The African Farmers Association of South Africa (AFASA) is concern by recently tabled Budget Vote by Minister Senzeni Zokwana of the Department of Agriculture, Forestry and Fisheries (DAFF). AFASA is concerned about the reduction of the DAFF budget as this could compromise the government’s goals of boosting the economy and creating jobs.
Mr Aggrey Mahanjana, AFASA Secretary General, said the organisation expected the agriculture budget to grow significantly due to the numerous challenges faced by the sector. This, coupled with the government’s National Development Plan objectives of creating one million jobs by 2030 to boost the economy through the sector. “The Minister’s reduced budget does not demonstrate government’s commitment to implement the NDP and grow the economy,” said Mahanjana.
Last year’s budget was R6, 383 billion compared to this year’s R6, 333 billion. Although the cut does not seem to be significant, Mahanjana said it is enough to get the farmers worried as they are expecting year-on year-growth of the agricultural budget.
“We are concerned that the budget of agriculture was reduced while farmers are still faced with the effects of drought, fuel, energy and general high input costs. We don’t understand why farmers or our sector should be punished because of other failed departments. We can’t talk of food security on one hand and on the other hand we don’t provide adequate resources for that, and we can’t expect the sector to create jobs while the support to the sector is dwindling,” Mahanjana said.
Comprehensive Agricultural Support Programme (CASP)
AFASA agrees with the Minister that CASP could play a crucial role in supporting smallholder producers who will supply their produce to the Agri-Parks across the country. However, the budget should then be used productively. The biggest problem with CASP is the lack of capacity and bureaucracy within the provincial department of agriculture’s offices. Also, the selection of beneficiaries is not always done correctly. We urge the department to improve on these, because failure to do so, would result in the collapse of this very important intervention from government. One needs to understand that the success of Agri-parks depends on primary production to feed into them. The importance of CASP can never be over emphasized.
“We believe the R1.1 billion CASP allocation to directly support farmers with infrastructure, production inputs, training and capacity building is insignificant and should be increased further to achieve these goals. With this small budget, we call on the department to prioritize and focus on projects that will create jobs and ensure food security not Projects that will ensure political gains. Radical transformation should not only be a buzz word that only ends in speeches and lip service, it must be shown through the AgriBEE commitments and resources. There must be targeted intervention for radical transformation in the agricultural sector,” he emphasized.
AFASA welcomed the Minister’s report on the increase of jobs in the sector which is reported to be 211 000 jobs created in the third quarter of 2015, the 743 increased number of smallholders and the increase of agro-processing sales by 8.4%.
Agriculture’s economic contribution
AFASA also applaud the department in its achievements in bringing underutilized land into production and other achievements the Minister reported on. According to the Minister, in the 2014/15 financial year, 136 253 hectares of land were put under production of maize, wheat, beans, vegetables and fruits among others, through CASP and Ilima/letsema. He further indicated that the department was also targeting to put 150 000 hectares for production through CASP and Ilima/Letsema in 2016/17 and R880 million is set aside for this purpose.
Together with the DTI, the Minister said his department planned to link small holder entrepreneurs with the mainstream market through the Supplier Development Programme, the Preferential Procurement Policy Framework Act and other related interventions aimed at linking small and medium size enterprises with the markets. “We have been calling for this over the years and we hope it is finalized as soon as possible.”
Although AFASA welcome the Department’s reported intervention on drought, the organization feels that the reduced budget will affect efforts of curbing the drought’s effect on smallholder farmers. “We appreciate the government’s intervention, the 224 boreholes and the distribution of about 320 000 bags of animal feed to the affected farmers,” said Mahanjana. However, he said the issue of drought goes deeper. Farmers, especially the smallholder farmers, continue to feel the effects of the drought. Earlier this year, AFASA wrote to the Minister proposing the following:
- Farm worker salaries subsidies to avoid job losses – The farmers said because of their affected income sustaining the running cost could be difficult without having to cut on costs, which laying off workers would be top on the list. Should government consider this, it should only be applicable to farmers who have registered their farm workers with the department of labour.
