DALRRD 2020/21 Quarter 1 Performance & Implementation of Covid-19 Agricultural Disaster Support Grant; with Deputy Minister

Agriculture, Land Reform and Rural Development

10 November 2020
Chairperson: Nkosi Z Mandela (ANC)
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Meeting Summary

Audio: Agriculture 10 November 2020

Covid-19 Agricultural Disaster Support Grant

In a virtual meeting, the Department of Agriculture, Land Reform and Rural Development (DALRRD) gave a presentation to the Committee on its 2020/21 first quarter performance. The performance of each programme was detailed. Looking at key highlights, during Q1, the agricultural sector grew by 27.8% which contributed 0,5% to the Gross Domestic Product (GDP). The increase was mainly due to increases in the production of field crops, horticultural products and animal products.  However, the implementation of Covid-19 national lockdown regulations had a negative impact on exports on commodities such as wine, tobacco, fibres, wool and cotton. DALRRD aims to achieve a target of 4% growth for exports in the agriculture sector and agro-processing by 2024. 893 jobs were created in the period under review benefiting 384 youth and 405 women. A total of 21 000 jobs were lost quarter on quarter in the agriculture sector. The job losses were mainly driven by losses in farming on animals, forestry and logging and related services. Four Agri-Hubs are partially operational (Nchora in the Eastern Cape; Springbokpan in North West; Witzenberg in the Western Cape and Mkhuhlu Agri-Hub in Mpumalanga.  71 agricultural infrastructure facilities were supported in the period under review. The support provided included irrigation technology, on farm mechanisation, farms infrastructures and resource conservation management

 Looking at the COVID19 intervention of the Department, R1.2 billion was reprioritised to be utilised as follows: R400 million towards production support on Proactive Land Acquisition Strategy (PLAS) farms in line with the stimulus package, R20 million for hygiene products, R1 million communication and R775 million towards production support on all other smallholder and communal farmers.

In terms of procurement, 400,000 disposable face masks were procured and distributed to farm workers nationally.  400,000 soaps have been procured and distributed. 200,000 additional cloth masks have been procured and distributed.

In terms of financial performance in the quarter, expenditure as at the end of June 2020 amounted to R2.258 billion or 15.7% against the budget of R14.416 billion. The highest contributing programme to the under expenditure is Rural Development and Food Security, Land Reform and Restitution. The COVID-19 pandemic contributed to slow movement. In relation to economic classification underspending was mainly on transfers, goods and services (delays in the infrastructure projects), and compensation of employees (vacant posts).

The Committee was concerned with the Department’s performance in the first quarter. It questioned what had led the Department to underperform as it had been allowed to work remotely. Another point of concern for the Committee was the fact that some farmers who did not qualify for relief from normal programmes could not get assistance from the Department. The Committee felt that the Department had missed the opportunity to perform in the first quarter which is critical for food security. The Committee was not happy that COVID-19 was being used as the scapegoat for the Departments underperformance. The Committee also said that it would like to know what would happen to the money that was not spent during the first quarter. The Committee questioned how the agriculture GDP increased without assistance being given to farmers.

The Committee asked if the Department had kept a register of who worked and who did not during the lockdown period in the first quarter and who was responsible for monitoring the register as it had been difficult to get assistance from senior officials during the lockdown – this as the Committee was concerned that even though the Department was deemed an essential service during the lockdown, many senior officials were not at the office.

Committee Members were concerned that not all vacancies within the Department had been filled. The Department was asked how it would organise its corporate structure. It was also asked to provide the Committee with updated information so that the Committee could be aware of what changes were being made in the Department. The structuring of the Department was concluded at the end of October and the Department said that it would send all details to the Committee. The Committee also asked about the Auditor- General’s report relating to COVID-19 funds.

 The Committee asked for a detailed report from the Department of how vouchers for farmers would be verified and how the outstanding 32 000 applicants would be reached. The Committee expressed that it was concerned that some provinces received more funding than others and based on this asked the Department to explain the criterion for funding. The Committee asked for a list of farmers that had received vouchers

Meeting report

The Chairperson greeted and welcomed all present to the meeting. the Department of Agriculture, Rural Development and Land Reform (DARDLR) would brief the Committee and there would be an opportunity for engagement with the Committee.

