Annual Report of the Department of Agriculture

Portfolio Committee : Agriculture and Land AffairsPresented by Director General Njabulo Nduli

18 November 2008

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TABLE OF CONTENTSIntroduction of teamOverview by Director General Livelihoods, Economics and Business DevelopmentBio-Security and Disaster ManagementProduction and Resource ManagementSector Services and PartnershipsFinancial PerformanceSummary and conclusion

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Overview by Director General2007/8, reviewed post settlement support, commenced with the fast-tracking of land delivery to attain the Presidential Priority 7Challenge of accelerating and aligning land and agrarian reform DoA, DLA and PDAs developed the Land and Agrarian Reform Project (LARP) accepted as Apex priority 7Aligns functions for improved service delivery and restructured consultative structures to include all relevant stakeholders. One-stop shop delivery paradigm for comprehensive support servicesObjectives of the LARP:Increasing black agribusiness entrepreneurs by 10 - 15%;Providing universal access to agricultural support services to the emerging black farmers;Increasing agricultural production by 10 - 15% Increasing agricultural trade by 10 - 15 %The DoA initiated the development of a Project Management Support Office to facilitate the translation of policy into implementation.

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Livelihoods, Economics and Business DevelopmentThe Livelihoods, Economics and Business Development promotes equitable access to the agricultural sector, growth and commercial viability of emerging farmers, and work towards achieving food security and rural development. The programme facilitates market access for South African agricultural products nationally and internationally by developing and implementing appropriate policies and targeted programmes. It promotes Broad-Based Black Economic Empowerment (BBBEE) in the sector.

Sub-programmes:

Livelihoods Development Support provides post-settlement support to emerging farmers, promotes farmer co-operatives and villages and is responsible for food security policy and legislation, programmes and information.

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Livelihoods, Economics and Business DevelopmentSub-programmes (continued):

Trade and Business Development facilitates international and domestic marketing access for South African agricultural products and promotes BEE in the sector. It also interacts with the National Agricultural Marketing Council.

Economic and Statistical Services provides for the collection and analysis of agricultural statistics, monitors and evaluates the economic performance of the sector and produces quarterly reports on sector trends. It also interacts with Statistics South Africa.

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Livelihoods, Economics and Business Development

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Livelihoods, Economics and Business Development

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Livelihoods, Economics and Business Development

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Livelihoods, Economics and Business Development

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MAFISAMafisa-funded projects during the first quarter included ostrich projects, broiler production, cash crops projects, and piggery projects.13 clients to the value of R1 175 000, for 26 clients to the value of R100 000, for 4 clients to the value of R107 000, implements for one client to the value of R10 000 and a for one client to the value of R10 400. loans to the value of R15 million were disbursed to 45 emerging-farmer clients in the Eastern Cape Province A total of 27 poultry enterprises valued at R81 369 and cash-crop projects valued at R24 650 were funded from Mafisa during this quarter. This amounts to a total of R106 019 to 36 clients in the Eastern Cape Province for the quarter.

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LARP and Farmer Support7 Land Reform Revitalisation Projects (LRRPs) were assisted in the Gauteng Province.The Farmer-to-farmer Mentorship Programme was implemented in 23 projects. A total of 16 land-reform projects from Gauteng and Mpumalanga have benefited from the LRRP and 14 Settlement Land Acquisition Grant (SLAG) projects benefited from CASP during the 2007/08 financial year.the LRRP five projects were completed in Gauteng Province and the total number submitted was eight. In Mpumalanga, 30 projects were submitted and two completed, at a cost of R679 270.Farmer-to-farmer Mentorship Policy began in the Northern Cape, Western Cape and Eastern Cape. Tenders for North West and Free State were resubmitted. The total number of projects was 667, and the number of beneficiaries 37 230.

