Department of Agriculture, Land Reform and Rural Development Q4 2021/22 Performance

Meeting report

The Chairperson welcomed the Department of Agriculture, Land Reform and Rural Development (DALRRD) to present to the Committee the preliminary outcomes of the fourth quarter of the 2021/22 financial year. The Minister and Deputy Ministers of the Department were not present to provide an overview to the Committee.

DALRRD's fourth quarter performance
 
Mr Mooketsa Ramasodi, Director-General, DALRRD, said the Department's performance in the 2021/22 financial year had been 60% against its targets, broken down into 72% in the first quarter, 55% in the second, 34% in the third, and 57% in the fourth. A breakdown by branch showed administration at 50%; agricultural production biodiversity (APB) & natural resources management (NRM) at 93%; food security, land reform and restitution at 46%; rural development at 60%; economic development, trade and marketing at 50%; and land administration at 25%.

Factors that had contributed to the below par performance had been:

The formulation of targets and technical indicator descriptions (TID) had a lot of external dependencies;
There had been protracted settlement negotiations with land owners in acquiring land, with court processes derailing the acquisition of land for farm dwellers and labour tenants;
Pro-active initiatives were needed to ensure the participation of women, youth, and people with disabilities, to meet the criteria for applying;
The use of available land in urban edges for commonages in municipalities.
Untraceable labour tenant claimants.

In the first quarter of the 2022/23 financial year, the overall performance against target had risen to 79%.
A breakdown by department showed administration at 0%; agricultural production biodiversity (APB) & natural resources management (NRM) at 100%; food security, land reform and restitution at 67%; rural development at 100%; economic development, trade and marketing at 60%; and land administration at 86%.

The Department's expenditure as at the end of the fourth quarter of 2021/22 had amounted to R16.9 billion, or 93.8% of the budget of R18.023 billion, leaving an amount of R1.124 billion unspent. The under-spent budget was mainly attributed to slow spending regarding support to farmers through the Presidential Employment Stimulus Initiative (PESI), and land development support under the Food Security and Agrarian Reform branch; land claims settlements within the Restitution branch, land redistribution and tenure projects; Agricultural Production Biodiversity and Natural Resources vacancies; rural infrastructure development projects; national geomatics services vacancies, and spatial planning and land use management projects.

Challenges included:
Delays in the approval and implementation of projects;
Late submission of invoices and payment parcels to finance by responsible managers;
The procurement plan submitted was not to be implemented due to a communication from National Treasury about suspending tenders since 15 February 2022.
The relevant directorates did not submit requests to process bids and therefore there was no movement on the approved procurement plan.

Interventions required:
Projects should be approved before the start of a financial year;
The procurement process should commence before or at the beginning of the financial year;
Invoices should be submitted to a central point. Branches needed to submit invoices within five working days of receipt;
The Executive Committee (EXCO) must advise on the procurement method or method of implementation of projects while waiting for National Treasury outcome;
A procurement plan circular must be issued with strict due dates. If the due dates to submit requests to process bids were not met, these bids would be removed from the procurement plan.

Mr Ramasodi said expenditure in the first quarter amounted to R2.482 billion, or 14.5% of the full year budget of R17.288 billion. This was an underspending of R1.647 billion compared to the drawings to date of R4.134 billion.

The programmes where under-spending occurred had been:
Administration, which under-spent by 67.8%;
Food security, land reform and restitution, which under-spent by 56.2%;
Economic development, trade and marketing, which under-spent by 24.4%;
Rural development, which under-spent by 23.4%;
Agricultural production, biodiversity and Natural Resource Management , which under-sent by 11.2%; and
Land administration, which under-spent by 9.8%.

