The Budgetary Review and Recommendation Report of the Portfolio Committee on Agriculture, Forestry and Fisheries, dated 19 October 2011

1. Introduction

Section 5 of the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No. 9 of 2009) requires the National Assembly, through its committees to annually assess the delivery and financial performance of each national department.

1.1 The role of the Committee

The Portfolio Committee mandate is to legislate, conduct oversight of the Executive, promote public participation, facilitate international agreements and review matters of public interest in relation to the Department of Agriculture, Forestry and Fisheries, as well as its entities.

1.2 The Department

Vision

The vision of the department is to be a leading, dynamic, united, prosperous and people-centred sector.

Mission

The vision is aimed to be achieved through developing and sustaining a sector that contributes to, and embraces:

• Economic growth (and development).
• Job creation.
• Rural development.
• Sustainable use of national resources.
• Food security.

2. Department’s Strategic Priorities and Measurable Objectives

2.1 Department’s 5-year Strategic Goals and Objectives

1. Increased profitable production of food, fibre and timber products by all categories of producers (subsistence, smallholder and commercial). The goal will be supported by the following strategic objectives:

• Promote efficient production, handling and processing of food, fibre and timber.
• Coordinate government food security initiative.
• Improve production systems anchored in commodities with a competitive and comparative advantage in each province.
• Comprehensive support towards rural development.

2. Sustained management of natural resources. Strategic Objectives are to:

· Promote environmentally sustainable production systems.

· Ensure the sustainable management and efficient use of natural resources.

· Ensure protection of indigenous genetic resources.

· Increase contribution to green jobs to improve livelihoods.

3. Effective national regulatory services and risk management systems. Strategic Objectives are to:

· Promote safe food by managing the level of risks associated with food, diseases, pests, natural disasters and trade.

· Establish and maintain effective early-warning and mitigation systems.

4. A transformed and united sector. Strategic Objectives are to:

· Increase equity, ownership and participation of previously disadvantaged individuals (PDIs).

· Enhance systems to support the effective utilisation of assets.

· Improve social working conditions in the sector.

· Provide leadership and support to research, training and extension in the sector.

5. Increased contribution of the sector to economic growth and development. Strategic Objectives are to:

· Increase growth, income and sustainable job opportunities in the value chain.

· Increase the level of public and private investment in the sector.

· Increase market access for South African and Africa agricultural, forestry and fish products, domestically and internationally.

· Increase production of feedstock to support the manufacturing sector.

· Promote the use of feedstock by-products for renewable energies.

6. Effective and efficient governance. Strategic Objectives are to:

· Establish and strengthen cooperative governance and functional relations with local and international stakeholders.

· Strengthen policy, planning, monitoring, evaluation, reporting and sector information.

· Provide effective audit, investigative and legal, human resources and financial risk management.

· Improve departmental services excellence through implementation of quality standards, Batho Pele principles and the general legislative mandate.

· Provide leadership and manage communication and information.

