Report of the Portfolio Committee on
Agriculture, Forestry and Fisheries on oversight to the
The
Portfolio Committee having undertaken an oversight visit to the
1. INTRODUCTION AND TERMS OF REFERENCE
The Committee, as mandated by the Constitution and Rules of Parliament,
undertook an oversight visit to the abovementioned provinces. The aim of the oversight was to:
·
Monitor and evaluate the pace of
agrarian reform in the provinces.
·
Assess the implementation and impact
of government-funded farmer support programmes that are undertaken by the
Department of Agriculture, Forestry and Fisheries such as the Comprehensive
Agricultural Support Programme (CASP) and Micro Agricultural Financial
Institutions of South Africa (MAFISA).
·
Facilitate cooperative governance
and intergovernmental relations between the National and Provincial Departments
of Agriculture, Forestry and Fisheries, as well as Local Governments.
2. DELEGATION
The oversight delegation consisted of:
Hon. M Johnson (ANC) – Committee Chairperson, Hon. Ms NM Twala (ANC) – Committee Whip, Hon. Mr S Abram (ANC), Hon.
Ms MC Mabuza (ANC), Hon. Ms RE Nyalungu
(ANC), Hon. Mr PJC Pretorius (DA) and Hon. Ms D
Carter (COPE)
The Committee was supported by parliamentary staff consisting of Ms M Solomons – Committee Secretary, Ms N Mgxashe
– Committee Researcher and Ms C Sheldon – Committee Assistant.
In the
In
In both provinces, the Committee was also accompanied by the officials
of the national Department of Agriculture, Forestry and Fisheries (DAFF) who
were represented by Ms V Titi, the Deputy
Director-General (DDG): Agriculture Support Services; Mr R Sebifelo,
Parliamentary Liaison Officer and two officials from the national DAFF’s Communication Directorate.
3. DAY ONE:
1 FEBRUARY 2010
3.1 Meeting with
Resolutions
of the Portfolio Committee
·
With the recent proclamation that
was signed by the Acting President, the Honourable Mr Kgalema
Motlanthe, which transferred most of the MCM to the
DAFF, the challenges faced by the community should be looked at together with
similar cases in the country. For
example, Hermanus in the
·
The Committee should also look at
how the number of abalone that the community can catch can be increased (total
allowable catch) as the three-a-day permits which they previously had, was not
cumulative and therefore, not reliable as a source of income.
·
The Committee should engage the
provincial Departments of Agriculture and Rural Development and Local
Government in looking at livelihood alternatives in the absence of abalone
fishing permits. Formal correspondence should be drafted to the relevant
department to engage further on the matter.
The Committee, to also liaise with the
relevant portfolio committees in parliament, to address the issue.
3.2 Site visit to Ncera
Farms (Pty) Ltd,
Ncera Farms (Pty)
Ltd, is one of the entities of the DAFF situated in the Kidds
Beach area near East London on state owned land measuring approximately 4 000
hectares. The entity is currently under
a Board of Directors as Board members resigned in January 2009. In the absence of a Board, the then Minister
of Agriculture and Land Affairs, Ms Xingwana,
appointed Mr Andile Hawes, the DDG: Production and
Resources Management, to be the ‘caretaker’ of the entity until a new Board is
appointed. Mr Hawes was not part of the
DAFF delegation during the Committee’s visit.
Ncera Farms (Pty) Ltd, is a public company
listed under Schedule 3 B in terms of the Public Finance Management Act, 1999
(Act No. 1 of 1999). The DAFF is the
sole shareholder. The complexity of the
situation at Ncera saw the Committee delegation
having two separate meetings: the first
one being a briefing by the Chief Executive Officer (CEO) of Ncera Farms (Pty) Ltd., Mr A Stylianou
and emerging farmers that were settled by the former Department of Land Affairs
on state farmers that form part of the Ncera Farms
(Pty) Ltd.
