ATC210909: Draft Oversight Visit Report to Limpopo Province: Select Committee on Land Reform, Environment, Mineral Resources and Energy, Dated 7 September 2021

NCOP Land Reform, Environment, Mineral Resources and Energy

Draft Oversight Visit Report to Limpopo Province: Select Committee on Land Reform, Environment, Mineral Resources and Energy, Dated 7 September 2021

1.BACKGROUND AND THE AIM OF THE VISIT

The Committee has prioritised oversight over the department’s capacity to supply support to small-scale and emerging commercial farmers since the second half of the 5th Parliament. The reasoning behind this is that a significant amount of financial resources has been directed at the development of rural and peri-urban agriculture support infrastructure through Conditional Grants without satisfactory departmental outlining on the impact of expenditure.

The success of Conditional Grant allocation towards the establishment of Agriculture support infrastructure is vital for the revitialisation of the entire agriculture value chain for small-scale and emerging commercial farmers in rural provincial economies, particularly those residing on communal land in former homeland areas, where investment in critical infrastructure has always been a challenge. The Department’s stated goal of the industrialisation of the rural economy, and the creation of vibrant, equitable and sustainable rural communities that is food secure, depends not on the repeated allocation of the grant funding, but the establishment of viable support services, farms and value chains to ensure the sustainability of farming enterprises.

Conditional Grants of the Department include:

Comprehensive Agriculture Support Programme

To provide effective agricultural support services, promote and facilitate agricultural development by targeting beneficiaries of land reform, restitution and redistribution, and other black producers who have acquired land through private means and are engaged in value-adding enterprises domestically, or involved in export; to address damage to infrastructure caused by floods.

Illima/Letsema

To assist vulnerable South African farming communities to achieve an increase in agricultural production and invest in infrastructure that unlocks agricultural production.

Land Care

To promote sustainable use and management of natural resources by engaging in community based initiatives that support the pillars of sustainability (social, economic and environmental), leading to greater productivity, food security, job creation and better well-being for all.

Oversight experience and external performance reviews indicates that the above targets are not always evaluated to determine impact and effectiveness of interventions. The impact of conditional grant focus and application need to be determined through comparison with the success of other farming applications in the same district. There is concern in the committee that the initial investments made by the Department would be lost if conditional grant allocation is not effective and does not lead to target outcomes. There is also concern whether the envisaged redesign of the programme will require significant further investment, or will reduce the reach of support into rural districts where it is needed most. The oversight is required to provide answers to these questions.

As stated in the preceding paragraph, air quality monitoring and enforcement challenges in the lower spheres of government is a key concern for the committee. South Africa is a signatory of the Paris Agreement and as such, need to implement an emissions reduction strategy through the sub-national government structures of the country. Readiness, capacity to implement and funding challenges could all negatively influence this stage of South Africa’s move towards a low-carbon economy.

1.1 Objectives of the oversight

During the latter half of the 5th Parliament, and continuing to the present, members of the committee had highlighted information coming from their constituencies indicating that the establishment of critical agriculture support infrastructure in rural municipal districts are behind schedule or not in place at all. Departmental presentations highlighted inconsistencies between National and Provincial officials, with contradicting evidence on state of development and readiness being received from different briefing. The latest strategic Plan of the department further indicates a potential concentration of development support away from many rural communities, with changes in the measurable targets for the development of a vibrant rural economy suggesting a reduction in targeted infrastructure development.

The Committee has not had the opportunity to perform follow-up site visits since the most recent changes in funding focus and planned outcomes were outlined in the most recent Departmental Strategic Plan. Before this announcement, the committee was close to developing a position on the impact of conditional Grant programmes on rural farming communities. The departmental refocus and continued reports of the slow roll-out of grant-funded agriculture support infrastructure has required an additional provincial visit to determine whether the change in approach would negatively affect past investment in rural farming communities. Limpopo province was chosen as it is a province traditionally associated with agriculture, and where many land claims have been finalised. It was therefore the ideal environment to measure the impact of conditional grant expenditure, as well as determine what recommendations could be made to improve programmes, should shortcomings be noted.

Additional to the agriculture and rural development focus of the oversight, the committee also wishes to be briefed, via a virtual platform, by the Department of Fisheries, Forestry and the Environment on the provincial air quality monitoring and enforcement capacity. Air quality challenges, including capacity and resource constraints in lower government sphere is a major focus area of the committee. Numerous national-level briefings have been received by the committee, but it fails to provide a clear picture of the provincial and local government perspective, which will be sought during this virtual briefing.

2.DELEGATION

Composition of the Delegation

The delegation comprised of Members of the Select Committee on Land Reform, Environment, Mineral Resources and Energy, and supported by Parliamentary Officials as reflected in Table 1 below. Depending on sites visited, the delegation was also accompanied by relevant Departmental land Provincial Officials as well as members of the Provincial legislature. As a result of Covid-19 protocols observed, all briefing sessions requested during the oversight was held virtually on the Zoom platform, with only site visits taking place in person.

Parliamentary delegation during the oversight[1]:

Select Committee	Support Officials	Designation
Ms T Modise (Chairperson/leader of the delegation – (NW) Mr J Nyambi (Mpumalanga) Mr B Smit (Limpopo)	Ms A Boss	Committee Secretary
	MrD Mvaba	Committee Assistant
	Mr J Jooste	Content Advisor
	Dr G Lekalakala	Researcher

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 oversight visit conducted by the Select Committee on Agriculture, Land Reform, Environment, Mineral Resources and Energy in Limpopo Province from the 16th to 20th 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.BRIEFINGSESSIONS

4.1 Briefing by the Limpopo Department of Agriculture and Rural Development, led by Lead by Hon. MEC Ndalani, on: Support Provided to Farmers throughout the Value Chain State of Nwanedi Agri-Hubs

4.1.1 Members of the committee attending the virtual briefing session:

Status	Name of Member	Political Party	Province
Present	Ms W Ngwenya Ms L Bebee Mr AJ Nyambi Ms TC Modise Mr TB Matibe Mr M Nhanha	African National Congress African National Congress African National Congress African National Congress African National Congress African National Congress	Gauteng KZN Mpumalanga North West Limpopo Eastern Cape

	Mr FAB Du Bruyn	Freedom Front Plus	Free State

	Ms M Mokause	Economic Freedom Fighters	Northern Cape

	Mr CFB Smit	Democratic Alliance	Limpopo

Apologies	Mr A Arnolds Ms C Labuschagne	Economic Freedom Fighters Democratic Alliance	Western Cape Western Cape

The two presentations were introduced by the respective responsible officials, followed by questions from members and deliberations related to specific points of interest.The first presentation focused on a provincial situational analysis, including the policy and strategic context, MTSF priorities, Departmental priorities, and the revitalisation of production and the value chain, members further received greater details regarding the different agricultural zones within the province, strategic commodities focused on and the various farmer support programmes in place.

The second presentation provided an overview of the Nwandeni Agri-Hub, including lessons learnt, the development model currently being implemented and the current situation of the Hub. In particular, the presentation focused on the realities faced by smallholder producers, the co-operatives and CPA’s that they are often organised in, and the current challenges that have to be overcome before there can be significant improvement in the financial stability and security of small-scale farmers.

