ATC210526: Report of the Select Committee on Appropriations on First and Second Quarter Expenditure For 2020/21 Financial Yearly Free State, Gauteng, Limpopo, Mpumalanga and North West Provincial Departments of Agriculture and Rural Development On Comprehensive Agricultural Support Programme Grant, Ilima/Letsema Project Grant and Land Care Programme Grant: Poverty Relief and Infrastructure Development, Dated 26 May 2021

NCOP Appropriations

Report of the Select Committee on Appropriations on First and Second Quarter Expenditure For 2020/21 Financial Yearly Free State, Gauteng, Limpopo, Mpumalanga and North West Provincial Departments of Agriculture and Rural Development On Comprehensive Agricultural Support Programme Grant, Ilima/Letsema Project Grant and Land Care Programme Grant: Poverty Relief and Infrastructure Development, Dated 26 May 2021

 

1. Introduction

 

In compliance with its oversight responsibilities as stipulated in the Money Bills Amendment and Related Procedures Act, No 9 of 2009, as amended in 2018, and holding the executive accountable for the expenditure of the appropriated public finances, the Select Committee on Appropriations (the Committee) scrutinisesconditional grant expenditure as reflected in section 32 reports of the Public Finance Management Act of 1999 (PFMA),together with other data sources. The Comprehensive Agricultural Support Programme (CASP) Grant, the Ilima/Letsema Project Grant and the Land Care Programme Grant: Poverty Relief and Infrastructure Development were amongst those conditional grants with expenditure found to bebelow the acceptable normof 25 percent per quarter for the first two quarters of the 2020/21 financial yearDue to time constraints, the Committee could not invite all nineprovinces who had reported poor expenditure, andresolved to invite only five provinces to give account of the implementation challenges as well as their mitigating factors to address the poor expenditure on the above-mentioned three conditional grants.

 

1. Objectives of conditional grants

 

• The Comprehensive Agricultural Support Programme (CASP) Grant is meant for post-settlement farmer support to former disadvantaged beneficiaries of the land reform programme, through the provision of on-farm agriculture infrastructure, production inputs and extension services through the Extension Recovery Programme (ERP).
• TheIlima/Letsema Project Grant provides production inputs to beneficiaries of land reform, as well as household production inputs (vegetable seeds, fertiliser and equipment) for the establishment of school food gardens, homestead food gardens and community gardens in support of food security efforts of the provinces.
• The purpose of the Land Care Programme Grant: Poverty Relief and Infrastructure Development is to rehabilitate wetlands, remove alien invasive plants and create firebreaks in order to promote viable ecosystems and sustainable agriculture.

 

1. Submissions byprovinces

 

3.1 Free State

The Free State Department of Agriculture and Rural Development (FSDARD) reported spending below the acceptable norm (25 percent per quarter) on all three grants for both quarters under review. Table 1 below shows the actual and adjusted budget allocations and the expenditure during the first and second quarters of the 2020/21 financial year. The FSDARD submitted that the impact of COVID-19 and the amendment of the allocations and business plan due to the redirection of money from the Comprehensive Agricultural Support Programme (CASP) Grant to COVID-19 programmes had contributed to the under-spending. 

Table 1: Free State conditional grant expenditure

Conditional Grant	Actual Budget R’000	Adjusted Budget R’000	First Quarter		Second Quarter
			Actual expenditure	% Spent	Actual expenditure	% spent
Comprehensive Agricultural Support Programme	143 374	159 764	6 842	5	14 696	10
Ilima/Letsema Grant	51 331	52 649	447	1	675	1
Land Care Programme Grant	8 378	8 278	0	0	1 609	19

 

The province reported that, within CASP, there were 10 provincial projects with an annual budget of R85.4 million. A total of R46.1 million had been spent by 9 February 2021, and R20.8 million had already been committed. The FSDARD assured the Committee that the remaining R18.4 million would be spent before 31 March 2021, on the following projects:

• Xhariep Fish Hatchery: R4.4 million;
• Glen College: R3.5 million;
• Risk management solution: R3 million;
• Marketing infrastructure: R2.3 million;
• Training and capacity building: R900 000;
• Enterprise Resource Plan: R726 000; and
• Graduate programme: R3.5 million.

