Minister and Department of Agriculture, Forestry and Fisheries Second Quarterly Performance Report: briefing; Consideration of Minutes

Meeting report

The Chairperson commented on the disappointing lack of progress noted in the previous meeting. He hoped that this meeting would see an improvement.

Mr Langa Zita, Director-General, Department of Agriculture of Agriculture, Forestry and Fisheries (DAFF), delivered the Department's Second Quarterly Performance Report, in which he noted a number of key achievements for the first quarter In the first Programme – Administration – such as 100% collection of Forestry and Fisheries policies. There remained many targeted challenges, however. Within Fisheries, the Oracle financial system infrastructure was currently experiencing hardware problems. In Forestry, the budget was not available, and ESRI licensing and sourcing funds were proving difficult.

In Programme 2 – Policy, Planning and Monitoring and Evaluation - some of the key achievements for the quarter included the signing of delivery agreements by 15 October 2010. The Monitoring and Evaluation Reporting (MER) framework had been adopted by the Department of Agriculture Executive Committee (DEXCO). The Micro-agricultural Financial Institutions of South Africa (Mafisa) Framework was adopted by Governance and Operational Policy Committee (GOPC) on 15 October 2010 and would now be tabled for approval at the next DEXCO.

For Programme 3, key achievements included the conclusion of amendments to the Marketing of Agricultural Products Act 1996 (Act No. 47 of 1996) to clarify the role of the Department and the National Agricultural Marketing Council (NAMC) on the marketing of agricultural products. Also the Department reached conclusion of amendments to the Agricultural Produce Agents Act 1992 (Act No. 12 of 1992) to make provision for broadened regulation of agents and traders facilitating the trade of agricultural products on behalf of farmers. A total number of 61 co-operatives were established during this quarter. The Department reported a number of challenges to this programme. Essentially, a primary target for 2010/11 was to facilitate the implementation of active and signed Memoranda of Understanding and resolutions in international relations and trade, specifically between South Africa and Zimbabwe, Namibia, Swaziland, Burundi and Ethiopia. Time and Ministerial availability were often factors in affecting corrective measures. A secondary target was as per scorecard for the sector – challenged by such factors as the reliance on the Department of Trade and Industry (DTI) Portal to report the implementation of the scorecards in the agricultural sector. Statistics on this portal had not changed since March 2010.

Key achievements for Programme 4 included a draft document for guiding the establishment of the Food Security Policy for South Africa. Since inception in 2007, the Department had secured approval of 14 Telefood projects to the value of US$129 000. Challenges to this Programme included sector capacity development – in the area of monitoring training support to 10 000 members of communities, including smallholder farmers and farm workers. The greatest challenge was in lack of funding. There had been several requests for budget reprioritisation, but these had been unsuccessful until now. Another challenge was in the area of national extension support services. There were insufficient funds to increase the extension officers according to their skills requirements. Discussions continued in to attempt to correct this situation.

In Programme 5, key achievements included training of an additional 16 animal surveyors from the Free State Province. Also 560 farmers were trained in milk production and husbandry. The Gariep aqua training facility should be completed on schedule in the third quarter (Q3). Service Level Agreements (SLAs) were signed and reports awaited from the Agricultural research Council (ARC), whilst research on wheat production and cultivar evaluation took place. Cotton and fruit strategies were reviewed. A cotton steering committee was in place. Regarding fruit, areas for amendment had been identified and work was being done in this regard. Proposed amendments to the Meat Safety Act were being prepared for vetting by legal services. Proposed amendments to Animal Identification Act 2002 (Act No. 6 of 2002) were being prepared for vetting by legal services. Challenges to this Programme were a lack of funds to carry out proper baseline studies. These were prioritised for future reference. A further challenge was the constraint due to lack of funds for gazetting of regulations for wheat and potatoes.

For Programme 6, key achievements for Forestry and Resources Management included development of the forestry small and medium enterprise (SMME) strategy and completion of consultation, and registration of seven fire protection associations (FPAs). During the second quarter 2 219 land care job opportunities were created. Challenges included the failure to meet several targets.