3.2.1
Meeting
with Ncera Farms (Pty) Ltd. CEO and settled farmers
The CEO, who resides at the Ncera Service
Centre where the meeting was held, reported that the Centre is assisting
emerging farmers and the surrounding rural communities through various services
in the form of advice, extension services, training, technical assistance with
equipment, etc. The farms that comprise Ncera Farms were previously commercial farms, which were
later inhabited by 50-60 families of farm workers. The farm workers and other community members
on these farms felt entitled to these farms, and were of the opinion that they
will be settled on some of the farms after they were handed over to the former
Ministry of Agriculture and Land Affairs.
However, in 2005, advertisements were placed in the local newspapers by
the Department of Land Affairs (DLA) in
That left nine farmers who now call themselves the Ncera
Progressive Farmers Cooperative. When
the farmers first settled on the farms, they were promised 3-year leases by the
end of the PTOs with the intention to purchase at the
end of the lease. This according to the DDG, is the Department’s policy on the disposal of state
land. The process was delayed and their PTOs have since expired without them having acquired
leases. Whilst settled on the farms, the
farmers invested infrastructure and production capital on the farms, using
their own funds, as loans were not granted to persons without legal entitlement
to the land. These monies were invested
with the understanding that they will receive rent-to-buy leases at a later
stage. To date, the farmers have not
received any official documentation from the former or current Ministry of
Agriculture and Land Affairs or Agriculture, Forestry and Fisheries – neither
renewed PTOs nor leases that give them some form of
entitlement to the farms.
Challenges
·
Despite the expiry of the PTOs, the farmers remained on the farms and continued to
farm with the little they had, and it was alleged by the CEO that some of them
had sold their homes to take occupation of the farms.
·
Residents from the surrounding
communities and previous farm workers were not happy with the resettling of
strangers on farms that they believed they were entitled to. They claimed that the process of allocation
of farms was illegitimate and they subsequently invaded the farms.
·
The police could not assist the
settled farmers regarding the invasions as they had no official documents that
proved their rights to occupy the farms.
Response by
Ms V Titi, Deputy-Director: DAFF (DDG)
·
The DAFF is currently in the process
of issuing the farmers new PTOs, which will later be
converted to leases.
·
Alleged that she had read from minutes
of a meeting that she did not attend, that one of the state farms, Rocklands Farm, was reserved for the settlement of the
50-60 families that formed the Ncera community.
Concerns of
the Portfolio Committee
·
The viability of the farms in terms
of productivity, which would enable the farmers to eventually purchase the
farms.
·
The PTOs,
which are valid for twelve months, do not provide much assistance to farmers as
they cannot secure loans from banks.
·
The legitimacy of the process of
allocating the farms if after 3 years, they still have no official documents.
·
The extent to which these farmers
were capacitated by the Department of Agriculture in order for them to be able
to graduate from emerging farmers to commercial farmers.
·
Given the extent of the problems at Ncera, it looked as if the DAFF only made some effort to
resolve the issue on hearing that the Committee was visiting the place. For example, if the PTOs
were a simple matter as the DDG claimed, why did it take 3 years for the
Department to issue those to the farmers?
Resolutions
of the Portfolio Committee
·
The DDG to get the DAFF or their
counterpart, the Department of Rural Development and Land Reform to investigate
the community member who is also an official of the Department of Rural
Development and Land Reform, who was attending the meeting, when he should have
been at work. His involvement as a
government official in the interests of the Department that he works for was
seen as a conflict of interest.
·
DAFF to finalise the issuing of PTOs to the settled farmers as a matter of urgency.
3.2.2
Meeting with Ncera
Community including the CEO and Settled Farmers
The briefing meeting with the farmers and the CEO was followed by the
all-inclusive meeting with the local community, including the aforementioned
parties. There were imminent tensions
and obvious divisions between the local community, the CEO, Mr Stylianou and the settled farmers. The meeting was characterised by
tension-filled heated discussions and lots of finger pointing by the community
to the CEO of the Ncera Farms (Pty) Ltd and the DDG
and her Department.