2.2 Measurable Objectives of the Department

Programme	Purpose	Measurable objective	Baseline	Targets
Administration	The programme provides the department with the necessary human recourses capacity, the facilities and ICT hardware to ensure the efficient and effective execution of the mandate of the DAFF. The programme is also responsible for the overall administration, stakeholder relations, intergovernmental relations, communication and legal services of the DAFF. It comprises the programmes Corporate Services, Chief Financial Officer (CFO), and Stakeholder Relations and Legal Services	Fourteen Human Resources Management (HRM) policies were submitted to the Governance and Operational Policy Committee (GOPC) during the period under review. This constitutes almost 90% of the set target. Micro-agricultural Financial Institutions of South Africa (Mafisa) retailing institutions, disbursed loans to 3 910 clients across the country for various agriculture-related enterprises. This constituted 150% of the set target (2 600) for the period under review and pertains only to loans. The target for the CASP was exceeded by 194% from the 10% set target of 2 600 farmers. A total of 3 473 subsistence farmers were supported through the Ilima/Letsema projects. Altogether 100% of the fisheries server mitigation project was completed, as well as Phases 1 and 2 of the forestry user migration project. A total of 78% of performance agreements for Senior Management Service (SMS) members was submitted by the end of the fourth quarter.	60% adherence 120 stakeholder relations .	70% adherence 3 new functional relations established
Policy Panning, Monitoring and Evaluation	The programme is responsible for the coordination of policy development, research and technology development, as well as monitoring and evaluation. Furthermore, it renders guidance to the strategic, programme and project planning process and conducts statistical and economic analyses. This is to ensure a greater impact of the DAFF policies and programme. The programme comprises two subprogrammes, namely Monitoring and Evaluation; Policy Development and Planning	The Monitoring and Evaluation Reporting (MER) Framework was approved by the Departmental Executive Committee (DEXCO) published and made available on the departmental intranet. The Strategic Operational plan Framework was also approved by DEXCO, published and made available on the departmental intranet. The Strategic Plan of the DAFF 2011/12 to 2014/15 was tabled in Parliament. The Service Delivery Improvement Plan (SDIP) for the DAFF was completed and published as Annexure 2 in the Strategic Plan.	58%	5%
Economic Development Trade and Marketing	The programme is of key importance in directing the DAFF’s priority to increase the sector’s overall contribution to national GDP growth through the creation of viable and sustainable cooperatives and rural enterprises, value-added products and an increase in exports. The implementation of international relations and trade strategies will be closely connected to marketing, in order to access foreign markets. The programme comprises three subprogrammes, International Relations and Trade; Cooperatives and rural Enterprise Development; and Agro-processing and Marketing.	Memorandum of Understanding (MoUs) and agreements with Zimbabwe, Swaziland and Uganda were finalised. The programme also participated in bilateral meetings with Namibia, Lesotho, Mozambique, Algeria and China. Based on preliminary data for the 2010 calendar year, 43% of agriculture exports were exported to markets other than the EU and the SADC. Again based on the preliminary data for the 2010 calendar year, 57% of agricultural exports went to the EU and the SADC – the two biggest destinations for South Africa agricultural exports. A feasibility report on the establishment of fresh produce collation and storage facilities, for the attention of the Industrial Development Corporation (IDC), the Land Bank, The Department of Trade and Industry (dti) and the European commission Fund (ECF) with a vies to possible funding, was completed during the period under review. Approximately 241 sustainable rural cooperatives (agriculture, forestry and fisheries) were established.	Current M&E Systems National, provincial and local plans aligned to government strategic priorities	Framework for MoUs and SLAs on M&E for government and stakeholders National, provincial and local plans aligned to new electoral mandate and MTSF
Food Security and Agrarian Reform	The programme is meant to develop and facilitate the implementation of appropriate agrarian reform policies and targeted programmes, aimed at enhancing the contribution of subsistence and smallholder producers to food security. This will be achieved through education and training; the provision of national extension and advisory services; and the promotion of transformation imperatives in the agricultural, forestry and fisheries sectors. The programme comprises three subprogrammes, Food Security; Sector Capacity Development; and National Extension Support Services. Food Security is responsible for subsistence farming, smallholder farming, smallholder development and the provision of inputs, implements and infrastructure support. National Extension Support Services aims to develop national extension policies and provide training and national extension support. The latter two are to direct and support agricultural education, training, as well as extension and advisory services un support of targeted groups.	The Grootfontein Agricultural Development Institute (GADI) research report and the Grootfontein Agricultural Journal were published. Service Level Agreements (SLAs) on targeted and priority research projects were signed with the ARC for implementation during the 2011/12 financial year. The draft Zero Hunger Strategy and implementation Plan were completed. A draft Food Security Policy was also completed. A total of 14 proposals on Telefood Programmes, in partnership with the FAO, were approved and implemented. The National Delivery Forum for Vulnerable Workers on farms and in forestry and fisheries was established after the Terms of Reference (ToR) for its establishment had been adopted. The DAFF Partnership Model (Sustainable Farming Model) pilot project, which is run in conjunction with Grain SA, Agri SA, NWK Ltd and VKB Ltd, brought assistance to 15 grain farmers in the North West and Free State provinces. These farmers each received support to the value of R500 000 in grants from the DAFF to grow bitter sorghum, maize, sunflower, and beans. The market for these grains was secured through Grain SA and the NWK Ltd. A total of 650 ha were planted with grains. Owing to effective coordination of training, a total of 31 474 members of communities, including smallholder farmers, the youth and women, were trained.	National Poverty Deprivation Index	Monitor food availability at household level in the country
Agriculture Production, Health and Food Security	The programme identifies opportunities and develops strategies, in order to optimise agriculture agricultural productivity and profitability within the agricultural sector. The programme also manages the risks associated with animal diseases, plant pests, genetically modified organisms and the registration of products used in the agricultural fields. The programme comprises three subprogrammes, Plant Production And Health; Animal production and Health; and Inspection Services and Food Safety. Animal Production Health is responsible for creating an enabling environment for increased and sustainable animal production through the efficient use of genetic resources. It manages risks associated with animal diseases by means of appropriate policies, legislation, norms and standards, technical guidelines and other services. Plant Production and Health focuses on increasing agricultural productivity with the emphasis on sustainable plant production systems and the efficient use of genetic resources. It also manages, risks associated with plant pests and diseases. Inspection Services and Food Safety s responsible for food safety and quality of regulated products provides for the national inspection service of regulated products intended for local and international markets.	Two feedlot facilities were established in cooperation with the Limpopo and Eastern Cape departments of agriculture. At Blouberg in Limpopo, Local municipality facilities were completed and weaners would be procured during the first quarter of 2011. In the Eastern Cape Province, the feedlot facility is already in use with cattle of all sizes being supplied for the market. The training of 16 animal surveyors for the Comprehensive Breed Survey in the Free State was completed. The survey of 1 437 farmers in all districts in the sample frame was also completed in the Free State. Regulations for plum and prunes, as well as nectarines and peaches, were submitted to the WTO for notification. Regulations relating to the ban of the use of chlorpyrifos were gazetted on May 2010. Research solutions on wheat production and cultivar evaluation were completed and included clear recommendations on the appropriate cultivars to be used in the northern and southern productions areas.	780 000 commercial farmers 200 000 smallholder farmers 4,07 % small farmers producing for sale	4 000 commercial farmers 10 000 smallholder farmers 5,27 % small farmers producing for sale
Forestry and Natural Resources Management	Sustainable use and management of natural resources underpin the agricultural, forestry and fisheries sectors. The programme is to provide policy advice and coordinate the implementation of programmes aimed at ensuring that forestry production is undertaken sustainably, within the capacity of the landscape and climate. This includes encouraging land-owners and managers to maintain and improve the natural resources base on which agriculture production relies, namely soil, vegetation, water and the atmosphere. The Resources Management part of the programme is to contribute to policy and programme development and implementation in the areas aimed at improving water access arrangements for all users, while promoting its efficient allocation, use and sustainable managements. The programme is also responsible for encouraging sustainable resources access and use through the development of policies to position the agricultural, forestry and fisheries sectors in such a way as to meet the challenges of achieving sustainable production. It aims to provide accurate and reliable information for improved natural resources management, which is essential for the sustainable use of natural resources, policy development and programme implementation. Resources Management is also responsible for promoting and facilitating greater adoption of sound agricultural, forestry and fisheries natural resources management at primary industries, communities and regions through targeted programme to improve natural resources management practices and management of the natural resources base; and to facilitate the development of agricultural infrastructure and use of agricultural resources. Other activities include auditing natural resources, compliance and law enforcement for natural resources management; controlling migratory pests; rehabilitating and protecting agricultural land; and running the community-based LandCare Programme. It will furthermore develop mitigation and adaptation measures, aimed at risk and climate change.	A total of 12 213 green jobs were created through the Forestry Livelihoods Strategy and the LandCAre Programme. A total of 1 000 ha were afforested in the Eastern Cape and 1 962 ha in Kwazulu Natal. During 201/11, altogether 25 fire protection associations (FPAs) were registered. A total of 571 commercial farmers, 2 024 smallholders and 2 314 subsistence farmers adopted land-use best practice during the period under review. A vulnerability assessment was conducted and three vulnerable areas were identified in the south-western parts of the Free State. Weather and climate capacity-building workshops were conducted for officials in the North west and Limpopo provinces. Short courses on Agro meteorology were also presented at the University of the Free State from 1 to 18 March and 28 March to 1 April 2011.	30% Estimated total water loss/nonrevenue water 95 wetlands rehabilitated per year 70% of land affected by soil degradation Existing extent of forest resources: 0,5 m ha (natural forests) 39 m ha woodlands	2% Estimated total water loss/nonrevenue water 6 wetlands rehabilitated per year 1% (800 ha rehabilitated) Rate of deforestation reduced by 0,004 % (16 000 ha)
Fisheries Management	The aim of the branch is to contribute to maintaining and restoring the productive capacity and biodiversity of the marine environment; ensuring the protection of human health; as well as promoting the conservation and sustainable us of marine living resources. The branch further aims to ensure that the degradation of the marine environment as a result of land-based activities is prevented by facilitating the realisation of the duty on the part of the DAFF to preserve and protect that marine environment through the application of the respective policies, priorities and resources.	The Transfer of Rights Policy and the Small-scale Fisheries Policy were gazetted. The Policy on the Transfer of Commercial Fishing Rights was published and gazetted. The programme continues with the granting of interim relief measures pertaining to exemption/permits. The Integrated Fisheries Security Strategy (IFSS) is in draft format and is being distributed to stakeholders for further inputs. A total of 20% of cases and tip-offs were investigated in accordance with services standards, and 11 cases were registered. Altogether 12 849 units of abalone were seized, as well as 19 units of West Coast rock lobster (WCRL). The Hake Recovery strategy yielded good results and signs are evident that the stocks are in the process of being rebuilt, albeit as a slow pace. The programme uses the standardised catch per unit effort (CPUE) indices for each hake species, in order to determine whether the stocks are increasing or decreasing. Abalone diving surveys were completed in Zone B (20 transects). A preliminary joint survey was carried out in conjunction with industry stakeholders. The stock assessment report on Eastern Cape abalone was reviewed. The research project on spawning sea urchins was successful. Phase 1 of the scallops’ grow-out trials was completed. Negotiations were concluded with the Universities of Cape Town, Rhodes, Kwazulu-Natal, Stellenbosch and the Western Cape to enter into MoUs with the DAFF to undertake aquaculture research. Larval settlement studies and photo period studies, aimed at the enhancement of gonad development, were completed. Altogether 20% of the EU’s Food ad Veterinary office (FVO) evaluation report recommendations regarding their requirements have been completed. Joint partnership with law enforcement and conservation agencies, e.g. With the SAPS, the South African National Defence Force (SANDF), South African National Parks (SANParks), the SARS, Kwazulu-Natal/Ezemvelo Wildlife and Swellendam were established and have been maintained.	Marine aquaculture policy finalised Commercial fishing rights allocated, and policy frameworks developed for rights allocations in other commercial sectors Strategy in place for abalone and hake	Conduct environment studies on 4 sites leading to the development of zones Finalised subsistence and smallscale fisheries policy and rights allocated Additional fishing rights on account of available TAE allocated in large pelagics fishery and appeals finalised Research on catch and/or effort limit for 22 fishery sectors and ecosystem interactions Continuous review of strategy for hake and abalone in respect of research, management and compliance