On CASP performance per district, the province reported that Xhariep District had two projects planned with a budget of R5.5 million; of which R3.2 million had been spent, and R2.2 million committed, by 9 February 2021. Mangaung District had nine projects planned, with abudget of R27 million, of which R9.2 million had been spent, and R17.7 million committed, at the time of reporting. Nine projects with a budget of R6.5 million were planned for Leweleputswa District, of which R4.7 million had been spent and R1.7 million committed at the time of reporting. In Thabo Mofutsanyana District, there were four planned projects with a budget of R7.6 million, of which R7.5 million had been spent and R50 000 committed at the time of reporting. Fezile Dabi District had 11 planned projects, with an annual budget of R27.7 million, of which R18.9 million had been spent and R8.7 million already committed to date.

With respect to the challenges experienced during the implementation of CASP, the FSDARD reported that from the outset, there had been delays in initiating administration processes due to late approval of business plans and budget approval as a result of the reprioritisation of the budget for COVID-19 relief. The province submitted that there had been delayed approval of the Beneficiary Project Approval letter; signing of Transfer Agreements by beneficiaries and the Accounting Officer; the opening of beneficiary grantholding accounts with the participating bank; and the establishment of CSD beneficiary business entities. There were further delays in the preparation of Sundry Payment Advice Request Forms for payment transfers; transfer of funds in tranches to beneficiary grant holding accounts; and the project implementation in line with the plan. The FSDARD undertook to mitigate these challenges by implementing the Expenditure Catch-up Plan, developed to fast-track expenditure in the third and fourth quarters. After the signing of the Beneficiary Project Approval letter, the Transfer Agreements and Project Implementation Plans had been signed simultaneously to release the first payment of funds into beneficiary holding accounts. There would be approval of transfer of funds in tranches informed by the imminent commodity seasonality and project activities.

The province reported that a number of challenges had been experienced with the implementation of the Ilima/Letsema Project Grant. These included the forced adjustment of business plans after the 2020 National Adjusted Appropriation due to COVID-19. Delays in approval of the adjusted provincial plans had resulted in delays in projects implementation. The final approval of projects and budget allocations, including transfers of funds, had further delayed project implementation and expenditure.

 

The FSDARD reported that six provincial projects had been planned for the Ilima/Letsema Project Grant in the current financial year. These had a total budget of R24 million, of which R17.2 million had been spent and R6.6 millioncommitted, at the time of reporting. The province assured the Committee that the remaining R101 000 would be spent before the end of the financial year. With regard to performance per district, the province reported that there had been two projects planned for Xhariep District, with a budget of R1.1 million, which had all been spent at the time of reporting. For Mangaung District, 17 projects had been plannedwith a total budget of R12.1 million. At the time of reporting, R9.6 million had been spent and R2.4 million committed. There had been 11 projects planned for the Leweleputswa Districtwith a total budget of R10.54 million, of which all had been spent except for R41 000, which had been committed. Fezile Dabi District had five planned projects with a total budget of R4.8 million, of which R3.1 million had been spent and R1.7 million committed at the time of reporting. No projects were planned for Thabo Mofutsanyana District.

 

The province reported that two provincial projects had been planned within the Land Care Grant with a budget of R1.5 million, of which R867 000 had been spent and R159 000 committed at the time of reporting. The remaining R572 000 would reportedly be spent before the end of the financial year. With regard to performance per district, the FSDARD reported that only one project had been plannedin Xhariep District with a budget of R1.3 million, which had been spent at the time of reporting. In Mangaung District, two projects had been planned, with a budget of R1.3 million, of which R920 000 had been spent and R330 000 committed at the time of reporting. The province assured the Committee that the remaining R50 000 would be spent before the end of the financial year. Three projects had been planned in LeweleputswaDistrict with a budget of R1.3 million. At the time of reporting, R1.26 million had been spent and according to the FSDARD, the remaining R40 000 would be spent before the end of the financial year. Two projects had been planned in Thabo Mofutsanyana District, with a budget of R1.35 million. At the time of reporting, R981 000 had been spent and R369 000 committed. Fezile Dabi District had only one planned project with a budget of R1.43 million, of which R514 000 had been spent and R892 000 committed at the time of reporting; with the remaining R24 000 reportedly to be spent before the end of the financial year.