The delegation expressed their appreciation for the detailed presentations received, and required further details on a few matters raised. One of the key concerns was that the department provided too little focus on the challenges that it is currently experiencing w.r.t. agriculture development and support, and what role the NCOP could potentially pay in resolving these. Members were concerned about the stability of Boards governing the various initiatives, and requested greater clarity regarding the departments input on the large differences in financial reward (return from yields) between different production and market agreement scenarios. Lastly, members wanted to get further clarity on actions that the department have taken to support the struggling tea estate that the committee visited during the morning.

The department responded to highlight some of the challenges they were facing. The biggest disruption in developing capacity among CPA’s and co-operatives was the disruptions caused by internal conflict within groups. There was no single approach that worked for all groups, resulting in a large amount of facilitation required to optimise each individual farming group. This also resulted in the need for different operational models, as there was no one-size-fits-all solution for all projects. The next biggest challenge faced by the department is that the receptiveness of communities varies regarding the advice given by the department. Finally, the department highlighted financial constraints within its farmer support programmes could ultimately have long lasing, negative impacts on programmes.

Discussing the tea plantations visited during the morning oversight, the department expressed the opinion that these were not considered viable at present and that it was unlikely that they would be viable in future. Venteco, an arm of LEDEC, was responsible for supporting the farms but that the department continues to engage with stakeholders at Tshivhase Tea Estate and Makumbani Tea Factory. The department had advised that the farm diversify into other high value crops as well.

Discussing the challenges of containing Foot and Mouth disease outbreaks, the department highlighted a number of key issues. First, it was difficult to maintain the buffer zone between wild game from the Kruger National Park and farm livestock adjacent to the reserve as large game continually breaks through the fence, creating points of possible contamination. The state of the border fence between South Africa and Zimbabwe was also a concern. Second, a steady, reliable supply of vaccine remains a challenge. Stocks are being supplemented with purchases from neighbouring countries. The third challenge highlighted was the fact that numerous farmers, ranging from small-scale to large commercial farms, continue to ignore disease management protocols. In response to the most recent outbreaks, the department stated that vaccination drives in affected areas have been initiated, while funding from other programmes is being re-allocated to improve vaccine supply.

4.2 Specialist Presentation on Air Quality Monitoring and Forecast by the South African Weather Services (SAWS) State of Nwanedi Agri-Hubs, and Provincial Air Quality Monitoring and Enforcement by Limpopo Department of Economic Development Environment and Tourism (LEDET)

4.2.1 Members of the Select Committee attending the virtual briefing session:

Status	Name of Member	Political Party	Province
Present	Ms W Ngwenya Ms L Bebee Mr AJ Nyambi Ms TC Modise Mr TB Matibe Mr M Nhanha	African National Congress African National Congress African National Congress African National Congress African National Congress African National Congress	Gauteng KZN Mpumalanga North West Limpopo Eastern Cape

	Mr FAB Du Bruyn	Freedom Front Plus	Free State

	Ms M Mokause	Economic Freedom Fighters	Northern Cape

	Mr CFB Smit	Democratic Alliance	Limpopo

Apologies	Mr A Arnolds Ms C Labuschagne	Economic Freedom Fighters Democratic Alliance	Western Cape Western Cape

The two presentations were introduced by their respective responsible officials, followed by questions from members and deliberations related to specific points of interest.The first presentation focused on the impacts of changes in atmospheric composition/air quality deterioration in South Africa. This included atmospheric composition observations and monitoring, as well as services offered by the South African Weather Services.The second presentation provided an overview of Provincial Air Quality Monitoring and Enforcement by Limpopo Department of Economic Development Environment and Tourism (LEDET).

The delegation expressed their appreciation for the detailed presentations received, and required further details on a few matters raised. Members wanted more details on the role that the Weather services play in addressing poor air quality in South Africa, and wanted more input from the Weather Services regarding the efficacy of air quality management in South Africa. The delegation further wanted to know if LEDET has any co-operative partnerships to assist in the enforcement of air quality regulations in municipalities, and weather the Weather Services are collaborating with local government in order to emphasize the need for air quality regulatory enforcement towards attaining the targets of Agenda 63. The Weather Services responded that the enforcement of air quality regulations are not a function of the Weather Services, but that their monitoring and advisory role informs the development and implementation of regulations across the three spheres of government. A further advantage of the role of the Weather Services is that their measurement of air quality at local government level assists in the integrated relative health risk management of local government. Local government is able to determine health risk hot spots, to which provincial and local government can respond. The data reported by stations is also interpreted by the Weather Services and made available to the public via web- and app-based interactive communication systems.

In terms of South Africa’s international climate change commitments, the Weather Services indicated that it is involved with the quantification of long-term emission analysis, which feeds into the country emissions inventory. It further assists in determining the contribution of “natural” sources of air quality impacts, such as dust storms, although it acknowledged the need for improved satellite-based estimations of the presence and origin of particulate matter. A final input on collaboration with Local Government i.r.t air quality Management was highlighting an interactive tool developed for Mpumalanga province. This tool can be expanded to cover the whole of the country, and is used to assess three climate response scenarios in terms of real cost estimation. The tool can be employed by local government to predict the cost-benefit relationship in various air quality management scenarios.

In terms of the interactions between the Weather Services and the general public, the committee asked why it appeared as if the local television stations appeared to be carrying less detailed weather broadcast than in the past and why this has occurred. The committee also wanted to know whether the Weather Service was able to assist with mapping crop pest predictions, and what role it plays in the monitoring of Greenhouse gases. The Weather Services responded that they have diversified away from only providing weather-related broadcasts on television to using a number of other digital media platforms to disseminate weather information and forecasts. It is also working towards developing further tools to target specific communities with impact reporting services. Additionally, the directorate responsible for education is targeting traditional leadership structures and schools (green schools programme) to improve air quality awareness and promote related environmental issues.

Responding to the presentation content related to the influence of air quality on local Covid-19 infections, the committee requested further details on this relationship. The Committee also linked this enquiry in follow-up to the role the Weather Services play in collecting data on, and warning communities about extreme weather conditions. In response, the Weather Services clarified that their air quality applications can indeed indicate a link to poor air quality and increased Covid-19 incidence. The demonstration of this ability will also lead to further product launches that will assist in the development of responses to the health risks associated with poor air quality. In terms of extreme weather prediction, the Weather Services clarified that they are focused on impact-based weather prediction, which targets the forewarning of communities against extreme weather incidences.

The delegation wanted to know what public engagement activity LEDET engages in to improve public awareness on air quality, extreme weather conditions. The committee further wanted to know how accurate the country’s air quality assessments were, which companies were responsible for the most air pollution in the country, and whether these polluters are fined/penalized as a result. The Weather services indicated that they could forward information to the committee regarding the number of monitoring stations in operation. In terms of mine monitoring, the Weather Services clarified that mining companies employ independent consultancies that collect emissions samples. The samples are analyses in accredited laboratories. The results are compared with reference samples and using data validation to ensure reporting accuracy.

Following up on questions regarding the Department’s (Forestry, Fishery and the Environment) relationship and information sharing with the Department of Mineral Resources and Energy, The delegation wished to know what transpires when air quality monitoring indicates that mining companies are responsible for poor air quality. The Department responded that it is difficult to pinpoint point sources of air quality impacts from monitoring data. As a result, taking polluting mines to task is not a straightforward task. Related to this, determining where communities deserve compensation for diseases suffered as a direct result of poor air quality is just as difficult and typically does not occur. Where mine employees are paid compensation because of disease, it is typically where the workplace can be directly linked with the disease experienced. In general, though, Vhembe district is not that heavily impacted by mining or other polluting industry and there are no cases of compensation because of poor air quality recorded. The Department clarified that the responsibility for responding to non-compliance from mines is that of the DMRE and that they cannot respond to questions focusing on such matters.