3. Analysis of the Department’s Prevailing Strategic and Operational Plan

3.1. The 2011/12 Strategic Plan

The Department underwent major restructuring that resulted in the renaming and/or combining of some of its programmes and reprioritising of its budget. While the Department had 7 programmes in 2010/11, in the current financial year (2011/12), the Department has six programmes, three of which have new names. The Department has done away with the former Programme 2: Production and Resources Management and Programme 3: Agriculture Support Services.

The sustainable use and protection of land and water mandate of the former Programme 2 and the disaster risk and management services mandate of the former Programme 3 have been added to the Forestry programme in the current medium term expenditure framework (MTEF) period. The rest of the activities of the former Programme 2, viz. agricultural productivity and infrastructure development now fall under the new Agricultural Production, Health and Food Safety Programme and the Food Security and Agrarian Reform Programme, respectively. The rest of the activities of the former Programme 3 are now split between the Administration; Trade Promotion and Market Access; as well as the Food Security and Agrarian Reform Programmes.

These changes and how the budget was reprioritised, which present a challenge in terms of continuity from the previous financial year, are not explained in the Department’s Strategic Plan. However, the National Treasury’s Estimates of National Expenditure shows that there was a budget for these ‘new’ programmes in the past financial year (2010/11). For all the Department’s programmes, some strategic outcomes and indicators were not aligned with the strategic goals and/or objectives. These issues were also highlighted in the high level review (not an audit) of the Department’s 2011/12 Strategic Plan by the office of the Auditor-General. The indicators are either not relevant or specific to the stated strategic objective or outcome and some are not quantifiable. Some seem to be a result of a ‘cut and paste’ job from previous years’ or draft documents. These highlighted issues raise concerns regarding the level of the Department’s engagement in the strategic planning process and the people who were involved. Below are some examples of the misaligned strategic objectives and outcomes:

Examples of misaligned Strategic Goals, Objectives and Outcomes

Programme	Strategic Goal	Strategic Objective	Strategic Outcome	Outcome Indicator
1. Administration, Trade Promotion & Market Access, Fisheries	Effective and efficient governance	Establish and strengthen cooperative governance and functional relations with local, regional and international stakeholders	Advancement of the SA agenda and sustainable development	Contribution to regional, continental security and stability

The Indicator is not aligned with the strategic goal, objective and outcome and will in no way strengthen cooperative governance and functional relations, which are largely lacking amongst government departments and other stakeholders. For example, in its Strategic Plan, the Department mentioned working with the departments of Public Works and Rural Development to create dams for cultivation and livestock but made no mention of the Department of Water Affairs.

Programme	Strategic Goal	Strategic Objective	Strategic Outcome	Outcome Indicator
2. Food Security and Agrarian Reform	A transformed and united sector	Provide leadership and support to research, training and extension in the sector	Increased production enabled by extension support and appropriate technologies	2000 extension personnel receiving targeted technical and generic training

The Strategic Objective is assumed to be referring to extension personnel, research institutions/agencies and all categories of producers in the sector. The Outcome Indicator addresses one aspect of both the Strategic Objective and Outcome.

Programme	Strategic Goal	Strategic Objective	Strategic Outcome	Outcome Indicator
3. Agricultural Production, Health & Food Safety	Effective and efficient governance	Coordinate government food security initiative	Sustainable agrarian reform	An increase in the number of smallholder farmers from 200 000 to 250 000 for crop and animal production

The Strategic Objective is not aligned with the Strategic Goal and the Objective is neither specific nor measurable. The achievement of sustainable agrarian reform will depend on collaborative activities with other Departments e.g. Rural Development and Land Reform (DRDLR)’s land redistribution programmes. In addition, there are also other departments involved in food security initiatives.

Programme	Strategic Goal	Strategic Objective	Strategic Outcome	Outcome Indicator
4. Forestry	Effective and efficient governance	Coordinate government food security initiative	Sustainable agrarian reform	An increase in the number of smallholder farmers from 200 000 to 250 000 for crop and animal production

· Agriculture, forestry and fisheries sectors are all based on natural resources. The Department did not explain the rationale for placing Natural Resource Management, one of the Government’s key priority outcomes, as a sub-programme of the Forestry Programme.

· Secondly, climate change has an impact on all three sectors and intensive agricultural production contributes to green-house gas (GHG) emissions. The Department’s focus for climate changes activities is only on Forestry.

· Lastly, disaster risk management (and mitigation) is also an overarching function and the Department did not provide the rationale for placing it under Forestry. For example, natural and climate change related disasters such as floods, drought or heat waves and disease outbreaks affect all three sectors.

4. Analysis of Section 32 Expenditure Reports

An analysis of the Department of Agriculture, Forestry and Fisheries’ Section 32 Reports was not done for the year under consideration.