The community reckoned that problems at Ncera
have been going on for more than 10 years but were aggravated in 2007, by the
settlement of farmers, all from outside the area except one, in the
neighbouring farms that the community used for their livestock. The settled farmers do not even allow the
local community to graze their livestock or use drinking points on these farms. The Department of Land Affairs had not
informed the surrounding communities, which had previously had free access to
these farms, about its plans. The
community felt that people who were born and bred in the area and those who
were previously farm workers on these farms while they were still operating
commercially, should have been given first preference on these farms. They felt that the whole process was flawed
and corrupt.
The community voiced their frustration at having government officials
coming to them to make promises and then disappear without ever resolving the
problem. Many people who have been at Ncera in the last 10 years included parliamentary
committees, the former MEC of the EC provincial Department of Agriculture, who
is now the Minister of Rural Development and Land Reform, Mr Nkwinti, who whilst MEC in the province, told them that the
matter was for the National Department and the former Minister of the
Department of Agriculture and Land Affairs, Ms Xingwana. The community said they had asked the then
Minister, Ms Xingwana, for a forensic audit to be
done on the Ncera Farms (Pty) Ltd to ascertain how
much money was, and is being spent by government on the farm while the local
community is not benefitting. They noted that they are yet to see the audit
if it was ever done and have no confidence in Mr Hawes who is the ‘caretaker’
of Ncera (Pty) Ltd.
While the CEO and the DDG maintained that the Service Centre is used as
a training and resource centre for the local and surrounding communities, the
community contended that they had no access to it. The community claimed that the only people
who are benefitting from the Centre are the CEO, his
family and those that he likes. The
community felt that with the 2 to 3 million rands
Parliamentary Grant that Ncera Farms (Pty) Ltd
receives, the Service Centre should be open to all instead of a select few who
are nominated by the current management of Ncera
Farms (Pty) Ltd. Furthermore, the
community laid serious charges of corruption against the CEO of Ncera Farms (Pty) Ltd., Mr Stylianou,
and all those involved in the setting up of the Centre, including some
government officials who were involved in the settling of the farmers on the Ncera state farms.
In previous interactions with the national Department of Agriculture, it
was resolved that a steering committee that would include members of the
community would be established to investigate some of these issues. In addition, that a forensic audit would be
commissioned to investigate the settling of the farmers. Though these resolutions were made, there has
been no further follow up by the Department on these issues and they hardly see
Mr Hawes, the Departmental ‘caretaker’ of Ncera (Pty)
Ltd. The community felt slighted that
their issues were not taken seriously.
They also voiced their disappointment at the DDG regarding an issue of
being resettled on Rocklands Farm, which she admitted
is in the minutes that the community claimed to know nothing about as they
never had a meeting with Departmental officials. They requested the DDG to send them a copy of
those minutes from which she got the issue of their settlement at Rocklands Farm.
The community also reported on what they called a fraudulent eviction
order that was served to one of the families that has always lived on one of
the settled farms. They claimed the
eviction order was written on a Ncera
Farms (Pty) Ltd. letterhead but had a
Resolutions
of the Portfolio Committee
·
Recognises the need for a forensic
audit at Ncera Farms (Pty) Ltd.
·
The DAFF should submit a full report
to the Committee on all the issues that were raised in both meetings and the
progress on what the Department has done and is currently doing.
·
It the forensic audit was previously
conducted, the DAFF must submit the report to the Portfolio Committee and the
community, including follow up with the community on findings.
·
The Portfolio Committee to contact
the community on its follow up on the issues by Tuesday, 9 February 2010.
3.3 Presentation by the Provincial
Department of Agriculture and Rural Development, Bisho
In a late afternoon meeting at the offices of the Provincial Department
of Agriculture in Bisho, the General Manager of the
Eastern Cape Provincial Department, Mr S Masebeni,
submitted apologies for the MEC for Agriculture and the Head of Department, who
were both attending a provincial Cabinet meeting.
The Senior Manager: Projects, Mr
Felix Hobson of the Provincial Department gave a presentation on the progress
of the Comprehensive Agricultural Support Programme (CASP), while Mr Delport of the Eastern Cape Rural Finance Corporation made
a presentation on the Micro Agricultural Financial Institutions of South Africa
(MAFISA).
