ATC210824: Special Joint Oversight Visit Report to Kwazulu-Natal: Portfolio Committee on Agriculture, Land Reform and Rural Development and the Select Committee on Land Reform, Environment, Mineral Resources and Energy, Dated 24 August 2021

Agriculture, Land Reform and Rural Development

SPECIAL JOINT OVERSIGHT VISIT REPORT TO KWAZULU-NATAL: PORTFOLIO COMMITTEE ON AGRICULTURE, LAND REFORM AND RURAL DEVELOPMENT AND THE SELECT COMMITTEE ON LAND REFORM, ENVIRONMENT, MINERAL RESOURCES AND ENERGY, DATED 24 AUGUST 2021

1.BACKGROUND AND THE AIM OF THE VISIT

The country has in the second week of July 2021 experienced unprecedented levels of unrest and destruction of public and private property, coupled with violence and looting of public and private property. Despite the fact that these acts of violence started in KwaZulu–Natal (KZN) and spread to parts of Gauteng, they have a socio-economic impact throughout the country. The unrest, which involved violent protests and looting, has had negative consequences for some farmers and agribusinesses in KZN Province. Financial losses as a result of road closures, burning of trucks and farms, damage to storage facilities and other infrastructure may have far-reaching implications for the agricultural industry, food security and sector employment.It has been reported that the violent protests amplified vulnerability and food insecurity in many communities of KZN and Gauteng Provinces.

It is against this background that the Portfolio Committee on Agriculture, Land Reform and Rural Development and the Select Committee on Agriculture, Land Reform, Environment, Mineral Resources and Energy conducted aspecial joint oversight visit to KwaZulu-Natal Province from 09 – 13 August 2021 to assess the impact of the unrest and destruction on the agricultural value chain and the Department’s response to the sectoral challenges.

The overarching aim of the oversight visit was to obtain insights into the impact of the recent unrest that took place in KZN on the agricultural and agroprocessing value chains particularly on land reform and other Government-funded farms, institutions and infrastructure; Government plans in addressing the impact of the unrest on the agricultural sector and availability of disaster assistance and its implementation as the KZN Provincial Executive has on the 29th July 2021, declared a state of disaster in the Province.

1.1 Objectives of the oversight

The objectives of the joint Portfolio and Select Committees’ oversight visit were as follows:

Ascertain the extent to which the unrest has impacted the agricultural and agroprocessing value chains, agrologistics and damage to relevant infrastructure.
Assess the impact of the unrest on the agricultural supply chain and food availability.
Assess the impact of the unrest on current and future employment in the agricultural and agroprocessing sectors.
Ascertain Government’s response and plans to address the resultant impact and relevant infrastructure damage.
Identify strengths and weaknesses as well as areas of complementarity amongst the different spheres of Government including implications for policy interventions.

2.DELEGATION

Composition of the Delegation

The delegation comprised of Members of the Portfolio Committee on Agriculture, Land Reform and Rural Development, Select Committee on Land Reform, Environment, Mineral Resources and Energy. The delegation was supported by different teams of Parliamentary Officials as reflected in Table 1 below. The number of project sites to be visited and their geographical location dictated that the delegation be split into two groups. Each group was equally supported by a team of Parliamentary officials responsible for secretarial, research and content advisory, communications, language interpreting and protection services. The delegation was also accompanied by the Minister, Deputy Minister and Members of the KwaZulu-Natal Provincial Legislature.

Parliamentary delegation during the oversight:

Portfolio Committee	Select Committee	Support Officials	Designation
iNkosi ZMD Mandela (Chairperson/leader of the delegation) (ANC) Ms MME Tlhape, (ANC) Mr. N Capa, (ANC) Ms KD Mahlatsi, (ANC)	Ms T Modise (Chairperson/leader of the delegation – (NW) Ms W Ngwenya (Gauteng) Mr J Nyambi (Mpumalanga) Mr B Smit (Limpopo)	Ms P Nyamza Ms A Kakaza	Committee Secretaries
		Ms C Maledu Ms A Zindlani	Committee Assistants
		Dr T Manenzhe Ms N Mgxashe	Content Advisor: Land Reform & Rural Development Content Advisor: Agriculture
		Ms N Qwabe Ms T Siyo-Pepeteka Dr G Lekalakala	Researcher: Agriculture, Researcher: Land Reform & Rural Development Researcher: Agriculture, Land Reform, Environment, Mineral Resources and Energy
Mr N Masipa, (DA)		Mr S Kheswa and Mr S Manono	Language Practitioners
Mr. MK Montwedi, (EFF)		Ms S Govender	Communication Officer
iNkosi R Cebekhulu, (IFP)		Mr Gwadela and Mr Abrahams	Protection Services

2. Members of the Provincial Legislature in attendance:

Names

Institution

Mrs N Sibhidla-Saphetha (Chairperson)

Ms JT Gumede

Portfolio Committee on Agriculture and Rural Development, KZN Provincial Legislature

The delegation was also accompanied by relevant government officials from the Department of Agriculture, Land Reform and Rural Development and KZN Provincial Department of Agriculture and Rural Development; Managers in the KZN Department of Agriculture, Project Officers and Extension Officers.

STRUCTURE OF THE REPORT

This report presents an account of a four-day special oversight visit conducted by the Portfolio Committee on Agriculture, Land Reform and Rural Development and the Select Committee on Agriculture, Land Reform, Environment, Mineral Resources and Energy in KZN from the 10th to 13th August 2021. It documents the delegation’s engagement with presentations made during briefing sessions and observations made during project site visits where the delegation interacted with senior Department officials, farmers, business owners and other stakeholders.