5.SITE VISITS

5.1 The Mukumbani and Tshivhase Tea Estates

The plantation was established under the Venda Development Corporation, and employed as many as 2,000 workers. That enterprise has dwindled to the present, with the workforce reduced to 231, only 80 of whom are farmworkers. In terms of production area, the original plantation covered 1,057 hectares. At present, the farm utilizes 70 hectares.

When in full production, the original Sapekoe tea plantation sold tea in bulk to centers in London and Egypt, among others. Sapekoe was forced out of business by rising input costs in 2004. When it was decided to revive the venture, specialists were asked to survey the state of the plantation and determine what can be done to reduce operating costs. The experts found all the tea plants in good health, though overgrown. The provincial government was advised to change some of the farming practices and sell the tea under its own brand rather than exporting in bulk.

In the 2004/5 financial year, the provincial government invested R160 million in the re-development of the plantation. The tea produced was marketed under the Midi brand, and commitments were obtained from a number of large retailers, should the tea match the quality of imported brands. At this point, the estate employed about 2500 people, of whom about 2200 are tea pickers in the 1077ha plantation.The venture failed to retain momentum and over time, the two production companies have lost more than 1800 employees, remaining with only 231 workers including administrative staff, farmworkers and general workers.

At present, the Limpopo Economic Development Agency is again reported to be[2] considering further financial aid to get the venture up to full capacity, but the concerns remain as tea production has drastically reduced. The business has been struggling to make sales, and are competing with other countries that produce tea at a lower cost. The published estimate is that just more than R10 million is needed to get back to business in full capacity.

5.2 Day 3: Visits to different farmers (Different scale and ownership models)

5.2.1 Easy Farm (private ownership, commercial operation)

Easy Farm is a citrus and banana farm near Thohoyandou in Northern Limpopo. The farm was started by Israel Nemaorani in 1990, with him receiving his title deed in 1994. The Farm is just over 200 ha in size, with most of it under citrus orchard. Currently, the farm is run by Israel’s sonLavhengwa.The farm produces citrus, bananas, as well as mangoes. The farm is supported by CGA (Citrus Growers Association) and CRI (Citrus Research International). This support has enabled the farm to increase production and export volumes over the past few years.

In 2013, the Department of Agriculture sponsored the construction of a new packhouse adjacent to the existing one. The current packing machinery was bought second-hand, and is not suitable for packing soft citrus, which has been established on the farm recently.

Some of the challenges faced by the farmer is theft, electricity cost and transport costs. The increasing cost of transport for our fruit has a significant effect on its profitability. It is around 800km from here to the Port of Durban. The pallets used to transport fruit to Durban has to be collected from Tzaneen (1 ½ hour’s drive away). The advantage of being as far north as we are is that the farm’s fruit ripens a few days earlier than in the production areas around Tzaneen.

5.2.2 Small scale female cash crop farmer

The farmer has a number of hectares of land under cultivation on land occupied through a P.T.O. agreement. The farm focuses on a number of crops (chillies, peppers, cabbage, maize and other vegetable crops) with individual markets for each crop type. The markets are local or regional, depending on the crop type. The farm is under drip irrigation but the infrastructure is far away (borehole) and old (drip lines and pipes). Apart from the lack of water at the site and ageing infrastructure, the farmer also has some theft challenges, as the farm is not fenced.

In terms of farm infrastructure shortcomings, the farmer further highlighted the need for a pack house and that she does not have equipment with which to de-bush some of the land at her disposal in order to expand her operations. In the past, the department had assisted her with inputs (chemicals and fertiliser) as well as technical support.

The Department, in response to hearing the challenges the farmer faced, stated that it is working on a “package deal” for the farmers in the area. The department outlined that for farmers to receive support, they require the development of a business plan, but that it will work on a plan to address water supply and fencing needs. The delegation requested that the department provided a clear timeline for the interventions, as working on plans does not equate to providing support.

5.2.3 Goddard farm

The delegation met up with a collective of small-scale farmers at the farm of Mr Goddard. The farmers were well organised, were supported in stages by the department and other agriculture businesses/organisations. The farmers were all affiliated with AFASA (African Farmer’s Association of South Africa), Vuyani Farmers Association and Buhle Farmers’ Academy. As a result of large purchases from a local seedling supplier, Sakata Seed of South Africa. Goddard farm has 15 full-time and 5 students (forming part of practical training and supplied with stipend) as staff.

Goddard farm itself is 18 Ha in size, and is occupied through a PTO agreement since 2007 with the local traditional authority. While some of the farmers present felt that this arrangement (a PTO) was perfectly fine for them, and works out much cheaper than trying to own the land, others acknowledged that access to finance is a challenge where there is no assets to offer as security for a bank or lending institution.

Goddard farm is a mixed farm cultivating cabbage, mango, litchis, tomatoes, peppadew and butternut. Because of the size of the operation, however, most produce is sold without contracts and farmers have to be price takers. Some crops are lost or have to be sold informally for a low price as there are over-supply at times.

The farmers highlighted the following challenges:

The lack of offtake agreements for produce results in reduced income potential;
The roads surrounding them are in a poor state of repair, making it difficult to have crops collected at the farm;
There are no fences, resulting in loss from theft being common;
There are no on-farm pack houses;
The farms need mechanisation support;
Poor maintenance of fire-breaks in area resulted in fire damage to irrigation infrastructure;
Considering tunnels to protect crops during hottest part of growing season, and could benefit from having a nursery section on the farm.

The farmers raised concerns about the manner in which the R35 000 covid relief to farmers were administered. They stated that they did not receive the full financial value of the grant, as they had to accept whatever support was made available to them by the department though a set of redeemable vouchers. The value of the products received, although appreciated, was well below R35 000. They questioned the process and how it came about that middle-men decided on their behalf what assistance the R35 000 was to be spent on. The Department responded that the R35 0000 Covid relief was arranged by the DARDLR and used contracted suppliers to disburse the grant.

From the Department’s response, it could be gathered that there is a certain level of disconnect between the farmer group and department. It is not clear whether the farmers have chosen to distance themselves from the departmental support programmes, or whether the department’s extension services had not done enough to reach all farmers. Farmers acknowledged that they did not attend the department’s information days, and were not aware of some of the services offered by the department free of charge, such as mechanisation support. The department further highlighted that all of the government procurement schemes are based on a tender system, and cannot simply be assigned to individuals. The department further highlighted that it is in the process of completing the district pack house, and that it will hopefully be functional by December this year. The nearest FPSU is 21 km away, and has 12 tractors from the district planning unit at its disposal for farmer support (mechanisation support).

5.3 Ravele and Ratombo Farming Enterprise CPA

Background on establishment and operation:

The history of CPA’s in Limpopo province from establishment in the early 2000’s to the collapse of initial co-management arrangements have been well documented.[3] In most cases, including the two CPA’s to be visited by the committee, the outcomes have had lasting financial implications for the CPAs concerned.

