ATC140711: Report of the Portfolio Committee on Agriculture, Forestry and Fisheries on the Strategic Plans, Annual Performance Plans and the Budget of the Department of Agriculture, Forestry and Fisheries (Vote 26) and its Entities, dated 11 July 2014.
Report of the
Portfolio Committee on Agriculture, Forestry and Fisheries on the Strategic
Plans, Annual Performance Plans and the Budget of the Department of
Agriculture, Forestry and Fisheries (Vote 26) and its Entities, dated 11 July
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 (DAFF) for the 2014/15
financial year, along with the Strategic Plan for the period, 2014/15 to 2016/17
and budget projections for the Medium Term Expenditure Framework (MTEF) period.
During the process, the Portfolio Committee also examined the Strategic Plans,
associated Annual Performance Plans (APPs) and budgets for the MTEF period of the
following DAFF Public Entities:
Marine Living Resources Fund
Ncera Farms (Pty) Ltd
Agricultural Research Council
National Agricultural Marketing
Onderstepoort Biological Products
Perishable Products Export
considered the APPs and budgets of the Department and its entities, the
Committee reports as follows:
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 institutions Medium-Term Strategic Plan (MTSP) and, where
applicable, with its APP. The Strategic Plans, APPs and Budgets of DAFF and four
of its Entities were tabled in Parliament on 27 June 2014. The Strategic Plan,
APP and Budget of the Onderstepoort Biological Products (OBP) was tabled on 30
June 2014 and those of Ncera Farms (Pty) Ltd were tabled on 01 July 2014. All
the tabled plans were 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 and APPs (2014/15)
of DAFF and its Entities taking into account their alignment with the following:
Key Government Priority
Policy Action Plan (IPAP);
The New Growth
Development Plan (NDP);
Growth and Development Plan (IGDP); and
Policy Action Plan (APAP).
above serve as Governments 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.
The Department of Agriculture, Forestry
and Fisheries (DAFF)
2. 1 The Mandate of DAFF
The mandate of DAFF is to
address production and consumption in the agriculture, forestry and
fisheries sectors. In this regard, DAFF has to advance food security and
agrarian transformation in the three sectors through innovative, inclusive and
sustainable policies and programmes. DAFF
s legislative mandate is derived from
Sections 24(b)(iii) and 27 (1)(b) of the Constitution and is further 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
and Objectives of the Department
Having analysed the Medium Term Strategic
Framework (MTSF) for 2014/15 to 2018/19, DAFF identified issues that are
relevant to the Department and developed the following key strategic goals
(SGs) for the medium term:
efficient strategic leadership, governance and administration.
employment and economic growth in the sector.
for food security and sector transformation.
Sustainable use of
natural resources in the sector.
The four goals are aligned with the Government
Priority Outcomes to which the Department contributes, namely, Outcome 4 (SG
2), 7 (SG 3), 10 (SG 4) and 12 (SG 1). DAFF further developed eight strategic
objectives through which the four strategic goals will be realised over the
medium term. The strategic objectives are to:
Strengthen the culture of compliance
with statutory requirements and good governance practice.
Strengthen institutional mechanisms for
integrated production and productivity in prioritised value chains.
Effective management of biosecurity and
sector related risks.
Ensure support for market access and
processing for agriculture, forestry and fisheries products.
Lead and coordinate government food
Strengthen planning, implementation and
monitoring of comprehensive support programmes.
Enhance skills capacity for efficient
delivery in the sector.
Ensure the conservation, protection,
rehabilitation and recovery of depleted and degraded natural resources.
2.3 The National
strategic goals and associated objectives have been revised in the medium term
in response to the objectives and targets of the New Growth Path, the National
Development Plan and other national policy mandates; and are also informed by
the Departments own Integrated Growth and Development Plan and the
Agricultural Policy Action Plan (APAP).
2.3.1 The National
Development Plan (NDP)
The NDPs overarching aim is to
and reduce inequality by 2030. The Plan recognises that South Africa needs an
inclusive economy that is more dynamic and in which the fruits of growth are
shared equitably amongst its citizens.
Agriculture is identified in the NDP as one of the key sectors through
which increased employment and poverty alleviation can be achieved. In this
regard, approximately 1 million new jobs and a trade surplus are expected to be
created from agriculture, agroprocessing and related sectors by 2030.
The NDPs focus is on
smallholder farmers and it is expected that the 1 million new jobs target can
be achieved by expanding irrigated agriculture. The Makhathini Flats and
Umzimvubu River Basin have been specifically identified for the development of
The NDP further expects that a third (33%) of the food surplus should be
produced by smallscale farmers or households.