4.BRIEFINGSESSION BY THE EXECUTIVE

On10 August 2021, the joint Committees (PC on Agriculture, Land Reform and Rural Development and SC on Agriculture, Land Reform, Environment, Mineral Resources and Energy) received briefings from theProvincial Department of Agriculture and Rural Development on the impact of the unrest on the agricultural sectorand from the National Department of Agriculture, Land Reform and Rural Development on biosecurity and the outbreak and impact of foot-and-mouth disease (FMD) in the Province.

4.1 Overview by the Minister of Agriculture, Land Reform and Rural Development

The overview by the Minister of Agriculture, Land Reform and Rural Development, Mrs Thoko Didiza,highlighted the impact of the unrest on the agricultural sector, which has also been grappling with diseases such as foot-and-mouth disease (FMD) and avian influenza. In KZN, FMD investigations could not take place during the unrest in the Mtubatuba and Ugu Districts that have been affected by FMD. There are plans to set up a multi-stakeholder Task Team to strengthen biosecurity especially the management and control of FMD.

The unrest had a significant impact on the agricultural value chain as movement of goods from producers and distribution centres was affected during the period of the unrest due to the closure of the N3; and ports could also not operate, which affected wheat and yeast distribution at the time.There was also a direct impact on some farmers such as dairy farmers that had to spill milk as it could not be collected, sugarcane farms that were burnt and sugar milling companies that had to close due to threats.

Following the unrest, the Minister and the Member of the Executive Council (MEC) for Agriculture in KZN, Mrs Bongiwe Sithole-Moloi held meetings with agricultural industry stakeholders and visited some affected farms. Inter-ministerial meetings were held with relevant Ministries (for example, Agriculture, Trade, Industry and Competition, Health, etc.) to devise strategies for immediate response.

4.2 Briefing by the KZN Provincial Department of Agriculture and Rural Development

The Acting Chief Director (CD) for Agricultural Services from Provincial Department of Agriculture and Rural Development, Mr Lethukuthula Jongisa, presented a high level presentation on the impact of the violent protests in the agricultural sector in the province as well as short to long-term interventions to assist the farming community following the unrest. The presentation outlined the impact across all commodity groups, food-and-mouth disease (FMD) operations, district reports on affected farms and proposed interventions across different commodities namely: vegetable and grain commodities, livestock commodity and sugarcane commodity. Short interventions include provision of production inputs (seedling, fertilisers and chemicals) for vegetable producers and burnt sugarcane fields, and procurement of feed for livestock. The total budget that is required to provide assistance to the KZN farming community following the unrest was estimated at R1.1 billion.

4.3 Briefing by the National Department of Agriculture, Land Reform and Rural

Development (DALRRD)

Thebriefing by the Chief Director from DALRRD, Mr Dipenene Serage can be summarised as follows:

4.3.1 Biosecurity and Risk Management

The Durban Port, which could not operate during the period of the unrest is the most central and convenient port for agricultural goods and approximately 80% of the meat that is consumed in the country is imported and mostly comes through the Durban Port. The hacking of Transnet ICT system also had a huge and negative impact on exports especially on citrus. The cold storage facilities were also affected, which had a negative impact on the quality and value of produce. The more time export produce has to spend at cold storage, the more chances that they will lose quality and there is also a threat of pests (e.g. citrus black spot (CBS) on citrus), which may result in rejections of those containers. The export rejections due to diseases and pests presents a phytosanitary risk to the country and also has an impact on costs, which have to be borne by the producer. The Department could account for 3 million cartons of citrus that could not be moved from the Durban Port due to the unrest. As an intervention, there were attempts to move some produce through the Gqeberha Port but unfortunately it is a small port and most of the produce is geared for the Durban Port.

4.3.2 Update on Foot-and-mouth Disease (FMD)

The new FMD outbreak in the province was detected in May 2021, which was followed by the declaration of the disease management area (DMA), namely, – Umkhanyakude, King Cetshwayo and Zululand Districts. Surveillance measures are in place to control the movement of cloven-hoofed animals and their products to prevent the spread of FMD. The decision to vaccinate or not to vaccinate will depend on the rate of the spread of the disease.

5.SITE VISITS

From the 10 – 12 August 2021, the joint Committees conducted site visits to the uMkhanyakude, Amajuba, Ugu, eThekwini Metro, King Cetshwayo, Zululand and iLembe District Municipalities.

5.1 eThekwini Metropolitan Municipality

5.1.1 Frey’s Abattoir (Cato Ridge)

Frey’s Abattoir is based in Cato Ridge in the eThekwini Metro,with Mr Walter Frey as a sole owner of the company. Frey’s food brand is a premium pork meat production company in South Africa that supplies the food service and retail industry such as Spar with meat, deliand other pork products.While there were no injuries to its personnel, the factory at Cato Ridge wasaffected during the unrest through extensive infrastructural damage through petrol bombing of properties and vandalisation of equipment and looting of carcasses and meat products. It was noted that the damage to the abattoir/factory was not to loot per se but to destroy the property including its equipment so that it cannot function again, which will have a negative impact to the country’s economy.

The facility used to process 1000 pigs a day from slaughter to processing (bacon, sausages and other pork products) but since the unrest, processing has come to a standstill as equipment has been damaged. The company now only slaughter pigs and store them as it has contracts with some of the farmers that supply pigs and also to assist farmers to get pigs off their farms when they are ready for slaughter. The estimated damage to the facility is R500 million and the company is busy with the insurance company to assess the damage on infrastructure. It is currently not making profit, which has an impact on employment sustainability for its 1 400 employees. Due to the extensive infrastructural damage and vandalism and the subsequent inability to do processing, most employees had to be asked to stay at home and the company now operates with 60 employees. It reported that although it submitted a report and application to the Department of Employment and Labour for the Temporary Financial Relief Scheme for Destroyed, Affected or Looted Workplaces that was gazetted by the Minister of Employment and Labour, it has not received a response from the Labour Department. The Scheme is supposed to assist with the payment of employee salaries/wages; and the company was concerned about the payment of salaries for its more than 1 200 employees that have to stay at home. Numerous follow-up correspondence to the Department of Employment and Labour have not yielded a response.