Apologies were received from Committee Members and the Minister, who was attending a Cabinet meeting.

The Deputy Minister of Agriculture, Rural Development and Land Reform, Mr Sidumo Dlamini, began by sending condolences to the family of Tebogo Machakela, the late Free State farmer. He then announced that Mr Mooketsa Ramasodi, Acting Director-General (DG), DARDLR, would lead the presentations. Due to travel arrangements to Cape Town, the Deputy Minister said that he would need to be excused later.

Taking over from the Deputy Minister, the Acting DG said that there were two presentations that would be delivered by the Department which dealt with the quarter 1 performance and the COVID-19 agricultural intervention.

DARDLR 2020/21 Q1 Performance Report

Performance of each programme was detailed [see presentation for details]

Looking at key highlights, during Q1, the agricultural sector grew by 27.8% which contributed 0,5% to the Gross Domestic Product (GDP). The increase was mainly due to increases in the production of field crops, horticultural products and animal products.  However, the implementation of Covid-19 national lockdown regulations had a negative impact on exports on commodities such as wine, tobacco, fibres, wool and cotton. DALRRD aims to achieve a target of 4% growth for exports in the agriculture sector and agro-processing by 2024. 893 jobs were created in the period under review benefiting 384 youth and 405 women. A total of 21 000 jobs were lost quarter on quarter in the agriculture sector. The job losses were mainly driven by losses in farming on animals, forestry and logging and related services. Four Agri-Hubs are partially operational (Nchora in the Eastern Cape; Springbokpan in North West; Witzenberg in the Western Cape and Mkhuhlu Agri-Hub in Mpumalanga.  71 agricultural infrastructure facilities were supported in the period under review. The support provided included irrigation technology, on farm mechanisation, farms infrastructures and resource conservation management

 Looking at the COVID19 intervention of the Department, R1.2 billion was reprioritised to be utilised as follows: R400 million towards production support on Proactive Land Acquisition Strategy (PLAS) farms in line with the stimulus package, R20 million for hygiene products, R1 million communication and R775 million towards production support on all other smallholder and communal farmers.

In terms of procurement, 400,000 disposable face masks were procured and distributed to farm workers nationally.  400,000 soaps have been procured and distributed. 200,000 additional cloth masks have been procured and distributed.

In terms of financial performance in the quarter, expenditure as at the end of June 2020 amounted to R2.258 billion or 15.7% against the budget of R14.416 billion. The highest contributing programme to the under expenditure is Rural Development and Food Security, Land Reform and Restitution. The COVID-19 pandemic contributed to slow movement. In relation to economic classification underspending was mainly on transfers, goods and services (delays in the infrastructure projects), and compensation of employees (vacant posts).

Discussion

[please note: some of the beginning of the discussion was missed by PMG due to poor connection]

Ms M Tlhape (ANC) was concerned about the performance of the Department in the first quarter. She said she was yet to see commendable performance in the first quarter. Throughout the presentation, the reasons mentioned in the presentation for under expenditure were linked to the impact of COVID19 and the lockdown. DARDLR was prioritised during quarantine and it was said that work by the Department would continue. Farmers were working with nothing as officials could not finalise plans and the funding allocated to the Department had not been utilised. Further, farmers who did not qualify for relief from normal programmes could not get assistance from the Department.

Ms Tlhape asked what was happening in the DALRRD which resulted in it not performing, as Parliament had allowed for departments to work remotely, because it did not finalise things due to lockdown restrictions. What stopped the Department from convening virtual meetings through online platforms with provinces and ensure that service delivery continued, funds were transferred and people could get assistance?

Performance in the first quarter had always been problematic and that the Department should prioritise this issue. Feedback from the Department that everything that had not been achieved in the first quarter would be deferred for achievement in the second quarter was unacceptable.  The first quarter was planting season for crop farmers - what should farmers do during planting season without assistance from the Department? The Department’s performance in the first quarter is critical for food security. Nothing had been done by the Department towards implementing food security.