5.3.1 Ratombo CPA:

According to Departmental reports, but disputed by the CPA, this CPA did not receive the deeds to the land. The state agencies originally involved with the procurement of farms proposed that the beneficiaries enter into co-management agreements with companies set up for this purpose. In the Levubu Valley, the South African Farm Management (SAFM) and Mavu Management Services, formed by a number of white farmers from Levubu, with individual black partners, as a second strategic partner for the Levubu claimants. SAFM was set up specifically to engage in such partnerships by established interests in the agricultural sector (existing commercial farmers) and new black empowerment partners. Ratombo CPA was partnered with Mavu Management Services.

The partnership was never favourable for the CPA, with a large number of issues reported on in the study cited. Some of the issues include:

Development grants that had been promised to the proposed joint ventures did not materialise at this time, however, and Mavu pulled out of the arrangement in June 2007, before any formal agreement was signed.
South African Farm Management, was appointed in a caretaker capacity by agreement with the provincial Department of Agriculture, but again without any formal agreement with the community of Ratombo.
In December 2007, however, the Ratombo community signed a 15-year lease and strategic partnership agreements with a new strategic partner, Umlimi Holdings. Umlimi Holdings was a black-owned and predominantly black managed investment holding company heavily involved in black economic empowerment deals.
During the first two years after the agreement was signed, harvesting and farm maintenance was sub-optimal, while community members complained that all farm revenues and grant income from the state was effectively under the exclusive control of Umlimi, with little or no involvement by community representatives in decision making and no reporting of financial affairs.
By late 2009, the Ratombo farms managed by Umlimi were in serious financial trouble. Umlimi representatives resigned from the boards of the two joint venture companies and were replaced with people previously unknown to the communities. Within a short time both operating companies were in provisional liquidation.
The financial stress caused by the mismanagement of grant funds and farm income also lead to problems within the CPA, with groups aligned to the traditional authority and those opposed to their dominance in the management of the CPA forming.
following the withdrawal of strategic partners, community members have been left trying to manage operations on their own. This, however, is under adverse conditions, and it is questionable what long-term prospects the farms have without dedicated support as expansion and renewal of orchards are needed.

5.3.2 Ravele CPA:

Government transferred 16 macadamia, avocado, banana, sweet potato and litchi farms worth R42 million in the subtropical Limpopo area to the Ravele Community Property Association (CPA) in 2005. The CPA represents 324 families with around 880 beneficiaries. The majority of them lives in nearby villages. The CPA was formed in April 2004. Since taking over the farms, the CPA in partnership with a managing agent has divided the area into four business units, each managed by one person supervising a group of farm workers. By 2017, the four business units employ 175 permanent staff who are all from the community and employ 51 seasonal employees.

Over time, however, discord developed within the CPA. News reports highlight challenges within the CPA stretching back to the first decade after its establishment. At the center of the conflict appears to be a common theme in the post establishment evolution of CPA’s – conflict between some of the recipients of land reform and the local tribal authority, which is also represented in the CPA as beneficiaries.

There were previous reports of court action being considered by the department as a result of complaints by thisgroup of CPA members, and there appears to be little improvement in the situation. It does not appear as if the whole group of beneficiaries can operate as a unified group, and accusations of mismanagement included corruption, nepotism and maladministration is still being made by the “concerned group”. The “concerned group” of 100 beneficiaries remain unhappy with the manner in which the CPA is administrated, and claim to have been side-lined by CPA committee.

The Concerned Group claim to have sought assistance from the Department of Rural Development and Land Reform, as well as the Public Protector’s office, without success, and have decided to appoint an attorney and take the matter to court.

5.4 Nwanedi Agri-hub and local small scale farmers

The agri-hub is completed and appeared to be operational, although the department did not offer the committee a tour of the facility. The department stated that a recent covid-19 positive case at the facility was the reason for this. The committee therefore could not assess the degree to which the hub was being utilised. One concerning matter raised regarding the service provision capacity of the hub was that an amalgamation of municipal boundaries has led to a significant change in the number of farmers that could be within the hub’s service provision area. The agri-hub was initially designed to support around 100 farmers, but due to the demarcation changes that had taken place within the district, it now serves 3 times as much. It can be assumed that it was not designed to support that number of farmers and will struggle to service outlying areas efficiently.

The operations of the Agri-hub is managed by a not-for-profit company in order to reduce financial pressure on tit. It provides extension, mechanisation, advisory, pack house and cold storage services to surrounding farmers. The Agri-hub is only using about 0.5 ha of the 5 ha land allocated to it at present. It is considering expanding operations, including:

The installation of a solar power array to lower electricity costs;
The addition of shade netting tunnels to protect seedlings in the hottest part of the growing season;
Using an area adjacent to the hub for crop demonstration or for testing different crops / production methods;
Developing a nursery area in order to be able to provide seedlings to adjacent farmers.

The department highlighted some challenges with farming in the area. These included the need to purify borehole water as it was not always useable for crops in its raw form, as well as the now common theme of high electricity costs. The hub is close to the country’s border with Zimbabwe, and the concern was raised that poor border control has resulted in an increase of crime in the area.

The mode of operation of the two CPAs that owned farms in the area around the Agri-hub was also interesting. After receiving the land, the CPA decided against trying to farm the whole area as a collective but are leasing out land to small-scale farmers that wish to farm. This has led to less conflict within the CPA, and almost no interference with those who wish to farm.

Farmers visited in the area were operating relatively effectively, but did not appear to use all the facilities on offer at the Agri-hub. During the visit, gem squashes and butternut were being harvested and packed on the farm for transport to buyers (local school feeding scheme for butternut, gem squashes for the local market). The farmer again was not very concerned about leasing the land (in terms of a PTO) agreement instead of owning it, as he could not grow tomatoes in this area. He has a supply contract for tomato to Tiger Brands and needs to lease land 100km from this site in order to service that contract.

Again, the pattern of success appear to revolve around experienced farmers that have a relatively solid track record in farming (the farm visited was operated by a previous winner of young farmer of the year title for the province, and although not the owner of any land had developed a sufficient track record to secure operational finance), renting land from CPA owners who are not forced into attempting to farm. The small-scale farmers still faced many of the same challenges as listed in other areas, such as volatile markets, lack of pack house infrastructure, cost of electricity and theft challenges, they appear to be making a stable income. The group seemed better aligned with their markets though, supplying Tiger brands, local school feeding schemes and regional markets, depending on crop type.

An additional challenge experienced is that farmers without supply contracts are often challenged with supplying produce to local factories. There appears to be a lack of communication between the factory and the farmers. There are periods when the factory is closed, and any produce that is ripe for harvest in this window (up to two weeks) could be lost.

6.COMMITTEEOBSERVATIONS

MAIN OBSERVATIONS FROM EACH SITE VISIT

6.1 The Mukumbani and Tshivhase Tea Estates

There appears to be an urgent need to focus efforts at this site as significant funds had been invested in the past and recently earmarked for further assistance, while there is disagreement between the two entities involved (LEDEC and DARDLR) about the basic viability of the operation.
There is a need to clarify the reported R10 million investment reported in news articles and raised by the provincial legislature during the site visit as it was not clear from the response given on site whether all involved with the project knew about this.
There appears to be a lack of in-depth knowledge of the project with the different provincial departments that should be working together to determine the correct way forward for the farm and then implement a business plan.
Even with the benefit of no land-related cost of operation (rent/bond), there is serious doubt regarding the basic business premise – that operating the farm at full labour contingent would be an employment creation exercise that can remain financially viable. The previous farm operators abandoned the project because of the non-profitability of the high labour demands of tea farming.
The previous business model was simple – grow tea and sell in bulk to export market. This was likely the most viable approach, but it was not duplicated when the resuscitation of the venture was implemented. Now operating on a mere 10% of the original farm extent, the operators are attempting to launch its own branded tea into a market that is already saturated. It is also attempting this without any significant brand-awareness plan or funds allocated to an expensive brand-building program.
The farm had been advised to diversify into other high value cash crops but had not done so in the past. The poor management of the remaining tea plants and the lack of foresight to diversify previously has resulted in the farm being in a very compromised position financially. Funds are not sufficient to endure the cost of diversification and then the wait for the first yield, or alternatively to rehabilitate more of the farm in order to increase production of tea.