5.1.2 Meister Cold Store (Pinetown)

The Meister Cold Store in Pinetown is a commercial cold storage and distribution facility within the fresh produce segment that also has quarantine capabilities with government authority cooperation. Their storage system can be used for small, medium and large applications and in a variety of different markets. The Director at Meister Cold Store, Ms D Nairansamy reported that it was tremendously impacted by the unrest, suffering significant losses due to damage to infrastructure, burning of some of the property and looting. It is the largest cold storage facility in KZN and during the unrest, has lost 22 000 tons of cold storage facility. Approximately 90% of the lost storage capacity is imported products for the manufacturing of local food products, which will impact certain food supplies. The devastation has resulted in over a 100 job losses and negatively affected family members. The company has submitted a report and a claim and is waiting for the South African Special Risk Insurance Association (SASRIA) to expedite their claim so that it can rebuild, save jobs and prevent food shortages.

The delegation was also seriously concerned that 4 weeks after the unrest, responsible authorities have not ensured a clean-up operation in the area as rotten trashed products posed a health hazard to the security personnel looking after the facility including surrounding businesses and community; and the unpleasant smell alone was quite overwhelming even before one enters the gate.

Snolink Cold Storage

The cold storage is a private facility located in Durban that plays an important role in the agricultural value chain because its operations range from frozen citrus to frozen poultryfor both import and export markets; and also in the distribution to retail valuechain. The vandalisation of the facility affected the agroprocessing value chain and agricultural sector broadly. The highlights of the site visit can be summarised as follows: About 15 preloaded trucks parked in the premises and ready for deliveries were completely emptied by the looters, thus creating shortages in the retail sector. It is estimated that the stock value of R35 million was looted from the trucks. Main customers affected were Clover, Checkers and others because their orders could not be delivered.

The ICT infrastructure was also damaged and it was difficult to replace IT equipment because almost every IT store was looted. The company had to source equipment from Johannesburg. The company estimated that, at the time of the visit, the total cost of replacement was around R95 million. The cost included ICT infrastructure, damage to trucks when batteries and diesel were being stolen. Further, it was reported that trucks with two and a half tons of frozen products were taken away from the facility.

It was estimated that it would take between three and 18 months to rebuild, repair and resume normal operations at strategic cold storage and processing facilities that were impacted in the Province. The biggest concern was security for the cold storage. Due to a security breach, the company had to contract a private security company from Johannesburg. In just two weeks, the company had put in security at a cost of R2 million and the high cost of security was considered unsustainable.

Fresh Produce Doc Station at Durban Harbour

The delegation was briefed by the management of the storage facility and the Citrus Growers Association. The facility was not physically damaged because it is located within the Port, which is not easily accessible to the public. FPT operates three multi-purpose terminals in Southern Africa, situated in the Ports of Durban, Cape Town and Port Elizabeth. These terminals handle close to 350000 pallets of fruit and 3.5 million tons of general cargo every year. On-site inspection is conducted by the Department of Agriculture, Land Reform and Rural Development, Perishable Products Export Control Board (PPECB) and Citrus Growers Association.

The Committee’s observations can be summarised as follows: The shutdown of N3 during the unrest including stoning of vehicles and road blockages, which resulted in theclosure of all major routes to Durban and workers unable to get to the Port precinct because of the hostile environment. A task team comprising of Transnet and Port stakeholders worked around the clock to coordinate necessary interventions and bring operations back to normal.

The facility experienced a week of an almost complete stop in all operations because there was no intake and shipping opportunities (container cargo). Truck turnaround time took longer than normal due to backlogs and operations were behind the normal schedule by two and half weeks. The citrus industry, for example, was among the hardest hit by the shutdown due to the riots and cyberattack at Transnet, which affected the ports. Whilst the unrest impacted the agricultural industry negatively, some of the challenges predates the unrest; for example, aging infrastructure at the Port.

The impact of the shutdown on the market is too early to quantify because some of the produce had not reached their destination at the time of the oversight visit. Proper assessment would be done once they reach their respective markets. However, there are risks of interceptions due to quality concerns. One of the positive developments emerging from the entire experience was that Transnet and Port stakeholders began to coordinate their efforts and work together to resolve the challenges related to the shutdown and cyberattack.

Durban Fresh Produce Market

The Durban Fresh Produce Market, one of the largest fresh produce markets in South Africa, is a municipal bulk fresh produce market that was established in 1876. It is owned by eThekwini Municipality and managed by a market management team. The market offers two spacious sales halls with four Market Agents trading within both Sales Halls. One is set aside for trading of fruit and vegetables; while Sales Hall 2 is specifically set aside for trade of potatoes, onions, garlic and ginger. The Market is open to all buyers, i.e. bulk market (wholesalers, supermarkets, retailers, hotels, informal traders), farmers market – especially smallholders trading to the public, platform traders, and ‘housewives’ market. Fresh produce supplies are sourced from commercial farmers from all over South Africa and neighbouring countries. In addition, they also obtain supplies from domestic emerging farmers and other fresh produce suppliers and cooperatives.

Four market agents currently operate at Durban Fresh Produce Market namely; RSA Market Agents, Delta Market Agents, Port Natal Market Agents and Hanly Market Agents. Market Agents and their sales personnel are required to be registered with the Agricultural Produce Agents Council (APAC) which is a statutory body formed by virtue of the APAC Act, Act No. 12 of 1992. The APAC’s function is to regulate, enhance and maintain the status, dignity and integrity of fresh produce, export and livestock agents whilst protecting the interest of farmers or suppliers.