2.3.2 The New Growth Path (NGP)
The NGP is a national framework for economic
policy and the driver of the countrys job strategy. Its
aim is to
target the countrys limited capital and capacity at activities that maximise
the creation of decent work opportunities through macro and micro economic
policies in order to create a favourable overall environment and to support
more labour-absorbing activities. The main indicators of success will be jobs
(the number and quality of jobs created), growth (the rate, labour intensity
and composition of economic growth), equity (lower income inequality and
poverty) and environmental outcomes.
The NGP proposes strategies:
To deepen the domestic and regional markets by growing employment,
increasing incomes and undertaking other measures to improve quality and
income distribution; and
To widen the market for South African goods and services through a
stronger focus on exports to the region and other rapidly growing
The NGP identified agriculture as one of the
key job drivers with the potential to create 145 000 jobs in agroprocessing and
to place 300 000 households in agricultural smallholder schemes by 2020. Jobs
are expected through smallholder schemes in industrial products and forestry;
fruit and wine exports; and extension services for the smallholder sector. The
NGP also recognises that the sector has the potential to improve the living
conditions of the approximately 660 000 farm workers through upgrading of
employment in commercial farms by 2020.
2.3.3 The Industrial Policy Action Plan (IPAP)
The IPAP 2013/14-2015/16 is informed by the
NDPs country vision and is framed by and constitutes a key pillar of the NGP. The
more general industrial policy framework for IPAP is provided in the National
Industrial Policy Framework (NIPF) that was adopted by Government in 2007.
The overriding goal of the IPAP is to prevent
industrial decline and support the growth and diversification of South Africas
manufacturing sector. The IPAP emphasises the development and expansion of
agroprocessing for the entire value chain in all three sectors. The focus for agriculture
is food processing; for forestry it is
and furniture making; and
for fisheries it is aquaculture development and processing.
2.3.4 The Integrated Growth and Development Plan (IGDP)
and the Agricultural Policy Action Plan (APAP)
The IGDP was
developed in response to the Government Priority Outcomes that relate to job
creation, rural development and food security, to which DAFF contributes. It is
a four-year plan that was published in 2012 in alignment with the IPAP 2013-16,
NGP and NDP. Its primary purpose is to achieve the transformation and
restructuring of the agriculture, forestry and fisheries sectors that are
currently dominated by a small number of large companies, and to ensure that
constraints experienced in the areas of input supply, production and marketing
are addressed cost-effectively and in a timely manner. The APAP has been
developed in 2013 to serve as an implementation arm of the IGDP. The APAP is
planned over a five-year period and will be updated on an annual basis. Its
encompassing objectives are to promote labour absorption and broaden market
participation; strategic interventions that aimed at increasing value-chain
efficiencies and competitiveness focusing on selected subsectors and/or value
of the Strategic Plan, the APP and the Budget of DAFF and
the Marine Living Resources Fund (MLRF)
The Strategic Plan and
Budget of the MLRF was considered together with that of the Department (DAFF)
as the MLRF is responsible for funding operational activities of the
Departments Programme 6, Fisheries Management.
3.1 Comments from the
Minister of Agriculture, Forestry and Fisheries,
Mr Senzeni Zokwana gave a political perspective and overview of the
Strategic Plan of DAFF. He mentioned that the focus of the Departments
Strategic Plan is on key government medium-term priorities that are informed by
the National Development Plan and the New Growth Path. The Minister also highlighted
the Departments specific deliverables as mandated by the NDP and the NGP in
terms of job creation through agroprocessing. He also presented the projections
on job creation opportunities through DAFF interventions over the 2014/15 to
2018/19 MTEF period, which included 3 596 jobs through LandCare and
12 000 jobs through reforestation of plantation areas. He mentioned that
the Departments focus will also be in achieving the vision for a united,
prosperous and transformed agricultural sector that contributes to food
The Minister highlighted some of the Departments
achievements in the past five years including legislative and policy reforms
that will take DAFF forward in championing the cause for marginalised and
vulnerable people in the sector. He mentioned legislative reforms that gave
effect to the finalisation of the Smallscale Fisheries Policy, which is going
to be implemented in the 2014/15 financial year to ensure allocation of
commercial fishing rights to fishing communities and smallscale fishers; support
that was given to smallholder agricultural producers to increase production and
assistance with access to export market opportunities through the World Food
Programme; and the regaining of the countrys Foot-and-Mouth Disease (FMD)-free
status, which has created a platform for resumption of the countrys red meat
trade on international markets. The Minister further mentioned new export
opportunities in Asian markets, trade agreements with other emerging economies
and expansion of trade with other African countries.