The COVID-19 excuse could hold water now however COVID-19 would continue and the Department needed to find ways to perform within restrictions. She reemphasised the Department was prioritised and people were given permits. The Department indicated before the lockdown, and prior to the merger happening in relation to the organogram, that people would not lose their jobs but rather be moved around to ensure all vacancies were filled, yet during the presentation the Department gave an excuse of vacancies not being filled. She urged the Department to have a commendable report of quarter one performance from here onwards.

Ms N Mahlo (ANC) was highly disappointed by the Department’s underperformance in terms of expenditure in the first quarter. She realised that politicians were being undermined as people underperformed and would simply leave when their term of office was done. These people would come with excuses of why things could not happen and not provide reasons. The Disaster Management Regulations set out to address, prevent and combat the spread of the Coronavirus and stipulate specific regulations to departments to ensure that their functions were performed whether at home or anywhere. There was no excuse that would be allowed by Committee Members related to COVID-19 as the regulations were put in place to assist leadership and the Minister with decision making. Ms Mahlo requested that the Department provide the Committee with details as to what went wrong and who omitted performance and where. The track record of leadership in the Department was good however she felt that the Committee was being undermined.

Ms A Steyn (DA) agreed with the previous speakers that agriculture was deemed an essential service however she found it difficult to get assistance from any senior official within the Department and only the previous two Directors-General and the current Acting DG assisted. She asked who the most senior person in the office was, who had the responsibility of dealing very important issues such as certifications of exports and state veterans as senior officials were supposed to be working during that time.

She asked whether a register had been kept of who worked and who did not. She asked what plans or processes were put in place in instances where people worked from home. Many workers in the country continued with home-based working and the Department should have found alternative means to carry out responsibilities. She asked whether tasks and responsibilities were achieved and if so, if they were monitored.

Having  visited some Land Reform offices in Mpumalanga during level one of lockdown, Ms Steyn brought it to the attention of the Department that she had asked to see the register of people who were at work and not one of the senior managers were back at work but were apparently working from home.  However, there had not been attendance registers during the entire lockdown stages but other staff members such as cleaners and admin staff were expected to be at work. COVID-19 was the scapegoat for underperformance. She asked if the people that were supposed to be working as part of the essential service to support agriculture were at work. If so, were they being monitored by someone and whose role and responsibility was it to monitor? She then went on to ask who in the Finance Department was responsible for the transferring of funds and if it was being monitored as farmers were complaining that they could not get their vouchers redeemed. If plans were put in place, why did the voucher system not work?

Ms Steyn again questioned whether all staff were back at work and if not, what were the reasons. What percentage of people received permission to work from home? Were these employees being monitored? What would be done with all the money that was not spent during the first quarter? Would the money be dumped again through certain provisions without Committee Members having full disclosure of what happened with the funds? Lastly, she asked for the list of farmers who received COVID funding along with their details.

Ms K Mahlatsi (ANC) welcomed the presentation and said that the first quarter analysis did not paint a good picture of the Department. She said it had been one of the worst quarters in all financial years. The capacity of Department officials was not doubted but one needed to reflect on their work as there was something wrong with planning in the Department.

She advised the Department to rework the expenditure programme in the 2020/21 year. According to a report by Statistics South Africa (StatsSA), the Gross Domestic Product (GDP) growth increased by 15.1% as far as agriculture was concerned. She asked how the agriculture GDP increased significantly without there being any assistance given to farmers. The report from StatsSA clearly did not reflect subsistence farmers and primarily included commercial farmers. She asked if the Department would organise its corporate structure, how money would be spent by the Department and how it would recover from this. Another question was whether transfer for funding had been adjusted.

Questioning how the Department would ensure that farmers that had not been assisted are assisted, Ms Mahlatsi said that the Department had the same excuses and was unsure if the Department took the Committee seriously. There should be consequences from management. She suggested that it be part of the next Committee meeting for reasons to be provided as to why funds are not being spent, so that people could be held liable which would lead to a shift in the Department.

Ms T Mbabama (DA) agreed with the previous speakers. She pointed out that the Chief Financial Officer (CFO) had procured laptops to ensure remote working. People working from home were not being monitored which meant that what was not measured would not be done. She was of the view that the Department was shut down in the first quarter altogether and feared that it had no management. She asked who would ensure there were consequences when there was no management in the Department.