The unspent budget was mainly attributed to:
Vacant posts within the Department.
The slow recruitment process;
Outstanding office accommodation payments due to disputes on invoices submitted by the Department of Public Works and Infrastructure (DPWI);
Slow supply chain management (SCM) processes and unavailability of stock result in delivery constraints, impacting the procurement of various assets such as laptops, desktops, cell phones and vehicles, and other equipment;
Delays in finalising the valuations process, and disputes by landowners and land claimants regarding offered amounts;
Delays in the acquisition of land due to prolonged facilitation and negotiations with landowners;
Delays in the payment of the Comprehensive Agricultural Support Programme (CASP), Ilima/Letsema and Land Care conditional grants to provinces, pending approval of the business plans;
Delays in the implementation of rural infrastructure development projects due to slow progress on site by contractors for the Mokgolwa and Mohlana projects; closure of the site for the Letlamoreng project due to health and safety issues;
Delays in the approval of spatial planning and land use management projects.

Expenditure per economic classification detailing each classification and the related figures were provided in the presentation.

The Department had instituted the following interventions:
The recruitment process for advertised vacant posts was under way;
Unspent funds due to vacant posts would be used for filling contract posts;
SCM processes that could not be implemented as planned due to Treasury’s instruction to stop were being fast-tracked, and processes that had lagged would be finalised by the end of September;
Development plans for the implementation of support packages to beneficiaries of agricultural state land so that funds were released, and approved plans, would be implemented from the third quarter;
Approval of business plans for the Comprehensive Agricultural Support Programme (CASP) conditional grants to provinces had been obtained, and outstanding funds were expected to be transferred from the second quarter;
Contractors for rural infrastructure projects had been advised to accelerate work as soon as materials were delivered on-site;
An improvement plan to fast-track land claims settlements was in place, and expenditure was expected to improve from the second quarter; and
There would be regular follow-up with suppliers on the delivery of goods supporting Farmer Production Support Units (FPSUs).

The DG said the Agriculture and Agro-processing Master Plan (AAMP) was based on six pillars:
Resolving policy ambiguities and creating an investment-friendly climate;
Creating enabling an infrastructure;
Providing comprehensive farmer support development finance, research and development (R&D), and extension services;
Ensuring food security expanded production and employment creation, decency and inclusivity;
Enabling market expansion, improving market access, and trade facilitation
Developing localised food, import replacement, and expanded agro-processing exports.

He said the AAMP was designed to address bottlenecks affecting strategic commodities to unlock job potential. It was designed to drive greater inclusivity by redressing models of support through investment and public-private partnerships that worked. The AAMP commodity corridors formed the basis for public-private partnerships.

The Department's economic transformation plans include master plans for agriculture and agro-processing, poultry, cannabis and sugar; the spatial development framework; the national integrated rural development strategy; the Communal Land Tenure Bill and Communal Land Policy; the Land and Agrarian Agency; beneficiary selection and land allocation policy; and norms and standards for the inclusion of designated groups. A women's empowerment strategy had been developed and was awaiting approval by EXCO, while a youth empowerment strategy was under consideration with the Food and Agriculture Organisation (FAO).

The greatest challenge to date has been addressing the transition. The first quarter non-financial report showed positive results for a performing Department. The demand for funding far outstripped the budget and at the moment, the levers to allow for effective, efficient, and economic financial expenditure were in place. The policy space and strategies were in place to assist with ensuring transformation in the sectors of agriculture, land reform and rural development.

Discussion

Co-Chairperson Qayiso asked the DG to explain to the Committee the role of consultants in the Department.

Mr Ramasodi responded that National Treasury had noted that both departments used consultants to carry out contract work. Consultants assisted with ensuring supplementation where there was no capacity within the Department to do that work. There were commodity groups doing work for the Department, aiming to build up the capacity to do work on its own through some SCM processes.

Mr A Shaik Emam (NFP) said that the performance appeared to be bleak, and a lot of work needed to be done to enhance the quality of services provided by the Department. He acknowledged that there had been organisational changes in the Department.