Programme 7 – Marine Fisheries and Coastal Management's key achievements included the completion and discussion of the Draft Environmental Management and Monitoring Framework (EMMF) with the Department of Environmental Affairs (DEA). Saldanha Bay surveys and Land-based abalone effluent surveys were conducted and a paper on the first phase of these ongoing surveys was currently being written. 85% of cases and tip-offs were investigated according to service standards. A total of 102 077 units of abalone with a value of R11 960 000 were retrieved and one syndicate-related case was concluded as guilty (R60 000). 10% of vessels were investigated at sea. Programme 7 met with several challenges. Policies could not always be implemented due to time frame considerations, final approvals and funding. There was not always adequate capacity for research requirements into marine research. In some instances there were internal communication limitations; and in other cases there were investigative capacity issues.

In conclusion, Mr Zita stated that, based on the above information, it could be seen that progress had been made towards the achievement of the strategic outcomes for the various programmes as compared to the previous quarter. However, the following should be noted: - the current DAFF structure in operation was not aligned to Parts 4 and 5 of the 2010/11 strategic plan and this was still causing some confusion. The unavailability of performance information by certain sub-programmes still persisted and the Department would need to work on this. It was difficult to confirm the actual performance due to the lack of supporting evidence and hard to substantiate the actual performance reported by programmes, and there were difficulties experienced in tracking the progress made because of the lack of a specific time frame. The confirmation of the annual performance plans by various directorates was currently ongoing and would be finalised before the end of the third quarter; that would make it easier to track the performance of the programmes against predetermined milestones. Reporting against annual performance plans would be reported on next quarter.

Mr Jacob Hlatshwayo, the Chief Financial Officer, DAFF, then delivered the Expenditure and Performance Trends for July, August and September 2010. Spending as a percentage of the budget for the whole year in the various programmes was detailed:  Administration – 25.2%; Production and Resources Management – 25.4%; Agricultural Support Services – 32.8%; Trade and Agricultural Development – 12.4%; Food Safety and Bio-Security – 23.3%; Forestry – 24.3%;     and Fisheries - 51.1%. Mr Hlatshwayo said that this set of figures represented progress (page 2).

Mr Hlatshwayo reported on economic application (page 3).

Mr Hlatshwayo said that Agricultural Support Services, Trade and Agricultural Development, and Fisheries were over budget in terms of the normal trend which would be 60%. This was because of transfer payments.

Mr Hlatshwayo then explained economic classification (page 5). For compensation of employees – out of the budgeted R1.1 billion the Department had already utilised 50%. For goods and services the Department had utilised 34.3% of the budgeted amount. Of total transfers and subsidies, the Department had spent 59.3% of the amount budgeted. Lastly, on payments for capital assets, the Department had spent 25.4% of the amount budgeted. Overall the Department had spent 51.8% of the budget allocated.

Discussion
Mr N du Toit (DA) raised his concerns about principles: the Department showed insufficient understanding of the basic principles of budgeting. He then went on question where exactly the problem lay –was it lack of policy, lack of capacity, or lack of the correct personnel? Was it perhaps a planning problem? He suggested that looking forward was critical – returning next year with the same issues would be detrimental.

Mr Zita replied that there were certain issues that the Department wanted to examine specifically. The Department had hired a consultant to do so. The Department wanted people to be able to feel comfortable going to the Land Bank, taking out loans at the Land Bank, working with the Land Bank, and so on.

As far as land use was concerned, Mr Zita emphasised that South Africa had to look specifically at sub-division, as it did not have access to land in the same way as other countries in the continent had vast areas of land for use for agriculture.

