Department of Agriculture, Forestry and Fisheries 2019/20 Annual Report

Meeting report

The former Department of Agriculture, Forestry and Fisheries (DAFF) Annual Report for 2019/20 was presented by Mr Kgobokoe Mokutule, Deputy Director General (DDG): Policy, Planning & Monitoring & Evaluation, and Acting Director General, Mr Mooketsi Ramasodi.

Presentation of 2019/20 annual achievements and challenges
The purpose of the DAFF six programmes (Programme 1: Administration, Programme 2: Agricultural Production, Health and Food Safety, Programme 3: Food Security and Agrarian Reform, Programme 4: Trade Promotion and Market Access, Programme 5: Forestry and Natural Resources Management and Programme 6: Fisheries Management) were outlined.

DAFF Audit findings and trends from 2012/13 to 2019/20 were noted (see document).

Performance Indicators 2019/20 Targets achievement
DAFF achieved 69% of its targets. Detailed tables on targets achieved and not achieved for the six programmes 1-6 for 2019/20 were shown.
Examples of unachieved and achieved targets were:
• 86 256 Households supported with agricultural food production initiatives: 44 849 Households were supported and 41 407 households could not be confirmed due to the COVID-19 pandemic.
• 109 534 hectares planted for food production: 17 908,94ha were planted. Support for 91 625.06 hectares could not be confirmed as physical monitoring was not possible due to COVID-19.
• 20 Extension support practitioners deployed to commodity organisations: 41 extension practitioners were deployed and 21 additional practitioners were deployed due to the interest shown in some provinces.
• 26 200 smallholder producers for support: 1 567 were supported. Support to 24 633 smallholder producers could not be confirmed due to the COVID-19 pandemic.

• 27 957ha of agricultural land to be rehabilitated: 35 183.56ha was achieved. Over-achievement was due to approved rollovers allocated for equitable share and EPWP incentive. The Eastern Cape changed the payment method from daily to task method which meant workers completed tasks more quickly to get paid.
• Qualified 2018/19 Audit Report due to material misstatements for biological assets such as forestry.
• 95% of Invoices were paid within 30 days which is more than the target of 80%.
• Some media plans were not implemented due to urgent need for focusing on preparation for new merged department from April 2020 and COVID response publicity towards end of March 2020.
• 168 CCS veterinarians were deployed during 2019/20. 21 international veterinarians could not be placed due to resource constraints.
• National Survey on Food and Nutrition Security was not conducted. The research agreement between DAFF and HSRC to undertake the survey was concluded at the end of March 2020. Centralising provincial funds and contracting service providers took longer than anticipated.
• Status Report on graduates placed has been compiled with 255 graduates placed.
• 144 cooperatives were supported together training as follows: EC: 21, FS: 23, GP: 26, KZN: 17, LP: 16, MP: 21, NC: 4, NW: 16.
• 12 commodity-based cooperatives have been established in various provinces.
• 551,53 ha planted in temporary unplanted areas (TUPs). 393.47 ha not planted due to insufficient rain.
• The Recommissioning Business Model was not developed. There were delays in the appointment of a professional service provider. The bid will be re-advertised once National Treasury has given approval.
• Annual performance monitoring report on agricultural land rehabilitation interventions was developed.
• A target of four Operation Phakisa Projects were to be supported and 14 were supported. The target was exceeded due to high interest in accessing water space in Saldanha Bay.
• A Small-scale Aquaculture Support Programme concept note has been compiled.
• Aquatic animal health research disease preventive measure was done and final progress report compiled.
• Research report on drivers of de-oxygenation and acidification on West Coast aquaculture compiled.
• Rights allocated to registered small-scale fishery cooperatives (Eastern Cape, KZN, Western Cape). 73 71 small-scale fisheries cooperatives have been registered and allocated 15-years fishing rights. Two Cooperatives registered in Eastern Cape have not been allocated rights. Allocation of small-scale fishing rights in Western Cape has not taken place due to delays caused by tip-off processes.
• Recovery plans for Abalone and West Coast Rock Lobster (WCRL) were approved and permit conditions reviewed. 60 joint operations with partners was the target and 66 were conducted.

