Reform (FSAR); Mr MS Masemola, Deputy Director (DD): Small
Holder Development in Food Security and Agrarian Reform Branch; Dr SF Mkhize,
Director: Provincial & State Owned Entities (SOEs) Performance Monitoring; Mr
B
Msomi
, Chief Director: National Extension Support
Services; Ms N
Mafani
, Parliamentary Coordinator; Mr
RT
Makoloane
, Office Assistant; Ms R Thompson,
Parliamentary Liaison Officer (Ministry); Ms V
Vika
,
Parliamentary Liaison Officer (Office of the Deputy Minister); Mr SN Samuel;
Principal Communication Officer, Mr AR Dietrich, Advisor to the Minister; Ms P
Morai
, Land Administration Officer; .
Agricultural Research Council (ARC):
Dr MA
Magadlela
,
Acting Group Executive Animal Science; Mr LF
Monkwe
,
Chief Information Officer.
Ncera
Farms (Pty)
Ltd:
Mr M
Titimani
, Chief Executive Officer; Mr X
Mlumbi
, Section Manager; Mr PM
Rubushe
,
Workshop Manager; Mr W
Fourie
, Farm Manager
Provincial Department of Rural Development and
Agrarian Reform:
Mr M
Gidwit
, Deputy Director
Coordination; Mr SO
Mfuywa
, Senior Project Officer
Recap; Ms DN
Nqhona
, Acting Chief Director; Mrs PZ
Njemla-Mntukatandwa
, Director; Mr M
Msimang
,
Acting Deputy Director; Mr B
Mbewu
, Project
Coordinator; Mr J Armstrong, Chief Engineer.
Provincial Department of Public Works:
Mrs AP
Maphoto
,
Deputy Director;
A
Umoetok
,
Director PPM.
Buffalo City Metropolitan
Municipality (BCMM):
Ms P
Nazo
, Councillor; Ms N
Mqhayi
, Coordinator Agriculture & Rural Development; Mr
M Dike, Coordinator Agriculture & Rural Development; Mr V
Mbatha
, Head: Economic Development; Ms VC
Hermanus
, Programme Manager Agriculture & Rural
Development; Mr LE
Simayile
, BCMM Ward Committee and
Mr V Peter, Standing Committee Member (LED); Mrs TC
Mbilini
,
Technician (BCMM); Mrs T
Msomi
, Technician (BCMM).
It should also be noted that the representatives from
Jongilanga
and
Phato
Chieftaincies,
resettled farmers, farm dwellers and other surrounding community members were
also in attendance (Attendance register attached).
2.
Engagements during oversight visit
2.1
Meeting with the Eastern
Cape Provincial Portfolio Committee on
Agriculture and Rural Development
A Member of the Portfolio Committee delegation, Mr CHM
Maxegwana
opened the meeting and welcomed all
present. He apologised on behalf of the Chairperson of the Committee, Ms MR
Semenya
who had a flight delay and would join the meeting
at a later stage. Mr
Maxegwana
also noted apologies
from the Minister and Deputy Minister of Agriculture, Forestry and Fisheries.
He then gave a background and the purpose of the meeting/visit; and requested the
Department to give a brief background on what lead to the recommendation by the
Fourth Parliament Portfolio Committee to deregister
Ncera
as an entity, and how far the process was.
The
Deputy Director-General (DDG) for Food Security
& Agrarian Reform (FSAR) from the Department of Agriculture, Forestry and
Fisheries,
Mr MJ
Kgobokoe
gave a brief
background of the challenges that resulted to the recommendation that was made
by the Portfolio Committee of the Fourth Parliament to the Department regarding
the status of
Ncera
Farms (Pty) Ltd.
The DDG reported that after considering all
the challenges and the parliamentary recommendations, the previous Minister of
Agriculture, Forestry and Fisheries, Ms Tina
Joemat-Petersson
,
approved the delisting of
Ncera
Farms (Pty) Ltd as an
entity; and to incorporate the entitys Service Centre (Welcome Home Farm) and
personnel into the Agricultural Research Council (ARC), which is also an entity
that reports to the Minister. In this regard, the Minister forwarded signed correspondence
conveying the decision to the Ministers of Rural Development & Land Reform
and Public Works, the Chief Executive Officer (CEO) of the ARC and the CEO of
Ncera
Farms (Pty) Ltd. The
Deputy Director (DD) for Smallholder
Development from the Departments Food Security and Agrarian Reform Branch,
Mr MS Masemola, further explained the challenges associated with land
claims against some of the land that constitutes
Ncera
Farms (Pty) Ltd and the process that was followed in allocating the 10 farms. The
progress on deregistering
Ncera
Farms (Pty) Ltd was
reported by the Department as follows:
2.1.1
Finance and Legal Implications
· The transfer payment to the ARC will need to be increased in the Medium Term Expenditure Framework (MTEF) allocation to accommodate Ncera Farms once the entity has been delisted in terms of the PFMA. The allocation for 2014/15 for Ncera amounted to R3. 62 million.