He asked the Department to explain why there had been a problem with spending in the first quarter -- whether it was due to poor planning or no planning. Why was there a budget available but no immediate implementation? Where did the three to five year plan feature, to ensure there was the capacity to spend in the first quarter, because slow spending would results in fiscal dumping towards the latter part of the year? The quality of performance was also affected by slow spending. He said there was a massive crisis in the maise and wheat sector due to the war in Ukraine and Russia. With the availability of such fertile land in South Africa, what was the Department doing to enhance this sector to become self-sufficient, seeing that the performance for food security was at about 46%? He said that the sugar cane sector had a quality issue. Crop growers in South Africa were having a serious problem that impacted sustainability, with a ripple effect on other industries like the confectionery industry. The imports from Eswatini at duty-free rates were impacting local farming and local production. He asked what role the Department had in this sector.

The poultry industry was also coming to a standstill due to dumping resulting from agreements such as entered into with the United States of America. He asked the Department what they were doing to protect the poultry industry, especially to save jobs.

His next concern was about groups targeting land. He asked what the Department was doing to handle the Khoi and San groups, especially due to the events in Grabouw. He acknowledged that the land fell within the Public Works domain, but noted that the Department had a responsibility too. It was important to enhance the very first indigenous people of this country who were the heirs to a large portion of land in the Western Cape, the Eastern Cape, the Northern Cape and KwaZulu-Natal.

His final concern was about farm dwellers. He said it was important to remain objective in this regard. When people worked on farms and retired after 30 or 40 years, farm owners were expected to provide retirees with accommodation. He said eventually farms would become residential areas. He suggested that the Department should work with farmers and local municipalities to provide sanitation, water and electricity sites. The employees of a farm should be placed on a waiting list the moment they start working, and the farm owner should contribute an amount to the municipality every month. When employees retired, this would assist with accommodation funded by the farm owner, with services provided by the municipality.

Mr E Marais (DA) said there was an issue that people at the managerial level did not submit invoices. It was a standard procedure that invoices should be submitted within five days, so the Department suggesting that invoices should be submitted within five days could not be listed as an intervention. A good consequence or intervention would be to initiate a disciplinary process when there was no adherence. The submission of invoices timeously should also be recorded in the key performance areas (KPAs) of the managerial staff, because it slows down the whole process.

His final concern was on who would be responsible for having a firm grip on the transfer of land. The Land Bank faced problems that would hopefully be picked up in the second or third quarters. The responsibility for the transfer of land should also be written into the KPAs of senior and executive staff.

Ms N Ntlangwini (EFF) suggested that the Department reassess the consequence management it implemented, especially regarding non-performance and late submission of invoices by employees. She said the common excuses of the Department, that non-achievement was due to Covid and that the Department was new, were no longer acceptable. There were employees in the Department with prior experience working with government, and people with the necessary skills and qualifications for the roles to which they had been appointed.

She asked the Department how much of the budget was dedicated to women and youth, highlighting the programmes and ventures targeting women and youth. She also required the number of women and youth that had been allocated farms since 2021, per province and per district.

The Land Bank was collapsing and thus far had supported mostly commercial white farmers, while black farmers had been left to fend for themselves. She asked what the plans were to ensure that the Land Bank continuously supports black farmers and whether the Land Bank had supported any new farmers in the last two years. In 2014, former President Jacob Zuma spoke about commercialising black farmers, and the current President also mentioned this in 2019. She asked what had been done thus far about the commercialisation of farmers, and how many farmers had benefited since 2014.

Ms D Peters (ANC) asked whether the Department had considered the impact of their slow delivery, non-delivery, and under-expenditure on the performance of the executing authority as per the performance agreement signed with the President. She said that by referring to it being a new Department, and showing that there was no control over the administrative functions, it seemed as if they were incompetent to perform the work they were meant to do.

She referred to a complaint about land redistribution support, where a farmer from Eshowe in KZN was not given the necessary support and funds to develop the land, resulting in the land losing value.  

Her next concern was about access to markets by emerging farmers, especially crop farmers. She asked what measures were being used to support farmers for their produce to reach the market. Slide 8 referred to proactive initiatives aimed at ensuring the participation of women and youth being a hindrance in the expenditure trends. She wanted to know how these vulnerable groups were seen as contributing to under-expenditure.