The Minister also acknowledged the challenges that are
faced by the sector, which include inter alia, international trade, export
market access, smallholder development support, poor infrastructure, disasters
and climate change. The Minister presented some of the planned activities for
the MTEF period including a specific focus on the previously disadvantaged
smallholder sector in agriculture, forestry and fisheries. In this regard, he
The introduction of compulsory community veterinary service for
remote rural areas to strengthen animal disease control and management.
The distribution of mobile veterinary clinics will also continue in these
The National Policy on Food and Nutrition Security that was
approved by Cabinet in September 2013 to address household food insecurity
and to minimise risks to South Africas food security status, particularly
escalating food prices and the impact of climate change.
The Fetsa Tlala Food Production Initiative that was introduced by
the President to address immediate household food insecurity. The
programme is implemented by DAFF.
Continued targeted support for enhanced food production at national
and household level through programmes such as the Comprehensive
Agriculture Support Programme (CASP) and Ilima/Letsema.
Tabling of the Departments APAP and IGDP, whose focus will be
infrastructure upgrading as mandated by the NDP.
Operation Phakisa through which DAFF plans to grow the aquaculture
sector value to reach between R4 and R6 billion with a potential job
creation of between 160 000 to 210 000 by 2030. Operation
Phakisa was described as an Inter-Ministerial Project that is led by the
Department of Environmental Affairs (DEA) to realise economic
opportunities for coastal communities.
In terms of forestry, conservation, rehabilitation and recovery of
woodlands and indigenous forests are critical interventions to restore the
land to optimum production. Through the LandCare Programme, woodlands and
indigenous forest management programmes, degraded land and indigenous
forests will be rehabilitated.
Implementation of climate change adaptation plans to ensure the
resilience of the agriculture, forestry and fisheries sectors.
3.2 The Presentation of DAFF Strategic Plan, APP and Budget
The Departments presentation was done by the
Director-General (DG), Prof Edith Vries, who is the accounting officer for
DAFF. The Marine Living Resources Fund presentation was done by the Deputy
Director-General (DDG) for the Fisheries Branch, Mr Mortimer Mannya. The DG of
DAFF presented an overview of the 5-year Strategic Plan of the Department for
the period, 2014/15 to 2018/19, as well as the Annual Performance Plan (APP)
for the 2014/15 financial year. She gave a brief background regarding the
establishment of the Department in 2009 and highlighted the unanticipated
complexities associated with combining the three sectors into one Department
since 2009, which became a lengthy process. The DG mentioned that the
Department is in the process of developing a Sector Plan.
The presentation highlighted the Departments new
strategic goals, which have been revised and reduced from six to four, the
associated strategic objectives, as well as an overview of deliverables for the
MTEF period for the Departments six budgeted programmes as allocated by the
National Treasury. The presentation highlighted some of the Departments
achievements in the past financial year, which included:
The assistance of 250 000 cooperatives in Bushbuckridge to
produce food for school feeding schemes;
R180 million that was given to the World Food Programme (WFP) with
the criteria that all maize should be procured from South Africa and 40%
of which should be from smallholder producers;
Further assistance that has been provided to smallholder producers
for the production of dry beans. Through the intervention, approximately
40% of beans that are used in baked beans in the country come from smallholder
23 mobile veterinary clinics that have been distributed to rural
An agri-village at the Dube Trade Port that supplies fresh produce
(vegetables) to Woolworths; and
An online extension advisory service.
In acknowledging that food security is central to the
development and growth of the sector, the DG mentioned the Fetsa Tlala Food
Production Initiative, which aims to increase production of food staples
particularly in the
of hectares of underutilised arable lands in communal areas. In this regard,
she highlighted increased departmental support for input access, mechanisation
services, technical support and linkages to local markets to ensure that by
2019, 1 million hectares of the shallow lands are under food production. The DG
further mentioned that a third (33%) of the Departments budget (approximately
R2 billion) is transferred to provinces in the form of conditional grants,
which will play a pivotal role in addressing food security and creation of jobs
through agroprocessing and beneficiation, particularly in forestry.
presentation also mentioned the challenges that the Department faces in
agriculture, which include inter alia risks associated with increased cross-border
movement of goods and people including within the country, which necessitates
more preventative measures in anticipation of, and to prevent, possible
introductions of animal diseases, plant pests, and other undesirable products
such as unsafe food and feed, including agricultural remedies. Given that the
medium term focus is the development and inclusive participation of smallholder
producers, the DG further reported that another challenge that faces the sector
is diversification of export destinations while broadening the basket of
commodities and value-added products that are destined for export markets when more
than half of all smallholder households live below the poverty line. She
mentioned that the challenge of growing the smallholder sector is closely tied
up with the challenge of making smallholder agriculture more remunerative. Furthermore,
some of the challenges are compounded by rising input costs, unsustainable land-use
practices and inadequate investment in agriculture.