- Energy (Eskom) bills subsidies – This type of subsidy, according to the farmers, should be structured in a way that government only subsidises farmers on the fixed farm electricity costs not the usage.
- Debt (production loans) subsidies – Farmers propose that government assist by paying off their debt for the previous season as financing production for the next season would be difficult with their current debt.
- Making grazing available to farmers on government owned unused farms
- Use farmers’ associations or commodity organizations as service providers for drought relief – Farmers argued that unlike service providers used currently, farmer organizations as non-profit organizations would not be escalating prices to maximise profits but would roll out the process in good faith to properly assist their fellow farmers.
- -On a long term the government must seriously consider the implementation of a subsidised index based insurance scheme which NERPO has been calling for many years.
- -The issue of establishing fodder banks or supporting farmers to establish the fodder banks is also highly recommended
“AFASA still maintain its position in this regard and will continue to engage with the Minister and his department in trying to ensure that farmers receive proper support as far as the drought is concerned,” concluded Mahanjana.
[Commentary] – As hundreds of delegates from around the world and Africa descended on Accra, Ghana for the 12th Comprehensive Africa Agriculture Development Programme Meeting (CAADP Partnership Platform) last week, all in the name of agriculture, the words of Kwame Nkrumah who led Ghana to independence from Britain in 1957 and served as its first prime minister and president came to mind:
“Something in the nature of an economic revolution is required. Our development has been held back for too long by the colonial-type economy. We need to reorganise entirely, so that each country can specialise in producing the goods and crops for which it is best suited.”
Africa’s Green Revolution has been suspended for far too long, despite its abundance in land, right climate, good soils and all the potential it has to be the food basket of the world. Africa’s agriculture is still faced with major challenges. With a food import bill of more than 30 billion Euros a year, indeed something in the nature of the continent’s (agriculture) economic revolution is required.
Although agriculture is competing with many other needs of the continent’s population, the sector remains the largest source of income and Africa’s biggest opportunity to eliminate poverty and cultivate significant prosperity for its people. At the meeting, the Former President of Nigeria, Olusegun Obasanjo (himself a farmer), launched the Africa Food Prize – a clarion call for a generation of bold, innovative individuals and institutions to reach new heights and achieve great things for Africa. Since leaving office, Obasanjo have been involved in various agricultural development projects for which he has raised more the US$10 million.
The Africa Food Prize through the diversity of winners, seeks to signal to the world that smallholder agriculture (the predominant feature of African agriculture) is finally on the path to prosperity on the continent. About 90% of farm holdings for example, in Ghana are less than 2 hectares in size, although there are some large farms and plantations, particularly for rubber, oil palm and coconut and to a lesser extent, rice, maize and pineapples.
The US$100, 000 Prize also aims to celebrate Africans who are taking control of the continent’s agriculture agenda and changing the reality of farming in Africa, from a struggle to survive, to a business that thrives. The Prize will be awarded annually at the African Green Revolution Forum, starting with the 2016 AGRF scheduled for 5-9 September in Nairobi, Kenya.
Agriculture on the continent is standing on the verge of a revolution…only time and effort will determine the shape and intensity of this revolution. Under the theme “Accelerating Implementation of CAADP through Innovative Financing and Renewed Partnerships” – the sector continues to look for the investments and partnerships it can get.
Delegates at the 4-day meeting also learned about investments from The MasterCard Foundation Fund for Rural Prosperity (US$10, 6 million) and Standard Bank of South Africa (US$100 million) about entrepreneurial and innovative agricultural support projects on the continent.