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Self Help GroupsA total of 304 agricultural co-operatives and SHGs were profiled, including 8 SHGs in Gauteng, 4 co-operatives (poultry) Eastern Cape, 152 co-operatives and SHGs in Free State, 7 SHGs in KwaZulu Natal, 30 SHGs in Mpumalanga, 91 co-operatives/SHGs in the Northern Cape and 5 co-operatives and 7 SHGs in Limpopo. A total of 89 SHGs were established in all provinces through the Jobs for Growth Community Based Organisation (CBO) Programme.A total of 178 bank accounts for SHGs were recorded . These includes accounts opened by Corn Masoyi (Mpumalanga)co-operative members, Udengezi project ( KwaZulu-Nata ,SHGs in Mangaung (Free State),Msinga Peace and Development Co-operative (KwaZulu-Natal), Udengezi project (KwaZulu-Natal), Vosloorus Farmers Co-operative (Gauteng), De Deur Farmers Co-operative (Gauteng) and Umzimbuvu Goat Co-operative (Eastern Cape).

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CooperativesA training program on co-operative governance and management was rolled out, with members of the co-operative, local economic development officers and extension offices participating, mainly in the Free State province. Total of 105 agricultural co-operatives were established in all the provinces. Two secondary co-operatives (the Bakenberg poultry secondary co-operative and Vhembe fresh produce marketing co-operative) were established, and a total of 189 agricultural co-operatives and SHGs were profiled to identify associated challenges.Three Agricultural Co-operative Chambers of Commodities were established in the Eastern Cape (at Tsolwana Municipality), in North West (the Bojanala Chamber) as well as a sisal production and agro-processing chamber.

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Permits and Economic Information SupportA total of 287 market-access permits were issued on time, and R37 500 was raised in respect of issuing permits.

The Agricultural market outlook report , Economic review of the South African agriculture 2006 , The Crops and markets report , and the Fruit and Vegetable sales on the major South African fresh produce markets.

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AGRI Bee & MarketingThe draft Marketing of Agricultural Products Amendment Bill was completed and discussed with all provinces for inputs and comments

A draft proposal to link the permit allocation policy with the AgriBEE Policy has been completed. The proposal could only be concluded after the AgriBEE Charter was approved. This project will now be concluded in quarter 1 of 2008/09.

Funds were disbursed to two Centres of Excellence. The MoU was signed with Tompi Seleka College of Agricultural on the establishment of a Centre of Excellence within Limpopo Province

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BIO-SECURITY AND DISASTER MANAGEMENT - PURPOSEThis programme seeks to develop and implement policies for food safety, agricultural risk and disaster management strategies in order as to control animal and plant diseases and ensure food safety.

The programme as two sub-programme - Plant health and inspection services (PHIS) and Food Animal health and disaster management (FAHDM).

During the year under review, the programme looked into reduction of incidence of animal and plant disease and pests, and also to ensure compliance with international and national agricultural risk

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BIO-SECURITY AND DISASTER MANAGEMENT

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BIO-SECURITY AND DISASTER MANAGEMENT

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BIO-SECURITY AND DISASTER MANAGEMENT - PURPOSE

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BIO-SECURITY AND DISASTER MANAGEMENT - Agric Disaster Relief

ProvincePurpose and Funds allocatedFunds not used to - dateChallenges Western CapeDrought for 2007/8: R25 millionR5.3 millionAdditional R37 million requestedNorth WestR8 million for cold spell, 2003; R 2 million for Taung floods and R45 million for droughtR8 million for Cold spell, 2 million for Taung floods and R45 million for droughtProvince has requested rollovers with supporting documentsFree StateDrought and Fire 2007; R25 million R8 millionAdditional requests made this year for the veld firesKwazulu- NatalDrought / Fire relief 2007: R40 millionR40 million Province has not approved implementation of relief

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BIO-SECURITY AND DISASTER MANAGEMENT - Agric Disaster Relief

ProvincePurpose and Funds allocatedFunds not used to - dateChallenges/Remarks and commentsMpumalangaDrought and Fire , 2007 :R45 millionR33.4 millionRollover has been approvedEastern CapeDrought/ Fire: R20 millionR7.8 millionRoll-over was approvedLimpopoDrought and Fire: R45 millionR45 millionRoll-over was approvedGautengR0.00R0.00NoneNorthern CapeDrought : R45 millionR6.2 million Rollover requested and granted

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Draught Coping Strategies

Coping strategies for drought were completed and translated into 10 official languages. A total of 1 500 fruitfly bookmarks were distributed and 3 900 pamphlets on activities of the Directorate Plant Health and plant health matters were distributed. A draft pamphlet on South African quarantine matters was finalised.