Key highlights of 2019/20
• Census on Commercial Agriculture report, undertaken by Stats SA for Department, was released.
• The Producer/Farmer Register, focusing on having a comprehensive register of smallholder producers is in the last stages of being concluded and will be launched during 2020/21.
• Reviewing of provincial department agriculture budget and indicators for the MTSF period started in March. The review is to strengthen accountability for use of allocated resources to ensure what matters most is implemented to achieve sector imperatives. Employment in the sector amounts to 865 000.
• The department hosted a successful World Food Day on 16 October 2019 in Lusikisiki.
• Risk Management Committee held quarterly meetings as required.
• Audit Committee was functional and played a key advisory role.

Challenges of 2019/20
• Management and control of conditional grants implemented by provinces.
• Insufficient funding in critical areas (such as disease control, monitoring).
• Insufficient capacity (posts abolished and some remain unfilled).
• Disaster challenges.
• Disease outbreak.

Human Resources
Between 2018/19 and 2019/20:
• Post establishment decreased from 6 120 to 5 235 posts,
• Staff turn-over rate decreased from 5.8% to 5.2%.
• The filling of vacant positions continued to be suspended due to inadequate budget for compensation of employees, resulting in an increasing vacancy rate which impacted on employment equity target progress.
• Consequence management remains on the radar as the misuse of government vehicles is becoming a prevalent misconduct which the department has addressed.

Financial Report
The Department spent 98% of its budget (see document)

Reasons for overspending and underspending
Programme 1: Expenditure of R14,471 million for development of DAFF Producer Farmer Register did not realise. Underspending on compensation of employees is due to vacancies not filled due to moratorium on filling of posts pending finalisation of National Macro Organisation of Government (NMOG) process.

Programme 2: Underspending was R5,005 million earmarked for compensation of  employees and equipment which did not realise as expected for Compulsory Community Service of Primary Animal Health Care Programme.

Programme 3: The expenditure of R3,750 million for Land Bank admin fee for Blended Finance Programme did not realise. Further underspending was result of vacancies not filled due to moratorium on filling of posts pending finalisation of National Macro Organisation of Government (NMOG) process.

Programme 4: Expenditure of R9,579 million for membership fees did not realise due to savings from foreign exchange rate fluctuations. Underspending of R1,122 million for Land Bank. Admin fee for Agri BEE Programme was not realised. Further underspending was result of vacancies not filled due to moratorium on filling of posts pending finalisation of National Macro Organisation of Government (NMOG) process.

Programme 5: The expenditure earmarked as transfer payment for Food and Trees for Africa for R400 000 did not realise. Expenditure of R1,135 million for Land Care programme grant to Gauteng province was withheld. Further underspending was due to vacancies not filled due to moratorium on filling posts pending finalisation of National Macro Organisation of Government (NMOG) process.

DAFF Audit Report 2019/20 DAFF: DAFF Audit Committee
The internal control reviews undertaken by the internal audit function reveal gaps in many operational environments. The root causes for most of the identified control weaknesses relate to ineffective procedures, lack of detailed planning, competency gaps and resource shortages. In many instances where the controls were found to be ineffective, non-adherence by officials was the reason. Capacity constraints and inadequate consequence management were major contributors to the ineffective control environment.

The system of planning, approval, disbursement, execution, and monitoring of conditional grants are fraught with planning and control weaknesses. DAFF continues to allocate conditional grants to provinces, while some department’s capacity to “follow the money” has not been adequately developed. Effective consequence management requires stability but the environment has not been conducive for consequence management. Instability challenges experienced in the prior year had an adverse impact on the reporting period. Management’s response to a number of audit findings points to under-funding which impacted on service delivery as the department has on a number of occasions been unable to speedily and sometimes effectively implement risk mitigation/prevention measures when faced with an outbreak of animal, plant or food related disease as experienced in recent times.

Shortcomings in resource utilisation prioritisation, gaps in planning and resource wastage also impact on the department’s ability to adequately pursue development opportunities within its area of mandate.