She said there was an issue with black emerging farmers being given leaseholds, or being allowed to buy farms, without a licence for the right to water use. She asked what the Department was doing with the Department of Water and Sanitation to ensure that emerging farmers had access to water use licences and rights. What programmes had the Department put in place to support emerging farmers, especially in the most rural parts of the country? The area of Schmidtsdrif had recently experienced veld fires and emerging farmers had lost cattle. A farmer lost more than 60 heads of cattle, and the DALRRD had taken months to respond. She asked if the Department could provide the ratio of extension officers to farmers per province.

Her next concern was that the Presidential Employment Stimulus Initiative vouchers were meant to alleviate the challenges of rising input agricultural costs by assisting smallholder farmers in purchasing supplies. The expenditure patterns had shown that the Department had grossly underspent on this programme. Had any legal processes been put in place to streamline this programme? How many farmers had benefited from these vouchers, and were any jobs created from this initiative?

Chairperson Buthelezi noted receiving an apology from the Minister for her absence.

Ms Ntlangwini expressed her disappointment that the Minister and Deputy Ministers were not present, despite knowing well in advance about the meeting.

Mr O Mathafa (ANC) also expressed disappointment that the Ministers were not present, but acknowledged the apology of the Minister.

He asked how far the micro-structuring organisational process was, whether the Department was happy with the process, and whether there a deadline had been set by the Department, the President and the Minister to ensure that the project would be fulfilled.

Regarding the cannabis master plan, he had raised an issue in previous meetings about Ms Ali Makobo (sp) who had encountered challenges as a small-scale farmer struggling to penetrate the market for transformed products such as skin care products, cannabis sweets, and cannabis alcohol, especially because it concerned the testing of the formulas by laboratories. Small-scale farmers could not afford testing by laboratories. In some cases, laboratories demanded that the formula be seeded to them, and revenue was received only after selling the end product. This caused a loss of revenue and intellectual property (IP). He asked whether the cannabis master plan was able to address such challenges for entrepreneurs like Ms Ali.

Since apartheid, South Africa has been moving at a low baseline compared to its competitors. The small-scale farmers had expertise but lacked financial support. They had a passion for succeeding and accessing the knowledge required to succeed. Was it a reality to the Department that certain designated groups should be empowered and uplifted into commercial trading -- how was this captured in the master plan? He asked whether there were spending targets in the master plan for emerging farmers, and how they would be protected from competitors, which also involved international plans.

Mr Shaik asked about the plans the Department had to make rural towns into semi-urban towns, and take development into those towns. He referred to a lady he had met who had a great plan in the Eastern Cape to grow plants for the cannabis market. She had the capacity to enter the market but there had been no response from the Department yet. He asked what the Department could do to support small-scale farmers. It was not doing enough to assist farmers, and the market was a good place for job creation.

Chairperson Qayiso said that he did not understand the DG when he spoke about budget pressures existing -- but under-spending existing at the same time. He asked what the Department’s role had been in the recent floods in KZN, and to what extent the Department had provided support where small-scale farmers had been affected.

He addressed an issue concerning vouchers for the support of small rural farmers, and community involvement. In ward 41 in Free State, the irrigation project had reached a standstill, and the community was frustrated. The programme had been given to another cooperative without their consent, and the community was stressed that if the issue could not be resolved, it would not be able to move forward. At what point would this issue be resolved? In the first quarter report, there was a delay in settlement of land claims -- what was the cause of this delay?. He also asked how far the land acquisition process was, and why the finalisation took so long.

The Committee had received indications of vacancies that were not filled. It was frustrating, because there was a problem with service delivery. There had to be a point where deadlines were set for filling vacancies, and he suggested that the deadline should be less than six months.

Chairperson Buthelezi asked the Committee secretary to read the Minister’s apology and asked the DG to express the Committee's disappointment to the Deputy Ministers who were not present without an apology.