3.3.1
Comprehensive
Agricultural Support Programme (CASP)
The Comprehensive Agricultural Support Programme (CASP) presentation was
on provincial progress from April 2009 to the end of January 2010. The CASP makes funding provision to targeted
beneficiaries of the land and agrarian reform programmes. These funds are conditional grants that are
managed by the provincial Department to provide post-settlement support to
farmers with infrastructure, production inputs, training and mentorship. The policy focus of the CASP in the
The province has thus far only used 55% of the R120 million that was
allocated for CASP in 2009/10, with only two months left into the end of the
financial year. One of the officials
assured Committee Members that by the end of March, the Department would have
used up the remaining 45% even if it means them buying equipment (most probably
fencing) and keeping it. It was apparent
that despite the need for CASP funding in the Eastern Cape, the provincial
Department is still struggling to effectively utilise CASP funds, beyond
infrastructure provision, for example, fencing, poultry structures, dipping
tanks, etc. and to some extent, training of extension officers. The province maintained that they needed a
capital investment in agricultural infrastructure of R350 million of which it
has only received R190 million, which leaves a deficit of R160 million. On numerous infrastructure projects they have
planned, for most of them less then 50% of the targeted outputs, were achieved
by the third quarter of the financial year.
With the serious skills shortages in its Extension Services, the
province has trained a total of 132 Department officials, 95 on technical
skills and 38 on general skills through its Extension Recovery Plan. For farmer training and capacity building, a
total of 412 beneficiaries were given accredited training on various farming
programmes.
Challenges
·
Socio-economic problems within
communities.
·
Increasing input process for
construction and production during the period between budget planning and the
time that projects get implemented.
·
Insufficient capacity in
agricultural engineering.
·
Lack of financial and project
management capacity of developing contractors.
In addressing some of the challenges, the provincial Department intends
to focus on proper planning of projects with the hope that this will improve
project implementation. Furthermore, the
Department intends to monitor district project implementation more closely to
identify bottlenecks in time.
Concerns of
the Portfolio Committee
·
That the Department is planning and
even admitted to fiscal dumping by using the remaining 45% in the CASP budget
within two months on equipment. This was
a serious concern considering that most of that equipment eventually gets
stolen or vandalised.
·
The national Department of
Agriculture, Forestry and Fisheries invested a significant amount of funds into
the Extension Recovery Plan. However,
given the size of the Province and the need for an effective and efficient
extension service for, subsistence and emerging farmers, the Province has made
little use of the available funds for improving the skills of its personnel.
3.3.2
Micro
Agricultural Financial Institutions of
The
The provincial presentation was based on the MAFISA pilot phase from
December 2005 to December 2007 and the current financial year. During the 2-year pilot phase, the provincial
MAFISA programme has granted 728 loans to the tune of R47.6 million. The majority of the loans were for ostrich
farming, broiler production, cotton farming and production inputs. The bulk of the loans in monetary terms were
for ostrich and cotton farming. From
June 2009 to January 2010, 128 loans were granted through MAFISA, amounting to
R4.9 million. The majority of these
loans are for production inputs and to some extent, broiler and livestock
production. In the past year, from
January to December 2009, R7 million was disbursed and R6.1 million was paid
back to Uvimba.
Challenges
·
Competition with grant providers
such as local municipalities, Accelerated and Shared Growth Initiative for
South Africa (AsgiSA) – Eastern Cape, NGOs such as
LIMA to acquire production outputs.
·
Competition with the Department of
Agriculture’s grant programme such as Siyakhula/Siyazondla.
·
The availability of social grants
affects the number of small scale farmers who apply for loans.
·
Since MAFISA is a government
intervention scheme; some farmers still refuse to repay their loans, seeing it
as grant money.
·
The in-house credit life scheme that
limits the age of an applicant to be no older than 65 years. At the time of
application, this disqualified many small scale farmers who are still
interested in obtaining loans to address the issue of food security.