2.1.2
The state
land disposal process is guided by the following pieces of legislation which
need to be considered and adhered to:
(a)
Land Administration Act, 1995 (Act 2 of
1995).
(b)
State Land Disposal Act, 1961 (Act 48 of
1961).
(c)
Agricultural Debt Management Act, (Act
45 of 2001).
(d)
Extension of Security of Tenure
Act (ESTA), (Act 62 of 1997).
(e)
Policy
on the Disposal of Agricultural State Land.
(f)
The
Public Finance Management Act, (PFMA), of 1999 (Act 29 of 1999).
It
was reported that the 10 state farms will be transferred to the Department of
Rural Development and Land Reform under the Proactive Land Acquisition Strategy
(PLAS). The transfer will be done by the Department of Public Works.
2.1.3
Human Resource
and Labour Relations Implications
Ncera
Farms (Pty) Ltd has
supplied a comprehensive report detailing the Human Resources (HR) for analysis
by the ARC before the merger. A plan of action with targets and dates on a HR
Plan/change management is being implemented.
2.1.4
Assets Identification
The ARC has been handed an Auditor-certified
list of all assets of
Ncera
Farms (Pty) Ltd. The ARC
will conduct a validation process on the assets before the incorporation or the
merger.
The assets of
Ncera
Farms (Pty) (Ltd) will be transferred to the ARC
based on the certified Asset Register.
2.1.5
Consultation Process
The Minister of Agriculture, Forestry and
Fisheries is in the process of informing the Minister of Finance about the
intention to de-list
Ncera
Farms as required by the
PFMA in order to obtain concurrence.
After the de-listing process has been
approved and concluded, the Department will proceed with
the
deregistration
of
Ncera
Farms (Pty) Ltd as a
company.
It
was further reported that a memorandum was being prepared by the Department and
the ARC to advance the takeover of
Ncera
by the ARC,
which will enable the ARC to develop a Master Plan. The planned target date for
the merger of
Ncera
Farms (Pty) Ltd with the ARC is 1
April 2015, pending the approval of the delisting of the entity from Schedule 3B
of the PFMA by the Minister of Finance.
2.2
Stakeholder meeting
The delegation was welcomed by the CEO of
Ncera
Farms (Pty) Ltd, Mr M
Titimani
.
Mr CHM
Maxegwana
, a Member of the Portfolio Committee,
in consultation with the Chairperson of the Committee, Ms MR
Semenya
, gave a brief background and the purpose of the
meeting. He then requested the Department to brief the meeting on the
recommendation by the Fourth Parliament Portfolio Committee to deregister
Ncera
as an entity and progress thus far.
2.2.1 Progress report on deregistration of
Ncera
Farms (Pty) Ltd as an entity
a)
Presentation by the Chief Executive Officer of
Ncera
Farms (Pty) Ltd
The CEO
Ncera
Farms (Pty)
Ltd, Mr M
Titimani
gave a background about the area
including the communities that surround the entity. He reported that the entity
is surrounded by nine villages that are under Chief
Jongilangas
Chieftaincy (
Imidushane
) with a population of ±18 000
people. He reported that other traditional authorities surrounding
Ncera
include
amaGqunukhwebe
(
Phato
Chieftaincy) and
amaNdlambe
Traditional Authority. The area is said to have an estimated unemployment rate
of 80%. Mr
Titimani
also reported on his employment
as CEO, the development of a Turnaround Strategy for
Ncera
that was rejected by the previous Portfolio Committee, what he did since his
appointment as CEO, the envisaged plans for the entity and lack of financial
resources to implement those plans.
b)
Presentation by the Department of
Agriculture, Forestry and Fisheries (DAFF)
The Chief Director for National Extension Support
Services from the Department, Mr
Bonga
Msomi
briefed the meeting on the challenges that Department
experienced with the entity in previous years which included failure to produce
acceptable Strategic Plans and Annual Reports for approval by Parliament, which
further led to the recommendation of the previous Portfolio Committee to
deregister the entity. Mr
Msomi
emphasised and
explained the matters that have been reported by the DDG in an earlier meeting
with the Parliamentary and the Eastern Cape Legislative Committees. He also
explained the process that needs to be followed as outlined in Section 2.1 for
the benefit of the stakeholders.