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Inspections/Surveys/Assessments/AnalysesAn audit inspection of wood was done simultaneously with import and export inspections. Inspections conducted, amounted to 10 852 and included physical inspections, nursery, field, bulk and liquor inspections. A system has been put in place to detect importers who do not comply with the extended detections. The golden cyst nematode survey protocol is being revised and updated, and the survey is ongoing Two interceptions were assessed; 26 import requirements were finalised; two import protocols; and seven interceptions were assessed. Assessments made on the export of regulated articles included eight phytosanitary certification requests and finalising 12 noncompliance assessments. A total of 15 287 diagnostic assessments were made; 9 779 detections and identifications; and 11 quarantine interceptions.,

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Production and Resource Management

This programme manages productivity and sustainability in agriculture, it also monitors and controls genetically modified organisms, develop and implement policies and legislation on the sustainable use of agricultural land and water resources.

The programmes two sub-programmes are Agricultural Production and Engineering, Energy, Resource Use and Management.

Through Agriculture Production facilitates improvement in agricultural productivity with emphasis on sustainable animal, aquaculture and plant production systems and administers the Plant Improvement Act of 1976, Plant Breeders Rights Act of 1976 and the Animal Improvement Act of 1998.

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Production and Resource Management

Engineering, Energy, Resources Use and Management facilitates the development of agriculture infrastructure and use of agricultural resources. Other activities include auditing of natural resources, controlling migratory pests, rehabilitating and protecting agricultural land and running the community-based LandCare Programme.

During the year under review, the programme sought to improve productivity and profitability in the agriculture sector, and sustainable use and protection of land and waster resources.

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Production and Resource Management

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Production and Resource Management

Sub-programmeActual performanceActual achievementChallengesAgricultural ProductionAll projects are nearing completion, and reports in terms of service level agreements with the ARC were received for groundnuts, beans and maizeNoneOn-farm conservation in Sterkspruit implemented and monitored (8 villages and 19 farmers)None

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Production and Resource Management

A total of 375 inspections were conducted on 33 887 hectares for CASP, LRAD and related projects A further 111 inspections were conducted on 8 246 hectares of land to resolve malpractice relating to CARA regulations and 56 inspections were conducted on 32 380 hectares of land to monitor CARA compliance on LandCare projects

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Production and Resource Management

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InfrastructureAt Kosi Bay, a 45-km fence was completed and 21 culverts constructed. At Punda Maria, a 28-km elephant fence was erected and one structure across dongas was completed. At Letaba River, a 12-km elephant fence was completed and a large river crossing is in the process of being constructed. At Altien, a 12-km elephant fence and at Kruidfontein, a 9-km fence were completed. At Malala Drift, 15 km of fence was cleared and at Bray, a 6-km fence was completed.

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Sector Services and PartnershipsProgramme Overview

The programme manages and coordinates stakeholder and international relations, agricultural education and training, extension and advisory services as well as scientific research and development. The programme has two sub-programmes, namely, Sector Services and Intergovernmental, International and Stakeholder Relations.

