ATC150805: Report of the Portfolio Committee on Rural Development and Land Reform on the Public Hearings on the Implementation of the Recapitalization and Development Programme held on 04 – 05 February 2015, Dated 25 February 2015.

Rural Development and Land Reform

(The following report replaces the Report of the Portfolio Committee on Rural Development and Land Reform, which was published on page 2738 of the Announcements, Tablings and Committee Reports of 04 August 2015)

 

Report of the Portfolio Committee on Rural Development and Land Reform on the Public Hearings on the Implementation of the Recapitalization and Development Programme held on 04 – 05 February 2015, Dated 25 February 2015.

 

 

The Portfolio Committee on Rural Development and Land Reform, having concluded the public hearings on the implementation of the Recapitalisation and Development Programme held on 04 – 05 February 2015, reports as follows:

 

1. Background and introduction

 

This report presents an account of the two-day public hearings on the Recapitalisation and Development Programme (RADP) conducted by the Portfolio Committee on Rural Development and Land Reform (the Committee).  The Department of Rural Development and Land Reform (DRDLR) initiated this programme in 2009 as a new strategic intervention to ensure sustainable land reform. The overall objective of the RADP to provide emerging black farmers with social and economic infrastructure and basic resources required to manage a successful agricultural business. It aims to contribute to the transformation of rural economy through establishment of enterprise and industrial development in various agricultural chains. The end of 2015/16 financial year will be significant milestone for the RADP because it would mark the end of the first five-year cycle for the programme, hence this assessment by the Committee.

 

1. The purpose of the public hearings

 

The overall purpose of the public hearings was to assess performance of the RADP in order to determine if farmers would be able to sustain themselves beyond the five year funding cycle. The Committee focused on the following:   

 

• Consideration of the Department of Planning, Monitoring and Evaluation (DPME) Implementation Evaluation Report for the ‘Recap’ programme;
• Enquiry into  farmer support mechanisms, i.e. training, inputs costs, marketing, extension;
• Identification of the ‘Recap’ programme policy strengths and weaknesses; and
• Source recommendations for improvement of the policy and its implementation thereof.

 

The Committee issued a public notice of interested parties to submit their comments on the implementation of the RADP. It received written and oral submissions from 15 members of civil society organization, the public, researchers and academics, as well as commodity groups acting as strategic partners in land reform. In addition, the Committee considered the RADP Implementation Evaluation Report of the Department of Planning, Monitoring and Evaluation, document by Business Enterprises at the University of Pretoria.

 

 

1. Summary of inputs by farmers and stakeholders

 

3.1     Overview of issues raised by Agribusiness strategic partners

 

Two agribusinesses, namely South African Sugar Association (SASA) and Grain South Africa (GrainSA), presented their experiences of the ‘Recap’ programme. These organisations raised the following issues:

 

• They affirmed their commitment to support land reform in South Africa and work with other social partners in order to find lasting solutions to the constraint of development support to emerging farmers.
• They provided training to emerging farmers in order to increase production, enhance skills development and capacity building among beneficiaries
• The programme is hamstrung by administrative challenges related to poor communication, delays in approval and release of tranches. This in turn affected production. The partners have reported that they were engaging with the Department to address some of these challenges.
• Their overall assessment was that since the commencement of the implementation of the ‘Recap’ programme, many farmers supported in terms of this programme have improved productivity of their farms.
• They appealed that government should not discontinue the ‘Recap’ programme.  

 

3.2     Overview of issues raised by civil society 

 

This sections draws on submissions and presentation by Land Access Movement of South Africa (LAMOSA), Legal Resources Centre, Centre for Law and Society (CLS), Congress of South African Trade Unions (COSATU), and Institute for Poverty Land and Agrarian Studies (PLAAS).

 

There was a shared view that the ‘Recap’ programme deals with lack of formal agricultural support to land reform beneficiaries, a task that the provincial departments of agriculture should be taking. Therefore, there is a perception that ‘Recap’ is duplicating work of the Department of Agriculture. According to some organisations, there should be a clear delineation of roles in order to ensure better use of available resources.

 

Some confirmed the findings of the DPME/University of Pretoria evaluation which stated that there was lack of clarity on the criteria used for selection of beneficiaries and farms for strategic partnership. Some also argued that the process was not transparent enough, and strategic partners were imposed on beneficiaries.