Challenges in the achievement of objectives
There were challenges in lack of long-range planning; priorities are not always scientifically backed; organisational design is not aligned with priorities and operational planning is not detailed enough. Risk management is not operationalised; monitoring and evaluation is not systematically resourced; internal controls are not adequate or effective and information and communication systems are not adequately geared to support core business. Ineffective co-ordination, particularly planning and reporting arrangements with provinces were observed and had an adverse impact on achievement of objectives.

Land Care and Drought Relief Programme implementation
Concerns related to fraud and risk indicators highlighted by reviews undertaken by both internal and external audit functions.

Progress made by management in the investigation
• The processing and closure of irregular, fruitless and wasteful expenditure is a matter of concern as the implementation of the necessary actions to address this type of expenditure is very slow.
• The resourcing of the risk and investigations unit is a concern as the current capacity is not sufficient.
• Significant gaps were observed in many Provincial Departments of Agriculture (PDAs) on relevance and completeness of reported information on project business plans and portfolio of evidence.

Discussion
Mr N Capa (ANC) said he did not have many questions, but that there were many challenges and that he did not think there was a way to change this now. He appreciated that DAFF was able to present on poor performance. There is a possibility of correcting the shortcomings, but his main worry is the 69% achievement. He asked if there was a satisfactory explanation for this.

Acting Director General Ramasodi replied that DAFF was equally disappointed in the 69% achievement and that it could do better.

Ms A Steyn (DA) said she understood that the report ends 31 March 2020 and COVID-19 began at the same time. She asked why challenges were attributed to COVID-19 and it could not say that items were not verified due to COVID-19. What has it been doing for the entire year from April 2019 to March 2020. “This is unacceptable and she was not impressed. Last week she communicated that COVID-19 would be blamed. We are not discussing COVID-19 so why is this even mentioned in the previous year report?” She would like a proper explanation on this.

Ms B Tshwete (ANC) (EC) said she was extremely concerned as the report did not speak extensively to 2019/20. She emphasised that she was seriously concerned. It could not achieve one of its targets because of lockdown. She asked for these reasons to be clarified.

Ms Steyn said DAFF gave COVID-19 reasons for non-achievement on the food security programme which she did not believe as it was not during the pandemic. Even if this was during the pandemic, this was only for a month or two. Agriculture should have been continuing as normal. She had been informed that during this time it was difficult to get hold of DAFF staff at the offices.  She asked which officials worked during COVID-19 as agriculture was supposed to be functioning and working. The farmers moved around and food was produced in this country under very difficult conditions.

Ms Steyn said she received an answer from the Minister on the suspension of the Chief Surveyor General as well as the Chief Director: Spatial Information suspended in May 2017. She asked if they are still suspended and why no investigation has been done. She asked how people could be suspended for three years on a full salary. She requested a full report on why disciplinary hearings were not held. She asked if the development of export protocols served a compliance purpose or whether it was so that exports could be sent to new countries. She asked if investigations were made into DAFF of Forestry and Fisheries and if anyone was charged and appeared in court.

Mr Ramasodi replied that the former Department of Rural Development and Land Reform would respond to questions on disciplinary hearings by sending a written report to the Committee. Export protocols have been signed with other countries, specifically where crops and fruits are exported. These have already been signed, but not all protocols were used as they depend on demand. He explained that performance is binary, so even where performance has been half-done, it will reflect as unachieved, but this will be completed. Investigations into fisheries has been articulated.  

Ms K Mahlatsi (ANC) agreed with other Members about their disappointment in DAFF. The report was no different to the one received in 2018/19 and does not give confidence to South Africans that DAFF will achieve its goals. The report does not indicate the impact agriculture has made on changing the lives of ordinary South Africans. She spoke on finances and performance versus impact. Department expenditure is 98%, but the targets achieved shows no correlation. The Department cannot spend almost 100% of its budget, but still not achieve its goals. This means there is something wrong in DAFF's planning process. We need to be taken through this process to ascertain if there is a challenge and if DAFF has the capacity and the right people to do the work.

She asked why DAFF had unfunded, vacant posts for more than a year as National Treasury should remove those. How does DAFF intend to improve its business and ensure there is correlation between budget and achieved goals? How does it intend to have a better audit outcome? It must not be taken for granted that this is a toothless Portfolio Committee that is not going to make noise or have an impact in ensuring proper oversight is done. We must make it clear that the Portfolio Committee is not happy and expects results. The pandemic being included in the 2019/20 report is an embarrassment.