He said that agriculture was a concurrent responsibility at both the national and provincial level, and asked how issues of agriculture were dealt with under these circumstances. The agriculture programme was a very important sector for economic transformation, food security and human economic growth. He expressed his disappointment with the Department's performance. He pointed out that the Committee was responsible for passing the budget in various sectors, and had to ensure that the money benefited South Africa and should therefore be accounted for. The Committee had the ability to reject the budget in its totality if the Committee was of the opinion that the Department was not taking care of the resources as it should.

He hoped the newly appointed DG would bring stability to the Department. He asked what should be expected for the current financial year's performance. There had been R1.124 billion underspending last year and various reasons had been provided. When budgets were appropriated, services must be delivered to people in the sector concerned. The Committee aimed to put money into the economy for economic growth, for farmers and small-scale farmers to be supported, and for employment opportunities to be created. The country was facing a financial deficit, so the country had to go to the market to borrow money, which placed state finances at a low level.

The Committee intended to call a follow-up meeting with the Department to hear about the progress of its performance. Under-spending due to the Presidential Employment Stimulus Initiative was a problem, because the Committee had approved the stimulus because of the urgency of getting young people employed. The initiative aimed to be an urgent intervention for young people, women, and people with disabilities. If it was a reason for unemployment, it was an issue. He asked the Department to inform the Committee about the issues which had affected the initiative, and what should be done differently, because it needed to approve the initiative for the next financial year.

It was worrisome when there was low spending in the first quarter and spending occurred only towards the end of the financial year -- usually referred to as the March spike -- and often signified fiscal dumping and a lack of planning. The country had a medium term expenditure framework (MTEF) budget which provided signals to all the departments as to what the allocations would be. Therefore it was a concern that fiscal dumping still occurred.

He said that the DALRRD’s personnel were educated and skilled, but the mandates were not being executed. The cannabis master plan had existed for some time, but the requirements were too high for black people who wanted to enter the sector. He asked the Department to share what the requirements for someone from Matatiele should be to satisfy entry into this industry. The industry was booming in Limpopo, and Matatiele was close to Limpopo, so what were the barriers to entry?

He referred to licences that government offered to support economic growth, and how these licences were used to promote economic transformation. His final concern was blended finance, and how the Land Bank was involved in this form of financing. He asked how the issues of the Land Bank were affecting the Department, and what its interaction with the Bank was at the moment.

DALRRD's response

Mr Ramasodi said the performance of both departments in the previous year had been good, except when there was a spike towards the end of the quarter. The Department needed to reach a point where planning was multi-year, not only in terms of its APP, but also its finances, so spending could start earlier every year from the first quarter. Issues were encountered because of the pressure the Department placed on itself by completing its spending in the fourth quarter, and then losing sight of planning for implementation in the first quarter of the next year. The Department was working on becoming better planners and better implementers by allowing enough time to ease into the implementation phase.

Mr Mokotule Kgobokoe, Acting Deputy Director-General (DDG): Corporate Support Services, said that the microstructure project had started, and a fit-for-purpose organisational structure had been developed. The current structure was not based on any strategy, but resulted from the national micro organisation of government following the proclamation by the President that land reform and agriculture should become one department. The Department of the Presidency and the Department of Public Service and Administration (DPSA) had developed micro start-up structures for the affected departments. Those structures were meant to be contiguous to help newly merged departments develop their strategic plans. A micro-organisational structure was supposed to be based on a strategic plan. The DALRRD had a five-year strategic plan approved by Parliament, which was the fit-for-purpose structure. The project started on 1 August 2022, and was supposed to take 12 months to implement. The Department and the accounting officer were trying to complete the implementation within 12 months. There were engagement sessions being conducted with the appointed service provider and the Departmental project team. The plan was to emerge with the draft organisational structure around January.

The filling of vacancies had been a thorn in the Department’s flesh. It had started this process in August 2021, but certain processes were underway which prevented filling vacancies because, as a new Department, these steps had to be taken first. Once the structure had been completed, there was a need to employ executive employees, senior management service (SMS) members, and employees below salary level 12. Once they had been appointed in terms of resolution 1 of 2019, vacancies could start being filled. The Department had been making placements from April 2020 to July 2021 of senior management and employees earning salary level 12 and below. When placements were made, they involved the decisions of the employer, employees and labour unions, and therefore it required a lot of consultation which led to the long delay. The current merged Department had more than 9 000 employees, all of whom were employed through a consultative structure, and it took a long time.

