Department of Agriculture: Strategic Plan & Budget 2007/08 briefing

SELECT COMMITTEE ON LAND AND ENVIRONMENTAL AFFAIRS
25 May 2007
DEPARTMENT OF AGRICULTURE: STRATEGIC PLAN & BUDGET 2007/08 BRIEFING

Chairperson: Rev P Moatshe (ANC, North West)

Documents handed out:
Strategic Plan of the Department of Agriculture presentation

SUMMARY
The Department of Agriculture briefed the Committee on its strategic plan and budget vote for the current financial year. The Department aimed to ensure food security, maximise growth of the Agricultural sector and enhance the sustainable management of natural resources. The Department intended to release a catalogue dealing with all its projects for guidance of emerging farmers. The various programmes were described. Processes such as Agri-BEE were introduced to assist integration of black farmers into mainstream agriculture, and bio-security and disaster management programmes aimed to increase sustainability. Management of natural resources and other schemes were important. The budget and expenditure of the department were highlighted.

Members raised questions on the numbers of people benefiting from the comprehensive agricultural support programmes, assistance to emerging farmers, the necessity to inform people of the assistance that could be provided, the reasons for decline in the disaster management budget, and clarification on the Land Bank. Members expressed concern that there were numerous complaints of lack of support, or problems in accessing finance and sought detail on the memorandums of agreement, food security and interaction with other departments, the Mafisa loans, the extent to which the Department worked with municipalities, and the problems with price control and imports of products that could have been supported locally. Further concerns were raised over conversion of agricultural land to game land, bio fuels, the shortage of dairy products,
rising market and farming prices, and interaction in the expanded public works programmes. The Department was asked to ensure that more detailed responses could be provided in future and to detail what it was doing to alleviate poverty. It was asked to send quarterly reports to the Committee.

MINUTES
Department of Agriculture (DOA) Strategic Plan and Budget Briefing
Mr Masipula Mbongwa, Director General, Department of Agriculture, tabled the mission statement and vision of the Department. He said that the Department aimed to ensure food security, maximize growth of the Agricultural sector and enhance the sustainable management of natural resources.

Mr Luvuyo Mabombo, Chief Operations Officer, DOA, covered the Administration Programme and mentioned that the Department would be reviewing its structure and also that it would be releasing a catalogue detailing all the projects of the department that emerging farmers could tap into. He also mentioned that the Department was intending to set up a system of electronic registration that would help in the streamlining of service delivery.

Dr Phil Mohlahlane, DDG: Livelihoods, Economics and Business Development (LEBD), DOA, highlighted that LEBD promoted equitable access to the agricultural sector as well as the growth and commercial viability of emerging farmers. He mentioned that processes such as AgriBEE were introduced to assist in the integration of black farmers into mainstream agriculture.

Mr Eben Rademeyer, Chief Director, Plant Health Inspection Services, DOA, presented on the issue of Bio-security and Disaster Management. He said the programme was focused on ensuring that production continued despite obstacles such as natural disasters and market entry barriers. He mentioned the programme’s objectives, citing the formulation of sound bio-security policies and legislation as well as compliance with international obligations as the main objectives.

Mr Njabulo Nduli, DDG; Production and Resource Management, DOA, stated that this programme focused on the management of natural resources and mentioned schemes that fell under the programme, highlighting the Animal Improvement Scheme as the pivotal programme that linked many projects of the department.

Ms Noncedo Vutula, Chief Director, International and Inter-Governmental and Stakeholder Relations, DOA, highlighted the goals of this Programme. These included promotion of agricultural growth, rural development, and stimulation of growth, enterprise and entrepreneurial development in agriculture by black people. Schemes such as AgriBEE were pillars of the programme.

Mr Thomas Marais, Chief Financial Officer, DOA indicated that the Department's budget was R2.28 billion, representing a 3.7% decline on the previous year. Comparative figures since 1994 were tabled. He detailed the expenditure incurred by the different programmes and projects of the Department.

Mr Mbongwa finally tabled details of the Ilima /Letsema campaign (working together) and it was noted that the Department was working in conjunction with the National Youth Service and a number of other programmes.

