REPORT OF THE PORTFOLIO COMMITTEE ON AGRICULTURE, FORESTRY AND FISHERIES
ON THE BUDGET AND STRATEGIC PLAN OF THE DEPARTMENT OF AGRICULTURE, FORESTRY AND
FISHERIES AND ITS ENTITIES, DATED 14 APRIL 2011
The
Portfolio Committee on Agriculture, Forestry and Fisheries having considered
the Strategic Plans and Budget of the Department of Agriculture, Forestry and
Fisheries (DAFF) and its Entities reports as follows:
1.
Background
The
Department and its entities are required to table their Strategic Plans as set
out by the National Treasury Guidelines. A Strategic Plan sets out an
institution’s policy priorities, programmes and project plans for a five-year
period, as approved by its executive authority, within the scope of available
resources. Its main focus being the strategic outcomes oriented goals for the
institution as a whole, and objective for each of its main service delivery
areas aligned to its budget programmes and, where relevant, also its budget
sub-programmes.
It is
against this background that the Portfolio Committee on Agriculture, Forestry
and Fisheries held hearings on the Strategic Plans and Budget of the Department
of Agriculture, Forestry and Fisheries and its Entities. These hearings were
held in Parliament on the 29-30 March 2011. The briefing was mainly focusing on
the strategic priorities and budget allocation of the Department of
Agriculture, Forestry and Fisheries and Entities for the Medium Term
Expenditure Framework (MTEF) period,
2.
Entities
that were considered:
a) The
Onderstepoort Biological Products (OBP)
b) The
Agricultural Research Council (ARC)
c) The
National Agricultural Marketing Council (NAMC)
d) Ncera
Farms (Pty) Ltd.
e) Perishable
Products Export Control Board (PPECB)
f)
The Forestry Sector Charter Council
(FSCC)
g) AgriSETA
The
Department and Entities reported on the following:
Ø
Outcomes and strategic goals
Ø
Challenges in the sector
Ø
Programmes
Ø
Outputs
Ø
Budget
3.
The
Department of Agriculture, Forestry and Fisheries
The mandate
of the Department of Agriculture, Forestry and Fisheries is to lead,
support and promote agricultural, forestry and fisheries resources management
through policies, strategies and programmes to enhance their sustainable use;
and to achieve economic growth, job creation, food security, rural development
and transformation. The Government priority outcomes through which agriculture, forestry and
fisheries sectors will play a role in addressing the country’s broad national
challenges in the medium term strategic framework (MTSF) are:
Ø Decent
employment through inclusive economic growth (Outcome 4).
Ø Vibrant,
equitable and sustainable rural communities contributing towards food security
for all (Outcome 7).
Ø Protect
and enhance
our environmental assets and natural resources (Outcome 10).
The key strategic goals for the Department
over the MTEF period as
identified in the 2011/12 Strategic Plan and on which each programme’s
strategic objectives are based, are:
Ø Increased
profitable production of food, fibre and timber products by all categories of
producers (subsistence, smallholder and commercial).
Ø Sustained management of natural resources.
Ø Effective
national regulatory services and risk management systems.
Ø A
transformed and united sector.
Ø Increased
contribution of the sector to economic growth and development.
Ø Effective
and efficient governance.
3.1. Challenges in the sector
The
following challenges have been identified:
Ø
The unregulated market environment,
which exposes the sector to fluctuations in world prices,
Ø
The decreasing share of field crops
in agricultural production and
Ø
The growing dominance of retail
chains and an increasing farmer to retail price differential,
Ø
High input costs for, among others,
fertiliser, fuel and feedstock,
Ø
Poorly skilled subsistence and
emerging farmers, who only achieve low production volumes and productivity
levels,
Ø
A lack of agricultural spatial
planning and poor infrastructure, which makes it difficult for farmers to
liaise with buyers, access markets and boost sales,
Ø
Poor information and knowledge
management for small holder farmers, which prevents them from correctly
addressing production challenges, and
Ø
The misalignment between
agricultural research and development (R&D) and practical implementation,
which implies that research, has little impact on the growth and development of
the sector.
3.2.
Challenges in the Commercial sector
The following challenges have been
identified:
Ø There has been a
significant increase in the concentration of the commercial sector as a result
of smaller and less efficient business not being able to take advantage of
increasing economies of scale and being forced out of the sector,
Ø
Inadequate monitoring and
enforcement of compliance in the sustainable use of natural resources,
Ø
Profitability has increased, but at
slower rates, which is attributed to a concentrated few that has been able to
survive the global market and financial challenges,
Ø
Transformation in the commercial
sector in all three sectors (Agriculture, Forestry and Fisheries) remains a
challenge:
i.