 

The FSDARD submitted that the main reason for under-spending on the Land Care Project Grant had been the closure of Junior Land Care and 800 schoolsdue to theCOVID-19 pandemic. This would be addressed by facilitating smaller Junior Land Care groups (50 per group) in the fourth quarter. The tender for Waterways had been awarded and was being implemented. 

 

3.2 Gauteng

The Gauteng Department of Agriculture and Rural Development (GDARD) indicated that the province was committed to implementing the following four APEX programmes: Commercialisation and Food Security; Agro-processing; Climate Change and Environmental Sustainability; and Solidarity Economy. These programmes were aligned to the national priorities as well as the Growing Gauteng Together (GGT)2030 priorities of the province. The GGT 2030 priorities found expression in the outputs outlined in the GDARD’s Annual Performance Plan and the Delivery Agreement of the Member of the Executive Council (MEC).

 

The GDARD reported that its total conditional grant allocation for the 2020/21 financial year had been R138.1 million; but that in the 2020 Special Adjustments Budget this amount had been reduced by R22.7 million, or 16.4 percent, due to budget reprioritisation by national government for the response to the COVID-19 pandemic. Table 2 below provides the breakdown of the main allocation per conditional grant, the adjusted allocationand expenditure per quarter, as well as expenditure as at 05 February 2021. (The GDARD also reported on the EPWP Integrated Grant, meant to fund labour-intensive work opportunities, even though the Committee had not required it.)

Table 2: Gauteng allocations and expenditure

Conditional Grant	Main allocation   R’ 000	Adjusted Allocation   R’ 000	Transfer from National R’ 000	First Quarter expenditure R’000	Second Quarter expenditure R’000	Expenditure as at 05 February 2021 R’000
Comprehensive Agricultural Support Programme	R100 108	R82 646	38 519	2 381 (3%)	5 494 (7%)	R78 464 (88%)
Ilima/Letsema	R30 928	R25 709	11 826	-	-	22 142 (87%)
Land Care Programme Grant	R4 787	R4 787	-	-	-	-
EPWP Integrated Grant for Provinces	R2 271	R2 272	568	-	426 (19%)	2 216 (98%)
Sub-total	138 094	115 413	50 913	2 381 (3%)	5 920 (5%)	104 427 (79%)

 

With regard to the Comprehensive Agricultural Support Programme (CASP) Grant, of the adjusted R82.6 million, the province reported that it had spent R2.4millionand R5.5 million in the first and second quarter, respectively, on compensation of employees (CoE) for the Extension Recovery Programme (ERP) and stipends for agriculture graduates placed on farms for training. The GDARD further reported that some CASP invoices had been paid for against the equitable share; due to grant budget cuts leading to delays in finalisation of business plans and the transfer of funds from National Treasury.

 

The GDARD reported no expenditure under the Ilima/Letsema Project Grant for the first two quarters of 2020/21, indicating that the main reason had been the delay in the completion of business plans, brought about by budget cuts in light of COVID-19 response.

 

With respect to the Land Care Grant: Poverty Relief and Infrastructure Development, as shown in the table above, there had been no expenditure until the end of the second quarter. This was reportedly due to changes in the deliverables from what had initially been planned at the beginning of the financial year. The GDARD submitted that, after finalising the business plan, projects from the 2019/20 financial year had to be finalised and the activities (conservative agriculture and permaculture) had been paid for from the equitable share. The inclusion of the 2019/20 projects in this year’s grant deliverables had required GDARD to change its current business plan, and this affected transfers from National Treasury, as well as spending against the grant allocation. The Land Care Grant funds were only transferred during the third quarter and procurement processes for project implementation was underway.