5. Analysis of the Department’s 2010/11 Annual Report and Financial Statements

The Department planned to complete an Agricultural Production Strategy in 2010, which will promote growth and development of subsistence, smallholder and commercial producers through different commodity groups and strategies. The departmental policies’ central focus is to address the challenges that are faced by rural and vulnerable people by empowering them to create cooperatives and small, micro and medium enterprises (SMMEs); facilitate access to development finance and improve capacity building and mentorship. The Forestry programme’s priorities for the medium term included the development of a strategy and fund for the SMMEs in the sector; developing a strategy to address timber shortages; establishing extension support for emerging growers and entrepreneurs; and reducing the regulatory burden on small and merging businesses. The priorities of the Fisheries programme included establishing and revitalising state-owned hatcheries; developing aquaculture development zones; cage culture pilots in state-owned waterworks and coastal areas; and doing research and development on candidate culture species for aquaculture.

5.1. Overview of the Department’s Performance for 2010/11

This section provides the summary of key performance areas for each programme in relation to key measurable objectives for the 2010/11 financial year as outlined in the Department’s Strategic Plan and Annual Report for 2010/11.

Programme 1: Administration

The Department has significantly reduced its vacancy rate from 17% to 11% by the end of the 2010/11 financial year due to the amalgamation of the agriculture, forestry and fisheries components, thus, exceeding its target of 16%. The Department also trained and developed approximately 53% of its targeted personnel, again exceeding the 50% target as outlined in its Strategic Plan. The Department also exceeded its target and made strides in addressing HIV and AIDS through counselling and testing campaigns, individual case assessments and employee service provision where necessary. However, occupational health and safety might still be a challenge in the Department as it managed to conduct only 7.8% risk assessments in occupational high risk areas, against the targeted 25% risk assessments for 2010/11.

For the development of smallholder and subsistence farmers through access to financial services, the Department set a baseline of 26 000 farmers (smallholder and subsistence) for the 5-year period starting from 2010/11 until 2014/15 financial year. However, in its Strategic Plan, the Department set itself a 10% target each year (i.e. 2 600 farmers) which adds up to 13 000 over the 5-year period, which is half its baseline. Based on the 10% annual target, for the 2010/11 financial year, the Department exceeded 2 600 for the MAFISA, CASP and Ilima/Letsema programmes. However, the numbers do not give a clear picture as the Department is inconsistent in its reporting. For MAFISA, it mentioned 3 910 clients and for CASP, it mentioned 6 149 smallholder farmers but nothing on subsistence farmers, who are also catered for under CASP. It will also assist if the Department can give objective definitions and a clear distinction between a smallholder and a subsistence farmer instead of boxing them in terms of support through CASP or Ilima/Letsema.

Programme 2: Policy, Planning, Monitoring and Evaluation

Service delivery agreements were signed by participating Ministers and service delivery forums were established by participating departments. The Department’s Monitoring, Evaluation and Reporting (MER) Framework was approved by the Departmental Executive Committee (DEXCO) and its Service Delivery Improvement Plan (SDIP) was completed and published. The Department also initiated work on the Monitoring and Evaluation (M & E) Framework for MAFISA, which could not be finalised due to the departmental restructuring process.

The Department failed to approve annual M & E plans and its M & E Plan template was put on hold pending the approval and placement of senior management service (SMS) members to new units. One of the Department’s challenges under this programme is other programmes that do not adhere to reporting quarterly and annual time frames. The plan is to address this challenge by implementing the MER Guidelines and enforcing that the Deputy Directors-General (DDGs) ensure that programmes and sub-programmes adhere to time frames. The Department planned to review and approve at least 3 policies but none was reviewed, and it also failed to monitor and coordinate targeted research and technology utilisation in the sector.

Programme 3: Economic Development, Trade and Marketing

The Department participated in numerous multilateral agencies and meetings in the region (SADC), the continent and abroad. The Department managed to increase the percentage of agricultural, forestry and fisheries products that are exported to markets other than its traditional markets, i.e. the EU and SADC, and exceeded the 37% target by 6%. However, based on preliminary results, the Department failed to maintain the average of 65% of exports to the EU and SADC, instead, achieving 57%. The Department plans to place more emphasis on tightening diplomatic relations with its current trading partners. In addition, it could not increase the percentage of agricultural, forestry and fisheries products imports from, and exports to African countries.

The Department planned for an increased share in agricultural, forestry and fisheries products (up to 31.8 metric tons) handled through additional investment in storage capacity but only managed to complete a feasibility report on the establishment of fresh produce collation and storage facilities. The reason given by the Department is that there were no funds to establish the storage infrastructure and the Department has submitted funding requests for possible funding to the Land Bank, Industrial Development Corporation (IDC) and the Development Bank of Southern Africa (DBSA). The Department also could not get 15.6 metric tons of products from the three sectors transported by rail but only managed to develop an agrologistics model but no commitment from Transnet Freight Rail (TFR). In this regard, negotiations are continuing with TFR’s executive and senior management.

For the 2010/11 financial year, the Department planned to establish and support 3 sustainable rural cooperatives (on agriculture, forestry and fisheries) as vehicles for local economic development. The Department failed to achieve this deliverable but instead, reported its assistance of 241 cooperatives to register. The Department attributed the failure to achieve the latter to poor coordination of cooperative functions amongst departments, provincial Departments of Agriculture (PDAs) and other government agencies; lack of clear cooperative development strategies from provinces and inadequate extension support inter alia. To address the issues, the Department’s Directorate of Cooperative and Enterprise Development will draw up a coordination strategy. The Department also failed to facilitate access to at least 12 BEE deals to the value of R48.6 million, citing delays in the signing of the AgriBEE Fund Memorandum of Agreement (MoA) between the Department and the Land Bank.

Programme 4: Food Security and Agrarian Reform

The Department undertook a number of national and provincial initiatives to monitor progress and food insecurity status in the country in partnership with SADC and the UN’s Food and Agriculture Organisation (FAO). The Department completed drafts of the Food Security Policy and the Zero Hunger Strategy, both of which have not been presented to Parliament or implemented.

The Department exceeded its target of monitoring training support to 10 000 community members (who include smallholder farmers and farm workers). Through various Sector Education Training Authorities (SETAs), CASP, colleges and universities, the Department facilitated training for 31 474 community members including women and youth. The Department signed service level agreements (SLAs) with the ARC on targeted and priority research, which will be implemented in the current financial year (2011/12). The Department also planned to establish a Research and Technology Fund to address resource constraints associated with long-term research.

Programme 5: Agriculture Production, Health and Food Safety

The Department planned to increase the percentage of productive animals and animal products by 30% (baseline of 29% + 1%). The Department reported that it has achieved the latter indicator and exceeded the baseline by 18%. However, this is not clear as the number of animals that make up the baseline was not given, and the Department did not provide the locations of the projects. The Department failed to increase animal products but managed to involve 591 dairy and goat farmers in the National Milk Recording and Improvement Scheme. It established two feedlots in two provinces viz. one in Blouberg Municipality in Limpopo and another one in an unnamed location in the Eastern Cape. In collaboration with China, an aquaculture facility has been completed in Gariep in the Free State but infrastructure around the facility is yet to be completed. The Department extensively reviewed a number of its regulations to improve compliance, some of which were approved and some are awaiting approval.