With regard to the unrest and looting experienced in KZN, the market was not vandalised because it was closed on time and there was no trade for three days during the riotsto protect the property, its staff and to secure produce at the facility. It worked with SAPS and private security companies to monitor and secure the area. However, the Market estimated that the closure resulted in loss of sales worth R15 million because there was a decline in the supply of fresh produce and it could not trade. However, when they opened, the demand started to increase and the market was able to recover the losses.Although it could make profit, it noted that it could have made R15 million more had there been no closure.

The Market ensured that farmers’ produce remained in safe storage at the market. However, due to the number of days without trade, the quality of the produce started to deteriorate thus affecting the market price. However, there was no need for the Market to compensate farmers as the produce was eventually traded. The highlights of the site visit can be summarised as follows:

About 65 per cent of the produce comes from outside the Province. The unrest and looting affected the transportation of produce from all over South Africa as all major routes leading to Durban were closed. Based on risk assessment, farmers did not want to risk losing their trucks and putting the lives of truck drivers in danger.
The closure of the market affected the informal traders across the city and other towns because they were unable to purchase fresh produce and also could not sell because of the shutdown. As a result, their livelihoods means were severely impacted.
There were a number of transformation initiatives being implemented by the management, especially black shareholding of market agents, rental discounts, and increasing the number of African traders. The market also intends to establish an Enterprise Development Unit within the market to support smallholders and emerging commercial farmers.

5.2 Ugu District Municipality (Sezela Sugar Mill and affected farms)

5.2.1 Provincial Department of Agriculture and Rural Development

The Provincial Department’s Director for Ugu District, Mrs Gwala reportedthat during the unrest, commercial and smallscale sugarcane farms in the District were affected through burning and looting in some cases. During the unrest, the Sezela Sugar Mill had to close for a week and by the time it re-opened, most of the sugarcane had deteriorated and not in a good condition for processing. This resulted in some of the sugarcane being rejected and farmers suffering losses. The District was waiting for a decision from their principals regarding assistance for farmers. In the meantime, it planned to assistsmallscale farmers with production inputs such as fertilisers that they had in storage.

5.2.2South African Sugar Association (SASA)

The Group Communications and Media Manager from the South African Sugar Association (SASA), Mr Cedric Mboyisa, gave an industry perspective of the impact of the unrest and looting. SASA constitutes the South African Cane Growers Association (SACGA), South African Farmers Development Association (SAFDA) and South African Sugar Millers’ Association (SASMA). More than 500 000 tons of sugarcane worth millions of rands in potential revenue were destroyed by arsonists, an act that had a negative impact on 65 000 direct jobs in the sugarcane growing sector and 1 million indirect jobs. Ten KZN sugar mills were forced to cease their operations during the unrest, two warehouses holding 12 000 tons of sugar were looted, 561 200 tons of commercial land reform and smallscale growers’sugarcane was burnt by arsonists and 40 000 tons of sugarcane at SezelaSugar Mill was unusable and had to be destroyed.The Mills associations have lost an estimated R100 million in revenue. The Association is in discussion with the Minister for a stimulus recovery package to assist the sugarcane industry.

The Executive Chairperson of SAFDA, Dr Siyabonga Madlala highlighted that the level of disaster tolerance among growers is not the same, while most smallscale growers have lost everything, commercial growers may have some sugarcane that can still be processed that will assist them to recover. He highlighted that the unrest has showed the slow pace of transformation in the sugar industry and the need for legislative review, in particular, the issue of the Daily Rateable Delivery (DRD), which disadvantages the smallscale growers. Land reform growers are mostly operating on marginal land and transport remains the greatest cost for all smallscale growers, who mostly rely on contractors to cut and transport their sugarcane. He further appealed to the Committees that government should prioritise and assist the smallholder growers as it is difficult for them to recover from the impact of the unrest. He emphasised that such assistance needs to be fast-tracked as growers are approaching the planting season.

The Regional Manager from the South African Cane Growers Association, Mr William Gillian, reported that the association had also lost sugarcane to the value of R70 million as a result of the unrest. And the affected growers are both smallscale and commercial growers. He highlighted the plight of a land reform farmer who lost all his sugarcane through arson and incurred tremendous losses in revenue.

5.2.3 Sezela Sugar Mill

The Director for Corporate Affairs for Illovo, Mr Tshepo Marumule gave a report on the impact of the unrest on Sezela Sugar Mill including on growers that supply the Mill with sugarcane. Sezela is part of Illovo Sugar, which has 3 sugar mills.All three sugar mills of Illovo Sugar South Africa and out-alcohol plants had to shut down during the unrest and export products could not leave the port. Outbound logistics were interrupted as the main arterial road networks were blocked and movement of products such as raw sugar, coal, molasses and other essential chemicals for processing came to a halt.Due to the widespread and uncontrollable arson fires, Sezela Sugar Mill was oversupplied and imposed a burn/harvest moratorium on the 11th of July 2021 and the Mill was closed for a week. The Mill restart was adversely impacted by the extent of deteriorated crushed cane and only fresh cane was able to bring crush to normal. That resulted in growers experiencing abnormal cane quality rejection criteria as only the ’freshest cane’ of a specific quantum was being considered for milling. More than 60 000 tons of sugarcane was rejected, 50% of which was from large growers and the rest from smallscale, medium scale, land reform growers and some of the company’s farms. This has an adverse impact on the growers’ revenue, recovery following the unrest and employment in the sector.

The total loss to Illovo is estimated at R175 million, constituting R150 million in damages and lost opportunity due to the inability to operate and export during the unrest,R5 million for additional security and R20 million worth of damage to sugarcane fields that were burnt and could not be crushed. Sezela Sugar Mill lost a total of R78 million inprofit in the form of 900 000 tons dumped cane, 21 million tons lostsugar and 38 million tons downstream losses. Illovo Sugar has spent in excess of R3 million combined expenditure supporting the South African Farmers Development Association (SAFDA), company employees and members of the community.