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Sector Services and Partnerships

Sub-programmeActual PerformanceChallengesIntergovernmental and Stakeholder RelationsExchange visits with Madagascar on the Litchi Industry

Hosted the Mozambique/SA Joint Management CommitteeHuman resource capacity and budget to meet international commitmentsAssisted Mozambique with Foot and Mouth Disease strategy for the Greater Limpopo Transfontier Park and Livestock PolicyHuman resource capacity and budget to meet international commitments

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Sector Services and Partnerships

Sub-programmeActual PerformanceChallengesSector Services(Extension recovery)The extension recovery plan was approved by stakeholders at the Extension Indaba. The plan entailed:Recruitment of 396 officers by March 2009Training of Extension Officer as follows:300 for qualification upgrading 700 for in technical and soft skills programmes (short courses).Due to the extension recovery funds being DORA framework the DoA could not establish a unit responsible for coordination and therefore lacked that capacity

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Sector Services and Partnerships

Sub-programmeActual PerformanceChallengesSector ServicesProvision of ICT Equipment 1000 officers by March 2009.Sector Services(Extension recovery)7200 benefited from mentorship and incubator training programmesThis work was done through a partnership with commodity organisations like NERPO, MPO, CGA, CSA, NWGA, SASA, etc as well SOEs like PPECB808 land reform beneficiaries received targeted skills programmes through GADI. Beneficiaries were mainly from small stock producing areas of Eastern Cape, Northern Cape and Free State.Although the mentorship programme has proven useful and popular the budget allocated has proved insufficient as result targets were revised.

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Sector Services and Partnerships

Sub-programmeActual PerformanceChallengesSector Services(Scholarships)265 young people awarded bursaries in various agricultural study fields. 58 will complete their studies by December 200872 individuals benefited from international training programmes. The programme range from a two weeks course to MSc 164 youth participated in the internship. 77 (47%) secured employment while undergoing the internship65 of the employed interns secured employment within government and only 12 was taken by the private sectorA further 15 interns decided to further their studies and were assisted through the international training programme and the external bursary scheme.The annual budget for the external bursary scheme is acutely insufficient. Although the number of application have increased over the years, the budget remained the same.

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Capacity BuildingEight agricultural commodity organisations that entered into a service level agreement with the DoA during the 2006/07 submitted their Year 2 workplans for the 2007/08 financial year. In total, for all eight commodity organisations, there are 397 mentorship programmes in place. All nine provinces are covered by one or the other of these projects. The projects involve 29 qualified Master Mentors. The total number of mentors developed is 49 and the total number of mentees developed is 6 999. Altogether 4 188 mentees are women, 2148 males and 722 youth.A total of 9 000 beneficiaries associated with commodity organisations benefited from the mentorship programme. Based on the reports presented, improvements and achievements have been recorded. The GADI research report was finalised and submitted to the ASRDC for notification. The training of 100 extension staff recruited from all nine provinces in accredited Project Management training commenced during September 2007

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Capacity Building continues Pretoria University, Fort Hare, Free State, Free State Technikon, Stellenbosch and KwaZulu-Natawere identified to provide short, accredited generic training programmes to 100 government-employed extension officers and a service level. Level agreement was reached with these institutions to provide accredited Project Management training to 100 extension officers.An agreement between the DoA and the FAO was signed on 30 April 2007. A list of 50 names of extension officers linked to CASP projects together with their respective profiles was finalised in consultation with the PDAs to undertake an exchange programme with Kenya. An orientation workshop with these 50 officers was conducted in Pretoria on 26 June 2007, in preparation for the visit. And a group of 25 extension officers from all nine provinces successfully visited Kenya on a Technical Exchange Programme. The visit took place from 14 to 22 October 2007

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Trade Agreements /RelationsEuropean Community (EC) agreed to address South African concerns on GIs, taxation, use of certain vine varieties, labelling of certain wines and other oenological practices., South Africa and the EC also agreed on the conditions and principles of normalising the Trade, Development and Co-oeration Agreement (TDCA) text The Africa Strategy was reviewed and the Stakeholder Engagement Strategy developed. The review undertaken identified a need for financial and human resources to allow the DoA to engage effectively and to make an impact on the continent. The review also proposed specific interventions to guide future engagements in Africa, as well as on international emerging issues of interest to South Africa. The DoA was engaged in the implementation of signed agreements and bilateral engagements with China, the USA and the EU. South African exports to China were promoted through the participation of the agricultural sector in the first phase of the 10th Anniversary celebrations of diplomatic relations between the Peoples Republic of China and the Republic of South Africa