Mr Ramasodi agreed about the non-correlation of expenditure and performance. Given the binary nature of performance management, it reflects as either achieved or not achieved. This does not mean that work was not done. There are no unfunded vacancies. There will be an audit action plan to resolve the audit findings.

The Chairperson agreed that it was completely unacceptable to present lockdown regulations as challenges in the 2019/20 annual report. The report was from April 2019 to March 2020 and COVID-19 Level 5 Lockdown was announced on 23 March and began on 26 March just four days later the reporting period ended. This makes it impossible for COVID-19 lockdown regulations to have had a negative impact on implementation by DAFF. The pandemic cannot be used as an excuse.

He asked about access to veterinary services vital for subsistence and small holder livestock farmers, especially in the wake of animal disease outbreaks like foot and mouth disease (FMD), African Swine Fever and most recently brucellosis. It was worrisome that DAFF has failed to deploy veterinary graduates for compulsory community service. This used to be the reason for not meeting targets in previous years. The 168 vets deployed in 2019/20 are far fewer than those deployed in previous years. DAFF should indicate where it got the budget to exceed the target for the deployment of CCS Vets from the planned 150 to 181 in 2018/19 while for 2019/20, it reports that it could not deploy the 189 vets due to budgetary constraints. DAFF should indicate what happened to the 21 vets that could not be deployed in 2019/20. How is it addressing the budgetary constraints to ensure that all veterinary graduates are placed. A report on access to veterinary services showed that 34 vets were deployed in Gauteng which is an urban province with far fewer livestock. The Northern Cape where most sheep are located employed only six vets. DAFF indicated that provinces make requests for deployment of CCS vets and the number of placements depends on the availability of resources or rather its state of readiness to accommodate additional vets. The rural areas have the greatest need, but do not have enough resources to accommodate more vets. How will DAFF, through its veterinary strategy, address this and assist provinces to improve access to veterinary services?

The Chairperson said DAFF reported that the National Policy on Development Support was tabled in Cabinet in March. Has the policy been approved and what is its current status? Since the policy was formulated before the merger of the two departments, will there be a need to review it so that it is relevant to the mandate of the new department? The National Agricultural Marketing Council (NAMC) which is an advisory board to the Minister on agricultural marketing policies and their application, and provides market access and research, and training to farmers about market access. DAFF should explain the linkages and gap between market training and the work done by NAMC on this. DAFF should report on its agro processing entrepreneurs and norms and standards. DAFF should indicate the criteria used to select crops. How does DAFF assess the impact of the training activities. How does DAFF ensure that after such training, the beneficiaries are able to use this to their benefit. For example where they could not have market access before, they are now able to gain access. NAMC reported that it visits commodity-based smallholder projects and writes assessment reports which it submits to DAFF. How is DAFF addressing the challenges raised by farmers on these projects which include land, infrastructure and access to market?

One of DAFF's targets achieved is the 2019/20 status report on AU and SADC obligations. DAFF should provide this. He referred to Programme 1 Administration workplace skills targets not achieved. This was concerning as competency gaps were seen as a root cause contributing to DAFF's failure to meet performance targets. How will DAFF ensure there is increased capacity to ensure it can positively respond to meeting its targets in the Annual Performance Plan. The reliability of the reported performance information in the APP remains a concern. DAFF should indicate the audit findings and concerns raised by the Auditor General SA (AGSA) and its audit action plan to protect the credibility of its financial performance.

Underfunding of programmes has always been a concern to the Committee. He asked that the Committee receive an update on challenges faced by DAFF on the funding of planned programmes and how this impacted the achievement of the planned targets. In DAFF's view, how will these funding gaps be met? DAFF should prepare a detailed report on how its allocated budget was used for the Comprehensive Agricultural Support Programme (CASP) and Ilima Letsema.

There are concerns about the Land Bank and its failure to ensure that financial support is given to small scale farmers and small holders. With the funds given to Land Bank, has it been able to fully ensure that those funds were utilised. Is the Land Bank the correct financial institution for small scale farm holders or should we be looking at other financial institutions. He asked for a full detailed presentation update on the Micro Agricultural Financial Institutions of South Africa (MAFISA).