·
Inadequate means to mitigate risks
related to natural hazards such as drought, floods, hailstorm, fires, etc.
·
Lack of understanding by
beneficiaries of land reform programme.
For example, they do not understand that the MAFISA loan application
process is not necessarily linked to these programmes.
·
Reduction in Reserve Bank interest
rates affects the competitiveness of MAFISA interest rates.
·
High default rate.
The provincial credit facility recommends the integration of their
services with grant providers (like CASP) to mitigate risk and improve
outreach, and for government to lower the threshold for collateral security to
R10 000.
4. DAY TWO: 2 FEBRUARY 2010
4.1
Site
visit to the National Emergent Red Meat Producers Organisation (NERPO),
Queenstown
The Committee visited a NERPO affiliated Wildevrede
Farm in Queenstown. The Managing Director
(MD) of NERPO, Mr Aggrey Mahanjana,
hosted the Committee and provided a briefing on the farm and the activities
that are carried out on the farm. Wildevrede Farm was acquired by NERPO in June 2009 on a
three year lease from the Department of Rural Development and Land Reform
through the Proactive Land Acquisition Strategy (PLAS) programme. It is used as a training facility for youths
interested in agriculture through NERPO’s Development
and Land Reform (DRDLR) who paid R6.8 million for the farm. NERPO leases it
from the Department for R220 000 at 10% escalation per annum. The farm is 1 500 hectares in extent, and 65
hectares of this, is arable land.
The youth training programme lasts for one year with participants being
exposed to every aspect of farming, including budgeting and financial
planning. The agricultural activities on
the farm are diversified to provide participants with greater exposure to the
different kinds of farming. Operations
on the farm include: extensive beef production, Boergoats,
free range indigenous chickens, agronomic crops and vegetable production. The farm is currently run and managed by 23
resident students who are part of the Training Programme. It is the intention of NERPO that once its
three year lease expires; the farm can be handed over to 5 nominated programme
participants who have excelled during the course of their training. It is hoped that with assistance from the
DRDLR, the 5 young farmers can eventually buy the farm.
Mr Mahanjana mentioned that they have tried as
NERPO, to involve the provincial extension officers in student training, but
realised that the extension officers themselves need more training as they
could not even perform basic technical activities like soil analysis. He also alluded to their frustration as NERPO
with the government’s failing land reform programme. He believes that no acquired farm can be a
success without a potential farmer’s own reserves of capital, as most farms do
not make any income within the first three years of inception. He believes that that is why most land reform
projects fail because government places onto farms large numbers of people with
no financial backing and technical skills.
To this effect, Mr Mahanjana showed the
Committee a neighbouring farm that is a classic example of failed land reform
projects.
The farm, which was once one of the top maize producers in the country
was bought by the then Department of Land Affairs and they placed in it a group
of people from different communal villages throughout the
Resolution
of the Portfolio Committee
·
That government should assist the
five identified youth with technical and financial assistance once they take
over the farm at the end of the 3-year NERPO lease.
·
That the DAFF, through the provincial
Department, provides the Committee with a list and details of failed land
reform farming projects in the province that are in similar situations to the
farm that is neighbouring the NERPO’s Wildevrede Farm in Queenstown. The Committee needs to undertake follow-up
studies after receiving the relevant data from the respective national and
provincial Departments.
·
The responsibility for the
challenges faced on these farms falls within the ambit of the work of the
Department of Rural Development and Land Affairs. It is therefore important that the Portfolio
Committee liaises with the Portfolio Committee on
Rural Development and Land Affairs so that the Department of Rural Development
reports to both committees.
4.2
Site
Visits to Qamata Irrigation Scheme, Cofimvaba
The Qamata Irrigation Scheme is one of the
four schemes that falls under
The Scheme, which covers a land area of approximately 4 000 hectares is
being revived through joint partnerships between the Provincial Department of
Agriculture and Rural Development and the
Challenges
·
Inadequate infrastructure – the
existing infrastructure at the scheme is said to be old and dilapidated, thus
leading to water wastage.