6.2 Easy farm

The owner is the second-generation farmer in the family. His father built up the farm with support of commercial growing and production support from industry and other farmers.
The farm had been secured on full title, which, together with the expertise developed by the farmers and support from private sector organisations had contributed significantly to the success of the farm. The department had supported the farm in the past through the construction of a new pack house, but commercial success requires greater integration into the private sector support structures such as grower organisations, produce agents, specialised fertilizer, pesticide and herbicide supply and access to finance. While it is noted that the department aims to develop farmers into fully-fledges commercial farmers, it is unlikely that the resources of an agri-hub will be sufficient to achieve this. The support models of the department should consider greater integration with the private sector when it comes to the development of commercial farmers.
The current owner spent 5 years after tertiary training working in the full value chain of citrus farming in order to learn as much of the industry as possible before starting to work with his father.
The export role of the venture is handled by agents and not any of the government structures envisaged under the Agri-hub concept.
Farm expansion is possible if a 600ha piece of communal land available to the farmer could be developed, but this will require a hybrid funding model from industry that supports farming on communal land or alternatively government support without interference from departments wishing to impose their business models or administration on the project. Both of which do not have the track record of achieving viability and export quality.
The export market operates on fine margins and small windows within which to shift produce over the border. Where instability disrupts port and transport infrastructure, such farms become extremely vulnerable and can suffer significant financial losses.
The management of his orchards also requires a management routine consisting of herbicide/pesticide spray routine and fertilization. The unrest and transport disruptions affecting KZN and Gauteng has put a question mark over the availability of such chemicals needed before September. Being unable to perform critical farm management at this time could compromise an entire year’s crop.
Margins already under pressure as a result of fuel and input costs. The same issue was raised at tea farm (competitiveness and profitability), raising questions about the ability of farmers to be able to compete against subsidised farming from all over the world in the local and export market. This raised questions whether South African small-scale and commercial farmers will continue to be able to compete in an open, unregulated market without subsidisation or preferential procurement support.
For experienced farmers like the owner to expand his business, there will likely be a need to develop a hybrid funding model to allow financing options for farms and communities with a PTO to collaborate with experienced farmers wishing to expand operations beyond the land that they hold title for.

6.3 Small-scale (lady) farmer:

The farm is not set up to supply a single market or offset point. It further does not appear to rely on the department for assistance with marketing her produce. She sells each crop type to a different market, ranging from regional to local.
The farmer has received some technical support from the Department in the past, and continues to receive periodic support in the form of fertilizer, chemicals and advisory services. The support, however, has not taken her challenges into consideration. It appears to be more down the line of a generic suite of services on offer by the department, with specific challenges highlighted by the farmer not being addressed. These operational challenges are not resolved by the advice and inputs supplied by the department. This observation is not restricted to the one farm only. There appears to be a common thread of a miss-match between farmer needs and assistance even though the farmer is clear in what it is that is required to secure/expand/improve her operation. This includes:
1. Fencing to protect against livestock and to improve security as there are theft challenges;
2. A water source closer to her farm as she has to source water from far away;
3. The irrigation system is ageing and is in need of replacement;
4. There is no pack house close to her (or an agri-hub close by for that matter);
5. For her to be able to expand land under cultivation, some of the land at her disposal need to be prepared (de-bushed)
In contrast, the Departmental support proposals was the following:
1. The department is working on a package deal to assist all farmers i n the area:
2. There is a need to develop a business plan for the farm, and to secure a better water source
3. There is a need to supply the farm with fencing.
The key issue to consider could therefore be that the solution for the farmer’s needs is not in the generation of generic models and package deals that is then offered to all, but to listen to each farmer’s needs and then to respond to those needs. The need for a business plan is also questionable as the farmer obviously has markets for her produce and has a stable operation she wishes to improve and expand. The current approach is just a micro scale of the agri-hub concept that requires compliance with an arbitrary set of conditions and envisages a uniform set of needs from all farmers.

6.4 Goddard Farm:

The farm is not owned by the farmer, but he has a PTOfor the property. Having discussed the matter of PTO vs Title Deed with other farmers present, it was interesting to note that some farmers are not concerned with requiring ownership. They stated that the PTO was cheaper by far. It might also allow for more flexibility regarding moving to larger or better land options on short notice as it does not require costly and time-consuming land transactions. The lack of ownership did, however, resulting in financing challenges, suggesting that the PTO option needs further financial support development from the Department in order to ensure that farmers opting for this route is able to access finances. The funding models that can be applied to those farmers who only have a PTO needs serious re-working. This is particularly true for those not seeking ownership and being happy within the PTO sphere. There is a critical need to address how these farmers will access resources to expand farming as departmental programmes simply cannot cover the developmental aspirations of all farmers.
While a diverse range of crops are grown, the farmers could improve operations. The production is not targeted at a known or contracted market and as a result, an over-supply of commonly grown crops in the region results in challenges to find markets and good prices for crops.
The department and the farming group seem to be operating in parallel to each other, with little overlap. The full support of the Agri-hub is therefore not at the disposal of the farmers, while the department is also not fully aware of their individual needs. The farming group had built up its own support network outside of the government sphere. This included forming a farming association, being members of AFASA, and receiving support from a private seed and seedling producer, Sakata.
The farming group (not just Mr Goddard) present stated that they received support with farming (inputs such as fertiliser and chemicals, technical advice) input from the Department, and acknowledged that the R35000 Covid-19 relief fund that they could apply for was made available. The R35000 support was not available for use to the farmer to his or her own needs but came in the form of vouchers. These vouchers were, in the opinion of the farmers, heavily overpriced and in some instances, administrative fees were deducted, resulting in far less than R35000 in value being trickled down to farmers.
The farmers’ operational and funding challenges were discussed. It is apparent from the issues listed that some may overlap with services from the Agri-hub, but not all. The distance between the farm and nearest hub is 21 km, thus also adding additional cost should farmers want to use facilities such as pack houses (which in terms of this site, is not functional yet). The issues raised by the farmersshows an interest in developing individual operations rather than having to make use of a centralised departmental support system.
The district does not have a pack house yet. This is another possible sign of resource concentration by the department trying to house to much of the farmer services located in agri-hubs that is not central to the province/district and thus not accessible to the farmers.
There is a need to look into how the departmental programmes synergise with the municipal LED in order to determine how issues of offtake and infrastructure can be addressed.
Farmers need to take greater care of developing a business model that maximised profit and market demand for produce rather than hoping that they can strike an offtake deal with the government. Government procurement is in the form of competitive tender and cannot be restructured in such a way that it is instructed to purchase everything that is produced by small-scale farmers.
There is a need to consider the value of government procurement support vs the development of a decentralised supply system, where small-scale producers feed into the national supply chain as is the case with countries such as Russia. It is possible, as has been demonstrated over time by this example, that up to 80% of a country’s production of a specific crop could be sourced from smallholder plots no larger than 2 ha in size.