There is no clear indication that the Department has managed to decrease production costs through improved efficiency of farming systems. The Department has not achieved the target of having a partially implemented Agricultural Production Strategy to support specific commodities but only managed to produce draft documents for cotton and fruit and has done consultations for other relevant policies and legislation. To manage risks associated with diseases, pests, natural disasters and trade, the Department planned to finalise a Memorandum of Understanding (MoU) between the national Department, the provinces and the Agricultural Research Council (ARC) to address phytosanitary issues in rural areas. In this regard, the Department is still yet to submit a discussion document for comment and approval. The Department cited lack of funds and expertise in some areas as constraints for not achieving some of its stated objectives.

Programme 6: Forestry and Natural Resources Management

The programme was initially called Forestry and Resources Management in the Strategic Plan. The Department managed to address its objectives and achieved most of its set targets for this programme, and where stated targets were not achieved, an explanation was given. Some of the targets that were not achieved include:

· The expansion of commercial forest estate by afforesting 10 000 hectares in the Eastern Cape and KwaZulu-Natal (KZN). Only 1 000 and 1 962 hectares were afforested in the Eastern Cape and KZN, respectively.

· The Department fell short of creating 25 000 green jobs, only creating 11 593 jobs. It has attributed the shortfall to poor reporting and verification structures and processes between the national Department and provinces.

· The Department failed to review and develop the Agricultural Land Protection Policy but only managed to complete Terms of Reference (ToR) and has tasked the ARC to conduct a policy study (evidence-based).

Programme 7: Fisheries Management

The Department has changed this programme’s name from that which is in the 2010/11 Strategic Plan, viz. Marine Fisheries and Coastal Management. During the Department’s 4^th quarter performance briefing of the Committee, the programme was still named Marine Fisheries and Coastal Management. No explanation has been given either for the name change or whether the change has a bearing on the Programme’s mandate. For Fisheries, the Department had minimal achievements in some of its targets and failed to reach its set targets for most of its objectives citing limited human and financial resources.

The Department for example, planned to conduct research on finfish and scallops for aquaculture but only managed to conduct some research on scallops. It planned to review 70% of fisheries but only managed to do a draft survey report and 50% of the assessment. The Department planned to investigate 75% of cases and tip-offs according to services standards but only managed to investigate 15%. The Department planned to implement the Transfer of Rights Policy and the Small-scale Fisheries Policy. In this regard, two applications were finalised and approved under the Transfer of Rights Policy and it is still collating comments on the draft Small-scale Fisheries Policy.

5.2. Human Resource Management

The Department has managed to reduce its vacancy rate by approximately 4% from 15% in 2009/10 to about 11% in the current financial year due to the finalisation of its restructuring. In the 2010/11 financial year, the Department employed 286 new staff members through appointments and transfers, including 4 members of the SMS (Chief Financial Officer, Media Liaison Officer, Director: Financial Administration and Director: International Relations). In addition, a total number of 118 employees including 3 members of the SMS (Director-General, Chief Director: Planning and Monitoring and Chief Director: Trade and Marketing Development) were promoted to higher positions in the Department. The Department evaluated 358 jobs resulting in the upgrading of the salary levels of 69 posts and downgrading of the salary levels of 128 posts (higher than the previous year’s 81).

The Department had a staff turnover rate of 5.9% and lost the services of 375 employees (a drastic increase from the previous year’s 185), which includes 2 members of the SMS through resignations, transfers, deaths, retirements and dismissals. The majority of employees who left the Department were in the salary level 9-12 band (highly skilled supervision). The Department employed 9 foreign workers, namely, 1 in the skilled band, 7 in the highly skilled supervisory band and 1 in the SMS band. The highly skilled supervision band (salary levels 9-12), which has the highest number of vacant positions and mostly in the sciences, also has one of the highest numbers of employees that used sick leave after the SMS and highly skilled production bands. This is a trend from previous years which the Department’s Human Resources Directorate has to look into as in most cases it has nothing to do with an actual illness but workplace stress and working conditions, or lack of internal controls as specified by the Auditor-General.

Utilisation of Consultants

Fisheries was the only programme that used consultants in the 2010/11 financial year. The programme utilised approximately R3 million of its appropriated funds on 6 consultants. The activities that were done by consultants included the rights allocation process, the catch monitoring programme (R1.1 million) and subsistence fisheries management in KZN (R1.2 million). No historically disadvantaged individuals (HDIs) have ownership of, or hold management positions, in any of the 6 consultancies. In each case, only 1 HDI was employed, possibly as a labourer. Two other projects were also carried out by consultants using donor funds worth approximately R443 682. The same scenario also applied in terms of ownership or employment of HDIs in these consultancies.

5.3. Financial Information

5.3.1. Budget Overview

It should be noted that due to the amalgamation of forestry and fisheries into agriculture, the budget allocation for 2010/11 was done according to the programmes that existed in the 2009/10 financial year. Therefore, the programme names are different from those that are in the 2010/11 Strategic Plan and Annual Report, as some programmes were either merged or phased out, while some functions were added to the Forestry Programme. This then presents a challenge in aligning the Department’s expenditure trends within programmes and how these relate to the 2010/11 Strategic Plan, which informed the Department’s performance as presented in the 2010/11 Annual Report. Now that the Department’s amalgamation and establishment of the new structure has been finalised, it is hoped that the Department will be consistent and refrain from changing the names of its programmes every year.

Table 1: Total Budget Appropriation and Expenditure

APPROPRIATIONS	ACTUAL EXPENDITURE	VARIANCE
R3.9 BILLION 2010/11	R3.8 BILLION	R103 MILLION
R3.8 BILLION 2009/10	R3.7 BILLION	R35 MILLION

Source: Annual Report (DAFF), 2011

Expenditure

The Department of Agriculture, Forestry and Fisheries was appropriated a total amount of R3.95 billion in the 2010/11 financial year, which was slightly more than the R3.8 billion that was appropriated in the previous financial year (see Table 2). Expenditure in the first six months of 2010/11 was R1.9 billion (47.9% of the adjusted appropriation of R3.95 billion), a slight increase of R76.2 million or 4 per cent, compared to the R1.8 billion expenditure in the first six months of 2009/10. The main expenditure increase compared to 2009/10 was due to increased allocations for the ARC, Comprehensive Agricultural Support Programme (CASP) and Ilima/Letsema.

The Department only spent 97% of its appropriated budget in 2010/11, which is less than the 99% expenditure that it achieved in 2009/10. As a result, the Department underspent a significant amount of R103 million, which it attributed to:

· An unpaid lease amount of R12.3 million for office accommodation as the building was not ready for occupation at the end of the financial year.