The Chairperson asked if there had been any changes with the structure since the last meeting. He recalled that Mr Hlatshwayo was the CFO and Ms R Sadiki (CFO) was the Deputy Director- General (DDG) of Corporate Services. He made a request for updated information so that the Committee could be aware what changes happened in the Department.

Responses

Ms Rendani Sadiki, CFO, DARDLR, replied that indeed, the performance of the Department during the first quarter was not satisfactory but the Department would do everything in its power to correct the non-performance. There had been many changes in the leadership of the Department and she did not have the authority to announce the changes - she asked that the response be deferred to the Deputy Minister or DG.

As from 1 April, what should have happened was that the two Departments of both the micro and macro structure of the old and the new Department should have been approved in terms of resolution 1 of 2019 between the employer and the employee representative at the bargaining council. This outlined the process that needed to be followed when placing people in the Department followed by the fit for purpose structure after everyone had been placed. The first process had not occurred as the approval for the macro structure was only finalised at the end of October. Due to the delay, it meant that people had not been placed in the new Department hence it was not, and is still, unable to fix the budget structure and people were placed where they were not supposed to be placed. She went on to explain that due to the migration of people not being finalised, people were sitting at the Ministry or at the food security branch resulting in over expenditure.  

She replied to Ms Mbabama regarding the procurement of laptops that seemingly was not monitoring. Monitoring by and reporting to the Department of Public Service and Administration (DPSA) had taken place on a monthly basis, on people that had not been at work. Those who were not at work had authorisation to work from home as they had provided a report of the co-morbidities. There had been a committee setup to assess all applications. Under level four of the lockdown, after the Department provided reports of employees at work, those not at work and those who could not work because they did not have the tools of trade, Ms Sadiki said these employees were put on rotation in order to adhere to lockdown restriction provisions of safety for staff members. There was proper reporting of who had been at work and those not at work. Everyone was accounted for and every DDG was accountable for their portfolio and there was accountability on where officials were.

She replied to Ms Mahlatsi saying that the structuring had not been finalised and that the DDG for Crop and Soil Sciences (CSS) would elaborate further. There should be finalisation of macro and micro structures by the end of the week and commencement would begin on the fit for purpose structure. She confirmed that the interim structure had been finalised and was in the process of approval. This happened before the fit for purpose structure was to be conducted as it could take longer. The Department wanted to make sure that it was operational. Funding was not adjusted but officials responsible for grants would answer further on this.  

She replied to Ms Steyn confirming that a register had been kept which workers signed and people working remotely were also accounted for. Reports were also sent to the DPSA in that regard. There had been an updated report on COVID19 that could be made available to the Committee. Staff was back at work and those who still posed a higher risk in terms of the open plan offices would be rotated. This applied mostly in the services section such as finance and corporate support. Everyone was back aside from those that have approval to work from home on condition that they would also account.

The Department would not spend money through dumping and each programme had plans that had been approved which would be implemented.

The Department would consider all recommendations to help assist it render its services to the public including regulations, planning and time management, as suggested by Members.

She asked that regarding the budget speech question, she be pardoned as she was only appointed to office in November and asked to consult with her colleagues and bring the response to the Committee later.

Mr Ramasodi said the presentation to be made later would respond to some of the matters raised by Members. The human resource issues raised by Ms Mahlatsi would be responded to.

The Chairperson asked for follow up questions.

Follow up questions

Ms Steyn asked for the attendance registers listing the people who were at work.

Ms Mbabama hoped the Department took note of suggestions and that there would be corrective measures put in place so that when the Department reports on the other quarters, the Committee would find the situation rectified.

Ms Mahlatsi said her follow up would have been coherent had the Department responded to her questions in the first round of responses.

Mr N Masipa (DA) said that the Department had provided answers however he would like to see more action.