 

The province reported that several factors had contributed to under-spending:The GDARD support had been negatively affected by COVID-19, especially with regard tofood production; meat regulation; export certification;the environment public employment programme (EPWP); and eco-tourism.In addition, the Infrastructure Development Management System (IDMS) process remained a challenge in the implementation of agriculture infrastructure support. However, a policy had been approved to exempt certain infrastructure, such as hydroponics, tunnels and boreholes. The GDARD reported that interventions in the implementation of its infrastructure programme, such as a memorandum of understanding with the Development Bank of Southern Africa (DBSA) for infrastructure procurement, were starting to show results; but that this area of work would be closely monitored for continuous improvement. The GDARD concluded by stating that there was a need to realign the conditional grant approval processes, to be concluded by the third quarter of each financial year, so that the start of a new financial year saw the commencement of grant implementation and spending, as opposed to initiating tender processes.

 

3.3 Limpopo

The Limpopo Department of Agriculture and Rural Development (LDARD) reported that its Comprehensive Agricultural Support Programme (CASP) Grant budget had initially been R232.5 million, but it had been revised downwards to R174.4 million during the 2020 Special Adjustments Budget. As indicated in Table 3 below, the province had spent only 24 percent of this allocation by the end of the second quarter - R19.6 million in the first, and R22.4 million in the second quarter. The table 3 also shows the pillars of the CASP Grant and the budget allocations and expenditure during the first two quarters of the 2020/21 financial year.

Table 3: CASP First and Second Quarter expenditure

CASP Pillars	CASP Allocation Budget   R’000	CASP Revised Allocation Budget R’000	First Quarter Expenditure     R’000	Second Quarter Expenditure   R’000	Total Expenditure	% Expenditure
ERP Technical & advisory services	65 775	58 611	11 682	9 422	21 104	36%
Radio Advert and Publication	1  000	804	-	-	-	0%
Agricultural Training Institutes	18 604	7 257	-	-	-	0%
Training & Capacity Building Services	15 350	10 000	333	2 150	2 483	25%
On & Off farm infrastructure Service	105 795	47 231	5 238	8 264	13 502	29%
Foot & Mouth Disease	5 960	4 789	-	-	-	0%
Crop Protection	5 400	4 399	-	975	975	22%
Placement of Graduates	10 581	10 581	2 322	1 633	3 955	37%
Kaonafatso Ya Dikgomo	4 093	4 093	-	-	-	0%
Post Settlement Support	-	26 733	-	-	-	0%
Total	232 558	174 498	19 575	22 444	42 019	24%%

 

With respect to challenges experienced and proposed interventions, the LDARD reported that the closing of infrastructure sites due to the COVID-19 lockdown restrictions had affected progress and the prohibition of mass gatherings had had a negative impact on the training of farmers. The LDARD submitted thatrecovery planshad been developed with the appointed service providers for both infrastructure and capacity building projects. In addition, the delay in concluding a fencing term contract due to the restrictions, had made verification and other important activities within supply chain management process, difficult. This challenge had been mitigated by concluding the fencing contract and starting the administrative procurement processes. The LDALR further reported that, as a result of COVID-19 restrictions, the recruitment of unemployed graduates had been delayed due to late assessment of potential hosting farms. To mitigate this challenge, the LDARD had reportedly fast-tracked the advertisement for placement of unemployed graduates. The advertisement had closed on 8 January 2021 and shortlisting was underway at the time of reporting. The whole process up to placement would be concluded by April 2021. The assessment of land to be released for settlement had also been delayed by theCOVID-19 restrictions. However, upon lockdown restrictions being relaxed, farm assessments had commenced during the third quarter. The procurement of support packages would be informed by the assessment report.Lastly, the conclusion of the Kaonafatso Ya Dikgomo memorandum of understanding (MOU) had taken longer than anticipated due to a lack of clarification of certain information, which had to be provided by the Agricultural Research Council (ARC). To address this challenge, the LDARD was engaging with the ARC to finalise the content of the document, so that the MOU could be finalised.