He assured the Committee that the Department was working with zest to ensure the process was completed. Other departments conducted all the checks. The DALRRD had successfully appointed a company to deal with employment, but by the time the company was appointed, there were 135 posts still pending. The SAPS conducted some checks, some done by other bodies, which had caused a big backlog. The Department was going to accelerate this process with the induction of the company. He agreed that the process must end, and that the Department would report back to the Committee on a six monthly basis.

Mr Kgobokoe said a new trajectory was emerging, authenticated by the first-quarter permanence, which was at 79%. The Department had observed under the leadership of the new DG that there were challenges at the planning level. When planning was messed up, all other things would also fall out of place, and at the planning level, some of the targets were not linked to technical indicator descriptions. If there was a disjunction between the target and the technical indicator description, plans would not be accurate. The Department had introduced a planning tool that had been approved by EXCO and shared with different functioning branches to use at the time of planning their targets. The plan has thus far improved planning. The first quarter planning was an indicator that the planning tool was working and that performance would maintain a positive trajectory from here on.

Mr Nasele Mehlomakulu, DDG: Food Security and Agrarian Reform, responded on the ratio of extension officers to farmers across the country. He said that the Department was nowhere near where it wanted to be. An announcement had been made that 10 000 officers were needed to supplement the programme. The DALRRD currently had 1 992 extension officers supported by 209 managers, which totalled 2 201 across the country. In the Eastern Cape, there were 527 officers, which meant one officer to 1 662 farmers. In KZN, there were 582, which was one to 1 216. In Limpopo, there were 321 officers, with a ratio of one to 2 058.

The national average was one extension officer serving 1 663 farmers. This was nowhere close to the Department's target, especially considering the number of farmers found by the general house survey conducted recently by Statistics SA. The Department was aware of how many households were involved in agriculture, those who were vulnerable, and subsistence farmers. There were over 2 700 vulnerable groups practising agriculture, with over 123 000 involved in subsistence farming who were the ones who most needed the advisory support in question. The Department was in the recruitment process, but had battled to secure the funding for the 10 000 officers required, and was currently aiming to recruit 5 000 officers in this financial year.

Responding to the presidential employment stimulus initiative concerns, he said the Department had redeemed 107 167 vouchers directly related to the number of farmers supported. It had issued 157 224 vouchers that were currently in the process of being redeemed. The initiative also included the work that the Solidarity Fund did during Covid, where there had been 36 676 producers supported and entered into the database to receive continuous support. For job creation, the Department of Performance Monitoring and Evaluation (DPME) was conducting impact evaluation work on this programme. The DALLRD could not confirm whether employment would be created due to the size of the vouchers and the intent of the vouchers being to keep households at a subsistence level. Job creation could not be at a high level, given the nature of the programme.

There had been glitches with the input suppliers and the verification of applicants because the Department was using the Vodacom USSD code system for applications. Other people who were not involved in farming were not applying; therefore, the verification of farmers also involved physical visits. Over 60 000 applications had been received, and physical visits were needed for those who did not understand technology. The National Treasury understood the challenges faced by the Department and had granted the rollover of funding being disbursed to farmers. The issues faced with suppliers of production inputs had now fortunately been resolved, because there were over 450 service points across the country, made up of bona fide agriculturists. The blind spots had been narrowed down, especially those areas that the Department was unable to reach, which meant that the redemption rate was improving.

To support small-scale farmers, there were programmes the DALRRD was working on with provincial departments. There were conditional grants targeting subsistence and small-scale farmers through the  Comprehensive Agricultural Support Programme (CASP). Farmer production support units and infrastructure support for the mechanisation of production inputs were also provided. There was a land care programme, and an animal and veld management programme that addressed issues of stock, water, handling facilities, fencing and infrastructure. Apart from these programmes, there were other programmes providing support too.

