Madam Speaker, hon members, the Agricultural Debt Management Act was passed by this Parliament in 2001 and created the Agricultural Debt Account, which is used as a mechanism to manage agricultural debt repayment, the administration of moneys in the account, the determination of the purpose for which funds in the account may be used, auditing and reporting on the account, debt agreements, interest rates as well as the collection and writing off of debt.
The establishment of the account further emanates from the Agricultural Credit Act of 1966 which gave financial assistance to farmers pre-1994, some of whom had more than one loan agreement. The Department of Agriculture, in consultation with the National Treasury, agreed to repeal the Agricultural Debt Management Act. This is due to the account being classified as a trading entity.
With the account being classified as a trading entity, problems were created for the administration of the account, as it did not yet comply with the prescripts of generally accepted accounting practices. This resulted in implementation problems and a qualified audit opinion in the Auditor-General's report for 2006-07.
The repealing of the Act will, however, not mean that financial controls will not be in place to manage funds that are in the account or that still need to be recovered. The committee, during its deliberations on the Bill, had to satisfy itself that adequate measures are in place to ensure that funds in the account are accounted for within the prescripts of the PFMA.
The committee further sought confirmation that the funds in the account would be used for the intended purpose, namely agricultural development projects. To this end, the committee engaged with the National Treasury, who indicated that the funds would be dedicated for future agricultural development projects and would be dealt with in terms of the processes associated with funds in the National Revenue Fund and the PFMA.
The committee further satisfied itself that although the account would cease to exist, the department would still report on the funds in the account via the annual reports and this would ensure that the committee, during its oversight role, would be able to monitor the activities associated with the funds that were supposed to be in this account. The committee will further ensure that these funds are adequately used for the advancement of emerging farmers.
Quite often when the committee is confronted with a three clause Bill, it is accepted that it is a technical amendment and that the Bill can be dealt with speedily. However, the portfolio committee did not adopt this approach, but rather, through its deliberations with the Department of Agriculture and the National Treasury, unpacked and discussed the possible and unintended consequences that may arise. We have satisfied ourselves that the repealing of the Act will not have negative effects.
To this end, the committee further requested an opinion as to whether the retrospective clause in the Bill met the constitutional requirements and thus did not infringe on anyone's vested rights. The committee was thus satisfied that this provision did meet the constitutional requirements.
As much as the Agricultural Credit Act was established to give assistance to farmers pre-1994, it is clear that these farmers received benefits from the previous government and as such had access to assistance as and when they needed it. Today some still have loans on the Debt Management Account, long after the Agricultural Credit Boards have been disestablished or have ceased to exist.
During these trying times of rising input costs in the agricultural sector and the rising food costs, it is imperative that our emerging and subsistence farmers are given the necessary and adequate assistance to enable them to develop into and graduate as commercial farmers.
This committee will ensure that through its oversight role the funds that would have been in this account are used effectively to support our emerging and subsistence farmers. This is a critical step, and as the chairperson of the portfolio committee I will have to ensure that this matter receives high priority.
The portfolio committee adopted the Bill without amendments and it is pleasing to note that the Bill was further adopted without any objections from any of the parties. I would like to call on the members to support this Bill. Thank you very much. [Applause.]
There was no debate.
Bill read a second time.