·
Inadequate funding – farmers who
have access to water do not plough their lands due to financial constraints.
·
Lack of maintenance.
·
Vandalism of the facilities and
existing infrastructure.
·
Poor access to national roads limits
market access.
The provincial Department of Agriculture and Rural Development, which
received funding from National Treasury for the revitalisation of irrigation
schemes is doing a survey of all irrigation schemes in the Province and only Ncora Irrigation Scheme has been completed.
Forming part of the run down infrastructure are houses that used to
house extension officers in the former homeland of
To address the issue of inadequate funding, an agreement was reached
between the provincial Department of Agriculture and Rural Development, the
5. DAY THREE:
3 FEBRUARY 2010
5.1
Meeting
with the Kwazulu-Natal Provincial Department of Agriculture, Environmental
Affairs and Rural Development, Ulundi
The Committee was joined by the Kwazulu-Natal (KZN) Legislature’s
Standing Committee on Agriculture, Environmental Affairs and Rural Development,
Local Government, senior officials of the office of the MEC and the provincial
Department of Agriculture, Environmental Affairs and Rural development and
members of various cooperatives from the District. The provincial Manager for CASP, Mr Z Duze, presented to the Committee. The province did not have a presentation on
Micro Agricultural Financial Institutions of South Africa (MAFISA) programme.
5.1.1
Comprehensive
Agricultural Support Programme (CASP)
In
Challenges
·
Lack of capacity at district level.
·
The lengthy procurement process.
·
Inflated prices by service
providers.
·
Design of some projects which
resulted in beneficiary conflicts.
·
The majority of commercial land
reform projects being too complex for beneficiaries to operate.
To mitigate some of the CASP challenges, in July 2009, a Cabinet Lekgotla approved the establishment of an entity, the
Agribusiness Development Agency (ADA), which will serve as an implementing arm
of CASP on behalf of the provincial Department of Agriculture, Environmental
Affairs and Rural Development. The
Concerns of
the Portfolio Committee
·
That with 35% of its budget still
remaining two months into the end of the financial year, the Committee is
concerned that the Department will engage in fiscal dumping in order to ensure
that its budget is spent.
·
The extent
to which the plans of the Department are linked to the IDPs
of the local municipalities, particularly those within which funded projects
are based.
·
In respect of technical and
extension services, the extent to which there is consultation and cooperation
between the provincial Department and organised agriculture (for example, AgriSA in terms of their various commodity training
chambers).
·
The National Department of
Agriculture, Forestry and Fisheries invested a significant amount of funds into
the Extension Recovery Plan – the impacts of which do not seem to be reflected
within the Province.
·
That a new official to the
provincial Department, not the HOD or CASP Manager, decided to respond to
Committee questions on the presentations.
Most of the responses on service delivery were vague.
5.1.2
Presentation
by Invundo Agricultural Tertiary Cooperative Ltd.
Imvundo
is a private company that seeks to provide an all-inclusive service to up and
coming cooperatives in both crop and livestock production. Without an indication of what the
organisation has achieved, the presentation was largely based on a proposal on
how the organisation can solve the challenges of cooperatives, and why
government should invest money in them to implement precision farming
technology for cooperatives. Imvundo does not offer technical training but will identify
a service provider to provide the training for the Cooperatives. One of the service providers with whom they
are partnering is another private company, Agritech,
which provides Precision Farming Training, and its proposed interventions were
highly technical and very irrelevant, for example precision farming, to
ordinary farmers, some of whom have no education background.
5.2
Site
Visit to Mcebusendlini Primary Cooperative, Ulundi
This cooperative, which is located on a 28-hectare site, was started in
1992, as a community-based organisation with financial and other assistance
from the South African Breweries (SAB) and the
During the Committee’s visit, the newly tended garden looked as if it
was done the previous day or that morning, for the benefit of the
Committee. Most of the yard was unkempt
with ready to harvest cabbages and lettuce that were almost buried in weeds and
some spoiling from rain. Except for the
office building, most of the infrastructure was run down (poultry structures)
while some looked as if they were never used.