c)
Presentation by the Agricultural Research Council (ARC)
The Acting Group Executive for Animal Science in the
ARC, Dr MA
Magadlela
presented a brief background on the
ARCs plans to incorporate
Ncera
into the ARCs
Animal Production Institute. Dr
Magadlela
mentioned
that there are various animal improvement schemes that are under the
stewardship of the ARC since 1 April 1995 such as
Kaonafatso
ya
Dikgomo
(
KyD
), which is an ARC-driven livestock flagship programme
aimed at accelerating the participation of smallholder producers in the
mainstream economy of the country. He explained that
KyD
covers the whole spectrum of animal agriculture, which is relevant to what
Ncera
is currently or planning to do. Dr
Magadlela
emphasised that a Master Plan that the Department
is talking about, which is also required by Parliament, will be informed by
certain processes and details that still needs to be provided by the Department
and/or
Ncera
. In this regard, the Department has not
yet provided the required details to the ARC. However, Dr
Magadlela
reported that the ARC can in the meantime, utilise the
Ncera
Service Centre as a base for its provincial livestock improvement schemes such
as
KyD
.
d)
Farms and farmers settled on the
Ncera
State Farms
The communities around
Ncera
,
Chieftainess
Phato
and
other Chieftaincies representatives and farmers welcomed the proposal of incorporating
Ncera
to the ARC. They explained that their major concern
was the closing down of the entity, which provides job creation for some
community members. Stakeholders also raised a concern regarding visits to
Ncera
by Parliamentary Portfolio Committees, which always
go there to listen to the stakeholder concerns but never follow-up and ensure
that raised issues are effectively addressed. Another concern was the plight of
farm dwellers
who
were born and raised in the state
farms and have no other alternative means of livelihood.
2.3 Site Visit
Due to time constrains it was agreed that the
delegation will only visit one farm and the
Ncera
CEO,
Mr
Titimani
proposed that it should be Mr
Matinises
farm, which has the most extensive invasion and is
also on the way to the airport.
2.3.1
Mr
Matinises
Farm
Mr
Matinise
informed the
delegation that his main challenge has always been the group of people that are
led by a gentleman called Mr Albert, who invaded his farm and denied him access
to farm the land. The group invaded his farm since 2008 immediately after it
was allocated to him and the invasions have continued since. Mr
Matinise
reported that he had immediately reported the
matter to the Department, which was then the Department of Agriculture and Land
Affairs, and the current Department after 2009 but to date, nothing has been
done. He reported that when police tried to intervene, Mr Albert threatened
them with his political connections and the police have since refused to be
involved. Mr
Matinise
also informed the delegation
that he and some of the Government officials that tried to intervene in the
invasions are constantly threatened by the group. Mr Albert, who later joined
the delegation to
Matinises
farm, responded and claimed
that they were not invading the farm but occupying what is rightfully theirs as
some have been born on the farm and their ancestors were buried on the farm.
3.
Committee Observations
The Committee observed that:
·
There
was
still conflicts which stem from the allocation of the
state farms and this was the main concern that needs to be addressed urgently.
·
The communities and
the farmers around
Ncera
welcomed the proposal of incorporating
Ncera
Service Centre to the ARC as long as it will
assist and benefit the surrounding communities and the province on livestock
improvement and food security.
·
There is a need for continued
monitoring of progress on deregistration of
Ncera
Farms (Pty) Ltd by the Department and the process of transferring the 10 farms
to the Department of Rural Development and Land Reform.
·
The verification of land
claims against the entity will also hamper productivity on the farms and
therefore, needs to be fast-tracked to ensure that farmers are able to farm.
4.
Recommendations
The Committee deliberated and resolved that:
-
The Department of Agriculture, Forestry and Fisheries (DAFF) should
ensures that
Ncera
Farms (Pty) Ltd is not closed
but deregistered as an entity and the Service Centre incorporated into the
ARC.
-
DAFF should ensure that the
Ncera
Service
Centre continues to assist the surrounding farmers and communities including
the Eastern Cape Province with livestock improvement and food production
programmes.
-
DAFF and ARC should develop a Master Plan that will inform how the
ARC will incorporate
Ncera
Service Centre within
its livestock improvement programmes. The Plan should include budget
allocation to the ARC that will assist the programme for the benefit of the
Province.
-
The Minister should ensure that a meeting is convened between the Provincial
Portfolio Committee, Buffalo City Metropolitan Municipality and relevant
stakeholders to address the invading in the state farms around
Ncera
, particularly those in Mr
Matinises
farm as well as to address and verify land claims against by some of the
people.
Report
to be considered.
Documents
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