· Mini-budget trends are positive Government programs are cumbersome and slow

Agriculture can create many quality jobs

· Black farmers have to overcome 100 years of repression and injustices

· South Africa's commercial agriculture continues to shed labour

• output increases, employment decreases
• Even in the presence of huge unemployment in the economy
• And of large tracts of unused arable land

• As result:

• Our rural areas are depressed
• And urban squatter camps are exploding

Land reform can create many jobs-cont.

· 30% of the land redistributed and developed would cost

• Around R35 billion
• Create 600,000 net full-time farm jobs at about R60 000 per-job
• No other sector can create quality jobs at such a Low cost

Mini-budget trends are favourable

· 2005/6-2007/8 average annual growth for:

• agriculture: 10/ 8%
• Includes conditional grants to provinces for Comprehensive Agricultural Support Programs):

• 2005/6: R250 m
• 2006/7: R300 m
• 2007/8: R415 m
• 2008/9: R435 m

· R1 20 m for drought and R20 m for swine fever

But challenges remain

· The absolute levels of spending in agriculture, water and land are not enough to achieve:

• 6% shared growth in agriculture; and
• Undoing 100 years of apartheid in the sector

It is the delivery problem which is too complicated

· This explains chronic under-spending in government at all levels.

'- Example R1.5b unspent last year

· Will also make the R120 m allocated this year for drought relief inaccessible to NAFU members

The cross cutting issue

• Strengths
• Weaknesses and their causes
• Recommendations

Strengths to build on

· Excellent constitutional framework and legislation

· Well thought-out policies to land and agriculture

· Well-designed decentralisation policy and wall-to-wall municipalities now in place

· Increasing political commitment to black farmers and land reform

Weaknesses

· Progress still far too slow and overall budgets inadequate

· Well-intended policies and programme of action are in fact perpetuating the injustices of the past through complicated implementation and funding strategies

· Government officials and consultants are driving implementation, not our members

· Poor co-ordination between Agriculture, Land Affairs, Housing, Municipalities, Districts, Provinces, etc.

· Many different programs, each with their own appraisal, approval, and disbursement procedures

· Unassisted black farmers are very frustrated

1. There is no unified Agri-BEE program including land redistribution, farm and enterprise development and commercialisation

• Instead:

- Many separate programs

- Delivered through stove pipes

Each with separate rules, procedure and deadlines

- very complex solutions to a simple problem...see next slide

As a consequence there are no unified budgets broad-based AgriBEE at municipal, district, and provincial levels

• Should include resources from Land Affairs, Agriculture, Housing, Land Bank, Khula, etc.

Components and costs of a typical land reform project [PMG Note: Graph not included]

• Land

• Infrastructure & housing
• Resettlement
• Advice
• Overhead

But government programs are fragmented into stove pipes (LRAD, CASP, RDP housing, MAFISA, Land Bank, Khula, AgriBEE, Landcare, AgriSETA, etc.)

• The many different programs, rules absorb enormous efforts from government officials at all levels, and from black farmers

• Well intended officials at district level cannot support us effectively

• It drives our members crazy

2. Black farmers are not allowed to implement their own projects

• Government officials claim that the financial management acts forbid them to directly transfer funds to beneficiaries and bodies outside government

• In spite of the Public Financial Management Act, 1999, article 38 (1), (j) which established the principles

• And the Municipal financial Management Act, No 56 2003, article 67, which specifically sets out the guidelines for this.

· Officials go out on tender on our behalf for services and contractors

and therefore end up practically running our farms

· This completely dis-empowers us, is very slow and costly, and leads to poor impact

Time Is Not On Our Side

· Political pressure to deliver on AgriBEE and land reform is mounting

• Land Summit confirms this

· Lack of success of black farmers is creating a backlash against us

· Radicalisation of our members is leading to calls for a "Zimbabwe solution"

Suggestions for the Way Forward

· Devolve much of the implementation to us, along with the resources to do it

• We will demonstrate capacity and accountability for state funds

· Unify programs and budgets

· Establish a one stop AgriBEE shop at the municipal level

• With different counters for each major program

One Stop AgrIBEE Shop

AgriBee Municipal council Co-ordinates, appraises and recommends projects

Orientation and training of beneficiaries

• If you want to acquire a farm and develop it (LRAD)
• If you want to develop your farm in the communal areas
• If you want to set up an agri-business

Common Principles

· A single budget which flows to each counter depending on demand and quality of proposals

· Same accountability mechanisms

· Direct disbursement from provincial level to beneficiaries (or their escrow accounts)

· Same Appraisal and approval procedures

· Same proposal and funding deadlines

· Same application and accounting forms

A single operational manual

• with separate chapters which contain the rules which are specific to each counter

Composition AgrIBEE council

• Departments of agriculture and land affairs, housing, local government, water affairs, environment, trade and industry…

• Municipal councellrs

• Organised agriculture, black and white

• Banks

• Civil society, independent experts and scholars

Functions of Municipal AgriBEE council

• Disseminates information, screens eligible beneficiaries, and orients and trains them

• Receives, appraises, and proposes projects for approval to the provincial AgriBEE council

• Keeps inventory of available farms, relevant experts and other resources

• Refer beneficiaries to competent market information and facilitators

• Monitors execution and ensures accountability

Benefits

• Common program treats everybody equally and without favour

• Accommodates even the rural poor

• Easy to understand and use

• Faster approval and delivery

• Consistent and easy measurement of results

• Balancing of rural and urban areas

International experience: examples

• Kecamatan Development program in Indonesia:

• Funds are given directly to communities to implement their own priority development programmes (agriculture, health, education, etc.)

• Delivery to 28,000 villages, benefiting 25 million people at once

• Similar programs operate in Brazil, Mexico and many African countries reaching millions of people

Conclusion

• Only if we re-design the way implement our programs will be able to:

• increase our spending;

• increase the share devoted to agriculture (broadly) from 4.4% 10% of the national budget in order to meet the African Union; and

• achieve the higher growth target of 6% as agreed upon by Business Unity South Africa and Government