 

Some NGOs alleged that strategic partners were problematic in the sense that some were only interested in making money for themselves rather than transferring skills and declaring profits. One of the NGOs, LAMOSA, made submissions of cases where the ‘Recap’ has resulted in unintended consequences, for example owners of the land being treated as workers.

 

Some organisations took a holistic approach in assessment of the ‘Recap’ programme and argued that the policy should be assessed within the context of broader rural development and land policies. For instance, the absence of tenure security on communal areas is a problem for investment. They further argued that the State should foster conditions which recognize the customary rights of individuals on farms or land they occupy. These sentiments on lack of tenure security as an impediment to farm development were also raised in the presentation of research findings conducted by PLAAS in the Eastern Cape. Research findings suggested that officials of the provincial Department of Agriculture did not provide infrastructure support on state farms (i.e. PLAS farms), which beneficiaries do not own.

 

Based on the figures presented in the DPME/University of Pretoria evaluation, some have concluded that there was a particular bias in favour of PLAS and LRAD farms vis-à-vis restitution ones. This was raised as a point of concern on the basis that all forms restitution grants were withdrawn, and that the only available support was ‘Recapitalisation and Development Fund’. This view suggests that restitution, which large number of beneficiaries, has subsidized development and recapitalization of PLAS and LRAD farms.

 

Business plans have been used, in some instances, as a stumbling block for farmers to access support in terms of the ‘Recap’ programme. The LRC used a particular example of Stellenbosch Cooperative on a commonage land, who have been sent from pillar to post trying to obtain approval of a business plan for funding of its project. To date, a total of R800, 000 had been used to develop business plan, yet the problem remained unresolved. Commonage land under municipalities was not being considered for utilization to develop farmers. They called for use of commonages for land reform.

 

Table 1: Summary of issues raised by farmers participating in the RADP

Name	Province	Description
IziNdongaZe Africa	Mpumalanga	This farm is managed by youth. They are specialising in poultry production. They are a contract grower, as a result they do not set the price but are price takers. Whilst they spend 35 days with the chicken and dispose it to a market, their returns are little as compared to the one who slaughters and package it. Farmers lose the value, so the group is looking at opportunities to construct facilities to add value in their production.
Selame Farm	North West	This is a family business on a PLAS farm, with a lease agreement. Since 2013, the farm has produced 9 cycles of broiler production. The success is that their production is of good quality and they remained within the industry standards of mortality. Their challenge is that as a contract grower, their return is less compared to the contractor with value-add facilities.  The farmers are exploring opportunities to develop a hatchery and abattoirs. It also assist in job creation, currently the farmers are exploring partnerships with universities and agricultural college to assist with experiential training for students.
Bela-Bela CPA	Limpopo	The CPA obtained the land through the restitution process. It has a large number of beneficiaries. The presentation put emphasis on restoration of dignity to the community of Bela-Bela, hence a need to ensure benefits accrue to members. It manages the farm under strategic partnership, and had four enterprises: game, crop farming, cattle farming, and poultry farming.
Qwabe CRDP	KwaZulu-Natal	This project was different from the rest because it is a Recap project on communal area, i.e. Mansomini Irrigation Scheme. Through the Recap, the programme has created massive business and employment opportunities for the community. The programme revived irrigation scheme which was abandoned for a long time, revitalization of the sugar mills as well as reviving the economy of the area. The community has seen massive job creation, reopening of the stores, and a boost to the local economy through an injection of the Recap fund. They also set up cooperatives to assist with milling
LANGA livestock farmers	Western Cape	This farm is owned by a group of 70 people, established in 2002 but got the land in 2009 in terms of the LRAD.  Challenges of this group regards access to services of the extension officers, of the 70 members, only 30 are active, yet those who are not active also want to share the rewards. They are raised concerns about strategic partnerships, the partner does not want to share risks but only want share profit. There is lack of communication between the Department and beneficiaries.
Marinda	Northern Cape	Government purchased 4912 ha through the PLAS and leased to Ms Marinda. She is the only beneficiary on the livestock farm, specializing in sheep and cattle. Capital developments are funded 100% under the Recapitalisation and Development Fund, but operations funded by DRDLR (70%) and strategic partner (30%). Some of the capital developments include construction of houses, solar power, fencing, borehole equipment. It also purchased the following equipment and machinery: fire fighter, tractor, and mobile toilets. She also highlighted the challenges that she has encountered, for example – there are serious threats to the business due to predators as well as adaptability of the animals she brought to the farm. She also ventured into particular breeding, for example she owns ‘vuvuzela’ and ‘snowball’ breeds of sheep.