6.5 Ravele CPA

The history of the CPA post-settlement has been well-documented and the CPA acknowledged that it had experienced challenges in the past. From media reports, however, it may not be entirely over yet. There still appears to be a group within the original beneficiaries that are at odds with the CPA board. The current board stated that the department should have followed a better verification process before including people into a group of beneficiaries that they considered not part of the family group with historical claim to a piece of land. This matter does not appear to have received any further investigation by the Department.
While the CPA is described as stable by the board, and the representative indicated that the CPA is working hard to comply with all the legal requirements for the CPA, stability has only returned in 2017. The issues of the past are being addressed and the farm is trying its best to improve income. Some costs, such as electricity costs, remain high, however, and although the farm is profitable, it does not pay out big dividends to all members of the CPA on a frequent basis.
The CPA board further acknowledged that the past challenges of mismanagement of finances and the farm by the strategic partner unilaterally appointed by the department had created a major financial burden for the CPA. The debt has since been repaid by the CPA itself, without any assistance from the department or any other arm of government potentially involved with auditing the actions of the strategic partner.
The CPA went into details of the profit sharing (labelled performance bonuses) that it undertakes with farm labour and management. Farm workers (167 permanent plus seasonal) are paid well above the minimum wage for farm workers. The CPA further provides bursaries for academic achievers at school and were able to assist school-going children of the beneficiaries/community.
Farm operations is stable, but there is a need to re-plant some of the older orchards as they will soon be reaching the end of their production cycle and will have to be replaced.
It would appear as if the CPA is being run effectively as an asset of the community rather than a source of income for all beneficiaries to share in income generated. Those CPAs are typically over-exploited without sufficient recapitalisation of the infrastructure, and regularly experience infighting and collapse as a result. The CPA board is however still concerned about the long-term sustainability of the venture and is looking into improving cost containment and increasing income.

Key points:

Sometimes there is a blur between traditional authorities and CPAs. In this instance, the current traditional leader was part of the group (mostly the Ravele Family) that successfully claimed land back. Under such circumstances, it is understandable if the traditional leader structure comes to dominate the CPA. This is different from a claim instituted by individuals that wish to control their CPA but is challenged in doing so by a traditional authority that was not part of the claim or beneficiary group.
The beneficiaries of the Ravele claim was given the title deeds to the land they claimed. This is not standard practice by the Department but it does provide the CPA with the option of borrowing against the land asset for future financial needs.
The challenges that CPAs experienced after the department unilaterally employed “strategic partners” need to be investigated. Strategic Partners frequently spent the development grant associated with the completion of the claim, as well as created debt in the name of a CPA. An audit of all CPAs where this took place is needed, inclusive of:
1. Details of the departmental oversight processes in place where financial mismanagement by a strategic partner took place;
2. Details of the amount of funds mismanaged or borrowed in the name of the CPA without its consent;
3. A police report/affidavit/internal audit/external audit report or paper trail indicating that the department instituted an investigation into the alleged financial mismanagement;
4. A record of outcome/decision regarding such an investigation.

6.6 Ratombo CPA

Ratombo CPA revealed a number of typical challenges recipients of land experience. These include:
1. The allocation of land without allocating the farms’ water rights as well;
2. Zerofarming experience within the beneficiary group;
3. Delays in finalising claims resulting in the neglect of farms prior to transfer;
4. Delays in finalisation of old order claims to the point that many of the claimed land has been traded at least once since claims were brought and where large-scale development is taking place on land, which could affect claims;
5. Poor support of the CPA after the claim was finalised, leading to infighting and poor performance;
6. Unilateral appointment of strategic partners that did not benefit the farm and where questionable business practices resulted in the mismanagement of development grants. This debt still impacts on the creditworthiness of the CPA;
In order to address the operational challenges of the CPA, the board formed a company in 2006 and is adhering to the corporate governance requirements and legislation. The lack of farming experience in the past led to some trail-and-error learning and reduced vitality of parts of the farm. A farm manager has been appointed but the farm is struggling with the sheer area to manage compared to the limited financial resources now at its disposal.
Ratombo CPA has applied for support under RECAP before the current redirection of CASP to COVID-19 relief funding, but has not been able to secure any funding.
The farm is able to generate some income through its operations, but the 100 permanent employees of the farm is a huge drain on disposable income. Capital is needed to replace old equipment, renew orchards and expand operations. The CPA also repeated the challenge highlighted by Ravele CPA, that the price of electricity is elevated as it is not procured from ESKOM but from the municipality, that adds a mark-up.

Key points:

The CPA also had issues with a strategic partner thus the same comment as for the Ravele CPA applies;
Funding models remain a challenge. RECAP is not sufficient to cover all needs, and either a lack of title deeds or poor creditworthiness as a result of periods of poor management hampers access to finance. The following points can be considered:
1. Focus on alternative strategic partnerships and funding models that reduces the pressure on departmental programmes but delivers real benefits to CPAs;
2. Preferential electricity procurement options for CPAs and other supported land reform beneficiaries as is the case for large industry;
3. Resolution of water rights issues and finalisation of old-order claims should be priorities of the department;
It is clear from this case that skills development and training of beneficiaries could have been handled better. These programmes of the department has shown to be problematic in the past and are difficult to audit during budget and strategic plan reviews. The appointment of poorly-managed strategic partners was obviously a significantly flawed attempt to manage the skills shortages of the beneficiaries as, apart from the negative financial impact caused, no real skills transfers took place during the time strategic partners were involved.
The departmental focus on land reform without having sufficient plans and finances in place to ensure or at least attempting to ensure that CPAs becomes financially viable and that the farming practice is sustainable is laid bare by the two CPAs visited. It is necessary to determine what lessons the department, if any, had learnt from these and many other similar cases and to determine:
1. What response these experiences have caused in government planning and implementation of land reform through CPAs
2. How funding allocation for post settlement has been refocused as a result of these cases;
3. How skills development have been re-assessed as a result of the challenges experienced by CPAs
The CPA stated that they have received title deeds for the restituted land, but this is contradicted by the CPA report used to compile a background document for the oversight. The issue of land ownership needs to be clarified.
There appears to be a reluctance with CPAs to approach commercial lenders for capital needed to expand. Some of this reluctance may be attributed to past experiences with strategic partners, but there may also be a factor of government reliance, with beneficiaries assuming that the department should continue allocating funds to CPAs to ensure that the farms succeed. This results in CPAs addressing their finance needs at the department instead of securing commercial funding or entering into new, beneficial partnerships. The difference in approach between Easy Farms and the CPA is a case in support of this statement. There is therefore a need to revisit post settlement farmer support to assess whether:
1. the department properly plans for the capitalisation, training and initiation of farming activity in order to ensure that CPAs can find their feet operationally;
2. a clearly planned and communicated exit strategy has been developed, at which point alternative funding sources are available should farms be in need of it;
3. as is the case with Easy farm, a close working relationship is developed between the farmer and the commercial support structures / associations / service providers / funding agencies in order to allow for effective development and expansion as it can be commercially afforded and implemented.
The pace at which old order claims, some dating back more than 20 years, need to be addressed. These farms are being traded on the open market and being developed, which ultimately is affecting the value of the farms and could lead to protracted legal battles should current owners resist government attempts to return the land to rightful owners. The fact that the farms are being developed also imply that they would not fall into the categories of land identified for expropriation should that process be finalised.