· Withheld transfer payments for CASP (R33.7 million) and Ilima/Letsema (R7.5 million) due to under-spending by some provinces.

· An incomplete fencing project on the Lesotho border resulting in an unspent amount of R2.9 million that will be rolled-over to complete the project. This is a concern given the risks that are associated with disease transfer across borders and stock theft in areas along the Lesotho border.

· The Department did not complete the registration of smallholder farmers through the Farmer Register Project, thus under-spending R19.5 million which will be rolled over to complete the project.

The unspent amounts above add up to R75.9 million and an unspent amount of R27 million was not accounted for, yet the Department claims it could not achieve some of its important objectives due to lack of funds. The 2% decrease in expenditure (97% versus 99%) compared to the previous financial year is largely due to under-expenditure in the then Programme 3, Agriculture Support Services, which is also responsible for conditional grants (±R41 million for CASP and Ilima/Letsema that was withheld due to under-spending in provinces). Although the Programme still constitutes the largest percentage (44%) of the Department’s total expenditure, this is 9.6% less than 53.6% that the programme spent in 2009/10.

Revenue

The Department estimated its revenue for 2010/11 to be R119.3 million, a decrease from 2009/10’s R250.5 million, due to decreases in debtor accounts repayments and unspent conditional grants refunded by provincial departments. By the end of the financial year, unspent conditional grants refunded totalled R10.6 million compared to R113 million in 2009/10. However, revenue in respect of recovered debt and inspection fees exceeded the estimate. As a result, the Department’s actual revenue received amounted to R156.96 million for 2010/11. As minimal as the returned amount is for unspent conditional grants (R10.6 million) the fact that it seems to be a norm is worrying. Given the level of poverty and unemployment in most provinces, the Department should be striving for 100% expenditure on conditional grants.

5.4. Financial Reports and Risk Management

5.4.1. Internal Auditing

The Department’s Audit Committee highlighted that the system of internal control applied by the Department over financial risk and risk management is not operating effectively, efficiently or transparently. In addition, as reported in previous years, Internal Audit is till under-resourced and cannot operate optimally in order to address and manage risks in the absence of a reliable risk assessment with concomitant controls identified to mitigate risks. The Audit Committee also mentioned that certain matters that related to deficiencies in the Department’s system of internal controls that were reported in prior years, had not been fully and satisfactorily addressed. The Audit Committee also commented that it had no oversight over the activities of the Fisheries Programme for the year under review, except expenditure in respect of compensation of employees. Therefore, it could not comment on the appropriateness and effectiveness of Fisheries internal controls or any other matters relating thereto.

5.4.2. Report of the Auditor-General

In terms of the financial statements, the Department received an unqualified audit opinion from the Auditor-General (AG), with emphasis of matter regarding the following:

• Unaudited supplementary schedules - Annexures to financial statements (page 159 to 175 of the Annual Report) were presented as additional information and therefore, were not audited and no opinion is expressed on them.

• Expenditure management – the Accounting Officer did not take effective steps to prevent irregular expenditure as required in the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA). Goods and services with a transaction value between R10 000 and R500 000 were procured without inviting at least three written price quotes from prospective suppliers as required by National Treasury Practices.

• Non-compliance with regulatory and reporting requirements (PFMA and Treasury Regulations) – the Accounting Officer prepared a Strategic Plan that did not include measurable objectives as required in Treasury Regulations. The Department conducted a risk assessment and although the risk management strategy has since been finalised, the fraud prevention plan had not been finalised, approved and implemented as per the Treasury Regulation 3.2.1. The latter issue was also raised in the last financial year.

• Presentation, usefulness and reliability of reported performance information – no adequate explanations were provided for major variances between planned and actual reported targets for 56% of reported targets with major variances in Programmes 5 (Food Safety and Biosecurity) and 6 (Forestry). For Programme 3 (Agriculture Support Services), Programme 5 and Programme 6, significant percentages of the planned and reported targets and/or indicators were not specific, measurable, verifiable and unambiguous. For 86% of selected indicators in Programmes 5 and 6, the validity, accuracy and completeness could not be established as sufficient appropriate audit evidence and relevant source documentation could not be provided for audit purposes.

• Deficiencies in internal controls – Lack of leadership: The Accounting Officer did not exercise oversight responsibility over reporting and compliance with laws and regulations and internal controls. For example, control weaknesses reported are not in all cases analysed by management and appropriate follow-up actions are not taken to address the root causes impacting on the financial and performance reporting. The Accounting Officer did not monitor the implementation of action plans to address internal control deficiencies reported in the previous year relating to performance information.

- Governance: Although a risk management strategy has been finalised, ongoing monitoring and supervision are not undertaken to enable an assessment of the effectiveness of internal controls over performance reporting.

• Other reports – Investigations: An independent consulting firm was requested by the Department to conduct investigations on allegations of irregularities and corruption related to procurement, recruitment and promotions of staff, administration and management of debt, and control over project funds. The investigations were finalised and a report was submitted to the Executive Authority for consideration.

In the previous financial year, the Department had similar investigations and the report was submitted to the Executive Authority for consideration by 31 July 2010.

5.4.3. Details of adjustments to Estimates of National Expenditure

a. Roll-overs

The Department had roll-overs amounting to R15.6 million from the following programmes:

• Administration – R3.7 million rolled over for membership fees for the Consultative Group in International Agricultural Research (CGIAR).
• Food Safety and Biosecurity – R11.9 million rolled over for purchasing Foot and Mouth Disease (FMD) vaccines (R8 million) and for compensation payments to farmers whose pigs were culled during the classical swine fever campaign (R3.9 million).

b. Unforeseeable and unavoidable expenditure

The Department received an additional allocation of R57 million for unforeseeable and unavoidable expenditure for the following:

• Agriculture Support Services - an additional R50 million for livestock feed for farmers in the Eden District affected by drought.

- an additional R46.9 million for drought in the Eastern and Western Cape Provinces.

• Food Safety and Biosecurity – an additional R7 million for combating FMD outbreak in Limpopo.
• An additional R30.2 million was allocated for higher personnel remuneration including increased housing allowance for all programmes.

c. Virements and Shifts

In this section, only the total shifts and virements with significant amounts are reported on.

Fisheries – R263.8 million was transferred from the Department of Environmental Affairs following the shift of the Fisheries function to DAFF.[1] The shifting of funds was effected between all programmes and was approved either by the National Treasury or the Department’s Chief Financial Officer (CFO). Most of the funds from all programmes were vired from Compensation of Employees (due to vacant posts), mostly for ICT-related activities. The largest amount of vired funds amongst programmes was from Agriculture Support Services Programme (R21.6 million) due to a reduction on contracts and mostly for the Farmer Register Project. The second largest amount was from the Food Safety and Biosecurity Programme (R17.4 million) due to vacant posts and mostly for ICT. The total virements granted for the 2010/11 financial year were R151 million.[2] Included in the activities that were funded through virements was farmer compensation for losses due to classical swine fever in the Eastern Cape, KZN and Free State provinces.

d. Self-financing expenditure

Forestry: R51.6 million from state managed plantations, which has been surrendered into the National Revenue Fund, will be used for operational costs for the commercial forestry function in Mpumalanga. In the previous financial year, an amount of R49.2 million from state plantations was used for the same purpose.