 

With respect to the Ilima/Letsema Project Grant, the LDARD reported that, of the R50.2 million allocated for the 2020/21 financial year, only R4.9 million and R6.3 millionhad been spent in the first and second quarter, respectively. The reason for the poor spending was reportedly the delay in finalising contracts for supplying seeds, seedlings and fertiliser, due to restrictions prohibiting gatherings, which affected the verification processes. The province reported that the contracts had been finalised at the time of reporting and that orders were being printed.

 

The LDARD reported that there had been no expenditure on the R12.8 million budget of the Land Care Programme Grant: Poverty Relief and Infrastructure Development; as the Land Care business plan had only been approved by the national Department of Agriculture, Land Reform and Rural Development in September 2020. The province indicated that most of the Land Care projects were for fencing, water source development and livestock water, and that the late finalisation of procurement for fencing and drilling of boreholes had affected the start of implementation. At the time of reporting, the fencing contract had been finalised and fencing material for all four fencing projects (62km) would be purchased by the end of February 2021. The LDARD further submitted that the pace of implementation would be improved by hiring more workers for these projects. 

 

3.4 Mpumalanga

The Mpumalanga Department of Agriculture, Rural Development, Land and Environmental Affairs (DARDLEA) reported that all identified conditional grants had performed poorly in the first and second quarter of the 2020/21 financial year. Table 4 below shows that the grants had been allocated a total of R201.6 million in the 2020 Special Adjustment Budget, and as at the end of the second quarter, only R38.3 million had been spent by all three grants.  

Table 4: Conditional grant allocations and expenditure as at end of Second Quarter

Grant Name	Budget 2020/21       R’000	Special Budget Adjustment 2020/21   R’000	First and Second Quarter Expenditure 2020/21 R’000	Remainder of the year 2020/21   R’000
CASP	151 303	132 399	36 237 (27.3 %)	96 162
Land Care	10 044	10 044	63 (6.3 %)	9 981
Ilima/Letsema	57 374	47 047	2 024 (4.2%)	45 023
Agricultural Disaster Management Grant	-	12 160	-	12 160
Total	224 721	201 650	38 324 (18.9 %)	163 326

 

The province submitted that many challenges had led to poor expenditure by all grants. The reduction in grant funding necessitated by reprioritisation of the budget to redirect funds to COVID-19 interventions, had affected most of the infrastructure projects. In addition,the restriction on movement during Phases 4 and 5 of the lockdown had led to limitations on the development of specifications for infrastructure projects. Because the specifications could not be finalised in time, a number of projects which would have been completed in a single financial year had been converted into multi-year projects; and for this reason, the DARDLEA intended to apply for a roll-over of the conditional grant budget. To mitigate other challenges, the province had revised the infrastructure project list with its business plans and the Annual Performance Plan. In addition, an acceleration plan had reportedly been developed and project sites handed over to the contractors. Moreover, the reduction in grant funding had led to a budget shortfall for compensation and other pillars of theExtension Recovery Plan(ERP). In order to resolve this, the DARDLEA intended to request approval from the delegated national transferring officer to transfer funds from other pillars of CASP that were under-spending.

Furthermore, the province reported that the current restrictions such as social distancing and limitations on occupancy due to COVID-19 made it impossible to conduct accredited-farmer-training, since it required farmers to attend for prolonged periods. This was also reportedlyapplicable to the appointment of service providers for the training. TheDARDLEA submitted that these challenges would be mitigated by collaborating with commodity associations to offer accredited-farmer-training until the training providers were appointed.

 

With regards to the Ilima/Letsema Project Grant, the DARDLEA reported that although the majority of agricultural activities were expected to continue, therestrictions brought about by the pandemic had limited the mobility and interaction of the Extension and Advisory officials with farmers; as the majority of the Extension and Advisory officials implementing the program,either had comorbidities, or were above the age of 60, and as such were forced to observe the lockdown restrictions. The province further indicated that the early restrictions of Phases 4 and 5 of the lockdown had limited the supply andavailability of, and the access to inputs and related materials by the service providers. This resulted in delayed delivery of production inputs procured.