There was a borehole that was non-functional as the provincial
Department of Agriculture, Environmental Affairs and Rural Development did not
provide required pipelines.
Challenges
·
Dilapidated infrastructure due to a
lack of maintenance.
·
Lack of financial and technical
support.
·
Lack of access to markets.
5.3
Site
Visit to Omakhelwane Cooperative, Ulundi
The cooperative was initiated in 1989 on 17 hectares of land. When cooperative members (all women) started
out, the area was highly infested with thorn trees (Acacia karoo) and there was no water or
infrastructure present in the area. The
members physically cleared the area to start the project and are currently
farming, primarily maize and chickens.
The cooperative farm looked very impressive with beautiful maize fields
at various stages of growth and harvest, as well as expansive poultry structures. The cooperative has won various awards
including being the overall winner of the provincial Female Farmer of the Year
Award and a runner-up in the national Female Farmer of the Year award. One of the members of the cooperative is Mrs
Ellen kaNkosi Shandu, the
former Minister of Education in KZN and a former Member of Parliament.
5.4
Site
Visit to Phezukomkhono Cooperative, Empangeni
Prior to the arrival at the site, the Parliamentary and Legislative
Members were given a report that had a current date and read like the project
exists. One gets to the last page to learn that the Cooperative had
collapsed. The report was also not well
put together and seemed like a last minute cut and paste job from reports of the
past three to four years. The Members
wanted to know what has been happening in the interim. The Chief Operations Officer (COO) of the
provincial Department, Mr C Boldogh, apologised on
behalf of the Department for the misleading report which he was not aware of,
as in his office, he had a recent detailed report including some previous audit
reports. He promised to avail all the
documents to Members.
Phezukomkhono
Cooperative, which has since collapsed, was located on a 257 hectare farm. The farm, which formerly produced sugarcane,
was repossessed by the Land Bank and was bought by the Department of Land
Affairs for 88 (all women, except 2) members of the Phezukomkhono
Cooperative through the Proactive Land Acquisition Strategy (PLAS). It used to be a model for mixed farming,
producing various vegetables, including paprika and mushrooms, poultry, and
fish farming (aquaculture). To date,
there is not even a structure or fencing on the farm but ruins of what used to
be aquaculture and broiler structures.
Different government departments and public enterprises invested
financial, infrastructural and technical support to
the Cooperative. These included the
Departments of Agriculture and Environmental Affairs, Land Affairs; Economic
Development; Local Government and Trade and Industry; Small Enterprise
Development Agency (SEDA) and Eskom. It estimated that more than R40 million was
invested in the now collapsed Cooperative, including the farm’s purchase price
of approximately R700 000. The
provincial Department of Agriculture, Environmental Affairs and Rural
Development acknowledged that no activity has taken place on the farm since
2005, and the land is still ‘owned’ by the Cooperative members. The provincial Department reported that it is
still busy with one of the many audits that have been done on the Cooperative
since 2006, and reported to be struggling to get hold of Cooperative members
and required information from some of the stakeholders and investors.
Concerns of
the Portfolio Committee
·
That the Department that is
responsible for the provision of services and support to the Cooperative does
not know the whereabouts of Cooperative members. Although the farm has been abandoned, the
initial members of the Cooperative are still liable for the mortgage and all
levies and payments on the land and it should not be difficult to trace their
whereabouts.
·
That it took so long for the
Provincial Department of Agriculture, Environmental Affairs and Rural
Development to pick up that there were problems within the cooperative.
·
Given the extent to which the
cooperative was supported and the financial resources that went into it,
particularly in respect of infrastructure, it is a concern that no audit on
funds allocated to the project, exists.
Resolutions
of the Portfolio Committee
·
The Department should make available
to the Committee all documentation about Phezukomkhono
Cooperative, including details of all stakeholders, partners and government
officials who were responsible for the Cooperative.
·
The Department needs to finalise the
audit of the Cooperative as soon as possible, and come up with a recovery plan
to rectify the situation. The government
cannot afford to waste resources on failing projects while they should be
promoting food security.