fisheries, one of the main limitations that was mentioned was that catch
volumes depend on fish stocks, which vary naturally and/or are subject to
depletion owing to overexploitation. Therefore, there is a growing demand for
decreasing finite marine resources, a challenge that is also compounded by
climate change. Stock depletion was reported to be more prevalent in inshore
species due to increasing illegal fishing and poaching resulting in inadequate
resources for new entrants. However, DAFF will promote transformation in the
sector by modifying its licensing regime as per the Smallscale Fisheries Policy.
forestry, the DG reported that there has been a decline in both softwood and
hardwood plantation areas since the mid-1990s, and there has also been a marked
increase in the area planted for pulpwood purposes compared to the area for saw
logs and mining timber. The food security and job creation mandates are
threatened by shortage of timber products; biased equity distribution in the
value chain; slow afforestation uptake owing to cumbersome licensing processes and
the impact of natural hazards.
Under staff establishment, the DG reported that all
but one DDG position have been filled and the Departments vacancy rate at the
end of June 2014 was 10.4%. However, the Department plans to fill most of its
vacant positions by the end of the 2014/15 financial year.
3.2.1 The Budget of the Department
The Chief Financial Officer (CFO), Mr J Hlatshwayo
presented the Departments budget for the MTEF period as per its six programmes.
The total budget of the Department for the 2014/15 financial year is R6.69
billion. It was reported that compensation of employees accounted for a quarter
(25%) of the total budget of the Department. The budget presentation also
highlighted the allocations as per each programme.
Table 1. Budget Allocation per Programme for the MTEF
R 694 570.00
R 725 558.00
2. Agricultural Production, Health and Food Safety
R2 199 796.00
R2 252 651.00
R2 089 434.00
3. Food Security and Agrarian Reform
R1 711 095.00
R1 718 832.00
R1 768 669.00
4. Economic Development, Trade and Marketing
R 294 223.00
R 247 491.00
R 309 945.00
and Natural Resources Management
R1 364 923.00
R1 233 410.00
R1 279 342.00
6. Fisheries Management
R 427 776.00
R 443 267.00
R 462 871.00
R6 692 383.00
R6 621 209.00
R6 674 165.00
3.3 The Departments Programme Deliverables and Budget Analysis of DAFF
The Departments presentation also included planned
activities for each programme as contained in the Strategic Plan for the MTEF
period and the APP for the 2014/15 financial year. The Departments spending
focus in the medium term (2014/15 to 2016/17) will be on increasing food
production by providing agricultural support to smallholder farmers through the
Comprehensive Agriculture Support programme (CASP), and implementing
Ilima/letsema food production, LandCare and Fetsa Tlala Food Security and
Nutrition Initiative. The Department plans to spend over R7 billion on
conditional grants to provinces over the MTEF period to support subsistence and
smallholder producers and improve extension services. The 2014/15 budget
allocation for the Department has grown by approximately R510 million from
R6.18 billion in 2013/14 to R6.69 billion in the 2014/15 financial year. In
terms of programmes, the largest budget allocation has been received by Programme
2: Agricultural Production, Health and Food Safety with R2.2 billion, followed
by Programme 3: Food Security and Agrarian Reform with R1.71 billion and then Programme
5: Forestry and Natural Resources Management with R1.36 billion (see Table 1). The
three programmes account for
78.8 per cent of the 2014/15 total budget of the Department.
These are the flagship programmes as it is through
these programmes that conditional grants and transfers to some of the entities
Programme 1 - Administration
The purpose of the programme is to provide strategic
leadership, a sound policy environment and support services to the Department.
The programme comprises of the Ministry, Office of the DG, Financial
Administration, Internal Audit, Corporate Services, Stakeholder Relations,
Communications and Legal Services, Policy Planning, Monitoring and Evaluation
and Office Accommodation.
Under the strategic objective that seeks to strengthen
the culture of compliance with statutory requirements and good governance
practices, the Department plans to align and integrate all the funding
facilities such as Micro Agricultural Financial Institutions of South Africa
(Mafisa), Comprehensive Agriculture Support Programme (CASP), Broad-based Black
Economic Empowerment for Agriculture (AgriBEE) Fund, Ilima/letsema and LandCare
into a Comprehensive Producer Support Package during the medium term. For the
2014/15 financial year (i.e. the reporting year), the Department plans to
develop efficient and effective internal controls to ensure maintenance of an
unqualified audit report status. The Department also plans to improve on
intergovernmental relations by implementing an Intergovernmental Strategy
through signing of Service Level Agreements (SLAs) by the fourth quarter of the
Programme 2 Agricultural Production, Health and Food Safety
The purpose of the programme is to promote
agricultural production through the management of 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 for the reporting year
(2014/15) would be on monitoring at least two animal improvements schemes
(Kaonafatso ya Dikgomo and a poultry scheme); developing an integrated Animal
Disease Management Plant to ensure effective biosecurity and related risks
management; implementing the Primary Animal Health Care Programme through the
delivery of mobile veterinary clinics; conducting two animal disease
surveillance and one plant pests (invader fruit fly) risk surveillance to
enforce a regulatory framework that will reduce the level of disease outbreaks
in production areas and to reduce interception at export channels to a minimum.