6. Budget Analysis for the 2011/12 Financial Year

It should be noted that the order of programmes in the Department’s Strategic Plan does not correspond with programmes in the Estimates of National Expenditure (ENE). For example, Programme 2 in the Department’s Strategic Plan is Trade Promotion and Market Access while in the ENE, this programme is Programme 4. Therefore, the order of programmes in the ENE was used for the Budget Analysis.

Table 2. The Department’s Budget Trends over the MTEF Period

Programme	Budget (MTEF)				Nominal Rand change	Real Rand change	Nominal % change	Real % change
R million	2010/11	2011/12	2012/13	2013/14	2010/11-2011/12		2010/11-2011/12
Administration	1 117.6	1 297.0	1 461.0	1 433.1	179.4	120.0	16.05	10.74
Agricultural Production, Health and Food Safety	610.2	891.9	994.3	1 048.4	281.7	240.8	46.17	39.47
Food Security and Agrarian Reform	1 092.0	1 244.2	1 379.7	1 559.0	152.2	95.2	13.94	8.72
Trade Promotion and Market Access	145.6	191.8	183.4	193.5	46.2	37.4	31.73	25.70
Forestry	755.0	770.7	902.5	935.7	15.7	- 19.6	2.08	-2.60
Fisheries	283.5	324.2	391.2	333.5	40.7	25.9	14.36	9.12
TOTAL	4 003.9	4 719.8	5 312.1	5 503.2	715.9	499.7	17.88	12.48

Source: National Treasury (2011) - Vote 26: Agriculture, Forestry and Fisheries and own calculations.

The Department of Agriculture, Forestry and Fisheries received an allocation of R4.7 billion in the 2011/12 financial year, which is 0.9 per cent of the total appropriation by vote (R499.5 billion) and 0.5 per cent of the total appropriation for the country (R888.9 billion) in the 2011/12 financial year.[3] In real terms (inflation-adjusted), the Department’s 2011/12 budget allocation has increased by 12.5 per cent compared to the 2010/11 financial year’s allocation of R4 billion (See Table 1 above). A significant proportion of the Department’s budget for 2011/12 will be allocated to the Administration (27.5 per cent) and the Food Security and Agrarian Reform (26.4 per cent) programmes, respectively, while the Trade Promotion and Market Access will receive only 4 per cent of the Department’s total allocation.

Over the medium term (i.e. 2011/12, 2012/13 and 2013/14, respectively), the Department identified efficiency savings of R33.1 million, R37.9 million and R150.2 million across all programmes in spending on goods and services as follows:

• R 11.2 million from agency and support services.
• R4.5 million from travel and subsistence.
• R2 million from contractors.
• R575 000 from inventory.
• R1 million from training and development.
• R8.5 million from consultants and professional services.
• R5.4 million from transfers and subsidies.

The Department’s revenue is projected to increase from R119 million in 2010/11 to R123.6 million in 2013/14, at an average rate of 1.2 percent due to revision of tariffs. Its expenditure is projected to increase to R5.5 billion, at an average annual rate of 11.2 per cent over the medium term. The increase over the Medium Term Expenditure Framework (MTEF) is due to increases in the conditional grant allocation for the CASP, Ilima/Letsema and LandCare. These allocations increased from R1.5 billion in 2010/11 to R1.9 billion in 2013/14.

The Department will receive additional allocations of R391.5 million, R609.3 million and R652.1 million over the medium term for the following:

• R34 million, R57 million and R60 million to provide for baseline amounts that were not funded for the management of forestry operations in Mpumalanga.
• R41.8 million, R45.4 million and R47 million to improve conditions of service.
• R5 million in 2012/13 and R7 million in 2013/14 to upgrade IT systems.
• R5 million, R60 million and R60 million for the Marine Living Resources Fund for the maintenance of patrol vessels.
• R63.3 million, R63.3 million and R 63.4 million for the prevention and mitigation of disaster risks.
• An additional R400 million was allocated to the CASP over the medium term and a further R100 million for LandCare for fencing for agricultural projects (R55 million and R45 million in 2012/13 and 2013/14, respectively).
• R197.4 million, R203.6 million and R139.7 million for carry through cost of funds shifted in 2010/11 from the Department of Environmental Affairs for the Fisheries function.

The Department is also funding infrastructure projects at a total cost of R1.2 billion, which include but not limited to:

• R28 million for fences to manage the spread of foot and mouth disease.
• R7 million to drill and fit boreholes for agricultural purposes.
• R2 million for the Lesotho border fence. In the 2010/11 financial year, the Department rolled-over R2.9 million that was unspent due to the incompletion of the Lesotho border fence, yet in the current year, the funding for the project is reduced to R2 million.

7. Consideration of Reports of Committee on Public Accounts

The Department of Agriculture, Forestry and Fisheries did not appear before the Public Accounts Committee.

8. Committee Oversight Visits

The committee conducted joint oversight visits on the Comprehensive Rural Development Programme (CRDP) with the Portfolio Committee on Rural Development and Land Reform to four provinces, namely, Northern Cape, Limpopo, Free State and Mpumalanga. The report of the oversight will be tabled in Parliament once the visits to two more provinces (North West and Western Cape) are concluded. Findings of the committee on the provinces visited illustrate the challenges that are experienced by rural communities, farm dwellers, farm workers and the Department itself.

8.1. Summary of the findings and recommendations

• Rural security: Livestock farmers complained about stock theft as well as damage-causing wildlife (predators). They argued that failure to ensure rural security posed a threat to the sustainability of their farms, their ability to contribute to food security as well as their own sources of livelihoods.

• Development of rural infrastructure in areas where land reform beneficiaries have been relocated to (roads, electricity, communication and water) required urgent attention.

• The role of municipalities in land reform projects as well as support of farm workers during evictions requires strengthening. It was unclear during the oversight visit whether the local and district municipalities were involved in any development initiatives in land reform.

• Private sector organisations such as the Stud Book South Africa have potential to contribute to the development of livestock farmers in South Africa. Through their stud breeding programme they could enter into joint ventures and mentoring programmes with the emerging farmers on both land reform farms and communal areas to ensure that they develop desired breeds of livestock.

• The recapitalisation programme, for example, through the VUKANI Farmers in the Free State, had fostered partnership between commercial farmers and emerging farmers in manners that link emerging farmers with both up and downstream industries.