6.7 Nwanedi Agri-hub and farmers:

The agri-hub is completed and appeared to be operational, although the department did not offer the committee a tour of the facility. The department stated that a recent covid-19 positive case at the facility was the reason for this. The committee therefore could not assess the degree to which the hub was being utilised.
The agri-hub was initially designed to support around 100 farmers, but due to the demarcation changes that had taken place within the district, it now serves 3 times as much. It can be assumed that it was not designed to support that number of farmers and will struggle to service outlying areas efficiently.
The operations of the Agri-hub is managed by a not-for-profit company in order to reduce financial pressure on tit. It provides extension, mechanisation, advisory, pack house and cold storage services to surrounding farmers.
The Agri-hub is only using about 0.5 ha of the 5 ha land allocated to it at present. It is considering expanding operations, including:
1. Solar array to lower electricity costs;
2. Shade netting tunnels to protect seedlings in hottest part of growing season;
3. Crop demonstration or testing farm areas;
4. Nursery services
Challenges with farming in the area include:
1. Water quality, although a basic purification system is usually all that is needed for boreholes;
2. Electricity costs;
3. theft
The mode of operation of the two CPAs that owned farms in the area around the Agri-hub was also interesting. After receiving the land, the CPA decided against trying to farm the whole area as a collective but are leasing out land to small-scale farmers that wish to farm. This has led to less conflict within the CPA, and almost no interference with those who wish to farm.
Farmers visited in the area were operating relatively effectively, but did not appear to use all the facilities on offer at the Agri-hub. During the visit, gem squashes and butternut were being harvested and packed on the farm for transport to buyers (local school feeding scheme for butternut, gem squashes for the local market).
The Farmer interviewed was not very concerned about leasing the land instead of owning it, as he could not grow tomatoes in this area. He has a supply contract for tomato to Tiger Brands and needs to lease land 100km from this site in order to service that contract.

Key points:

A once-size-fits-all approach to agricultural support in provinces through the placement of Agri-hubs in a few district municipalities will not be efficient. Some districts, such as Vhembe, has far more small-scale farming activity and expansion potential for agriculture than what can be supported by government’s current distribution of hubs. Rather than simply trying to spreading these thinly on the ground in all rural districts that are labelled as “poor” or “under-developed” and therefore in need to be supplied with farming options, more agriculture support infrastructure need to be provided in intensive agriculture areas.
Even where there is significant agriculture activity close to the Agri-hub, farmers do not appear to be using all the services equally. There is potentially a need to look at the basic design of the Agri-hub and the needs of farmers in each location in order to determine which services should be optimised.
The example of land use in this area should better inform departmental decision making in terms of the farming models it is promoting. Not all CPAs are going to make a success of farming and not all farmers find themselves inside CPAs with access to land. CPAs that rent out land to those that wish to farm appears to be a better model than the expensive and frequently unsuccessful approach of attempting to make a large CPA operate a complex farming model when no one in the CPA has that experience. It would also not have created the opportunity for dubious “strategic partners” to seriously damage the financial strength of many CPAs.

7.COMMITTEE’SRECOMMENDATIONS

7.1 The Mukumbani and Tshivhase Tea Estates

The committee noted the history of investment in the tea estates and factory and applauds the province’s desire to rebuild these assets. It is a great concern, however, that the departments involved do not appear to have a common business vision and opinion about the financial viability of further investment in the farms.
The committee further noted what it considers a lack of in-depth knowledge of the project with the different provincial departments/entities involved. This included the costing of alternative operational strategies such as crop diversification, producing for bulk sale or investing in brand development.
The committee believes that a viable business model should urgently be developed for the farms before more resources are invested. To this end, there is a need to clarify the reported R10 million investment into the farms reported in news articles and raised by the provincial legislature during the site visit.

Easy farm

The committee commends the dedication towards building an export quality citrus farm by the current owner and his father before him.
The committee feels that valuable lessons can be learnt from this example, including:
1. The value of owning a farm secured on full title which enables owners to access financial support for expansion and development;
2. The need for the development of expertise by farmers and specialised support from both government and private sector organisations to ensure the success of an export-focused farm.
The committee noted that most, if not all of the infrastructure the farmer requires to fulfil export commitments had to be located on site. This observation has to be contrasted with the objectives of the department. While it is noted that the department aims to develop farmers into fully-fledged commercial farmers, it is unlikely that the resources of an Agri-hub will assist to achieve this. The support models of the department should consider greater farm-focused support and better integration with the private sector when it comes to the development of commercial farmers.
The committee notes with interest that the owner of Easy Farms could expand his operation to include a 600ha piece of communal land available to him. Such a development will require a hybrid funding and support model from government and private industry that supports farming on communal land.
The committee further notes that the current support models of the department is not aimed at such development options, rather opting for a one-size-fits-all agriculture support model that integrate with the District Development Model and does not have the flexibility required to support experienced farmers.
The committee therefore propose that the Department, working with private industry, develop a viable model of support for experienced farmers or CPAs with a track record of farming success to expand operations onto under-utilised state land. This model should be sensitive to the funding needs of farmers coupled with the fact that full title of the land to be developed might well be held by state or a third party not involved with the actual farming activity.
The Committee further noted with concern the impact that unrest in KZN and Gauteng has had on Easy Farm. Export markets operate on fine margins and small windows within which to shift produce over the border. Where instability disrupts port and transport infrastructure, such farms become extremely vulnerable and can suffer significant financial losses. The management of his orchards also requires a management routine consisting of herbicide/pesticide spray routine and fertilization. The unrest and transport disruptions affecting KZN and Gauteng has put a question mark over the availability of such chemicals needed before September. Being unable to perform critical farm management at this time could compromise an entire year’s crop.
The committee therefore urges the Department to continue to monitor the impact of export constraints and the availability of critical inputs on the country’s commercial farming sector with the aim of extending financial aid to farmers who continue to suffer losses because of the unrest.

Small-scale (lady) farmer:

The committee noted that the farm was effectively targeting more than one market with produce, which indicates that the farmer in question is well-established in the market and capable of gearing production to selected markets.
The committee was concerned, however, that it appeared as if specific on-site needs of the farmer could not have been met to date. This highlighted a shortcoming of the Department’s district-based development focus.
The committee acknowledges that the farmer has received technical support from the Department in the past, and continues to receive periodic support in the form of fertilizer, chemicals and advisory services. The support, however, has not taken her on-farm challenges into consideration. This observation is not restricted to this one farm only. There appears to be a common thread of a miss-match between farmer needs and services offered at Agri-hubs of FPSUs.
The committee proposes a re-evaluation of the focus of conditional grant expenditure, moving away from the generation of generic support models or the concentration of resources at district level where it will likely not be utilised by farmers such as this. The department needs to step away from a support model that requires compliance with an arbitrary set of requirements and envisages a uniform set of needs from all farmers.