 

To mitigate the above challenges, the DARDLEAsubmitted that they would ensure that farmers were provided with personal protective equipment (PPEs), pending the sponsorship and budget. The province assured the Committee that itwould ensure that the programme offered services within the restrictions and guidelines of the COVID-19Command Council, and that it would implement the Work from Home Policy, as guided by the Department of Public Service and Administration. Furthermore, the DARDLEA reported that deliveries would be completed shortly and suppliers were contacted daily to expedite the process. In instances where the limitation of the planting timeframe had occurred, the farmers would be assisted with the alternative but relevant crop to plant.

 

With respect to challenges with theLand Care Project Grant: Poverty Relief and Infrastructure Development, the DARDLEAreported delays in finalisation and signing of the funding agreement and the late transfer of funds (in November 2020) by the Department of Agriculture, Land Reform and Rural Development. Added to this, had been above normal rainfall which had caused delays due to unworkable days. To mitigate these challenges, the DARDLEA submitted that an acceleration plan, to speed up procurement of necessary material and implementation of projects, had beendeveloped. Secondly, the DARDLEAreported that, in order to compensate for the time lost, the number of field workers doing the conservation work had been increased,from 102 to 212 EPWP workers, in the last quarter of the financial year. More workers were being appointed and supplied with raincoats to minimise the impact of rain during working hours.

 

3.5 North West

The North West Department of Agriculture and Rural Development (NWDARD) reported that, in the 2020/21 financial year, the Comprehensive Agricultural Support Programme (CASP) Grant had been allocated R138 million, and further had received a roll-over amount of R3.6 million. As at the end of the second quarter, only R5.2 million (4 percent) had been spent. Table 5 below shows the breakdown of the projects per district, their budgets, quarterly expenditure, and breakdown of beneficiaries.

 

Table 5: CASP breakdown per project, budget expenditure and beneficiaries.

Number of Projects	Budget Allocation R’000	Q1 Exp R’000	Q2 Exp R’000	Total Exp R’000	Beneficiaries
					Fe-male	Male	To-tal	Youth	Disabi-lity
Ngaka Modiri Molema District
4	10 851 535	0	0	0	9	11	20	3	1
Dr Ruth Segomotsi Mompati District
37	32 364 827	0	0	0	6	43	49	6	0
Bojanala Platinum District
14	20 990 617	0	499 641	499 641	10	51	61	10	1
Dr Kenneth Kaunda District
5	9 900 000	0	120 600	120 600	3	3	6	2	0
Provincial Projects
7	67 568 021	2 097 171	2503 171	4 600 342
67	141 675 000	2 097 171	3 123 412	5 220 583	28	108	136	21	1

 

With respect to the Ilima/Letsema Project Grant, the NWDARD submitted that the budget of R51.8 million had beenincreased by roll-over funds of R608 000, bringing the total for this grant to R52.4 million. However, in the first and second quarter, the province had only spent R546 000 (1 percent), even though a total of 67 projects, with 136 proposed beneficiaries, had been planned. Table 6 below shows the breakdown of the projects per district, their budgets, quarterly expenditure, and breakdown of beneficiaries.

 

Table 6: Ilima/Letsema Programme Grant breakdown per project, budget expenditure and beneficiaries.

Number of projects	Budget Allocation R’000	Q1 Exp	Q2 Exp	Total Exp	Beneficiaries
					Female	Male	Total	Youth	Dis-ability
Ngaka Modiri Molema District
11	14 093 781	0	146 773	146 733	21	37	58	11	1
Dr Ruth Segomotsi Mompati District
15	21 347 297	0	0	0	72	241	313	8	1
Bojanala Platinum District
9	14 767 061	0	352 588	352 588	7	14	21	11	11
Dr Kenneth Kaunda District
1	2 132 750	0	46 910	46 910	600 Households
Provincial Projects
1	155 111	0	0	0	Household food security
37	52 596 000	0	546 270	546 270	100	292	392	30	3

 

The NWDARD indicated that the Land Care Programme Grant: Poverty Relief and Infrastructure Development had been allocated R8.5 million, of which R4.6 million (55 percent) had been spent at the end of the second quarter. The NWDARD further reported that, out of an annual target of 3000 hectares of agricultural land rehabilitation, only 300 hectares had been targeted for the first quarter and nothing had been achieved. However, in the second quarter, from a target of 700 hectares for rehabilitation, 1395 hectareshad been rehabilitated. On the key result area of the number of green jobs created, the NWDARD reported that the annual target had been 800 jobs. However, on the first quarter target of 50 jobs, there had been zero achievement; and in the second quarter only 113 out of a target of 350 jobs had been created.