5.2.4 Makhubo Sugarcane Farm

The farm is owned by Mr ZC Makhubo for whom the South African Sugar Research Institute compiled a farm agronomic assessment following a request by the former Department of Rural Development and Land Reform (DRDLR), channelled through the Sezela-Land Reform Development Committee (SLRDC). The agronomic assessment is requested to motivate grant funding for the farm. The total farm extent is 122.819 hectares (ha) of land with 81.9 ha planted sugarcane,and 40.9195ha being indigenous bush. The farm is managed by Mr Ngcebo Makhubo (youth), whose father bought the farm. Its sugarcane is delivered to the Sezela Sugar Mill for processing. The farm was also affected and the entire 81.9 ha of sugarcane (approximately 1 000 tons) was burnt during the unrest. The Provincial Department was instructed to assist the farmer with the fertiliser and other necessary production inputs in preparation for the planting season.

5.2.5 Idwala Sugarcane Farm (Umdoni Local Municipality)

The Humberdale farm, now recorded as Idwala Farm is 199 hectares (ha) in extent and is predominantly under sugarcane. It is a land reform farm owned by Mr Sipho Wiseman Njikija, who is youth. The cane is delivered to the Sezela Sugar Mill, which is approximately 15km away from the farm. The farm owner reported that his farm was also burnt and looted during the unrestand he lost approximately 600 tons of sugarcane which amounts to half a million rands. It was further reported that the Provincial Department has not liaised with the farmers regarding their losses or provision of assistance. Farmers were in communication more with Farmer Organisations than the Department and reported that as farmers they are in desperate need of production inputs now in August before the rain starts. The delegation instructed the Department to assist the farmer, including Mr Makhubo, with the fertilisers and other production inputs that it has reported were available for assisting smallscale farmers.

King Cetshwayo District Municipality

Provincial Department of Agriculture and Rural Development

The Provincial Department’s Chief Director for the District, Mr Sipho Shange, reported that all local municipalities in the District were affected by the unrest. There was extensive damage to infrastructure including residential areas, burning of sugarcane farms and theft of livestock. The District had 5 000 bags of fertiliser for the one-household one-hectare (1HH 1ha) food security programme and all these have been distributed to beneficiary households. The District has submitted a Preliminary Report to the Provincial Department with details of the impact of the unrest and what is required for different commodities, not just sugarcane. Approximately R127 million will be needed by the District to assist affected farmers.

5.3.2Siyamdumisa Sugarcane Farm (UMlalazi Local Municipality)

Siyamdumisa Farm was leased from the government through the Proactive Land Acquisition Strategy (PLAS) in 2009. The farm is a family orientated agricultural company headed by the Sibiya family with Mrs Zandile Adelaide Sibiya as the Executive Director and farm owner and her daughter, Zinzile Sibiya (youth), the Farm Manager. Mrs Sibiya, a retired teacher, mentors smallscalefarmers, is a member of the Women in Agriculture and Rural Development (WARD) and sits in the boards of a number of organisations. The farm is 192 hectares (ha) in extent and 127.37 ha are under sugarcane. The farm was originally producing sugarcane and grapefruit for an international market. Although cane is still the main source of profit, 50 hectares of grapefruit were later removed due to loss of the market, which had a business relationship with the previous farm owner. The Department classified Mrs Sibiya as a smallholder farmer graduating to commercial. The farm hosts a number of interns each year to broaden their skills. Two of the students are starting a chicken/poultry business and have leased space from the farm.

During the unrest, 21.24 ha of sugarcane were burnt, which resulted in a loss of approximately R200 000 in revenue. Of the burnt sugarcane, 10.32 ha was not ready for harvest and therefore had to be dumped. The sugarcane burnt during the unrest produced a total of 1050 tons which was cut by 10 cane cutters (seasonal workers). During the visit, field maintenance was underway with 12 field workers, 6 of whom are permanent and an additional 6 were recently hired after the fire to speed up work and ensure that salvaged burnt cane gets to the Amatikhulu Mill as quickly as possible.

The farmer reported that following the unrest, herbicide prices increased significantly with Roundup increasing from R900 to R1 500, which further had a negative impact on the recovery and sustainability of smallscale farmers. The farm needed some assistance with production inputs (herbicides, pesticides and fertilisers)for the upcomingcane growing season.

5.3.3Zone H and meeting with a group of smallholder sugarcane growers (Gingindlovu)

The delegation visited Zone H in the Gingindlovu area, where burnt and damaged sugarcane that is not good for milling is dumped. Whilst there, it also met with a group of smallscale sugarcane growers, who wanted to raise some of their concerns. The concerns centred around struggles with competing with large scale commercial growers. The farmers reported that some of the sugarcane from smallscale growers is rejected by the Mills in favour of cane from commercial farmers. The farmers reported that they have been appealing to no avail for the prioritisation of their sugarcane for milling, which is normally ready by July to August, in order to level the playing field and ensure fair competition in the industry.

5.3.4 The Chase Farms

The Chase farms, owned by Mr JG Chennells, are made up of a number of subdivisions on the outskirts of Eshowe; growing sugarcane, bananas and flowers. The farms have been in the Chennells family for over hundred years and they have built up a strong and healthy relationship with the neighbouring communitiesover many years. The recent violent unrest has affected the whole communities of Eshowe and KwaKhoza.The farm has 620 ha of sugarcane in Eshowe and during the unrest it was subjected to 41 different incidents of arson on various routes through the farms and along the main roads into the Eshowe town as looters ran to and from the town through the farm in an unnatural and terrifying anger, which caused fear and trauma on the farm owners and employees, some of whom were threatened. Mr Chennells reported that there was no assistance from the South African Police Service (SAPS) or any government department during the unrest. Farmers and the community had to help each other.