9. Committee’s Observations

· Most of the financial and risk management issues in the Department, in particular the lack of internal controls and unreliability of reported performance information, have been raised by the AG in the past three years and the Committee in the past year. This is a very worrying trend that clearly shows that the Department simply ignores the AG’s report and the concerns raised by Parliament.

· Lack of monitoring and evaluation is still the Department’s biggest challenge as evidenced by the lack of or poor performance from provinces, through which most of the Department’s programmes are implemented. The challenges that the Department have with provinces impede progress in providing farmer assistance and support, thus threatening food security. This is notwithstanding the fact that the Department’s mission is to develop and sustain a sector that contributes to, and embraces inter alia job creation, rural development and food security. During the Committee’s oversight visits to land reform and agricultural projects in provinces, it was evident that there is serious lack of planning, coordination and intergovernmental relations within and amongst departments (including with the Department of Rural Development and Land Reform), as well as lack of monitoring and evaluation.

· It seems the Department makes plans without linking them to its budget and personnel capacity and availability. The Department for example, did not achieve most of its planned activities and had a number of incomplete projects in the past financial year due to lack of financial and human resources. Some of these projects have been on-going for a number of years, e.g. compensation of farmers for the classical swine fever campaign.

• Poor intergovernmental relations: there is a lack of engagement between the Department and its entities; sister departments and the private sector including stakeholders. The Department does not involve relevant stakeholders, particularly beneficiaries of its programmes, in planning.

• The Department does not conform to the Batho Pele principle as evidenced by the lack of responses to stakeholder queries including Members of Parliament (MPs). The Department does not even acknowledge receipt of correspondence.

• The bilateral and multi-lateral agreements that the Department has entered into with various countries and multi-national agencies are not communicated to the Committee.

• Agricultural stakeholders and beneficiaries do not get the required and necessary assistance from the Department to an extent that they have to resort to other departments such as Rural Development and Land Reform for assistance. For example, a Broiler Chicken project in Free State Province and the Ram Programme for wool production in the Eastern Cape Province that was on the verge of collapse until the stakeholders approached the Department of Rural Development and Land Reform (DRDLR) for assistance. In both cases, stakeholders approached DRDLR after failed attempts to get a response from the Department of Agriculture, Forestry and Fisheries (DAFF).

• The Department lacks a clear strategy with a long-term vision (instead of five- year terms) on how to achieve and maintain food security in the country in response to the growing population, the millennium development goals (MDGs), climate change and other external factors.

• For the past 5 years, the Department has been having roll-overs and virements for the compensation of farmers that were affected by classical swine fever in the Eastern Cape, which the Department confirmed was eradicated 4 years ago. The Department previously attributed its inability to finalise the cases to not having records of all the affected farmers. If this is still the case, the Department should give details on who did the culling of pigs, how it was carried out - assuming that all affected areas have extension officers attached to them; and state when the compensation of farmers will be finalised.

• In previous years, the classical swine fever cases were only reported in the Eastern Cape, which the Department confirmed was eradicated. Disease eradication means that it has been cleaned out and therefore, is not expected to break out again. Yet, in this Annual Report, cases for compensation are reported in the Free State and KZN, which both border the Eastern Cape. As has been noted from the handling of the FMD and avian flu cases, this issue also highlights the poor capacity of the Department in disease control and management, as well as poor management of the movement of livestock and/or livestock products across borders. For instance, in the reporting year, R2.9 million was unspent and had to be rolled-over because the Department could not complete fencing on the Lesotho border. This ineffectiveness has negative consequences to the sustainability of the livestock industry and its contribution to the economy.

• For the past two financial years since Forestry has been amalgamated into Agriculture, revenue from state managed plantations has been used for the operations of commercial plantations in Mpumalanga. The Department must give details on these Mpumalanga plantations stating when were they established and when are they expected to be self-financing since they are commercial enterprises.

10. Conclusion

The Department cited the restructuring as a result of the amalgamation of Forestry and Fisheries with Agriculture, lack of capacity and skills within the Department, financial constraints and poor cooperation from provinces as some of the challenges that constrained it from achieving all the targets that were set out for the 2010/11 financial year. It has since finalised its amalgamation and restructuring, therefore, it is hoped that poor performance will no longer be attributed to this challenge. Otherwise, with the exception of research which is under capacitated, it becomes difficult to advocate for a budgetary increase for the Department as it struggles to spend the little that it receives, and has little to show for it. Therefore, the Committee acknowledges and recognises that some of the challenges are a result of little research that is being done in agriculture due to underfunding. The Department is commended for the fact that in identifying and highlighting its challenges and constraints to meeting its targets for each programme in the previous financial year, it has also provided corrective measures to address the challenges.

11. Recommendations

• The DAFF should be accountable for all the funds dispersed to provinces and be able to monitor how the funds have been used. The DAFF should devise a monitoring plan for Land Reform for Agricultural Development (LRAD) projects and all other projects that are funded by the Department and intervene where beneficiaries struggle to maintain them, for example some ended up being invaded by squatters. Many such struggling or abandoned land reform agricultural projects were observed during Committee oversight visits.

• Any budgetary increase to the DAFF must prioritise research and technology development by increasing the grant allocation to the ARC, which is the country’s premier agricultural research institution and the Ondersterpoort Biological Products (OBP), which currently does not get any budget allocation from the Department. The OBP, which has infrastructure challenges, plays an important role in livestock disease awareness and control and therefore, the Committee would like to see it being allocated a Budgetary Allocation from the 2012/13 financial year.

• Where provinces are failing to utilise conditional grants, particularly Ilima/Letsema and LandCare, agribusinesses, organised agriculture and established local and non-profit community-based organisations (CBOs), not private consultants, should be contracted to disburse the funds. Some of these organisations have proved to be efficient and are carrying out commendable work in poor communities.

• The Department should minimise the use of consultants by presenting to the National Assembly a long-term plan to strengthen the capacity of its personnel in carrying out the work that is done by consultants.

• The Extension Recovery Plan (ERP) has not yielded tangible results in terms of benefits to the people that are served by the extension service. The Committee recommends that the Department do a review of the ERP and the extension service.

• The Committee recommends that the Department present by March 2012, a forward-looking plan for the sector that outlines the number of people that the country is currently feeding (through domestic production and imports); the shortfalls; long-term projections on the number of people that the country will be able to feed in 20-40 years for example; the possible constraints and opportunities in meeting the projections; and how these will be addressed to ensure that the country and each household in the country remains food secure.

• The Department should refrain from path dependency and do feasibility studies and needs-based research that encompasses the real needs of the beneficiaries before investing large sums of money on unsustainable projects.

• Developing farmers who acquired farms through private means should be afforded assistance to productively run their farms. The Department should present a plan to the National Assembly in this regard.

• The Department should strengthen intergovernmental relations and project coordination between and amongst national and provincial role players.

• Pieces of legislation that constrain the development of the sector should be reviewed and amended where necessary.

Report to be considered.

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