Differences in interpretation, and
implementation.
ii.
Transformation is still mainly
translated as the number of ‘black’ individuals in a company.
iii.
Challenge with transformation not
having significant socio-economic impact.
Ø
An increase in production in
agriculture has mainly been in horticultural crops, with a significant decrease
in field crops (source of staple food), which translates into increasing
concerns around National Food Security (Household Food Security),
Ø
Increasing food prices and
anti-competitive behaviour impact on national food security,
Ø
Three important proximal factors are
the slow progress in terms of increasing production efficiency, poor innovation
systems, and the slow rate of opening up new markets and value adding
opportunities,
Ø
Many of the challenges stem from a
lack of implementing programmes and regulations.
3.3.
Challenges in the Smallholder sector
The following challenges have been
identified:
Ø
Weak Support services / extension
services essential to grow and develop the smallholder and subsistent sector,
Ø
Technical support services are
currently inadequate. There is a need for an upscale and expansion of support
offered,
Ø
Lack of spatial plans to guide
implementation of support programmes, access their economic impact and ensure
easy monitoring and evaluation,
Ø
Inadequate and unstructured
intervention with regard to provision of on-farm infrastructure such as water
sources (dams, windmills, irrigation schemes) essential for sustainable production
Ø
Implementation of the mechanisation
support programmes are very weak due to the lack of a targeted programme,
Ø
Lack of support for the established
smallholders to establish commodity groups,
Ø
Inadequate access to agro-processing
industries for value addition,
Ø
No guaranteed market for products
produced by smallholders,
Ø
Poor infrastructure to ensure
equitable access to development finance through the grant system and loans
programmes,
Ø Uncoordinated
or lack of targeted training for smallholders
Ø
Aquaculture – no meaningful investment made in terms
of experimental facilities, hatcheries, research and disease management to
promote aquaculture,
Ø
Non-existent support (access to
equipment, finance, extension and training) for the established smallholders in
the fishery industry,
Ø
Poor infrastructure to ensure
equitable access to development finance through the Department’s grant system
and loans programmes
3.4. Policy and programme interventions
The Department’s policies and
programme interventions derive from:
Ø
The adoption by government of the 12 Key
outcomes at the January 2010 Cabinet Lekgotla.
Ø
The signing of performance agreements and delivery
agreements with DAFF directly contributes to the three national priority
outcomes that relates to the Department’s mandate.
Ø
The second Industrial Policy Action Plan (IPAP2).
Ø
The New Growth Path.
Ø DAFF’s
Draft Integrated Growth and Development Plan for the three sectors of the
Department.
3.5.
Programme interventions: development
targets
Ø
Increase the number of smallholder farmers from 200
000 to 250 000 by 2014,
Ø
As a result of the continued success of commercial
farming, the number of employees on commercial farms should rise from 780 000
to 800 000 by 2014,
Ø Aim to place 300 000
households in smallholder schemes by 2015 (goat, sheep, wheat, aquaculture,
forestry, etc.),
Ø Create 145 000 jobs in
agro-processing by 2020,
Ø
Create 5520 jobs through Community Works Programme
Plan by 2014,
Ø
Rehabilitation of a percentage of agriculture land by
2014,
Ø
Recovery of targeted fish stocks (abalone, hake and
West Coast Rock Lobster) by 10% by 2014.
3.6
The Departmental Budget
The total
budget of the Department was R4 billion for 2010/11 while R4.7 billion is
budgeted for 2011/12. The overall budget allocation for 2011/12 has increased by
12.5 per cent in real terms compared to the previous financial year’s
allocation. A significant proportion of the Department’s budget for 2011/12
will be allocated to the Administration (27.5 per cent) and the Food Security
and Agrarian Reform (26.4 per cent) programmes, respectively, while the Trade
Promotion and Market Access will receive only 4 per cent of the Department’s
total allocation.
3.6.1
Programme 1: Administration
The purpose of the Administration
programme is to provide strategic leadership, management and support services
to the Department. This programme’s budget for 2010/11 was R1.1 billion while
for 2011/12, R1.3 billion is budgeted. The Administration programme budget for
2011/12 showed a nominal increase of 16% and 10.7% in real terms.
This increase seeks to:
Ø Assist in
reviewing the PDMS system, monitor and evaluate performance,
Ø Improve
financial systems and practices,
Ø Align the
communication strategies to the Government National Communication Strategy
Ø Optimise ICT
infrastructure and utilization.