Responses

Ms Bafedile Bopape, Acting DDG: Corporate Services, DARDLR, informed the Committee that she started in the position of Acting DDG on 1 November 2020. She responded to the question regarding the information on the registers pertaining to the attendance of workers since level five of the lockdown - she confirmed that it was available. Prior to being the Acting DDG, she was the COVID-19 compliance officer for the Department. There had been reports sent to the national steering committee (NSC) where there were indications of how many people were attending work up to date. The information was with the NSC and would be given to the Committee.

Responding to the question regarding the two people that had been transferred to the Ministry, due to many stakeholder enquiries, the two individuals were transferred to deal with these enquiries. Both the macro and micro structure of the Department had been approved and people had been placed, especially the Senior Management Service (SMS) members which have been finalised. There were about 364 SMS members that had been placed, 91 posts which were vacant and 21 SMS members had not been placed. This did not mean that those who were not yet placed were losing their jobs. Those who were not yet placed were allocated special projects and once the fit for purpose structure had been finalized, they would be reassigned to their new posts where necessary. The Department would start placing level 12 and below employees to the macro structure.

The Chairperson asked that the Acting DDG provide the responses on the micro and macro structure in writing.  

Mr Ramasodi said the Department noted the concerns raised by Members. At no stage would the management of the Department undermine the authority bestowed to the Committee. In terms of the issues that transpired in the first quarter, it was regrettable that COVID-19 coincided with the period where the Department had to deliver on strategy plans it had. The Department had committed to rectifying issues and the second quarter review would be quite palatable where changes needed to be made. 

One of the matters raised by Ms Mahlatsi was how government needed to ensure small holder and subsistence farmers were being assisted - her observations that government needed to be assisting crop farmers during the period of the first quarter was correct as it pertained to commercial farmers and the statistics provided of 15.1% GDP increase in the second quarter. The data should be reflected in terms of the interventions made by the Department, as any consignment that has left the country did so with certification from the Department. Therefore it pertained to foreign earnings from agriculture which was one of the major contributions towards the 15.1% GDP growth.

Mr Ramasodi said it was evident that Department officials were working during this time. He admitted that the Department had experienced challenges, as Ms Steyn had elucidated, but despite these challenges faced by the Department, most of the time, when it came to the rendering of services, the Department was at the tail end to ensure that farmers were supported. Systems that the Department had in place during the first quarter ensured that all blockages the Department was experiencing were dealt with. Going forward, the Department would be submitting reports regarding the matters at hand.

He apologised to the Committee regarding the changes in the structure of the Department and took full responsibility for it. The structuring of the Department was concluded towards the end of October and the Department would submit to the Committee its structure and all the post establishments it had made to inform the Committee of who occupied which position within it and provide a comprehensive report of what transpired in terms of the positions and reasoning behind the CFO and other positions.   

Discussion

Ms Steyn asked for information on the attendance list. She acknowledged that the list had been received but found the details looked sketchy which made it difficult to find the people.. She asked about the Auditor-General’s (AG’s) report relating to COVID-19 funds. The Committee had been informed that there had been a database that was used by the Department and a new programme had been bought and funds were paid to update that programme. According to the AG’s report however, it seemed as though all processing that had been done was done manually particularly on the vouchers for the approved farmers. She asked if the information of applicants would be put on a database or spreadsheet so that a follow up by the AG could happen for people without Identity Documents, applicants that did not qualify and those that had not met the minimum criteria, to ensure they could be assisted by the Department.

She highlighted the PPE list on the Treasury website and asked who was responsible for monitoring the Supply Chain Management (SCM) regarding PPE. There were offices that were given massive funds for PPE whilst many of the offices were not fully functioning or open. Who in the Department was responsible for looking at those tenders and the payments thereof and whether cleaning and PPE were done correctly?

She said she visited many offices and there were many posters explaining the process of wearing masks all over the offices whereas the money could have been used in a better way as it was not necessary to have a small office with ten posters. The Department should pay attention to what it spends money on. She was concerned that every time something would happen, it seems as if the Department starts the process anew as if it had never been done before. She did not think the Department would reach a point where it said it perfected the system. It needed to have many people on its databases to report fully to the Committee. She asked if there had been any backlogs captured since COVID-19 and if there was a system where information and details were available through the press of a button.