 

1. Findings of the Committee  

 

Having considered the submissions, the Committee recorded the following successes and challenges of the RADP.

 

4.1     Success of the Recapitalisation and Development Programme

                                                                  

1. Number of farms supported: In November 2009, about 1,807 distressed farms were targeted for recapitalisation and development over the Medium-Term Strategic Framework (MTSF) period. The farms were to be funded over a five year period in terms of a funding model outlined above. To date, about 1459 farms or 80.74 per cent of the total targeted were recapitalised. The DRDLR has also reported about 298 projects under mentorships and 314 under different forms of partnerships were operating successfully. Therefore, this suggests that 612 farms or 41% of 1459 farms were progressing well.  The 1459 farms covers about 1.3 million hectares accross South Africa. This represent 46 per cent of the total 3119 farms farms transferred in terms of both restitution and redistribution between 2009 and 2014. About 64 farms were ready to exit RADP by the end of 2015/16.

 

1. Agricultural production: The overall view was that the Department, through the RADP, has achieved considerable progress towards achieving its intended objectives. All the eight farmers that appeared before the Committee has expressed gratitude for the support that the state has offered to the them, especially in relation to infrastructure development, funding of capital developments and operations. This was in line with the finding of the DPME study which showed that 70 percent of the farms included in the evaluation were sustaining agricultural production.

 

1. Job creation: Based on the findings of the DPME evaluation, the RADP contributed to the creation of 540 additional jobs on 89 farms that were surveyed that is 111 full-time and 429 part-time. However, the Committee has expressed a need to consider the number of jobs vis-à-vis the total investment made.

 

1. Strategic partnerships/mentorship: Two agribusinesses that appeared before the Committee presented their experiences of the RADP. Part of their successes relates to the training and capacity building programme that they run for emerging farmers. The Committee’s overall assessment was that since the commencement of the implementation of the RADP and strategic partnerships/mentorships, farmers who had access to it have improved productivity of their farms.

 

1. Emergence of commercial farmers: The idea that RADP should assist to rekindle a class of black commercial farmers appears to have started to bear fruits. The examples of farmers that appeared before the Committee bears witness to this assertion. For example, Marinda Farm, and Izindonga Ze Africa farm have reported that they have a turn over of over R1 million, focusing of primary agriculture. The example of Super Grand Feeds shows creativity by farmers to create backward and forward linkages, especially in the production of feeds as well as in marketing of produce, not only of their farms but for other smallholders or emerging farmers.

 

4.2     Challenges confronting the Recapitalisation and Development Programme

 

1. Coordination between the DAFF and DRDLR: The RADP addresses lack of formal agricultural support to land reform beneficiaries. A question arises, therefore, regarding the role that provincial departments of agriculture should play.  In the absence of visible support, RADP closes the gap in terms of farmer support. However, RADP runs the risk of duplicating the functions of the DAFF and its provincial counterparts.

 

1. Selection of beneficiaries and farms: Some stakeholders raised concerns about how beneficiaries and farms for ‘Recap’ are selected. This appear to be in line with the finding of the DPME that the RADP lacked clear criteria for selection of beneficiaries and farms for support. In the absence of clear criteria, there is a perception that selection process was not transparent enough and that strategic partners were imposed on beneficiaries.

 

1. Programme design: The ‘one-size-fit-all’ approach which privileges commercial farming systems has resulted in exclusion of the majority of the small-scale subsistence and smallholder farmers from the benefits. In terms of data presented before the Committee, the programme had supported one project in communal areas and one irrigation scheme by 2012. The impediment for small-scale farmers appear to be the requirement of strict business plans which are ill suited for small-scale subsistence farmers. The design have also failed to capture requirements of other land reform programme such as Commonage projects.  The design of the programme, as it stood, was susceptible to ‘elite capture’, especially in the absence of clarity on selection processes. Much of it could benefit the ‘corporate agribusiness’ rather than the intended beneficiaries.

 

1. Lack of policy synergies between programmes of the DAFF and DRDLR. According to the research evidence presented before the Committee, Eastern Cape officials of the Department of Agriculture refuses to give CASP fund to PLAS beneficiaries, citing that farmers lack security of tenure and therefore government could not invest on farms that farmers did not own.