Mr Mehlomakulu said that to address land leases, water licence issues and water allocation reform; there were close working relations with the Department of Water and Sanitation. The benefits of irrigation were huge; therefore, the DALRRD recognised the need to speed up the process. Progress was being made on the commercialisation of black farmers and the blended finance scheme. A R1 billion Agri-Industrial Fund was recently launched by the Industrial Development Corporation, in partnership with the Department, in a key development aimed at addressing funding constraints facing black farmers and breaking entry barriers to commercial farming. There had been 28 processed transactions thus far -- seven in horticulture, 14 in poultry, two in forestry, two in beverages, and three in another sector. The 28 transactions had created 1 353 jobs.

To deal with the farm labour tenancy issue, there was an agri-village concept the Department was working on to tackle the challenge of evictions and living conditions of farms. He acknowledged that a farm was a place of employment, and not living. The DALRRD targeted the hotspot eviction areas and set up settlements to house labour tenants.

Ms Rendani Sadiki, Chief Financial Officer (CFO), said the Department welcomed the suggestions of 30-day payment to service providers, initiating disciplinary hearings, and including tasks in the KPAs of the managers. The Department’s performance had improved since the latest controls had been implemented, because the August report had reflected 100% performance against the targets set. The qualified audit opinion had indicated that they had finalised certain matters, and they were still handling disputes with the Auditor General, such as the PESI grant. They had not finalised the verification and confirmation that everybody had received production inputs acquired through the PESI, and this was the only area where the Department still had an issue.

At the beginning of the year, there had been an allocation for the PESI to make planning easier. On 12 August, Treasury approved a rollover of R231 million. In September, the Treasury had threatened to take the money back because the Department had not started the process, and such threats created instability. It would be better if the DALRRD received the money for the year early to assist with adequate planning, because approvals were usually communicated late.

The Department had been using the Preferential Procurement Policy Framework Act (PPPFA) strategy to deliver on the targets for women, youth, and people with disabilities. In February, the Constitutional Court ruled that the pre-qualification step of the PPPFA was unconstitutional. This ruling had impacted the Department because it had not factored it into its policy yet. It was reviewing the supply chain policy to include the constitutional order. Treasury needed to finalise the draft regulations they had published for public comment, and once they had finalised this, it could be factored into the Department’s procurement policies. At the moment, it did award benefits to women and youth groups in companies, but no specific plan was being used.

The funds returned to Treasury were made up of non-compensation of employees amounting to R288.5 million. This amount had been ring-fenced, and could not be touched. The amount submitted from the PESI, R378 million, was also ring-fenced. The final amount was from restitution and land distribution and tenure reform. When the books were reviewed, many invoices could not be paid because the money left over was specifically allocated to specific economic groups. She assured the Committee that fiscal dumping did not take place. A lot of money was spent towards the end of the year, but it was still on the plans set at the beginning of the year which had taken time to get approval, and this had caused the delays.

Mr Ramasodi recognised the challenge the Department was facing in terms of spending, and said it did not take it lightly.

He responded to the sustainability concerns of the sugar master plan, the poultry master plan, and the sustainability of the sugar industry considering the cheap imports. The master plan looked at the long-term viability of the sector, which aimed to diversify the value chain-based sugar cane industry into other globally competitive areas, including bioplastics and the co-generation of power. The DALRRD and the Department of Trade, Industry and Competition looked at the issue from a diversification point of view. Mr Shaik Emam had reminded the Department about where they were with the agreements made under the poultry master plan. The biggest issue faced was the issue of scaling up the poultry industry. The Department had fewer barriers to entry in this sector, and it was the cheapest source of protein. It had developed a plan covering five areas, one of which was the export of poultry. It was evident that the country would become competitive if the Department concentrated on exporting white meat.

Land tenure was an area where the Department had the support of the Office of the Special Master of Labour Tenants, which oversees the work being done under the land claims court. To resuscitate the economy in rural towns, the Department concentrated on the rural infrastructure and industries using the DDM and the national integrated wealth development strategy.