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FINANCIAL STATEMENTS: 2007/08

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FINANCIAL STATEMENTSFinancial Statements

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- Unqualified - No emphasis of matter - other matters performance information Reporting at QRMs Financial and non-financial Compilation of quarterly reports and signing off

Agricultural Debt Account

- Clean report

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ACTUAL SPENDINGR000

Main estimate2 281 166Plus: Special adjustments 700 000 Adjustments estimate 488 437Total amount appropriated3 469 603Less: Actual expenditure3 328 417Surplus 141 186

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ACTUAL SPENDINGR000

Surplus 141 186Less: CSF claims awaited 96 311 Capital projects (PWD) 19 766 Drilling rig not delivered 3 970Not spend by the Department 21 139

% of total appropriation 0,6

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PROCUREMENT:2007/08-In terms of monthly reporting to the National Treasury

R000 %Contracts allocated as follows:Black enterprises 69 42367,9White woman-owned enterprises 2 287 2,2Non-HDI enterprises 30 55229,9

Total value of contracts 102 262

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HR ISSUES: 2007/08POST ESTABLISHMENTTotal post establishment3 056Posts filled 2 638Vacancies (numbers) 418Vacancies (percentage) 13,6%Turnover rate 10,7%

VETTING/VERIFICATIONWith effect from I January 2008Criminal record checkCitizenship verificationFinancial/asset record check-Qualification verificationPrevious employment verification

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Uncoordinated government support programme. Lack of ccoordination of social sector departments activities in all the three government spheres is still a challenge to be tackled for CASP

Lack of funds and delegations for disposal of state land caused delays in the disposal of farms for land settlement

The only institution involved in disbursement is Uvimba in the Eastern Cape province. Other institutions are to be brought on board after an accreditation process in the next financial year for Livelihood Development Support

Time delays to endorse meaningfully any BEE initiatives in the sector for AgriBEE implementation. The complete staffing complement is critical for implementing AgriBEE.

AgriBEE also faces the issue of collaboration with sector stakeholder which takes time, is complex and has direct bearing on rate of progress.

Summary of Challenges (Livelihoods, Economics and Business Development)

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The Sniffer Dog programme faces insufficient supply of local dogs as well as delays in the appointment of personnel

Delay in completion of plant health policy and use of unregistered products as well as the interpretations of phytosanitary requirements are some concerns facing Plant Health and Inspection Services

Food, Animal Health and Disaster Management faces the following challenges:0 Poor implementation of policy on animal health, 0Line of command for provision of Veterinary services not harmonised0Meat imported manufacturing0Loss of market of export of animal products to the EU0No record keeping in subsistence farming systems 0Delay in completing country profile0Improper use of pesticides0Microbiological contamination of products0Poor record keeping

Summary of Challenges (Bio-Security and Disaster Management)

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Agricultural Production - Withdrawal of drilling Machinery / Equipment Monitoring the genetic integrity of accessions in the Gene Bank Discontinuation of projects Engineering, Energy, Resource Use and Management - Lack of Cooperation and commitment from beneficiaries and officials, budget constraint, limited skilled, personnel among PDA on irrigation, engineering and natural resource management and also non-availability of ASGI-SA funds to plan implementation

Summary of Challenges (Production and Resource Management)

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Human resource capacity and budget to meet international commitmentsDue to the extension recovery funds being DORA framework the DoA could not establish a unit responsible for coordination and therefore lacked that capacityAlthough the mentorship programme has proven useful and popular the budget allocated has proved insufficient as result targets were revised.The annual budget for the external bursary scheme is acutely insufficient. Although the number of application have increased over the years, the budget remained the same

Summary of Challenges (Sector Services and Partnerships)

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Thank You