 

1. Lack of targeting support for both redistribution and restitution: According to the DPME report, of the total 640 projects reviewed, 29 were restitution and 374 Proactive Land Acquisition Strategy (PLAS) and 190 LRAD and 18 SPLAG+SLAG. It is quite obvious that there is preference of redistribution rather than restitution. This suggest that there was a need to deliberately ensure equitable spread of assistance so that both redistribution and restitution are given equal attention in terms development support. This is in view of the fact that all forms of grants available to restitution are no longer available. RADP is the only vehicle through which they could be funded.

 

1. RADP was also hamstrung by administrative challenges: The most prominent challenge was the delays in release of tranches to farmers, thus having a negative impact on farmers’ ability to grow crops at the most opportune times/season. On the other hand, the Department has also reported that some strategic partners have failed to comply with the reporting requirements, there is lack of accountability. It appears that lack of farmer-friendly reporting mechanisms has created this administrative anomaly. Farmers and strategic partners suggested that the DRDLR should reconsider the current reporting mechanisms which puts strain on the time of farmers, especially emerging farmers.

 

1. The sustainability of the funding model was a critical question which some suggested that it should be addressed. So far R3 billion has been invested on 640 farms by June 2012. The question posed to the Committee was whether there was ‘value for money’ from the investment. Examples presented during the hearings suggests that there is a huge potential for the ‘Recap’ fund to produce successful commercial farmers. However, stringent monitoring and evaluation (M&E) of the programme, appropriate business strategy to improve accountability by farmers and strategic partners, as well as instituting adequate reporting mechanisms is required.

 

1. Integration in value-chains and weak monitoring and evaluation programmes: One of the weaknesses relates to access to markets. It is reported that this has been the most common challenge and strategic partners have not focused on this matter. In the absence of stringent Monitoring and Evaluation of the programme, one is unlikely to pick up if there is widespread neglect of this aspect of the RADP.

 

1. In addition, Monitoring and Evaluation, based on the contracts entered into and the policy objectives, would enable the DRDLR to learn from their own best practice that emerges as they implement the programme. Monitoring and Evaluation could also focus on empowerment of farmers and benefits of the programme.

 

1. Farmer support through the ‘Recap’ programme and proposed policy improvements was, there was a general concern about exit strategy regarding business sustainability  

 

 

5        Recommendations

 

In view of the findings and observations discussed above, the committee recommends the following:  

 

1. Endorsement of a recommendation of the DPME evaluation of RADP to redesign and overhaul all public agricultural support programs to end current implementation silos as the best possible option. Further, that in the interim the DRDLR finalise the review of the RADP, taking into consideration all the inputs from the Parliamentary public hearings as well as the DPME Implementation Evaluation of the RADP.

 

1. The Integrated Funding Model for agricultural support for implementation should be finalized by the Department of Rural Development and Land Reform, jointly with the Department of Agriculture, Forestry and Fisheries, supported by National Treasury, and further ensuring policy synergy and coherence in relation to farmer support across government, within three months of adoption of this report.

 

1. The Minister of Rural Development and Land Reform should ensure, within three months after adoption of this report by the House, that:

 

1. Differentiated farmer support programme which takes into consideration differential needs of various categories of farmers, from small-scale subsistence to large-scale commercial farmers.
2. There are clear Service Level Agreements (SLAs), in languages that beneficiaries understand, that binds a tripartite cooperation among government, strategic partners and farmers. 
3. Enhanced monitoring and Evaluation of RADP, in particular implementation of business plans, contracts and SLAs.
4. There is equitable distribution of recapitalisation and development funding for both redistribution and restitution programmes.A progress report on the investigations of allegations of fraud and corruption in the DRDLR, especially relating to the Recapitalisation and Development Fund, be submitted to the portfolio Committee.
5. viability of projects before and after disbursements of funds Indicate measurements and ratios to determine
6. A revised RADP policy that addresses the findings and recommendations of the DPME report as well as the findings and recommendations of this report must be presented before the Portfolio Committee on Rural Development and Land Reform jointly with Portfolio Committee on Agriculture, Forestry and Fisheries

 

 

 

1. The Ministers of Rural Development and Land Reform; and Agriculture, Forestry and Fisheries should present joint quarterly progress reports on the implementation of the integrated funding model at a joint meeting of Portfolio Committees on Rural Development and Land Reform, and Agriculture Forestry and Fisheries within three months after adoption of this report by the House.

 

 

 

Report to be considered.