Discussion
The Chairperson mentioned that the Department seems to be concerned with the quantity rather than quality of beneficiaries from the Comprehensive Agricultural Support Programme (CASP) and asked the Department to provide a list of people that have benefited from CASP and were still successful, as well as details of those who had failed.

Mr Mbongwa stated that the Department has started looking beyond the spending on CASP and were now on the second phase of CASP where it sent out teams to assist in cases where there had been under spending. The Department was expecting report-back, and from there would be able to take decisions on what action must be taken.

Mr L Van Rooyen (ANC, Free State) mentioned that emerging farmers were not receiving any assistance from the Department and wanted to know whether there was no other way to assist those from rural areas.

Mr Mabombo mentioned that the Department was planning to come up with a catalogue that detailed all the department’s projects and directions on how farmers could take advantage of these programmes so as to reduce the confusion that many had with the different projects.

Mr Van Rooyen also asked where the responsibility of starting up Co-ops lay. He said that people were confused as to where to go if they wished to get assistance.

Dr Mohlahlane replied that there was need to cluster co-ops around one interest because dealing with individuals had proven to be futile. He said this would allow for fast and efficient delivery of services by the Department.

Mr Mbongwa added that the Department had come up with a one-stop shop where any office of government would be in a position to assist individuals with any problems. He said this streamlining of service delivery should help with efficiency and time management. He noted the Gauteng province’ initiative to streamline service delivery by all departments through this one-stop shop.

Mr Van Rooyen also wanted to know why there was a decline in the budget allocation for disaster management.

Ms Nduli replied that the decline in the disaster management budget must be compared to the allocations in previous years, when bigger budgets had been given to cope with disasters such as Asian Flu. She further said that additional funds would be afforded when and if the disaster actually happened.

Mr van Rooyen lastly wanted clarification on the issue of the Land Bank as there seemed to be conflicting reports from the media.

Mr Mbongwa stated that the Minister had issued a press release re-appointing three managers, who had resigned, to take charge some of the issues that needed attention within the Land Bank. He further mentioned that the Department would also have input on whatever measures were to be taken.

Ms M Oliphant (ANC, Kwazulu Natal) asked the Department to help with irrigation facilities and the provision of tractors for farmers in Kwazulu Natal. She also asked for clarification on the issue of Greytown farmers complaining about lack of support for the irrigation of their land.

Ms Nduli stated that there were policy issues on the financing of agricultural inputs, which needed to be settled, because financing of these inputs on a random basis was not working. She said there would have to be policy consultation to come up with a holistic way of dealing with this issue.

Ms Oliphant also wanted the Department to list municipalities that the department had claimed to have helped with the registration of boreholes.

Ms Nduli replied that the Department would send the list of municipalities and also mentioned that the Department was targeting around one hundred boreholes for the province.

Ms Oliphant requested the Department to clarify the details of the Memorandum of Agreement signed with the World Fish Centre for Aquaculture.

Ms Nduli responded that there was a broad Memorandum of Agreement (MOU) with NEPAD and another with the Department’s Chinese counterparts which would see employees from the Department going to China for further training.

Ms Oliphant wanted clarification on food security and the Department’s interaction with other departments in delivery of services.

Dr Mohlahlane responded that there was supposed to be a food security coordinator in all provinces, where all departments involved met monthly to deal with issues of coordination in food security. He said that this was a national programme.

Mr R Tau (ANC, Northern Cape) asked about the Department’s ability to reach targets if it had only managed to approve 900 of the 2000 loans intended for the Mafisa programme.

Dr Mohlahlane stated that the targets were made on the assumption that after the Mafisa pilot project in Limpopo had ended the Department would have been able to extend to two more provinces. However, Limpopo on its own had used up almost half of the projected budget. He further emphasised that Mafisa had to be spread to all the nine provinces to meet the needs for these services in the country.

Mr Tau also asked about the extent to which the Department worked with municipalities since there were constant complaints from municipal authorities about the lack of support from the National Department.

Mr Mabombo replied that the Department had decided to interact with municipalities through the integrated development planning (IDP) process and that it had started to profile all municipalities in order to assist them with whatever services they needed.