Mills were closed for weeks and farmers could not deliver sugarcane, which resulted in revenue losses. During the unrest, out of the 620 ha under sugarcane on the farm, 81 ha were burnt and 5205 tons of sugarcane salvaged, with the estimated loss on underage cane approximately 1850 tons with a value of R1.15 million. Estimated loss on milling delays was about R268 736 as the burnt cane took on average of 11 days to be milled instead of the normal 52 hours resulting in a substantial decrease in cane quality and thus, revenue loss.

Approximately 75 ha of the farm is under bananas and following the unrest, large volumes of bananas could not be sold and were discarded as shops, local trading stores and hawkers were closed. The total loss in banana revenue amountedto R109 350. Flowers were also thrown away as they were too old for harvesting as the closure of roads resulted in flowers ready for transportation to the airport for the international market being discarded. Some staff on sugarcane, bananas and flowers were intimidated to stop working for a number of days resulting in loss of earnings for them. However, none of the employees will lose their jobs.

The farmer also raised a serious concern with the delegation about the land reform programme beneficiary allocation. He reported that 8 years ago, he handed over to the Department a 160 ha farm next to his property for land redistribution. The Department allocated the farm to someone who knew nothing and was not interested in farming. The farm has never been fully operational since, it currently has nothing and even infrastructure has since been vandalised and destroyed.

iLembe District Municipality

Gledhow Sugar Mill

The Gledhow Sugar Company is reportedly the most transformed sugar milling company with a B-BBEE level 1 status, multi-stakeholder ownership that is 61% black owned and with 59% of its sugarcane coming from black growers. Gledhow shareholding constitutes 34.9% UShukela Milling, 10% Sappi Pulp & Paper, 30% Illovo Sugar South Africa and 25.1% Gledhow Growers Share Trust. The company’s General Manager, Mr Andrew Francis,reported that the company incurred loss of profits ranging from R8.4 to R10.5 million due to the unrest as the Mill was also closed for 6 days during that period. The total burnt cane stock during riots was 95 100 tons and total cane rejected, 5 500 tons.In addition to losses due to burnt cane, the company also incurred additional security costs. The company has given the farmers one-month loan payment holiday to adjust due to the unrest and has extended July deliveries by a week on request from growers.

Comments from Farmer Organisations

Mr Mashile from the SA Canegrowers Association applauded developments at Gledhow Mill and highlighted that total revenue loss to growers in iLembe District amounted to R163 million and included smallscale, land reform and commercial growers.

Dr Madlala from SAFDA also applauded Gledhow Mill for its progressive initiatives especially grower representation in the company ownership and further emphasised the prioritisation of smallscale and land reform farmers.

uMgungundlovu District Municipality

Mvoti Heights (Branvlei): Mr Thabiso Sithole

Branvlei farm is 714 ha in extent and is located at Mpofana Local Municipality. The farm was allocated to two beneficiaries under the Proactive Land Acquisition Strategy (PLAS) programme. Mr Sithole, one of the beneficiaries who was a recent graduate at the time of allocation, reported that they were given the farm in 2015. In 2017, government awarded them a grant funding of R2.7 million and 120 cattle. They bought a planter and boom sprayer, further constructed fencing and installed solar panel for the borehole. The bailer is leased for a cost of R547 000. Due to this investment, there was increased farm productivity which resulted in the project receiving the Farmer of the Year award in the developing category. However, at the time of the visit, the farm appeared to be in distress, which was confirmed by Mr Sithole in his presentation. He attributed the challenges to lack of government support in terms of funding, FMD outbreak and Covid-19 Alert Level 5 lockdown. The farm employs seven people, including four interns provided by the provincial Department of Agriculture and Rural Development and the cost for labour is R7500 per month.

In terms of the recent unrest and its impact on the farm, it was reported that apart from fires that are common in the area, opportunistic criminal elementstook advantage of the situation to burn grazing lands. In addition, the farm bakkie (with chicken feed) was hijacked and was allegedly used to transport looted goods. The fire destroyed the rented bailer, whose cost of replacement is R546 000 and unfortunately, the farmer did not have insurance for the bailer. It was unclear at the time of the visit how the lessor was going to deal with the matter, especially third party liabilities. The farmer indicated that the farm was not going to be able to pay for such costs.

The effects of the looting and destruction of property compounded the effects of the FMD which has resulted in restriction of livestock movement (meaning they were unable to sell livestock outside their area). The area is also prone to fires, some by acts of arson from those who challenge the farm allocations, especially former farmworkers and labour tenants who believe they have legitimate claims to the land. Although the Department is aware of these issues, they have been unable to resolve these challenges, hence an escalation of tensions. The farmers reported that they formed part of the Fire Association of the area, affiliated at the cost of R595 per annum. However, the association has on numerous occasions failed to respond to their request for help when there were fires, including the recent one.