Over the medium term, the Programmes focus will also be on the implementation
of the Compulsory Community Service Programme for Veterinary graduates.
The Parliamentary Grant to the Agricultural
Research Council (ARC) and the budget allocation for the refurbishment of
infrastructure for the Onderstepoort Biological Products (OBP) are also transferred
through this programme.
Over 70 per cent (73.9%) of the budget allocation
for this programme (R1.63 billion) is transferred to provinces and
municipalities, departmental agencies and accounts, and public corporations and
private enterprises. In the current financial year, the Ilima/letsema project is
allocated R460 million, the ARC is allocated approximately R1 billion and the
OBP is allocated R127.5 million.
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 through the
implementation of the national policy on food and nutrition security, targeting
subsistence, smallholder and commercial producers. The programme comprises of
three subprogrammes, namely, Food Security, Sector Capacity Development and
National Extension Support Services.
The spending focus of the
programme for the reporting year will be on the development and coordination of
the Draft Food and Nutrition Security Policy Implementation Plan (Plan to be
finalised by the fourth quarter); providing support to 16 000 smallholder
producers; cultivating 200 000 hectares for food production to meet the
objectives of the Fetsa Tlala Initiative; implementation of the National
Extension and Advisory Policy; and reviewing the National Education and
Training Strategy. O
the medium term, 70 per cent (R1.7 billion) of CASP allocation for the
infrastructure pillar will be reprioritised to support the Fetsa Tlala
The grants to Ncera Farms
(Pty) Ltd (R3.6 million), CASP (R1.3 billion in the current financial year) and
Ilima/letsema are transferred through this programme.
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, Agroprocessing
and Marketing and Cooperatives and Rural Enterprise Development.
The spending focus of the programme for the
current financial year is linking 18 smallholder and commercial producers in
rural areas to mainstream markets; supporting 90 cooperatives with training; establishing
18 commodity-based cooperatives; ensuring that the countrys Comprehensive
Africa Agriculture Development Programme (CAADP) Compact is signed;
implementation of the Trade Promotion Strategy; and provision of annual reports
on the implementation of the AgriBEE and the Forestry Sector Codes to monitor
transformation in the two sectors.
In the reporting year, the programme transferred
R36 million to the National Agricultural Marketing Council (NAMC), R1.8 million
to the Small Enterprise Development Agency (SEDA), R3.7 million to the Forest
Sector Charter Council and R85.3 million to the Land and Agricultural
Development Bank of South Africa (Land Bank) to support the retail emerging
markets (REM) model.
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 of three subprogrammes, namely, Forestry Operations, Forestry
Oversight and Regulation and Natural Resources Management.
The Department indicated that approximately 70
per cent of land in South Africa is degraded, which translate to approximately 800
000 hectares. The focus for the current financial year is to rehabilitate
approximately 30 000 hectares of agricultural land and 500 hectares of
woodlands and indigenous forests; advance APAP through increased agricultural
production on 2 300 hectares; get the Irrigation Strategy approved by the
Executive Committee (EXCO) of the Department; and implement the Climate Change
Research Programme on crop suitability that is carried out by the ARC.
Programme transfers R582.2 million to provinces under the LandCare (R67.8
million) and CASP (R493.8 million) activities. It would be beneficial for the
Department to indicate the allocation per province to better understand the
resource allocation in line with the actual needs.
Programme 6 Fisheries Management
The purpose of the programme is to promote the
conservation and sustainable use of marine resources and the recovery of
depleted fish stocks by implementing the stock recovery strategy and conducting
annual fishery specific research. The programme comprises of four
subprogrammes, namely, Aquaculture and Economic Development, Fisheries Research
and Development, Marine Resources Management and Monitoring, Control and
The spending focus of the programme for the current
financial year will be supporting 10 fish farms; getting the first draft of the
Aquaculture Bill approved by EXCO; conducting research on reproduction and
nutrition for 1 aquaculture species; drafting the Fishing Rights Allocation
Process (FRAP) Framework; amending regulations that were promulgated
under the Marine Living Resources Act (MLRA)
(Act No. 18 of 1998) to include the management of the smallscale fisheries
sector; and ensuring the implementation of 4 598 compliance and
enforcement measures in the 4 prioritised fishery sectors, namely, hake,
abalone, West Coast Rock Lobster (WCRL) and linefish.