Mr Tau expressed his concern at the extent to which multinational companies like Parmalat manipulated prices to keep domestic farmers from competing in the market.

Mr Mbongwa replied that Government could not have the control they used to have over the market before deregulation, and that the only alternative was the use of tariffs which was considered as anti-competitive behaviour. He mentioned that this might even go to the extent of thwarting other government objectives such as promotion of competition. He said that it might be possible to deal with the matter by appealing to the patriotism of businesses, and calling upon   producers, processors and distributors to collaborate and share costs in order to put them on a better standing in the market.

Mr Tau complained about the importing of agricultural products that were also locally grown rather than empowering local producers.

Dr Mohlahlane responded that there was need to align the permit mechanism with the AgriBEE Charter, which looked to integrate black agri-business into mainstream agriculture. He said that companies would risk losing their importing licenses if they did not play a role in the development of local agriculture.

Mr Tau advised that the Department should have a monitoring system that checked on co-ops and ensured that the training they were afforded by the Department was put to use.

Mr Tau also noted that there was price discrimination when selling cattle and further differences in the requirements farmers were subjected to when selling their products.

Ms Nduli responded that the Department would engage with auctioneers to address issues on the price discrimination during the auctioning of livestock. Furthermore she mentioned that the Department was working through the Agricultural Research Council and its assorted schemes to ensure that farmers met quality requirements, thus enabling them to compete on the market.

Mr Tau mentioned that agricultural land had been sold and converted into game land because farmers were struggling to make a living out of agriculture. He also said that the issue of bio-fuels, where maize produced was used to produce bio-fuels rather than for consumption, needed to be addressed.

Mr Mbongwa mentioned that there was a need to protect agricultural assets hence there was a need to introduce a system where agricultural needs of a province were considered before the land could be converted from Agricultural to Game use. He also cited the probability of diseases arising due to the mixing of domestic and wild life.

Mr Mbongwa also stated that increased productivity of agriculture had seen up to three million hectares of land being released for production in the bio-fuels industry. He however mentioned that the Department had to maintain close monitoring on the bio-fuels industry, and consider especially whether the social benefits were commensurate with the other issues.

Mr Van Rooyen expressed his support for issues raised by Mr Tau.

The Chairperson asked why there was currently a shortage of milk in the market.

Mr Mbongwa responded that the problem came from the deregulation of the agricultural sector because this attracted a lot of attention from major players, even outside the Agricultural sector. Initially the prices of agricultural products such as milk had dropped but had risen again lately, coupled with the lessening numbers of small farmers in the market. He also mentioned that the Department had learned that because of this problem thousands of dairy farmers had been running out of business every month, hence the shortage in milk and other dairy products.

Mr Tau also expressed concern on the market prices that forced emerging farmers out of the market, as well as the limited government power to interfere and leverage domestic enterprise in markets.

Dr Mohlahlane replied that the market behaved like a cartel, so that the Department should start looking at the issue of market behaviour in a holistic manner rather than concentrating on the commodity side. He said that domestic farmers had to be empowered to a level where they could compete in the market rather than trying to control market behaviour.

Mr Van Rooyen complained that some of the responses received were inadequate or not clear enough for members to present to their constituents.

Mr Tau wanted to know the Department’s stand on the Extended Public Works Programme (EPWP).

Mr Mbongwa replied that the Department had dealt with the EPWP through the Land Care Programme and have also subscribed to a new programme with the National Youth Service, especially related to training and would continue to conduct the many programmes of the Department in the same manner.

Mr Tau also expressed concern on the point that land formerly used to rear Karoo lamb was going to be converted and used for maize production.

Mr Mbongwa mentioned that the Department had to do all it could to ensure the preservation of the standards of the Karoo lamb, putting more emphasis on European Union standards.

The Chairperson asked the Department to give more in-depth explanations of it was doing to help alleviate poverty in the country, as this was one of the major priorities and causes of complaint.  He also reminded the Department to look into releasing quarterly reports so that Members would be able to address matters as they arose rather than dealing with them in bulk.

The meeting was adjourned.