The highlights of the site visit can be summarised as follows:

Despite the farmers’ affiliation with the Fire Association in the area, emerging black farmers were not being assisted during the outbreak of fires. Mondi Forestry responds mainly because of risk of proximity. The provincial Department of Agriculture and Rural Development was reportedly not aware of this unfair practice.
The incidence of fire on the farm could not be directly linked to the unrest/looting on the basis of longstanding history of fire outbreaks. However, it appeared that opportunistic criminal elementstook advantage of the unrest.
The area is characterised by tensions and conflicts around land, especially between land reform beneficiaries and former labour tenants who believes they have legitimate claims to the land as compared to tenants on PLAS farms. Further, farms are being allocated without settling any existing disputes involving former labour tenants or farm dwellers.
The South African Police Service has tried interventions involving traditional leaders, DARD, COGTA and other stakeholders. However, it has become clear that the challenge is much bigger than the criminal element of arson. It requires community facilitation in which the DALRRD could play a leading role.
The Committee noted the request for financial support by the farmers, not only to the site visited but other 52 land reform and emerging farmers in the area. There is a master plan and comprehensive business plan for the area. It further noted that government has limited financial resources. For 2021/22, only 2 projects were considered for assistance; Brantvlei received R6m and Klevervlei received R12m. It was also noted that budget cuts on land reform causes more backlogs. As a result, the Department does not have funding commitments regarding the proposed interventions on the farm (feedlot and effects of vandalism).
The Committee also expressed concerns with regard to allocation of farms without housing. Farmers had to be accommodated on other farms, thus presenting the risk of loss of livestock to theft or fire.
The effect of COVID-19 and FMD, compounded by the unrest has negatively impacted farmers who apart from inability to sell due to restrictions on movement, could also not get access to feeds and had to deal with the threat of loss of property, e.g. livestock and farm equipment including vehicles.
The farm was operating at 25 per cent capacity, thus raising questions about the farmer of the year award and the extent to which it helped the farmer to improve production.

Zululand District Municipality

Mampontshi Piggery and Fencing

The farm was acquired in 2013 through PLAS at the total cost of R9.7 million covering the price of land (R5.7 million) and immovable assets (R4 million). The enterprise has a 30-year lease (2013- 2043). The farm is located south of Vryheid between Vryheid and Dundee. Government coordinated for the beneficiaries an accredited piggery training with ARC and Amscor. In addition, a funding of R6.4 million was made available by the Provincial Department of Agriculture to purchase a tractor, renovate piggery structures and feeding equipment, construction of two silos of 18.5 tons each and renovation of an office block.

In 2015 and 2018 the Mampontshi farming received awards, namely 2nd runner-up of DARD Female Entrepreneur Awards, Winner of MEC’s Special Award – youth and winner of the Top Entrepreneur Commercial. Whilst the enterprise was doing well, it had challenges which can be summarised as follows:

FMD has in the past, and at the time of the visit, impacted the enterprise negatively because they were unable to move the animals outside the district.
The piggery runs a very high electricity bill.
FMD outbreaks made farmers to think about diversifying their farming operations and not only rely on piggery. They reported that they were beginning to diversify with cash crops in order to offset cash flow problems.

With regard to the effects of the unrest on the enterprise, the Committee noted that the farm was not directly affected by the looting and vandalism that was witnessed in some of the urban centres in KZN. Yet its effects were experienced insofar as up and downstream valuechainsare concerned. The farmers reported that -

The farm experienced three weeks of no business because no trucks were allowed. As a result, they experienced cash flow problems.
At the time of the unrest, the farm had about 250 pigs ready for sale. It therefore meant that the enterprise had to carry extra cost for feeding (about R400 000 at the time of the visit). There has been massive accumulation of debt for the enterprise.
On the production side, failure to sell the pigs meant that they were running over capacity, which in turn resulted in stress for the pigs (experienced tail bites) and the general welfare/growth of the pigs was affected because of limited feed.
Due to lockdown and closure of some abattoirs, there was a decline in terms of the demand, thus affecting the prices that the enterprise charge.
When the roads were ultimately opened, they could sell weekly but prices were not stable.
The outbreak of FMD also created massive challenges for the enterprise. For example, they could not transport their livestock outside the provincial borders (especially Mpumalanga as their main market); further, it was not easy to obtain permits for transportation of animals. All these made the enterprise suffer significantly, in terms of revenue and running a profitable farm.
The enterprise seeks to expand by creating facilities for value addition, i.e. to slaughter and package meat; as well as cold room for storage of processed meats before it is sold directly to retailers.

uMkhanyakude District Municipality

Phangela Trading and Stock Enterprise (Feedlot Project)

Phangela trading is located at Hluhluwe under Hlabisa Local Municipality. It is owned by Mr Sphamandla Maphanga. The farm is 160 ha in extent with a grazing capacity of 3.5ha/AU and also leases 600 ha to breed Boran and Brahman cattle to produce weaners on veld. Project currently operates with 400 cattle feedlot fattening for 120 days and sold to the abattoir. These animals are placed on the monthly batches so that the project sells a minimum of 100 cattle on the monthly basis. Weaners produced on farm are also supplied to the feedlot and as they do not have enough to reach the feedlot maxim capacity, they source weaners from the surrounding farms and auction sales.

The faming enterprise was beset by numerous challenges associated with the outbreak of FMD and the recent unrest that took place in KZN. Whilst they are different, both FMD and the recent riots disrupted the farming operations as the enterprise was unable to sell cattle. The unrest also restricted in and out movement of livestock, the operations and auction sales, which were already severely restricted because of the FMD outbreak. The highlights of the site visit can be summarised as follows:

The farmer was running a successful farming enterprise despite all the challenges confronting the sector, especially new entrants into commercial farming.
There was no criminal activity (i.e. looting or burning of property on the farm). However, the effect of the shutdown severely impacted the enterprise as itexperienced challenges of overstocking; feed supply shortages as there were no trucks allowed to travel or the companies did not want to risk sending trucks in or out of KZN; and limited cashto manage the operations.
Due to limited feed, cattle lost weight, which affected market prices.
The local abattoir (Allen’s Abattoir) was also closed since the movement of animals was not allowed due to FMD. It posed a great challenge for all commercial (including feedlots) and communal farmers. The abattoir found it difficult to source animals outside the province because it was in excess of their production cost and would have been a loss to the enterprise.
At the time of the visit, the enterprise had just received during the previous week, a permit to source cattle for slaughter and the abattoir had resumed its operations. However, transport costs increased significantly since all cattle came from outside the province.
The veterinary services were doing a commendable job to assist in risk assessment for commodities such as cattle on feedlot to determine whether such facilities would be safe from FMD. There were also a number of interventions such as control of movement operations conducted jointly with SAPS.
The facilities that met biosecurity standards were granted permit to sell their livestock to the abattoir. Further, all facilities identified for slaughter in the FMD zone were to operate under supervision of a State Veterinarian.
And all-in and all-out system may be implemented to ensure survival of the feedlot business and avoid cross contamination of cattle.