The Intsika Team wishes to thank NEPAD and CAADP for the opportunity to be part of the 2016 event, as the official media partner, where we captured proceedings on film and interviewed various high-profile individuals on the future of sector. If you wish to order a DVD from us (free of charge), please email Malixole Gwatyu at: firstname.lastname@example.org
South African agriculture received a hail of criticism at the first National Agricultural Marketing Council Symposium (NAMC) held in Pretoria amongst others for a lack of transformation and keeping the status quo for a conglomeration of a few people. Mr Mzwanele Manyi, President of the Progressive Professionals Forum ripped into AgriBEE, describing it as a practice “codified to keep the current practices”.
“I hope it fails (AgriBEE). All these charters are a waste of time. Why should there be a standardised code for all farmers? It is time for the current landowners to face the music one-by-one,” he said. Manyi was part of a panel who debated a theme titled, “Measuring and tracking the development of smallholder farmers in South Africa: Are we making progress?”
Mr Ishmael Motala, a fruit grower from the Western Cape Province who was part of the panel, described agriculture as the “least transformed sector” in South Africa. The session was moderated by Dr Moraka Makhura from the Land Bank and attended by various stakeholders, including Minister Senzeni Zokwana, of the Department of Agriculture, Forestry and Fisheries.
Last year farmers and producers organisations questioned government’s commitment to transformation in the agricultural industry. In 2014 about R230 million allocated to AgriBEE was returned to the National Treasury, as there was “seemingly” no use for it. The AgriBEE Charter Council is also battling to align its scorecard to the amended Codes of Good Practice of the Department of Trade and Industry, due to contentious issues such as thresholds and land transformation. With land transformation proving to be a political hot potato.
The AgriBEE Sector Code was published in the gazette on December 2012 under section 9(1) of the B-BBEE Act of 2003. This was after many years of negotiations by different stakeholders in the agricultural industry. The first draft was published as the AgriBEE Transformation Charter in 2008 under section 12 of the B-BBEE Act of 2003. The difference between publishing under section 9 (1) and section 12, is that the B-BBEE Act of 2003 is merely a statement of intent and not binding under section 12, whereas section 9 (1) is binding to all entities within the sector code’s scope of operation.
Back to the drawing board
The B-BBEE Act stipulates that all entities within the scope of operation of the gazetted sector code can only be measured for BEE compliance using that sector code, in this case the AgriBEE Sector Code. Barely a year down the line after the AgriBEE Sector Code gazette in 2012, the Department of Trade and Industries (DTI), which is the custodian of the B-BBEE, issued amended Codes of Good Practice (generic codes) in October 2013.
These had major differences from the Codes of Good Practice that were issued in February 2007, on which the AgriBEE Sector Code was negotiated upon and based. It meant the AgriBEE Charter Council, whose responsibility it was to align the AgriBEE Sector Code with the amended Codes of Good Practices, had to go back to the drawing board.
The previous Codes of Good Practice had seven elements on the scorecard, whereas the amended Codes of Good Practice had merged some of these elements so that there were only five. It also introduced priority elements, increased thresholds that took inflation into account as well as sub-minimums and discounting principles. Entities were given a year as a transitional period to comply with the amended code. Companies were however unable to comply, resulting in another six month extension, and a further six month to October 2015.
Thresholds are the levels of annual turnover at which entities need to start complying with BEE. In the amended Codes of Good Practice micro enterprises are exempted if they have an annual turn-over of less than R10 million. Two other categories were introduced, Qualifying Small Enterprises (QSE) with an annual turn-over of R10m to R50m and Large Enterprises with an annual turn-over of R50m and above.
What to comply with?
Many entities in the sector often ask what to comply with under these uncertain circumstances? The answer is very simple. The sector has a Code that was gazetted in 2012 and that Code is still effective until repealed, possibly by the gazette of another Code. Also, entities in a sector with a Sector Code can no longer use the generic codes (Codes of Good Practice) for compliance according to the B-BBEE Act.
The AgriBEE Charter Council has to develop means to monitor transformation and the implementation of the AgriBEE Sector Code. One way is to have entities report their verified AgriBEE Certificates into the portal or any system that the Council will be able to view and generate reports from periodically. There is no way to monitor transformation progress or the lack of it, if there are no reports. The question still remains, why should entities report? Is there a willingness on the part of entities and farming enterprises to report?