3.6.2 Programme 2: Agricultural Production, Health
and Food Safety
This purpose of this programme is to
manage the risks associated with animal diseases, plant pests, genetically
modified organisms (GMOs) and registration of products used in agriculture; to
promote food safety and to create an enabling environment for increased and
sustainable agricultural production. The programme’s budget for 2010/11 was
R610.2 million while R891.9 million is budgeted for 2011/12. This programme’s
budget showed an increase of 39.5% in real terms.
This increase seeks to:
Ø
Create an enabling
environment and partnerships for the support of the production strategy,
Ø
Facilitate programmes,
schemes and support packages for smallholder farmers
Ø
Increase the number of
regulatory compliance and monitoring interventions (Regulatory interventions
are policies, legislation, strategies, regulations, risk analysis, inspections,
surveys, testing and diagnosis, permits and certification)
Ø
Create an enabling
environment for partnerships with other government departments and stakeholders
for an efficient Bio-security system
3.6.3 Programme 3: Food Security &
Agrarian Reform
The Food Security and Agrarian
Reform programme aims to facilitate and promote food security and agrarian
reform programmes and initiatives. This programme’s budget was R1.1 billion for
2010/11 while R1.2 billion is budgeted for 2011/12. This budget showed a real
increase of 8.7%. This aims to:
Ø
Facilitate the
implementation of training extension personnel in technical and generic skills
Ø
Provide appropriate training
to new producers
Ø
Monitor compliance to food
security policy
Ø Implement the Zero Hunger Strategy
Ø
Facilitate the
implementation of training extension personnel in technical and generic skills
Ø
Provide comprehensive
support to new producers
Ø
Monitor compliance to the
mechanization policy
Ø Develop engineering norms and standards on production technologies
Ø Audit departmental processes and deliverables aimed at vulnerable groups,
youth, subsistence and smallholder producers
3.6.4 Programme 4: Trade, Promotion and Market Access
The purpose of the Trade Promotion
and Market Access programme is to ensure value chain integration and to
facilitate market access for agriculture, forestry and fisheries products. This
programme’s budget for 2010/11 was R145.6 million while R191.8 million is
budgeted for 2011/12. This budget showed an increase of 25.7% in real terms.
The increase is to:
· Facilitate and support
the establishment of commodity structures and associations,
· Facilitate the
development and implementation of sector charters and strategies,
· Facilitate intra-Africa
trade on DAFF products by promoting the export of valuable added trade.
3.6.5 Programme 5: Forestry & Natural Resources Management
The
Forestry programme purpose, as stated in the Department’s 2011/12 Strategic
Plan and the National Treasury’s 2011 Estimates of National Expenditure (ENE),
is to develop and facilitate the implementation of policies and targeted
programmes to ensure the management of forests; the sustainable use and
protection of land and water; as well as to manage agricultural risks and
disasters. The programme’s budget was R755 million for 2010/11 while R770.8
million is budgeted for 2011/12. This budget showed a nominal increase of 2 %
and a decrease of 2.6% in real terms.
The
programme seeks to:
Ø
Create an enabling
environment for planting 40 000ha of forest.
Ø Provide support to 10 000 new small growers.
Ø
Support refurbishment and
maintenance of 2% of smallholder government irrigation schemes.
Ø
Facilitate the creation of 5
200 job opportunities.
Ø
Develop and implement
disaster risk mitigation strategies.
Ø
Develop and implement
climate change adaptation plans.
Ø
Rehabilitate 3 200ha
indigenous forests and woodlands.
Ø
Increase number of hectares
of agricultural land under rehabilitation.
Ø
Develop and implement
climate change adaptation plans.
3.6.6 Programme 6: Fisheries
Management
The purpose of the Fisheries
programme is to promote the conservation and sustainable use of fisheries
resources. The Fisheries programme budget was R283.5 million in 2010/11 while
R324.2 million is budgeted for 2011/12. This budget showed an increase of 9% in
real terms.
The aim is to:
Ø
Improve Small-scale
Fisheries Policy.
Ø
Develop the aquaculture
sector.
Ø
Empower communities and
provide support through Working for Fisheries programme.
Ø
Facilitate fishery
programmes for economic development.
Ø
Fisheries research to inform
Total Allowable Catches /Total Allowable Effort and Stock Recovery Strategy
Ø
Integrate
Fisheries Security Strategy
Ø
Improve
stakeholder engagement, management and communication
Ø
Improve the marine resource
strategy
3.7 Committee Recommendations
for Programmes 1 to 6
The
Portfolio Committee recommends as follows:
Ø
A report must be submitted
to the Committee on how DAFF has re-structured its programmes and how it has
re-prioritized its budget for the new programmes.