experienced a reduction in the budget from R433.7 million in the 2013/14
financial year to R427.8 million in the current financial year. Fifty eight per
cent (R251.3 million) of the Programmes allocation will be transferred to the
Marine Living Resources Fund (MLRF) for operational activities.
of Committee Observations and Conclusions on the Strategic
and Budget of DAFF
The Committee welcomed the strategic overview of DAFF by the
Minister and the presentation by the Department on its strategic goals and
objectives over the MTEF period. During the engagements and discussions with
the Minister and the Department, the Committee made comments and further raised
the following concerns:
The need to fast-track the finalisation of the Implementation Plan
for the Small-scale Fisheries Policy within 30 days of the adoption of the
Report by the National Assembly; and also address the concern regarding
limited financial resources to ensure successful implementation of the Policy.
Lack of awareness activities and intervention programmes to ensure
that indigenous coastal people and some inland rural communities
understand the value of fishing beyond immediate food needs but as an
income generating activity. This should be an ongoing activity.
rate in the country particularly of the youth, who also happen to be less
interested in agriculture. The Committee wanted to know the Departments
plan for encouraging young people to consider agriculture as a profession
and a business opportunity to assist in reducing high unemployment rate
and to further create
opportunities to absorb the approximately 10 000 unemployed
Lack of Departmental plans to capacitate and assist smallholder producers
to participate actively in the economy through the
provision of infrastructure, agroprocessing, security, and markets. For
example, raising the participation of the smallholder sector into the World
Food programme to 100% instead of 40%.
livestock farmers are not receiving the necessary support particularly in
communal areas despite the potential and many opportunities that are
presented by livestock in some of these areas. An example was made of
abattoirs that have been built by Government throughout the country, some
of which are not operational.
Branch has been involved in research on new fisheries since 2004; yet, no
new fisheries have been opened since then.
Consideration of the
Strategic Plans and Budgets of DAFF Public Entities
5.1 Agricultural Research Council (ARC)
The 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 ARCs 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.
strategic goals over the medium term are to:
To improve the productivity, production,
competitiveness and sustainability of crop-based and livestock-based agriculture.
To enhance the productive use and conservation of
To translate research results to support agrarian
transformation and the efficiency and competitiveness of the sector.
To achieve good governance, financial
sustainability and a high performing and visible organisation.
The Chairperson of the Board of the ARC, Mr Jonathan Godden gave a brief
overview of the strategic objectives of the ARC. The Chief Executive Officer
(CEO), Dr Shadrack Moephuli presented the strategic plan and budget of the ARC.
that the ARC is funded mainly from government transfers (parliamentary grant)
and income generated from applied research and other projects. The key
strategic issues of the ARC over the medium term would be on the external
income growth, replacement and upgrading of infrastructure and improving
organisational processes to eliminate adverse audit findings. Some of the key
projects and activities of the ARC that are aligned to the NDP objectives
ya Dikgomo, which is the smallholder livestock development project;
collaboration with the Perishable Products Export Control Board (PPECB) on
training of citrus farmers including control of citrus black spot (CBS);
training of 350 extension officers (640 in the past year) and animal health
technicians on functional innovation systems; and upgrading of the
Foot-and-mouth disease (FMD) Facility from laboratory stage to manufacturing
The total budget of the ARC
for the 2014/15 financial year is R1.3 billion, of which R957 million is the
Parliamentary Grant for operational and capital expenditure. The
ARC reported that 40%
of its income is generated from contracts and intellectual property; and that
it was engaging with the Department of Science and Technology (DST) regarding
the implementation of the Bio-economy Strategy.
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 companys strategic goals over the medium term are
build a successful, high performance organisation.
improve business process and management practices.
build a profitable and sustainable company.
facilitate job through indirectly supporting clients and directly
creating subsidiaries joint venture incubating, accelerating and spawning off
new business entities.
contribute to government priorities with respect to food security and
The Chairperson of the Board of the OBP, Dr JH Adams
gave a brief overview of the OBPs strategic objectives for the current
financial year. The OBP does not receive a Parliamentary Grant but generates
revenue from the sale and supply of livestock vaccines, mostly to the local
commercial sector. In the MTEF period from 2013/14 until 2015/16, it received
a grant of R492.4 million from National
Treasury to modernise its aging vaccine manufacturing infrastructure.
The presentation of the CEO, Dr Steven Cornelius focused on the OBPs
background, governance, its Corporate Plan, the review process, its alignment
to government programmes, its strategic objectives, key indicators, financial
information and performance monitoring. The OBP is the only entity that has met
the employment equity and affirmative action requirements in terms of personnel
representation (86% black and 48% female).