He asked if Mr Shaik Emam could provide the name and details of the lady he referred to. Where there was noncompliance, the Department always implemented consequence management,especially because of the current levels of performance and governance targeted.

The Land Bank was currently under the oversight of National Treasury and Minister Didiza, because it had a big impact on land and agrarian reform. National Treasury appointed the board, and the administration function was under National Treasury too. The Department entered the functions because it was affected as far as the Bank was concerned, with issues such as blended finance in its various forms, which included the programme’s Job Fund. The Department intended to make the newest form of the blended finance similar to the agrarian industry funds, to best assist farmers with the agriculture master plan.

Mr Ramasodi said that the Department had a beneficiary selection policy for women and youth that Cabinet approved. From 2019 to 2022, 76 000 hectares were allocated to women, and 52 000 to youth. The Department faced challenges with people with disabilities, as only 489 hectares had been allocated. He said the Committee misunderstood the concern raised that vulnerable groups were not a priority. The targets for designated groups were not being attained because people were not applying. The Department needed to actively engage with these groups and conduct training for them to benefit from the opportunities available. It would concentrate on training and creating compliant applications to meet targets.

The issues picked up on land redistribution were proactive land acquisition and the strategies used. Initially, properties were analysed, and prioritisation was developed for the acquisition of the properties. Some farmers had been left outside the loop, and the Department was working on including them. The Department had a task team delegated to the issue of water licences and looked at water pricing caps for agricultural use. It was looking at previous strategies the Department of Water and Sanitation had used to support under-resourced poor farmers, resuscitating and funding them. Cost recovery was required when disasters were faced, especially around water issues. The DALRRD was working on issues of water quality and asset ownership because of the regional water schemes.

He said he would take up the issue of Schmidtsdrif with the Department in Northern Cape. Usually, in terms of the Natural Disaster Management Act, a quick assessment and emergency procurement occurred.

Part of the cannabis master plan was to have an industrialisation strategy that the Department of Trade and Industry was looking at to address the transfer of products and testing laboratories. He said that the Department would develop a plan to commercialise black farmers. When the floods occurred in KZN, assessments were done and a task team was put in place to implement the plan. Usually, the province was called to provide emergency assistance, and the national Department would reimburse the province at a later stage. The irrigation scheme was fully existent before the Department came with the FPSU, and there were now dynamics the Department had to work on. When the President was in Free State, he engaged with the beneficiaries. A task team was also working on ensuring that the scheme reflected the needs of the beneficiaries.

He said that in an ideal scenario, national competence vs provincial competence would function, where the national department would be responsible for policy and the provinces for implementation. However, in terms of various acts, there were specific national mandates in certain areas, and specific provincial mandates. Government was striving to separate the competencies to enforce better oversight.

He responded to the concern about Lesotho and Matatiele regarding the cannabis plans, saying that the master plan usually benefited people who had been doing it for a very long time due to their indigenous knowledge. The legal framework on the use of cannabis and the impact on the industrialisation strategy created barriers to entry and issues of infrastructure. These issues could be addressed only when the legal disputes were sorted out. The Land Bank had a significant role in this sector. A new bill would be instituted, and there would be a focus on smallholders. Agriculture required consistency and predictability, and any failure of the Land Bank would always impact the agriculture sector. Since the climate of Covid had subsided, the sector had an upward performance, producing double figure growth.

Chairperson Buthelezi asked what the involvement of the Department of Health in the issue of cannabis licences was, and where the licences came from.

Mr Ramasodi said cannabis had two components -- hemp and marijuana. The Agriculture Department had been issuing permits for hemp since October last year, with the SAPS. The Department of Health issued the permits for marijuana, otherwise referred to as hard cannabis. The Department aimed to achieve uninhibited access through the master plan, subject to a few regulations, without impacting too much on agriculture.

Committee matters

The Committee Secretary announced that the Committee needed to move their travelling plans to a week later than the originally planned dates.

The meeting was adjourned.