Ø
The Department must outline
the role it plays with regard to tariffs and subsidies.
Ø
The Department must give the
Committee specific details on how they will ensure the creation of jobs by
smallholder producers through agro-processing.
Ø
The Department must
cooperate with existing commodity groups rather than re-inventing the wheel.
Ø
There must be an established
financing model for fisheries.
Ø
There must be well
coordinated training programmes between DAFF and other stakeholders to better
serve the developing farmers.
Ø
DAFF must present to the
Committee a detailed progress report on the implementation plan on policy and programme
interventions as part of their quarterly reviews.
Ø
The Department must outline
the programme on the interventions, how it would progress per year and which
provinces it was targeting.
Ø
The Department must provide
its annual performance plan, outlining a plan per province.
Ø
A plan on the extension
services training must be made available to the Committee.
Ø
The Department must present
to the Committee, the Zero Hunger Strategy.
Ø
The Department must outline
how it administers the Marine Living Resource Fund in fisheries.
Ø
There must be engagement with the provincial
research institutions to promote and achieve co-ordination of research
institution activities.
Ø
A report on the reasons why the ARC had been
underfunded for such a long time must be made available to the Committee.
Ø
A detailed quarterly report on a number of
smallholder farmers that are supported, their location/s and the support
activities that they receive must be made available to the Committee.
Ø
DAFF must report back to the Committee on
time-frames as per programme interventions by the end of May 2011.
Ø
DAFF must consider options with regards to
financing models that will benefit developing farmers at accessible and
affordable interest rates.
4. Entities
4.1 The
Onderstepoort Biological Products (OBP)
The Onderstepoort Biological
Products (OBP) is a state-owned company that operates in terms of the
Onderstepoort Biological Products Incorporation Act, 1999 (No. 19 of 1999). The
mandate of the OBP is the manufacturing of veterinary medication for the
prevention and control of animal diseases that impact on food security, human
health and livelihoods. The OBP is operating without a
Board, but the OBP management took a decision that all business will operate as
usual until a Board is appointed. The Board ceased to exist in October 2010.
The organisation had been reluctant to present the Strategic Plan that was not
approved by the Board to the Committee. It has been difficult to operate
without an oversight body.
A decision
was taken in 2008 that the organisation should introduce cost-cutting measures.
The organisation had saved funds to buy equipment to operate but the Public
Finance Management Act (PFMA) does not allow them to do so in the absence of
the Board. The revenue for the current financial year is R158 million,
of which R128 million is from local sales and R30 million from export, and this
is R64 million above budget. This has been achieved on the back of a
large increase in vaccine doses produced, resulting in more animals being
vaccinated. Operating profit at the end of February 2011 stood at R30
million, compared to a R4.1 million loss the previous year. OBP had
therefore managed to turn around its financial situation.
There is a need to
recapitalise the facility, as its infrastructure and equipment are old.
OBP had the funds to procure new equipment, but was hamstrung by the
requirements of the PFMA. Management had to decide whether to proceed
with the purchase of urgently needed equipment, which would in fact exceed their
delegated authority.
The replacement of
critical equipment to ensure security of vaccine supply would cost R48, 3
million in 2011/12, and a further R71, 8 million over the following two
years. If necessary, external funding would be sought.
The
Committee raised a concern about operations of the Entity taking place without
a Board and felt that the Minister was delaying the operations by not
confirming the Board of OBP when interviews have been finalised.
4.1.1 Strategic Objectives:
Ø SO1 – Build
an innovative, passionate, high performance culture.
Ø SO2 – Build
a profitable, sustainable and socially responsible bio-manufacturing company.
Ø SO3 – Focus
on core competencies and unique strains, products and know-how to develop new
product & leverage strategic partnerships.
4.1.2 Strategic Goals
Ø
Growing revenue and operating costs.
Ø
Investing in profits by way of
developing new vaccines.
Ø
Replacing critical equipment to
maintain manufacturing capacity.
Ø
Support the emerging sectors through
the Provincial Government and rural vaccine distribution opportunities.
Ø
Prioritise skills development
through Learnership and Internship programmes.
Ø
Increase bursaries and development
programmes budget.
Ø
Prioritise GMP Projects during
2011/12.