OBP plans for the medium term include the establishment of a Vaccine Reserve; increased
manufacturing of public good vaccines (orphan vaccines) and provision of rural
farmers with vaccine packs to assist with the prevention and management of diseases.
In this regard, the company has applied for additional funding from the
National Treasury, with support from DAFF. The outcome of the funding application
will be known by the end of financial year.
The estimated operational expenditure of the
OBP for the 2014/15 financial year is approximately R125.7 million. The OBP
lost R30 million revenue in the past year due to lack of Good Manufacturing
Practice (GMP) Certification. The lack of GMP Certification also constrained
the OBPs ability to generate more revenue from export markets.
Perishable Products Export Control Board (PPECB)
The 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) requires the Board to monitor minimum quality
standards of perishable products for export.
The PPECBs strategic objectives over the medium term are to:
the credibility of South Africas export certification.
the export competitiveness of South Africas perishable products
the PPECBs capacity to provide a professional suite of services.
The Chairperson of the Board of PPECB, Mr Angelo Peterson
gave a brief overview of the PPECBs strategic objectives for the
current financial year.
The CEO, Mr Stuart Symington, presented the strategic plan of
PPECB. He mentioned some of the challenges that are facing the organisation as
well as progress going forward.
He reported that the PPECB plans to be more
entrepreneurial and less bureaucratic and in 2013, they have accordingly restructured
their management and now have eight people reporting directly to the CEO.
Furthermore, papers for inspectors are being replaced with Tablets to ensure
faster and efficient service. The Tablet Project will be launched in October
The PPECB is also assisting black
farmers in four provinces with access to markets (mostly local, but a few on
export markets). In terms of skills development, the PPECB has an Unemployed
Graduate Programme where recently graduated previously disadvantaged
individuals (PDIs) are put through a 12-month all-inclusive training programme.
All 48 of those that were trained in past year have been absorbed into PPECB.
The presentation also mentioned export opportunities and untapped
potential in the Continent. The CEO reported that
Africa is becoming an
exciting trading partner and approximately 23% of apple exports go to the
Continent. He also mentioned the large supermarket chains that are moving large
numbers of perishable products (dairy & tinned food) to the Continent,
which is becoming a challenge for PPECB to keep up with the demand.
estimated operational expenditure for PPECB for the 2014/15 financial year is
. As PPECB is a service
organisation, employee costs constitute 65% of their expenditure.
also does not get a Parliamentary Grant but generates revenue
mainly from fees and levies for statutory
services for the perishable products industry.
5.4 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 NAMCs 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 Acting Chairperson of the Board of NAMC, Mr Andre Young gave
an overview of the strategic objectives of NAMC for the current financial year.
He also reported that the Board
has 3 vacancies and 60% of the Board
membership is about to expire.
The Acting Chairperson
of the Board also highlighted the need to review the
Agricultural Products Act to ensure that the NAMC has legal powers regarding
the operations of Agricultural Trusts.
The CEO, Mr
Tshililo Ramabulana presented the strategic plan of NAMC and highlighted the
programmes that the NAMC is implementing with funding from various sources
R372 million that was collected from statutory levies from all
agricultural products in 2012. He further mentioned that the NAMC has been requesting
additional funding from National Treasury for specific projects but due to
other national priorities, such funding could not be allocated. One of the
NAMCs flagship projects is the National Red Meat Development Project, which
received funding of approximately R340 million over a five-year period from
203/14 to 2017/18 from the Department of Rural Development and Land Reform. The
NAMC also received R15 million from DAFF to coordinate and manage SIP 11.
The NAMC received a Parliamentary Grant of R36 million from DAFF for the 2014/15 financial year.
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 entitys strategic goals over the medium term are to:
and implement effective and efficient Ncera management and governance
systems and procedures.
franchise type agricultural business models in support of entrepreneurs in
and sell good quality vegetables and livestock to the market locally.
organisational growth and sustainability.
The DG of DAFF reported that the Fourth Parliament has recommended
that Ncera be closed down and there has been no final decision that has been
taken yet regarding the future of the entity. She reported that the Department
had submitted proposals to the previous Minister around April 2014 and the
current Minister has to take the matter forward. It was further reported that
until a political decision is taken, the Department is legally required to
continue allocating a budget to the entity.