Goddard Farm:

The same observations made regarding on-farm needs of farmers versus the centralised, generic support functions of the District Development Model applies to this site.
The observations made at Easy farm regarding hybrid funding models for farmers wishing to farm on communal land with a PTO also applies to this site.
The committee noted with concern that the department and the farming group seem to be operating in parallel to each other. The full suite of support services on offer by the department is therefore not at the disposal of the farmers, while the department is also not fully aware of their individual needs. The farming group had built up its own support network outside of the government sphere. This included forming a farming association, being members of AFASA, and receiving support from a private seed and seedling producer, Sakata.
The committee urges the department to improve its communication with all small-scale farmers in order to ensure that service available to farmers are optimally utilised.
The committee notes with concern statements made by the farming group (not just Mr Goddard) that the R35000 support was not available for use to the farmer to his or her own needs but came in the form of vouchers. These vouchers were, in the opinion of the farmers, heavily overpriced and in some instances, administrative fees were deducted, resulting in far less than R35000 in value being trickled down to farmers.
The committee requests, as soon as possible, that the National department, with the support of provinces if required, brief the committee on how the Covid-19 relief support was structured, and what help actually reached farmers vs deductions made by appointed service providers.
The committee observed that many farmers produced crops without having secured a buyer up front. The committee agrees with the department that farmers need to take greater care of developing a business model that maximised profit and market demand for produce rather than hoping that they can secure an offtake deal with the government. The committee need clarity, however, how much the department focuses on this aspect of business development and support in its advisory services offered to the farmers.
As a possible solution for generating a secure market for a large number of small-scale producers, the committee wishes to investigate the potential for the development of a decentralised supply system, where small-scale producers feed into the national supply chain as is the case with countries such as Russia. It is possible, as has been demonstrated over time by this example, that up to 80% of a country’s production of a specific crop could be sourced from smallholder plots no larger than 2 ha in size.

Ravele CPA

The committee acknowledges the effort that the CPA has made to stabilise the operations and income of the CPA, and appreciates the degree to which financial support is offered to employees and surrounding communities, particularly where bursaries are offered to scholars.
The committee further acknowledges the fact that the CPA had been able to pay off the debt created in its name by a previous strategic partner.
The committee is concerned about the frequency of similar reports from CPAs. Both CPAs visited during the oversight had been assigned with a strategic partner that was not contracted by the CPA and did not act in the best interests of the CPA. Of great concern is the possibility that the development grants assigned to each CPA upon settlement of the land claim was mismanaged.
The committee requests a briefing by the department on the matter, highlighting:
1. How the department selected and appointed strategic partners;
2. The investigations that took place for Ravele and Ratombo CPAs after complaints about strategic partners were received;
3. The outcomes of the investigations, and if any mismanagement was identified, what steps the department took to recuperate misappropriated funds;
4. What allocations, if any, were made by the department to compensate CPAs for losses suffered as a direct result of the actions of strategic partners.

Ratombo CPA

The comments on strategic partners made i.t.o Ravele CPA also applies to Ratombo CPA.
The committee learnt with concern that the CPA is still awaiting the finalisation of a number of old-order claims on land surrounding the farms for which claims were finalised already. The delay in finalising land claims has a negative impact on the claimants and could negatively influence the cost of acquiring and redeveloping the farms. The committee requires feedback from the department on the number of outstanding claims in Limpopo Province, including:
1. The total number of outstanding claims affecting the Ratombo CPA;
2. The total number of claims outstanding in the province;
3. Reasons for delays in finalising claims, and;
4. Timelines for the completion of the claims.
The committee learnt that after financial losses was suffered under the strategic partner, the CPA applied for RECAP (before the current redirection of CASP to COVID-19 relief funding), but has not been able to secure any funding. The committee requests feedback on the reasons for turning down the application, particularly considering the challenges it is facing with the maintenance and development of the farms returned to the community at great cost.
The committee is concerned that current post settlement support options remain a challenge. RECAP is not sufficient to cover all needs, especially where large farms such as with the Ratombo claims are transferred. Either a lack of title deeds or poor creditworthiness as a result of periods of poor management hampers access to finance. The committee proposes that the following points should be considered by the department:
1. Focus on alternative strategic partnerships and funding models that reduces the pressure on departmental programmes but delivers real benefits to CPAs and leaves CPAs in control of the partnership;
2. Preferential electricity procurement options for CPAs and other supported land reform beneficiaries as is the case for large industry;
3. Resolution of water rights issues and finalisation of old-order claims should be priorities of the department;
The committee expresses its concern about the departmental focus on land reform without proven implementation plans and sufficient finances in place to ensure or at least attempting to ensure that CPAs becomes financially viable. The committee wishes to be briefed by the department to determine:
1. What response these experiences have caused in government planning and implementation of land reform through CPAs
2. How funding allocation for post settlement has been refocused as a result of these cases;
3. a clearly planned and communicated exit strategy has been developed, at which point alternative funding sources are available should farms be in need of it;
4. as is the case with Easy farm, a close working relationship is developed between the farmer and the commercial support structures / associations / service providers / funding agencies in order to allow for effective development and expansion as it can be commercially afforded and implemented.
5. How skills development have been re-assessed as a result of the challenges experienced by CPAs
6. What efforts have been put in place to build relationships between beneficiaries and private entities capable of assisting with financial or skills development partnerships;
7. Whether the department had considered advising CPAs that they can lease the farm out to other farmers should they wish, as has been seen successfully implemented during this oversight.

Nwanedi Agri-hub and farmers:

The committee appreciated the fact that the Agri-hub appeared to be completed and operational, although the department did not offer the committee a tour of the facility.
The committee is concerned about the fact that, due to demarcation changes in the municipality, an Agri-hub that was initially designed to support around 100 farmers, may have to serve 3 times as many. It can be assumed that it was not designed to support that number of farmers and will struggle to service outlying areas efficiently.
Under these circumstances, and having observed the impressive scale at which successful small-scale farmers were operating in the province, the committee propose that the Department re-evaluates its roll-out plans for Agri-hubs and other centralised farmer support infrastructure. At present, the plan had placed such infrastructure evenly across the country, but many of the facilities appear not be be functional. Limpopo province clearly has a greater agriculture capacity and need for support infrastructure, and should be implementing these in sufficient numbers to adequately support the number of farmers in each district..
The committee was interested to learn about the mode of operation of the two CPAs that owned farms in the area around the Agri-hub was also interesting. After receiving the land, the CPA decided against trying to farm the whole area as a collective but are leasing out land to small-scale farmers that wish to farm. This has led to less conflict within the CPA, and almost no interference with those who wish to farm. The committee wishes to engage with the department on this option taken by the two CPAs as it would appear a far better operational plan than what has been put into operation for most other CPAs.
The committee observed that farmers visited in the area were operating relatively effectively, but did not appear to use all the facilities on offer at the Agri-hub. During the visit, gem squashes and butternut were being harvested and packed on the farm for transport to buyers (local school feeding scheme for butternut, gem squashes for the local market). The committee is interested in receiving an update from the Department regarding the use of all the different services offered at Agri-hubs, and whether the envisaged range of services are all being used by farmers. If it becomes apparent that some services are required more than others, how will the Department respond to this knowledge?

[1] Different members logged into the committee briefing sessions and committee meeting that took place during oversight. These interactions will be reported on and the list of participants captured individually.

[2]https://www.dailymaverick.co.za/article/2021-05-04-moves-to-sweeten-mukumbani-tea-estate/

[3] Inclusive Business Models in the Agricultural Sector: Case Studies from South Africa’s Limpopo Province.

Documents

No related documents

ATC210909: Draft Oversight Visit Report to Limpopo Province: Select Committee on Land Reform, Environment, Mineral Resources and Energy, Dated 7 September 2021

NCOP Land Reform, Environment, Mineral Resources and Energy

2.DELEGATION

5.SITE VISITS

6.COMMITTEEOBSERVATIONS

7.COMMITTEE’SRECOMMENDATIONS

Documents

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