Dr L Bosman (DA) asked why the budget needed to be increased if there had been little movement in the amounts spent, with little change in results. The report was not as detailed as he would have liked. Further, he asked what was happening with the Land Use Management Bill. He had also heard the Minister saying that she was devolving the training of Extension Officers. He was worried about that. He asked for more information and wanted to know about employment standards. He also had a question around the Agricultural Broad-Based Black Economic Empowerment (AgriBEE) fund. What had happened to that money and to the Memorandum of Understanding (MoU)? He also said he would like to know what had happened to the agreement between South Africa and Zimbabwe agreement and the extension of the EPA. Under the previous minister, R300 million had been allocated to an agreement, which was rolled over. He would like to know what happened with that agreement, and to that amount of money.

Mr Zita acknowledged that the Department was aware that there were shortcomings in the skills of the Extension Officers, but that the Department was in the process of overhauling their training  to develop this area, which would be opened up for discussion, and Extension Officers would, in future, be given proper management skills.

Mr Zita added that the initiative of the MoU between South Africa and Zimbabwe has been led by the IDC. That had come to an end the previous month. Discussions had been under way to extend the agreement. Those discussions were ongoing at the moment.

Mr R Cebekhulu (IFP) mentioned that time was a crucial factor in giving people in farming communities assistance. If assistance was not given in time, the opportunity to assist was lost, and might not come around again.

The Chairperson echoed Mr Cebekhulu’s statement, saying that the time taken for approvals to occur could often hamper progress. The other area where he would like clarity was the area of Fisheries, particularly the area of slipways.

On the issue of slipways, Mr Zita assured the meeting that it was an issue that the Department was committed to.

The Hon. Tina Joemat-Pettersson, Minister of Agriculture, Forestry and Fisheries, mentioned that the Cabinet had only approved a harvest of 150 tonnes of abalone for this season. In order to obtain an approval of an increased tonnage, the Minister would have to make a new application to Cabinet.

Ms N Phaliso (ANC) asked what the communication would be to those communities regarding the poaching of abalone, so that there could be consistency in communication across the communities.

The Minister replied that there were two views – a socio-economic perspective, and an economic view. It was necessary to take a view where one said that this was where one could harvest. That was why the previous minister banned the harvesting totally. Government had since re-opened harvesting.

Mr Du Toit (DA) stressed that poachers needed to be caught and prosecuted.

Ms Phaliso mentioned that there had to be a meeting scheduled with the President about poachers, and about the abalone farms in Hermanus, and about the proliferation of abalone farms in that area. Ms Phaliso appeared to be particularly concerned about the rapid growth of the abalone farms in the area, and the lack of concern that was shown by authorities in the area.

Dr Bosman restated his question about the Land Management Bill, and said that he would like to have feedback on the AgriBEE fund.

Mr Zita responded that the AgriBEE fund would be instated at R3 billion over the next three years with a particular focus of improving the Land Bank and thereby insuring that the fund was effective and efficient.

Ms Phaliso asked the Department about the Land Bank. She mentioned that people were not using Land Bank as they should. Why was this? Secondly, the Department was a department which dealt with seasonal operations, yet people did not seem to realise this. How, and when, was this mindset going to change?

Mr Zita responded that there were some pervading problems around the Land Bank including farmers not repaying loans but those would be sorted out as speedily as possible. Some people had been discouraged from using the bank and that was also a persistent problem which needed to be addressed. He liked the idea previously mentioned of extension officers and the Land Bank and said that it could provide a means of improving the Bank further.  

Mr Du Toit was critical of the presentation and felt that in-depth analysis was missing.

The Chairperson commented that Onderstepoort Biological Products (OBP) was not receiving enough support from the Department in terms of funding.

Mr Zita responded that the Department would assist OBP in whatever way possible.

The Chairperson said that OBP was expected to do a job but it was not getting support from the Government despite being a statutory body.

Mr Zita said that the Department would assist through private public partnerships but that would take some time. OBP was not mutually exclusive and the Department was willing to listen to suggestions on how to improve it from the private sector as well as the public sector.

The Chairperson remained unconvinced but agreed to disagree on the matter with the Director-General.