The NWDARD reported that the following challenges had contributed to the low expenditure:

• Funds from the national department had been transferred late;
• Business plans for the Land Care Project Grant and the Ilima/Letsema Project Grant had only been approved late in July and in August 2020, respectively;
• The lack of internal capacity within the NWDARD had affected procurement processes and thus implementation of projects; and
• The outbreak of COVID-19 had negatively affected project implementation.

 

4. Findings and observations

During the deliberations, the Committee made the following findings and/or observations:

4.1 The Committee noted with concern that the lockdown regulations following the outbreak of theCOVID-19 pandemic had reportedly seriously affected the roll-out of grant programmes, while food security had become more critical during the pandemic.

4.2 The Committee noted that allocations to provinces had to be revised due to budget reprioritisation and redirection of funds to COVID-19 intervention programmes; and that administrative delays in making adjustments had created budget uncertainty that had contributed to non-spending in the first quarter.

4.3 Regardless of the above, the Committee is of the view that a lack of proper planning by provinces had contributed to low spending in the first two quarters, leading to farmers not consistently receiving the required support.

4.4The Committee noted with concern the under-spending on the Land Care Grant by all invited provinces; in light of the constant degradation of agricultural land through various factors such as pollution, soil erosion, alien plants and poor water conservation.

4.5 While appreciating the efforts to assist subsistence farmers in rural communities through CASP and Ilima/Letsema, the Committee observed that there was a need for interventions to assist those in rural communities who may not be literate or computer literate to benefit more readily from the programmes.

4.6  The Committee noted with concern that money was being returned unspent to the National Revenue Fund (NRF), while there was a critical need to invest in water infrastructure, such as the construction of dams, drilling of boreholes and the revival of the existing windmills in provinces such as the Eastern Cape.

4.7The Committee noted with concern the reported challenges in Limpopo with respect to thefinalisation of contracts for supplying seeds, seedlings and fertiliser; and the possible negative impact if farmers were not able to plant seeds at the right time as a result of an administrative failure.

4.8The Committee observed that some of the underlying issues leading to the North West under-spending year on year and recording the lowest spending over the previous five years were related to maladministration during the province’s 5th administration, leading to the province being under administration in terms of Section 100 of the Constitution of the Republic of South Africa at the time of reporting.

4.9The Committee noted that the merged Department of Agriculture, Land Reform and Rural Development was currently working on aligning the Comprehensive Rural Development Programme (CRDP), designed by the 4th Administration to address rural development, with the Rural Development Policy Framework and other relevant programmes. 

4.10The Committee expressed concern that, in light of the slow spending by the five provinces in the first two quarters, provinces may not have the ability to spend the remainder of their budget in the last two quarters of the financial year, which could lead to fiscal dumping.

 

5. Recommendations

After having deliberated, the Committee made the following recommendations:

5.1 Whilst the Committee acknowledges the fact that there was an urgent need for government to implement lockdown regulations following the outbreak of the COVID-19 pandemic, it is of the view that the policy-making process in government should at all material times take into account the effects of unintended consequences, in that policies or regulations should not inhibit the roll-out of planned programmes, particularly those that are meant to alleviate poverty and hunger and to create infrastructure for sustainable food security.

5.2Whilst the Committee understands the need for budget reprioritisation and redirection of funds following the advent of COVID-19, which reportedly impacted on planned expenditure and created uncertainty, it is of the view that the National Treasury, provincial treasuries and the affected provincial departments should proactively work together to prevent administrative policy uncertainty during emergency situations. The Minister of Finance, together with Cabinet, should ensure that proper plans and mechanisms are developed in advance to mitigate administrative challenges during disaster situations and further ensure that a reasonable amount of budget reserves are earmarked for unforeseen and unavoidable situations, such as virus outbreaks and any other possible disasters.