4.1.3 Committee
Recommendations
Ø
The OBP must assess their funding requirements
for the recapitalisation of its facility and the replacement of old equipment
and submit a detailed report to the Committee by the end of the first
quarter.
Ø
Permanent positions must be filled as a matter
of urgency.
Ø
Other Departments must be urged to access
products from the OBP rather than from international companies.
Ø
The DAFF must make available the report on Board
and staff appointments by the 18 April 2011.
Ø
The DAFF must appoint the OBP Board timeously.
Ø
Reasons on why the current CEO’s contract is not
being terminated must be made available to the Committee.
Ø
OBP must report back to the Committee by the end
of May 2011.
4.2 The Agricultural Research Council (ARC)
The Agricultural Research Council (ARC) was established by the
Agricultural Research Act, 1990 (Act no. 86 of 1990, as amended by Act 27 of
2001). The ARC is the principal agricultural research institution in
The ARC funds from contracts had decreased and it was therefore
unable to grow its human resources and it could not achieve all its objectives.
The ARC cautioned that although it was under-funded for the type of work that
it carried out, it had been able to cope up to this point, but warned that the
decrease in funds obtained from contracts placed greater strain on its
resources.
There was also a need to increase food production in a wide range
of other food categories, such as vegetables, fruit and teas, and to improve
the quality of local production. This objective would lead to job
creation and poverty alleviation. Rural farmers with limited incomes
should focus on high value crops such as fruit trees and essential oils.
4.2.1 Strategic
Objectives
Ø
Sustainable use of agricultural resources,
Ø
The management and mitigation of agricultural
risk,
Ø
Food safety and security,
Ø
Technology transfer and
Ø
The generation of new knowledge
4.2.2 Key Challenges
Ø 1%
Decline in operational parliamentary grant (PG).
Ø External
Income growth declining year on year.
Ø
Limited funding to fulfill the mandate.
–
required number of critical vacancies
–
Equipment
–
Research and development mandate
–
Agrarian reform needs – technology
transfer
–
Mitigating agricultural risks
Ø
Aging Infrastructure.
Ø
Ageing scientific capacity (demographics).
Ø
Reduced skills base for recruitment
(scientists, engineers & researchers etc).
Ø
Urban encroachment – increasing costs of
security and competing demands for land use.
Ø
Meeting its transformation obligations e.g.
50/50 gender representation.
Ø
ICT information systems requiring upgrade.
Ø
Insufficient funding (PG and contract
income) that may lead to staff lay-offs.
4.2.3 Key Focus Areas
Ø Submission
of comprehensive motivation for additional Parliamentary Grants.
Ø Identification
of new revenue streams to increase external income.
Ø Review
and prioritization of programmes to manage costs.
Ø Review
of current ARC infrastructure requirements.
Ø
Cost sharing arrangements with
Universities.
4.2.4 Committee
Recommendations
Ø
There has to be a drastic increase in the
funding of the ARC.
Ø
There must be a dedicated economic research division
that will focus on areas of mitigating and managing risk and future projections
in the agricultural sector.
Ø
The ARC must instigate programmes to DAFF for
the purpose of transfer of information to the farmers.
Ø
The ARC must present a report on how the Kaonafatso ya dikgomo programme benefits
developing farmers and how the Animal Recording Scheme fits into the programme.
4.3 Ncera Farms (Pty) Ltd.
Ncera Farms
(Pty) Ltd is a public company listed in Schedule 3B of the Public Finance
Management Act, 1999 (PFMA), with the Department of Agriculture, Forestry and
Fisheries as the sole shareholder.
In terms of the
mandate granted by the shareholder the objective of Ncera Farms (Pty) Ltd is to
provide:
Ø
Industry focused
farm management training
Ø
Provision of
farmer support services
Ø
Design of
franchise type agricultural business models.
4.3.1 Challenges
Ø
Absence of a CEO
and Board.
Ø
Lack of governance and policy.
Ø
Delays in administrative requirements.
Ø
Irrelevant and skewed services and programmes.
Ø
External challenges caused by illegal
settlements.
Ø
Poor farm infrastructure.
Ø
Lack of respect between stakeholders and
ineffective enterprises.
4.3.2 Committee
Recommendations
Ø
DAFF must submit to the Committee, audited
Financial Statements and Budget of Ncera Farms for 2010/11 and 2011/12
financial years, as well as the 2010 Forensic Audit Investigation Report before
the 24 May 2011. The Committee needs this information to consider what the
Department presented as a Strategic Plan.