In summary, feedlots were severely affected because with the FMD control measures, it meant that this enterprise, given its carrying capacity (400 cows, with a target to sell 100 per month) and the fact that they needed to sell all stock before they brought in new stock, and further given that the fattening takes about four months, it meant that they will spend four months without income, but must continue to purchase and feed the livestock. The committee noted that it cost R16000 per day to feed 400 cows.

6.COMMITTEEOBSERVATIONS

The Committees’ delegation made the following observations during the oversight visit:

Lack of urgency on the part of the Provincial Department as 4 weeks after the unrest, some Districts reported that they have submitted reports of the impact of the unrest including required interventions to the Provincial Department, which has highlighted budgetary constraints despite the declaration of the State of Disaster in the Province on 29 July 2021.

The slow pace of interventions and lack of liaison and direct communication with affected farmers by Districts while they are awaiting decisions from their principals. Short-term intervention for sugarcane farmers was mainly provision of fertilisers, which might not be what some farmers need; and in some cases, there was no criteria on how the available bags of fertilisers will be distributed among affected farmers.

Appreciation for the iLembe District that has timeously distributed all the available production inputs to the intended households for the 1HH1Ha food security programme; while it also submitted a report to the Province with a specific figure of how much the District will need to assist affected farmers across all commodities.
With the exception of Gledhow Sugar Mill, minimal or no specific role is played by the other Sugar Milling companies in assisting smallscale growers for the coming planting seasons while they are waiting for government intervention. In addition, no other avenueshave been explored by Mills on the use of sugarcane whose quality has deteriorated for processing in order to assist smallscale growers.

In light of the significant losses and damage to critical infrastructure, there is a lack of action plans with timelines on how the Provincial Department with assistance from the National Department, will source funding to assist the sector particularly smallscale farmers to recover from the impact of the unrest.

There is no eminent role that is played by the Departmentin addressing the slow pace of transformation in the sugar milling sector as current laws and policies are said to favour large growers; and sugarcane from commercial growers is reportedly prioritised over that from smallscale growers.

The negative impact of the unrest and disruptions in the agro-logistics segment on food security and prices, cash flowand employment in the agricultural and agroprocessing sectors as some of the small to medium agribusinesses and farms may take a while to recover while some may not recover.

Despite the continuous challenges in the sector and lack of support, particularly in land reform farms, youth and women involvement was commended.

Uncertainty regarding the implementation of the Rural Safety Strategy and lack of intergovernmental relations as throughout the site visits, there was no indication of the role of, or collaboration with local government and other relevant institutions in respect of intervention measures to assist affected farms and agribusinesses.

Inadequate funding and farmer support to smallholder and emerging commercial farmers is a serious threat to sustainability of farming. Giving land reform beneficiaries once-off funding without sufficient extension support and other funding avenues amounts to setting up farmers for failure.

Opportunistic criminal element appears to have taken advantage of the situation to damage some farms because of existing tensions between local communities and farmers placed on PLAS farms by government. One of the contentious issues being the beneficiary selection process that overlooks former labour tenants or farm dwellers living in the area.

As the sugar industry (growers and millers) is regulated by both the Department of Agriculture and the Department of Trade, Industry and Competition (the dtic), it will be necessary for the Committees to also engage further with the dtic to ascertain if they will be providing any assistance to affected industry stakeholders in order to avoid double dipping.

7.COMMITTEES’ RECOMMENDATIONS

The Committees make the following recommendations to the Minister of Agriculture, Land Reform and Rural Development:

Ensure that the KZN Provincial Department of Agriculture and Rural Development makes use of the opportunity that is availed by the declaration of the State of Disaster in the Province to make budgetary adjustments in order to fast-track assistance to affected farmers and agribusinesses in the Province particularly smallholder farmers including those that have been visited by the delegation.

Ensure that the KZN Provincial Department of Agriculture and Rural Development develops an Action Plan with specific details and timelines on how affected farmers will be assisted in the immediate term and in the future to save livelihoods and prevent further job losses.

Ensure that interventions to support affected farmers (and agribusinesses) are informed by farmers’ needs and the Department should work closely with industry stakeholders in this regard to safeguard food security and jobs in the sector.

Engage with the Ministry of Trade, Industry and Competition to address the slow pace of transformation and required legislative review in the sugarcane and sugar milling sectors including discussions on the implementation of the Sugar Master Plan that is meant to address some of the challenges.

Investigate the plight of the 160 ha farm that was handed over to the former DRDLR for land redistribution by Chase Farms in 2013 near Eshowe in King Cetshwayo District Municipality and submit a report to Parliament.

Engage with the Ministry of Police and agricultural sector stakeholders regarding the implementation of the Rural Safety Strategy to ensure the safety of farming communities and provision of assistance during unrests.

Ensure that the implementation of the Veterinary Strategy is fast-tracked and well-resourced to strengthen the Department and provinces’ ability to control and prevent the spread of FMD and other diseases of economic importance. Additionally, submit to Parliament an update on FMD Surveillance and Control measures in all affected areas.

Response to the above recommendations should be submitted to Parliament two weeks after the adoption of this Report by the NA and NCOP.

Report to be considered.

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