The CEO of Ncera, Mr Mziwamadoda Titimani, was allowed to present
the Annual Plan of Ncera Farms (Pty) Ltd. In his presentation, he mentioned
that the aim of Ncera Farms is to contribute towards an industry focused farm
management training, farmer support services and the design of franchise type
agricultural business models
in general and beneficiaries of land and agrarian reform particularly within
the immediate catchment area of Ncera. However, the entity is unable to fulfill
its objectives due to financial constraints and other challenges including the organisations
governance structure. The CEO also provided possible recommendations to address
financial year budget allocation for Ncera from DAFF is R3.6 million and the
CEO reported a R1.8 million shortfall which is encountered every financial
of Committee Observations and Conclusions on the APPs and
of DAFF Entities
examined and made observations on the APPs and budgets of the entities, the
Committee raised the following concerns:
Research Council (ARC)
Insufficiency of funds that are allocated to the ARC to enable it
to achieve its objectives for the benefit of the country. Among these are
activities to prevent and address challenges associated with the diseases
such as citrus black spot (CBS) and foot-and-mouth disease (FMD).
Misalignment of the ARCs activities with provincial plans.
Biological Products (OBP)
Lack of a budget allocation to the OBP to enable it to achieve its
objectives for the benefit of the country and the region, given the
prevalence of animal disease outbreaks and notwithstanding that the OBP is
a National Key Point.
Invisibility of the OBP in provinces.
Perishable Products Export Control Board (PPECB)
impact of CBS on export revenue and indirectly on employment.
Agricultural Marketing Council (NAMC)
coordination of research into markets in provinces and the African
6.5 Ncera Farms (Pty)
of the entity, which is not assisting the surrounding communities as per
its mandate; and the protracted process by DAFF in closing or re-establishing
After discussions and deliberations on the Department
and the Entities Strategic Plans, APPs and Budgets, the Committee makes the
following recommendations to the Ministry and the Department of Agriculture, Forestry
Ensure the development of a strong business case that will be
presented to the National Treasury for additional funding for DAFF that
will also include a plan that shows how the Department will work in a
coordinated and collaborative manner with its entities by the end of
The Department of Agriculture, Forestry and Fisheries (DAFF) should
provide an action plan to the Committee on the implementation of the Integrated
Growth and Development Plan (IGDP) and Agricultural Policy Action Plan (APAP)
before the end of the second quarter of 2014/15 (October 2014).
The development of a long-term integrated
Sector Plan that will encompass agriculture, forestry and fisheries should
be prioritised to ensure coordinated development, growth and
transformation of the sector within 12 months of the date of adoption of
this report by the National Assembly.
Enforce intergovernmental relations (IGR) to avoid duplication of
activities from limited financial resources and to ensure optimal resource
use for efficient service delivery and maximum impact. For example, DAFF
should be involved in collaborative activities with its entities and other
Departments such as Rural Development and Land Reform, Trade and Industry,
Environmental Affairs, Water and Sanitation, Public Works and others.
Fast-track the full scale implementation of the Small-scale
Fisheries Policy before the end of the next financial year (2015/16) to
ensure participation in fishing activities, by poor coastal communities, some
of whom have no alternative livelihood options besides fishing.
the National Agricultural Marketing Council (NAMC) should provide a
Mechanisation Policy and an implementation plan for Fetsa Tlala Initiative and
the Agroprocessing Strategy during the second quarter of the 2014/15 financial
The NAMC must submit a detailed report of projects that are funded
Infrastructure Project 11 (SIP 11) that is aimed at improving investment
in infrastructure to support agricultural, forestry and fisheries
production (including aquaculture).
The NAMC should also provide a full briefing to the Committee on
its role in SIP 11 during the second quarter of the 2014/15 financial
DAFF should strengthen capacity in the Departments Monitoring and
Evaluation (M & E) Division and present an M & E Plan to the
Committee in this regard by the last quarter of the 2014/15 financial year.
DAFF should fast-track the finalisation of the changes to the Marine
Living Resources Amendment Bill and the Policy on Inland Fisheries before
the end of 2015.
DAFF should provide the Committee with a report on research that
has been conducted on new fisheries within 30 days after the adoption of
the Report by the National Assembly.
DAFF should fast-track the deregistration of Ncera Farms (Pty) Ltd
as the Committee also supports the decision of the Fourth Parliaments
Portfolio Committee on Agriculture, Forestry and Fisheries regarding the
DAFF should provide the Committee with an action plan including financial
implications for the implementation of the Forestry and the AgriBEE
Charters; and prioritise the tabling of the National Forests Amendment
Bill before the end of 2014.
DAFF should intensify the development of the extension service
particularly visibility in communities and the quality of service that is
provided; and should brief the Committee on the National Policy on
Extension and Advisory Services by October 2014.
DAFF should develop by the end of the 2014/15 financial year, a
disease priority matrix to strengthen the control and management of animal
and plant diseases; and consolidate research and development funding in
Report to be
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