Ø
The DAFF must meet with the Provincial
Departments, agricultural training institutions and other relevant stakeholders
to strategise on a way forward to take Ncera Farms out of the current crisis
situation.
Ø
While the Committee is still awaiting all the
reports from DAFF, Ncera Farms must continue its operations on a month-to-month
basis.
4.4 The National Agricultural Marketing
Council (NAMC)
The National Agricultural Marketing Council (NAMC) was
established in terms of Section 3 and 4 of the Marketing of Agricultural
Products Act (No. 47 of 1996), as amended by Act No. 59 of 1997 and Act No. 52
of 2001. The mandate of the NAMC is to advise the Minister of the DAFF and other
directly affected groups on agricultural marketing policy.
Its main objectives are to:
Ø
To increase market access for all participants
Ø
Promoting efficiency of the marketing of
agricultural products
Ø
To optimize export earnings and
Ø
To enhance the viability of the agricultural
industry.
The Council was targeting the job creation, information exchange,
trade, training, and budget allocation. The current market structure was shaped
largely to cater for existing mainstream market participants. The market
structure at the processing and retail level was highly concentrated. The
reason for this was because it was inherited from the previous regulated
marketing regime and Government support incentives, and because it was
providing a breeding ground for a non-optimal competitive environment and high
entry barriers for smallholder farmers.
4.4.1 Key actions
Ø
A paradigm shift to benefit the grain industry,
meat industry, cotton industry, fish processing and forestry,
Ø
The size of the cake needs to be increased by
reviewing the bio-fuel policy; realignment of export promotion policy and
tools; and encouraging buying of local products,
Ø
The potential of quick wins needed to be
leveraged so as to develop new and expand existing development incentive
schemes; and to leverage the potential of institutional markets
Ø
Contributions by the private sector.
4.4.2 Job creation
measures as presented by the NAMC
Ø National Red
Meat Development Project (NRMDP)
Its funding value is R42 million spread over 5 years. In order to
realise this, funding must be secured; infrastructure must be developed; there
must be market information; there is a need for training; and special
programmes should be designed per custom feeding programme.
Ø
Vineyard development scheme
Its investment value is R62 million for 570 ha of vineyard.
Funding is required for infrastructure, operating capital, training and
extension services, and market linkages.
Ø
Grain crop development scheme
Its investment value is R140 million. Funding is required
for operational and risk mitigation funding, training and extensions services,
on farm storage, and mechanisation.
Ø
Deciduous Fruit Trust - tree
planting project, +- R5.1 million Comprehensive Agricultural Support Programme
(CASP) funds administered in 2010
Total = R12.2 million. 1st Phase = 1 000 ha by 2014 – 600 ha in the
Ø
Winter Cereal Trust - Commercialisation
of and promotion of wheat production amongst developing farmers in the
Ø
Maize trusts - funding to the
Grain Farmer Development Association to assist small holder farmers in soil
preparation, input costs, harvesting and storage of grain.
Ø
Oil and Protein Seed Trust - its
aim is to assist 165 emerging farmers to plant 15 100 ha of sunflower. A
total of 1 250 temporary job opportunities would be created during the season.
4.4.3 Budget Allocation:
2011/12 – 2013/14
The NAMC has received an MTEF budget allocation letter for the
period from DAFF.
Ø
2011/12 R35
988 000
Ø
2012/13 R30
115 000
Ø
2013/14 R32
220 000
The decrease of R5 million in 2012/13 is a result of the fact that
the NAMC had in the previous financial years, received additional funding to
expand the export promotion programme meant for affording 100 emerging
agribusinesses the opportunity to participate in international trade. This
funding was for the Medium Term Expenditure Framework (MTEF) period 2009/10 –
2011/12 only.
4.4.4 Other sources of
income
The NAMC is anticipating generating income from the investment of
the grants to be received from DAFF at the beginning of the financial year
2011/12.
The following are the projected interest to be generated:
Ø
2011/12 R1
350 000
Ø
2012/13 R1
200 000
Ø
2013/14 R1
400 000
Total income for the MTEF period:
Ø
2011/12 R37
249 000
Ø
2012/13 R31
315 000
Ø
2013/14 R33
620 000
4.4.5 Committee
Recommendations
Ø
There must be an economic research unit that
analyses future market requirements of various commodities based on economic
principles that advises DAFF on what should be produced in future.
Ø
The NAMC must regularly report to the Committee
on progress made on its job creation measures.
Ø
The NAMC must provide the Committee with full
details on various activities of its Trusts including their financial
statements.