Response
Mr Ramasodi agreed with the stance Members took about the pandemic, but he wanted to highlight that when Lockdown began at midnight on 26 March 2020, a provision was made to declare agriculture an essential service to produce goods. However, not every aspect of agriculture was at work during this time. The challenge was not about implementation, but verifying what has been said to be done via monitoring and evaluation. This was not determined as essential at that stage. At the time, veterinary services, plant health services, pharmacy were declared essential then but every employee at DAFF was not working at the time.

DAFF takes the Committee very seriously and whatever the Committee advances is made a responsibility of the Department. He and his colleagues did not want to be part and parcel of a department that was not responsive and DAFF would strive to ensure that what the Committee advances will be done.

Ms Steyn interjected saying that she was sorry to interrupt the DG, but he should indicate why no monitoring and evaluation took place for a full year.

The Chairperson asked that Members afford DAFF an opportunity to respond to the questions.

Mr Ramasodi replied that verification would be captured on the programmes. When the Food Security Programme data comes in, it will reflect that verification had taken place. This was done on all quarters except for Quarter 4.

Ms Bafedile Bopape, Chief Director: Policy Development and Planning, replied to the Chairperson's questions about Programme 1 workplace skills plan. This had been approved and implemented. Once approved, DAFF is required to report on implementation quarterly.

DDG Mokutule added to the ADG’s comments on COVID-19 saying that that Quarter 4 is very critical for performance information as that is when implemented projects are wrapped up. Once Quarter 4 ends, very important verification work is undertaken. Physical visits must take place, such as supported households and smallholder farmers. Without verification, the Auditor General will not accept this to have been achieved without evidence. The Chairperson is spot on as evidence must accompany performance information. For this information to be reliable, monitoring must be strengthened. In the middle of 2019/20 additional staff were recruited on a 12-month contract to strengthen monitoring and evaluation. This was an attempt to ensure performance information is reliable and supported by evidence.

Ms Jemima Moeng, Chief Director: Food Security, said the physical driving by national officials to reach the areas where support had been provided could not take place. During lockdown, there were also accommodation challenges as officials needed to sleep over in these places. This was challenging. The figures reported were factually verified, but not everything could be reported on given the lack of evidence to prove this. The newly merged Department is considering options to switch from producing hard copy evidence to online methods so that indicators can be easily verified.

Cabinet had referred the concerns about the Preservation and Development of Agricultural Land Bill (PDALB) back to DAFF for further consultation at NEDLAC. Processes have been put in place for business and labour to submit their concerns and this will be put to the Minister.

The two merging departments consulted on policy and its status will not change in providing support to various categories of producers.

Ms Phindiwe Dingile, Chief Director: , Chief Director: International Relations and Trade, replied that there are various categories of training such as where producers are assisted on agricultural markets and how they work, how to access them and what the requirements are. Training is offered to food manufacturers to ensure compliance with government regulations and understanding mitigating factors to prevent disease outbreaks in food manufacturing. There is a corporation that informs DAFF of local needs toward the end of each year. She requested that DAFF be allowed to submit a response on NAMC in writing.

Ms Sue Middleton, Chief Director: Fisheries Operations Support, replied on Programme 6 saying that several investigations are ongoing by the Hawks and there have been a number of disciplinary cases such as that against the former DDG of Fisheries Management who was dismissed. The Chief Director of the Marine Living Resources Fund (MLRF) was dismissed and another case involving a director is on appeal at present. There are criminal cases against the Gansbaai Nine.

Mr Ramasodi replied about the employment of CCS vets. The 168 from the University of Pretoria were absorbed. Those who could not be absorbed were those requesting to come into South Africa and be employed. After absorbing 168, only R5 million was left. DAFF had to consider who to take in. Based on the budget allocation, only 168 could be taken – those who had been to South African universities to obtain their qualifications.

DAFF has worked on an escalation plan to ensure that it gets more vets. This year, it is focused on getting more funds to ensure it reaches its targets.