5.3 The Committee strongly believes that under-expenditure on conditional grants which are meant to alleviate poverty and create infrastructure to ensure sustainable food security, is highly unacceptable. Provinces should use the available resources, such asthe medium term projected budget estimatesand the intergovernmental relations system,to carry out their future, or MTEF, planning cycles to prevent poor expenditure as a result of not planning timeously; while also making provision for unforeseen and unavoidable situations.

5.4 The National Treasury and provincial treasuries, together with the affected provincial departments, should see to it that adequate capacity, proper plans and remedial actions are developed to ensure that the Land Care Grant expenditure is improved, given the constant degradation of agricultural land through various factors such as pollution, soil erosion, alien plants and poor water conservation. Moreover, effective expenditure on this conditional grant should enable government to create much needed jobs in poor communities during theCOVID-19 pandemic, while also building the much needed infrastructure for the sector.All five provinces that have reported under-expenditure onthe three agricultural conditional grants should develop clear remedial actions and ensure that these are implemented without delay to improve expenditure. 

5.5Given the importance and the need to improve support for rural communities, the Committee is of the view that the Department of Agriculture, Land Reformand Rural Development, together with the provincial departments, should consider establishing arural help desk programmeto assist rural communities to fast-trackadministrative processes that would enable them to access funding more readily;consider capacitating traditional authorities and councils to assist people to access this funding; and/orconsider seconding departmental officials to assist at a district level.

5.6 The Committee is of the view that theremight be a need for the Department of Agriculture, Land Reform and Rural Development to launch an aggressive media campaign to motivate people to go back to cultivating the land to promote food security during this time. This mayreduce the heavy reliance on government social grants, which is unsustainable in the long term, given the magnitude of the growing government debt.

5.7 The Department of Agriculture, Land Reform and Rural Development should expedite the process of aligning the Comprehensive Rural Development Programme (CRDP), which was developed and adopted by the 4thAdministration to address rural development, with the Rural Development Policy Framework and other relevant programmes. Parliament will continue to monitor progress.  

5.8 The National Treasury, together with provincial treasuries, should ensure that provinces have adequate systems and measures in place to deal with corruption and maladministration before it negatively affects expenditure earmarked for the most vulnerable communities. Furthermore, provincial departments should develop early warning systems and strengthen their internal audit units, audit committees and monitoring and evaluation systems to detect any possible maladministration, corruption, under-performance and/or under-expenditure and ensure that consequence management, as set out in the Public Finance Management Act, as well as appropriate actions recommended by the Auditor-General of South Africa as part of the audit improvement plan, are implemented decisively.

5.9 The National Treasury, provincial treasuries and the national Department of Agriculture, Land Reform and Rural Development should provide the necessary support to provincial departments to enable them to spend atleast 25 percent of their grant funding per quarter,rather than withholding funds as a result of under-expenditure; as this has negative implications for the beneficiaries of each programme. This is with the exception of infrastructure projects which may require more time before expenditure cantake place. Furthermore,National Treasury and provincial treasuries should ensure that fiscal dumping, which leads to wasteful and fruitless expenditure, is not toleratedwithin any sphere of government. Parliament should continue to monitor progress in this regard.

 

6. Conclusion

The Committee intends to invite the MECs of Agriculture from the Free State, Gauteng, Limpopo, Mpumalanga and the North West Province to its meeting that considers the next quarterly expenditure report to explain how remedial actions have been implemented as recommended by the Committee in this Report. The Report should also be brought to the attention of relevant Premiers, Provincial Legislatures and their relevant sector committees for their necessary interventions. While the Committee believes that some of these matters should be brought to the attention of sector committees in Parliament, it is of the view that the provincial departments of agriculture and other departments should resolve their budget issues with the provincial treasuries and the national sector department, where applicable.

 

Report to be considered.