4.5 The
Perishable Products Export Control Board (PPECB)
The
Perishable Products Export Control Board (PPECB) is a national public entity
that is listed under Schedule 3A of the
Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA). The PPECB
derives its mandate from the Perishable Products Export Control Act,
1983 (Act No. 9 of 1983) as amended. The mandate of the PPECB is to certify
perishable products for quality and safety, apply cold temperature protocols
(cold chain) for designated markets, conduct research and provide advice and training.
The PPECB aligns its strategies with those of the Department of Agriculture,
Forestry and Fisheries (DAFF) with careful attention given to the Medium Term
Strategic Framework (MTSF). The PPECB’s strategic objectives for the 2011/12
financial year are therefore, to:
4.5.1
Strategic Objectives
Ø
To enhance the credibility of South
African Export Certificate.
Ø
To support competitiveness of
Ø
To strengthen PPECB’s capacity as a
credible source of strategic information for serving Industries and
Stakeholders.
Ø
To support Government in ensuring
confidence in quality assurance and food-safety systems for local perishables
products markets.
Ø
To support Government in building
systems to ensure compliance with South African quality and food-safety
standards for imported perishables products.
4.5.2 Budget
2011/12
The Budget of the PPECB is mainly informed by two drivers, namely, the
fulfilment of the mandate from government and execution of the previous
three-year strategic plan that was approved by the Board and approved by
PPECB’s Executive Authority and the Parliamentary Committee.
The budget provides for a shortfall of R2.8 million that is to be funded
from previous year’s surpluses. The R2.8 million funding relates to the
implementation projects namely the development of an electronic export
documentation system of R1.4 million, a major upgrade of Navision of R900K and
preparing the PPECB for an ISO 17020 certification of R500k. The PPECB received
a budget allocation of R15 million from DAFF over three years.
A more sustainable strategy is to re-engineer current operational
methodologies that will lead to improved efficiencies without compromising the
desired outcome. Another opportunity would be for PPECB to grow its scope in
value adding services and generate additional income by leveraging PPECB’s
infrastructure, intrinsic knowledge and existing capabilities. The budget
provides extensively for interventions to transfer skills and management of
change through training, development, mentoring and increase supervisory
capacity.
The PPECB CEO has been suspended by the Board based on the serious
allegations levelled against him.
4.5.3
Challenges
Ø Capacity
of the Department of Agriculture, Forestry and Fisheries (DAFF) to support realisation
of the PPECB Strategic Objectives.
Ø Capacity
shortage caused by aging technical skills.
Ø Effectiveness
of communication due to the diversity and geographic spread of stakeholders.
Ø Outdated
legislation and regulations.
Ø Escalations
in business costs
Ø Increased
international competitiveness.
4.5.4
Recommendations
Ø The
must provide a full report to the Committee on the suspension of the CEO and
the outcomes thereof.
4.6 The Forestry Sector Charter Council
(FSCC)
The
FSCC was launched on 22 May 2008 and was legally constituted as a Section 21
Company. Its main responsibility is to oversee, monitor and encourage
implementation of the Charter. The Council comprises people from the forestry
industry, Government, labour, communities, the Forest Industries Education and
Training Authority (FIETA) and the Independent Development Corporation (IDC).
Its main objective was to extend economic opportunities and benefits of the
forestry sector to the previously disadvantaged communities.
The CEO was suspended by the Board on the 17 February 2011 after a
few allegations were made against him and following investigations. The CEO was
requested to make available the budget of the Council but that was never made
available until the relationship between him and the Board was irreparable.
Presently, the Chairperson of the Council oversees the running of corporate
matters. There is also no Financial Officer. The Council operates with a budget
of R3 million, and overemphasised the need to have a CEO and a CFO who will manage
the Council and oversee its budget, respectively. The Board admitted that they
were reluctant to appear before the Committee, which is for the first time,
given the current state of the Council.
The Committee was not happy with the Council’s current status and
was not impressed with the unavailability of its financial information.
All Entities’ representatives were reminded that they should
openly outline their matters that hamper operations to the Committee in order
for the Committee to be able to assist.
4.6.1 Committee
Recommendations
Ø
Another meeting must be convened to focus on the
challenges facing the Council and the transformation of the forestry sector.
Ø
Financial information of the Council must be
made available to the Committee within two weeks of the strategic plan and
budget hearings.
Ø
FSCC must provide the Committee with full
details on the suspension of the CEO.
4.7 Agricultural Sector Education and
Training Authority (AgriSETA)
The term for the AgriSETA Board was ending on the 1st
April 2011 and that was why they could not attend the meeting.