The Committee advised the Department that they should desist from
allocating one project to large cooperatives and groupings of people as under
such circumstances, conflict is inevitable.
5.5
Site
Visit to Sikhululelike Agricultural Cooperative, Empangeni
The Sikhululelike Agricultural Cooperative is
an emerging farmer cooperative affiliated to the National African Farmers Union
(NAFU). The Cooperative has 5 hectares
that it has acquired from the local Mzimela Tribal
Council. The Cooperative has no project
in place, but its members plan to farm with vegetables and poultry to supply
their local Pick n Pay and a large supplier to
hospitals and prisons. However, for
project implementation, the Cooperative currently faces serious funding
constraints for infrastructure, including fencing and poultry structures and
equipment, starter chicks, land preparation and production inputs. So far, the Cooperative has not been able to
receive assistance from the provincial Department of Agriculture, Environmental
Affairs and Rural Development.
5.6
Joint
meeting with the Standing Committee on Agriculture, Environmental Affairs and
Rural Development of the KZN Legislature and officials of the provincial
Department of Agriculture, Environmental Affairs and Rural Development, Durban
In an evening meeting at the
The key issue that the Committees agreed on was the poor state of the
extension services. It is apparent from the projects visited that there is a
lack of farmer and cooperative support form the provincial Department. It was mentioned that approximately 55 farms
that were supported by the Land Bank have collapsed in the country. The KZN provincial Department of Agriculture,
Environmental Affairs and Rural Development has to date, received 32 farms
(mostly sugarcane) that form part of the collapsed land reform farms in the
province. The provincial Standing
Committee estimated that approximately R300 million in KZN alone has been
wasted on failed cooperatives and land reform projects, and the Standing
Committee has been struggling to obtain reports on these projects as they are
administered by different government departments and entities.
The Portfolio Committee on Agriculture, Forestry and Fisheries and the
KZN Legislature’s Standing Committee on Agriculture, Environmental Affairs and
Rural Development crafted the following resolutions:
·
The KZN provincial Department of
Agriculture, Environmental Affairs and Rural Development needs to undertake an
investigation into what took place at the Phezukomkhono
Cooperative Farm and produce a comprehensive audit report to both Committees.
·
All available reports, documents and
files on Phezukomkhono Cooperative should be sent to
the Portfolio Committee on Agriculture, Forestry and Fisheries.
·
Both Committees require a report
that details the provincial Department’s future plans on reviving the Phezukomkhono Cooperative.
·
Furthermore, the provincial
Department needs to provide the two Committees with a detailed report of other
projects and cooperatives that have or are about to collapse in the
Province. These reports should include
details as to whether these projects are state owned or privately owned, their
location, details of members, stakeholders or service providers, current
status, etc.
·
The national Department of
Agriculture, Forestry and Fisheries should provide the Portfolio Committee with
a similar detailed status report on all projects (countrywide) that have
collapsed and those in the state of near collapse.
·
The DDG from the national Department
of Agriculture, Forestry and Fisheries, Ms Titi,
needs to follow up with the provincial Department on all the resolutions that
pertain to the province.
6. Conclusion and Recommendations
The Portfolio Committee on Agriculture, Forestry and Fisheries noted
with concern the role of extension services, which negatively impacted service
delivery in both the
In light of the issues stated above and those that have been observed by
the Committee in the two provinces, the Portfolio Committee on Agriculture,
Forestry and Fisheries made the following recommendations:
·
The Department of Agriculture,
Forestry and Fisheries and the Department of Rural Development and Land Reform
should jointly present to Parliament (Portfolio Committee overseeing the two
Departments) their respective roles in assisting resource poor farmers and land
reform beneficiaries; promoting rural development and agrarian reform; ensuring
the country’s food security; as well as the role of the extension service in
fulfilling this mandate.
·
The Portfolio Committee could ask
the Office of the Auditor-General to undertake a study on the Ncera Farms (Pty) Ltd in the
Report to be
considered.