Ms T Breedt (FF+) observed many of the APP targets could not be achieved due to COVID-19 and due to the harsh lockdown the country experienced. She assumed that in the second and third quarters, the APP targets would look the same and asked whether the Department had an improvised plan with an updated version on how it would target the backlog or would if it would write off 2020 and start afresh in the new financial year. She asked about the COVID-19 response and said there seemed to be a lot of silo working between government departments - she would like to see transversal working where there was improved inter-departmental work.

She asked about the 88 000 applicants that had been approved and verified for the voucher system and asked what the deadline was to reach the other 32 000 applicants. She asked how the Department would determine who would be verified or if this would be done via districts to verify farmers. How would vouchers be monitored? She would like to see a more detailed presentation in that regard. She asked how many extension offices the Department had and how it monitors the system.

Ms Mahlatsi wished COVID-19 presentation was a standalone item. She asked how the Department would review unsuccessful applications and whether it had been able to assess the relief fund. There were abnormalities that pertained to funds. Overall, what lessons had the Department learned from the challenges it experienced? Further, what had it observed and learned about the evaluation and monitoring of systems? She asked how the Department intended to improve shortfalls in the future.

The Chairperson asked Committee Members to bring forward key issues that they wanted specific responses to, so that the Department can respond to them at the next Committee meeting.

Ms Mbabama said that she wanted oversight on the report. She was concerned that small holder farmers that did not have finances during the first quarter were not assisted by the Department due to disqualification of their applications. She wanted responses to her question regarding the Rand value of vouchers. Was the value the same for all voucher recipients or were there more funds allocated to others? She asked what the criteria were to determine the value of the vouchers.

Mr Masipa pointed out that the provinces that needed assistance most were the Western Cape, Eastern Cape and Northern Cape regions. He was concerned that these provinces received lesser funds and asked what the criteria was for giving other provinces more funds than these provinces. These provinces should have been given more support in order for greater impact to be achieved. He asked whether there was any chance of getting a brief update on blended finance. The Minister said blended finance was not happening and farmers were supported through other means – he asked for more information on this.

The Chairperson asked how the Department helps farmers perform. He asked that in future, reports should accompany slide presentations. He asked how many farmers were beneficiaries, where they were located and what the funds were used for.

Mr Terries Ndove, DDG: Land Redistribution and Development, DARDLR, asked Ms Steyn what details the list needed to have. He explained the Department used a spreadsheet and details were added manually. No system was updated and this proved to be a weakness. The PPE was not for internal departmental use but it went to the sector for farmers and not staff members.

He replied to Ms Breedt that departments working together had been considered however, because this process related to fund verification, it took longer. The value of the voucher was R8 000 each but his colleagues would provide more information in that regard. The verification of vouchers was done including the validity of farmers although the verification process was not thorough enough. 

He replied to Ms Mbabama confirming that there was a list and confirming the voucher and the Rand did not correspond. The voucher was dependent on commodities and how production was acquired including fertiliser, boiler fit, medication for livestock etc. The number of vouchers given to farmers did not correspond as there were instances where one farmer would receive two vouchers depending on surrounding factors taken into account. In terms of funding, farmers were not restricted to the amount requested for funding and could approach the Department when more funds were needed.  

In closing, the Chairperson said that the performance of the Department was unsatisfactory to the Committee. The Committee requested a full report regarding the macro and micro structure, a list of the farmers, including personal details. There needed to be statements made to the Committee confirming that the Director--General’s contract ended on 1 November.

The Chairperson further said the Committee needed a recovery plan from the Department on all missed targets. It also asked for a broad presentation regarding land reform, for statistical analysis on those working remotely and through branch levels. The responses should be comprehensive.

There were recommendations on budget and special budget and a request that the Department provide information of all beneficiaries of the Agricultural Disaster Management Fund. The Chairperson also told the Department that it needed to provide a status report on the blended financial scheme. There needed to be full briefing on land rights and on the statutory body to discuss progress and shortfall. The Committee needed a presentation on the Project Kuyasa report regarding claims of land and information regarding approvals and cost of approvals. The Committee also asked for an update on the matter of labour tenants at the land claims court.

The meeting was adjourned.  

[please note the PMG audio did not capture the end of the meeting]

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