NAMC fills the market access gap and ensures good agricultural practices by considering how markets are accessed. There will be smallholder market access expertise in NAMC. It was also responsible for the National Red Meat Development Programme which ensures that small holder farmers in this industry are advanced on the value chain.

The SADC Protocol documents with annexures showing South Africa’s agricultural commitment, will be sent to the Committee. 

The Department is underfunded but 2% of unspent budget was returned to National Treasury due to a few items that could not be concluded on time.

Plant health certification is done on an e-platform and DAFF was happy to report on this achievement.

The Portfolio Committee should be pre-warned that the funding is enough for now. The biggest challenge DAFF is faced with is switching from a manual system to an online system which would make record keeping and administrative processes much easier.

The Land Bank is doing its own work and the loan book is not only for emerging farmers but other farmers were also dependent on it. The challenges the Land Bank is now experiencing will have an impact on the rest of the country. The Minister is engaging in discussions on this.  

Further questions
Ms Steyn asked who is responsible for monitoring and evaluation. She did not want to use the term shocking, but she could not believe DAFF could wait until the end of the financial term or quarter to verify projects. She asked for DAFF's policy on this given that extra personnel were employed to do this. What is the role of extension officers in monitoring and evaluation. She asked for a list of DAFF staff that worked during lockdown and how many extension officers were working during this period. She did not buy the story that monitoring and evaluation could not occur during COVID-19. Government worked very hard to ensure people got travel documents to work. She understood now the frustration of farmers trying to put food on the table in this country after the President said agriculture should proceed during lockdown. She could not find a single DAFF official during lockdown to help with serious challenges that were experienced on the ground. She wanted a full report on who worked.

Mr Ramasodi replied that a written list of people who worked would be sent. All provinces will be asked to submit this.

Ms Tshwete said she was not satisfied with the manner in which DAFF answered some questions. She asked if Members could submit more questions to DAFF to respond in writing.

Ms T Mbabama (DA) asked how the Minister could be brought to account as it had been a long time since she had met with the Committee. Even the Deputy Minister is scarce. DAFF does not even have a DG at the moment. These is nobody at the top. Nobody is managing anybody which may be why DAFF has no direction. She would appreciate if the Minister could account.

The Chairperson said DAFF was being managed by the Executive and the Deputy Minister has joined meetings, specifically that morning. Commitments had clashed with the Men’s Parliament that was currently being held. The dissatisfaction of the Portfolio Committee will be expressed to the Minister who will be requested to account to the Committee.

Ms K Mahlatsi (ANC) said DAFF has not been doing its work as expected. There needs to be a proper Audit Committee to assist DAFF in achieving its goals. She recommended that an external Audit Committee report on DAFF be generated to indicate the challenges in the past financial year. There should be a risk register. She asked who managed risk in the Department and whether the person was at director level. Their work is quite critical but DAFF does not take this seriously. There could have been mitigating elements for what is being debated today. The inability of DAFF to perform at a satisfactory level is a direct reflection on the Portfolio Committee. The Committee is quite rich in expertise and wants to assist DAFF in moving forward. It is not viable to have huge figures to achieve in the Fourth Quarter as most government officials are only back at work in February, so nothing will be achieved. Some responses caused one to become upset.

The Chairperson said anger should be expressed so that DAFF can be held accountable to assist small scale farmers in particular. The Committee was exercising its mandate to ensure the challenges experienced by South Africans are resolved. The Committee wanted to understand more about what the budgets were utilised for. There should be a detailed stand-alone presentation on this. He asked if DAFF carried out the implementation of such funds or if it was outsourced to the Provinces. What is the role of the Agribusiness Development Agency (ADA) in Kwa-Zulu Natal and the funding which should be used by the KZN Provincial Department? Why is this handed over to ADA? The Committee is limited in holding such entities to account. What is the role of the Eastern Cape Development Corporation?

Mr Ramasodi replied that a presentation would be made to the Committee on the concerns raised and once it has consulted with labour, business and civil society. The Audit Committee report was shared and the Audit Committee chairperson should also appear with DAFF to account for this. There is a risk register at both at strategic and risk level. There is a Chief Director for Risk.

The Chairperson thanked DAFF for its responses. He asked that questions be responded to in writing for the Committee's perusal.

The meeting was adjourned.