4.7.1 Overarching Aims
for 2011/12
Ø To disburse 78% of possible mandatory grants– R85
million
Ø
To disburse al
discretionary funds – R84 million
Ø
To disburse all
PIVOTAL grants – R22 million
Ø
To roll-out
large scale land reform project – R64 million over 3 years
Ø
To increase
focus on commodity organizations
Ø
AgriSETA to
remain one of the leading Sector Education and Training Authorities (SETA) in
offering occupationally aligned qualifications
Ø
To continue
promoting learnerships, skills programmes, bursaries, internships, mentoring
and Adult Basic Education and Training (ABET)
4.7.2 AgriSETA
priorities to National Skills Development Strategy
Ø
Sector Intelligence: to offer credible skills
planning, and career and vocational guidance
Ø
Responsive Management Information System (MIS):
to offer credible skills planning, and career and vocational guidance
Ø
Scarce skills information: to offer credible
skills planning, and career and vocational guidance
Ø
Responsive to rural needs: to support coops,
small enterprises, etc
Ø
Integrated rural support: to support
cooperatives, small enterprises, and to form partnerships with government
Ø
Impact on Black Economic Empowerment (BEE) and
equity: to find better use of workplace learning
Ø
Decent work: to provide access to occupational
learning
Ø
Responsive provider sector: to promote growth in
the Further Education and Training (FET) sector
Ø
Provincial presence: to form partnership with
government.
4.7.3 Allocations of the
R106 million Discretionary Funds for 2011/12
Ø
Sector Intelligence – R1.3 million
Ø
MIS Revised and aligned to NSD III – R0.3
million
Ø
Career Information available throughout sector –
R0.6 million
Ø
Skills development support to the rural economy
– R45 million
Ø
Development of Extension Officers – R2.0 million
Ø
Agri-BEE Charter support – R0.3 million
Ø
Decent workplace work – R38.9 million
Ø
Provider Development and Integration – R3.8
million
Ø
Environmental Focus – R1.3 million
Ø
Good governance and decent conduct – R3.9
million
Ø
Provincial presence – R0.6 million
4.7.4 Learning
programmes to be supported
Ø
800 Learnerships – R14.7 million
Ø
1 200 skills programmes (employed) – R5.3
million
Ø
800 skills programming (under resourced) – R3.5
million
Ø
80 apprentices – R3.4 million
Ø
160 foundational learning programme – R5.3
million
Ø
40 bursaries – R1.5 million
Ø
50 new ventures creations – R1.8 million
Ø
Rural structures, commodity organisations –
R12.5 million
4.7.5 Research
Activities
Ø
210 post-graduate research programme have been
funded
Ø
26 Agricultural Research Council (ARC)-specific
post-graduate research bursaries have been funded
Ø
Every 5 years extensive research into the
agri-sector is being conducted
Ø
During 2010/11 a sum of R0.3 million was
allocated into Agri-BEE research
Ø
R1.3 million for 2011/12 is set aside for
research into environmental matters
4.7.6 Challenges
Ø
AgriSETA experienced delays in obtaining service
level agreement from the Department of Higher Education and Training (DoHET)
Ø
Rural development requires high level of
commitment from all Government departments
Ø
Poor and Ad-hoc access to National Skills Fund
Ø
Low levels of education in the agricultural
sector
Ø
Few young people entering the sector.
The Committee applauded the AgriSETA for their dedication in the
work that they do and the excellent presentation that covered what was
required.
5. Conclusion
The Committee acknowledged that there are entities that are
working hard to fulfil their mandates and commended these, in particular those
that are not subsidised by the government such as the PPECB and the OBP.
However, the Committee felt that a lot of work still needs to be done on those
that are faced with challenges and the Department must take the lead. Finally,
the Committee raised their concern regarding the serious lack of collaborations
on training and research activities between the Department, its Entities and
other departments such as Rural Development and Land Reform, as well as among
entities.
6. Recommendations
The Committee recommends that the strategic plan and budget of the
Department of Agriculture, Forestry and Fisheries (Vote 26), including those of
the following Entities, be approved and passed:
a) The
Onderstepoort Biological Products (OBP)
b) The
Agricultural Research Council (ARC)
c) The
National Agricultural Marketing Council (NAMC)
d) The
Perishable Products Export Control Board (PPECB)
e) The
Forestry Sector Charter Council (FSCC)
f)
Ncera Farms (Pty) Ltd. – notwithstanding the challenges facing Ncera Farms
(Pty) Ltd.
Report to be considered.