One of the enablers of AgriBEE as stipulated in the undertakings by government within the AgriBEE Sector Code is the provision of funding, in the form of an equity fund named the AgriBEE Fund. However, not much of the fund has been used over the years resulting in an amount of about R230 million being returned to the National Treasury in 2014, according to a report in Parliament by the Department of Agriculture, Forestry and Fisheries.
South Africa reported an estimated 8 992 000 jobs in the formal non-agricultural sector in December 2015, Statistics South Africa (Stats SA) said on Wednesday. Briefing reporters on the results of the Quarterly Employment Survey (QES) for the fourth quarter of 2015, Statistician General Pali Lehohla said employment increased by 43 000 quarter-on-quarter from 8 949 000 in September 2015 to 8 992 000 in December 2015.
According to Lehohla, gains were observed in trade, finance and other business services as well as in community and social services.
According to the survey, which covers private and public enterprises in the formal non-agricultural sector of the South African economy, the same industries recorded a year-on-year growth with trade increasing by 36 000 employees, finance and other business services by 22 000 employees and community and social services by 7000 employees year-on-year.
The survey noted that the quarterly growth in trade was driven by retail trade which grew by 34 000 and hotels and restaurants which grew by 6 000. The mining industry continued its decline in the fourth quarter by 14 000 employees while construction declined both quarter on quarter (8 000) and year-on-year (19 000).
Meanwhile, the survey showed that gross earnings paid in December 2015 showed a quarterly increase of R31 billion and an annual increase of R29 billion compared with the same quarter of the previous year.
According to Stats SA, the changes in gross earnings in all industries were due to increases in salaries, payment of bonuses, overtime payments commission and/or leave pay. Average monthly earnings increased by 0.7% to R17 517 quarter-on-quarter while increasing at 6.7% year on year.
The Commission for Conciliation, Mediation and Arbitration (CCMA) announced the launch of a pilot Workplace Mediation service in the Western Cape fruit sector. Workplace mediation is a process to resolve conflict in the workplace that may arise between the employer and employee(s) or between employees.
In 2012 the Western Cape was rocked by a wave of farm workers’ strikes and protests. The wage-related protests mostly took place in the towns of De Doorns and Worcester with smaller protests in Ceres, Robertson, Grabouw, Wolseley and Villiersdorp.
The initiative is aimed at resolving workplace problems at an early stage prior to disciplinary action being taken or grievances being lodged. The overriding aim of the process is to restore and maintain employment relationships wherever possible by focusing on helping parties to work together to go forward; not determining who was right or wrong in the past.
“It provides employers and employees an opportunity to resolve workplace problems in a less adversarial manner without compromising existing workplace disciplinary and grievance procedures or the right of parties to refer disputes to the CCMA,” the organisation said in a statement.
This initiative is being embarked upon in collaboration with the Fruit Industry Value Chain Round table, a partnership between government and the fruit industry (incorporating trade organisations, business and labour) sponsored by the Department of Agriculture, Forestry and Fisheries and Fruit SA with the aim to foster collaborative industry-government actions that help to secure an enduring competitive advantage of the fruit sector.
The purpose of the pilot, which will run for a period of six months from March to August 2016, is to test the appropriateness of Workplace Mediation as a means to manage conflict in the workplace. The pilot will be limited to the Fruit Sector in the Western Cape, including agriculture and packing with an envisaged phased roll to other fruit producing provinces depending on the evaluation of the pilot.
CCMA Acting Director, Cameron Morejane, said described the initiative as, “a significant measure contributing to the CCMA’s strategic imperative in advancing good practices at work and transforming workplace relations. A key focus area of the CCMA’s new strategic plan Senz’umehluko-making a difference, 2015/2016-2019/2020 is reducing conflict in the workplace which contributes to industry sustainability resulting in employment security, labour market stability and economic growth,” Morejane explained.