Comprehensive Rural Development and Food Security: Challenges and Opportunities

1. The Presidency Department of Planning Monitoring and Evaluation Briefing on the 2014/15 Annual Performance of the Department of Agriculture, Forestry, and Fisheries (DAFF) A presentation to the Portfolio Committee on DAFF Tsakani Ngomane, PhD Outcome Facilitator, Rural Development 13 October, 2015

2. The outcomes system The outcomes system was introduced in 2009 to achieve more effective spending and performance. The aims are to: • Increase the strategic focusof government by focusing on a limited number of priority outcomes • Increase focus on measurable results - targets for indicators linked to key outcomes, improved logical links between inputs, activities, outputs and desired outcomes and impacts • Improve coordinationacross departments and spheres of government by introducing whole-of-government plans (the delivery agreements) • Move away from a culture of doing the same activities the same way, without consideration of the impacts of those activities (develop a culture of continuous improvement) DPME tracks government performance against 14 Outcomes. Outcome 7 focus on Rural Development, with DRDLR as the lead department and supported by DAFF, and other departments

3. Outcome 7: Comprehensive Rural Development and food security (MTSF 2014-19)

4. Outcome 7: Comprehensive Rural Development (MTSF 2014-19) Outcome 7 seeks to implement Chapter 6 of the NDP through the following sub-outcomes; 1: Improved land administration and spatial planning for integrated development in rural areas 2:Sustainable land reform contributing to agrarian transformation 3: Improved food security ( DAFF Led) 4: Smallholder producers’ development and support (technical, financial infrastructure) for agrarian transformation ( DAFF Led) 5: Increased access to quality infrastructure and functional services, particularly in education, health care an public transport in rural areas 6: Growth of sustainable rural enterprises and industries- resulting in rural job creation

5. Outcome 7: specific actions to achieve sub-outcomes • Developing and implementing spatial development plans to guide how land is used while prioritizing the 27 resource-poor district Municipalities • Acquiring and allocating 2 million hectares (ha) of strategically located land for land reform • Developing under-utilized land and bringing into production 1 million ha of land in communal areas and land reform projects • Eradicating infrastructure backlog in rural schools, rural health facilities and provide rural communities with ICT infrastructure

6. Classification of performance for this report

7. Sustainable land reform contributing to agrarian transformation

8. Sustainable land reform contributing to agrarian transformation Analysis: • The 30% target on land reform was set in 1994 and not part of the 2009 targets. In retrospect, the challenges of undertaking land and agrarian reform were under-estimated and the target was very ambitious • Specific challenges with restitution, redistribution and recapitalisation a) Restitution • Though the pace of settling claims has improved since 2009, claims settled are not necessarily finalised for hand over. Insufficient attention was given to ensuring finalisation and sustainable development of land restored to beneficiaries. Further, the remaining claims for settlement are largely on high value commercial farmlands, and most difficult to resolve b) Redistribution • Since 2009, the number of hectares acquired under the land acquisition programme has been rising benefitting mostly rural provinces such as the North West and Limpopo • However, many of the farms transferred under the land reform programme are not productive. The under-utilisation of newly acquired land by beneficiaries is the primary concern

9. Sustainable land reform contributing to agrarian transformation Analysis continue: c) Recapitalisation of deteriorated farms • The Recapitalisation and Development Programme has provided a partial response to the under-utilisation of newly acquired land • 259 farms are under recapitalisation and development programme from April 2014 till June 2015 ( DRDLR report, Aug 2015) • However, recapitalisation needs to be more effectively coupled with improvements in other forms of support (such as access to finance and markets and agricultural support) • Many of the new smallholders being counted are not sustainable commercial enterprises

10. Sustainable land reform contributing to agrarian transformation • Challenges with utilisation of transferred land and development of more commercial smallholders: • Insufficient involvement of the commercial sector in developing smallholders • Inadequate/ineffective agricultural support (extension workers) • Questions regarding effectiveness of financial support to small farmers • Crowding out of smallholders from markets by commercial producers • Smallholders are not producing enough volumes of produce continuously to be able to compete with commercial producers • Lengthy process of land transfer leads to lack of investment by former owner, resulting in deterioration of infrastructure by the time of transfer • Insufficient coordination between DAFF, DRDLR and DTI for agricultural development

11. Policies/Acts restricting agrarian transformation • The policy and legal environment related to land ownership and use has in the past not been conducive to agrarian transformation and development of the agricultural sector • The National Environmental Act 107 of 1998 (NEMA) establishes principles for decision-making on matters affecting the environment • However, NEMA does not adequately ensure the protection of high value agricultural land as its focus is on biodiversity and environmental conservation • Spatial Planning and Land Use Management Act, 2013 (SPLUMA) provides the framework for spatial planning and land use, asserting that the use of agricultural land for agricultural purposes, is a matter that vests in the national sphere of government however, there are issues related to capacity to implement. • SPLUMA also has the potential to create dualism in the management of land by Municipalities and Traditional Leadership.

12. Improved Food security

13. Improved Food Security • South Africa is food secure nationally, with high levels of vulnerability at household level • In 2011 about 11.5% of HHS were vulnerable to hunger, and achieving a marginal reduction by 2014 to 11.4% (Stats SA GHS 2012; May 2015) • Government committed to reduce it to 9,5% by 2019 • However, initiatives by DAFF,DSD and DBE aimed at reducing vulnerability to hunger at household and community levels are not yet achieving expected impact • The situation is likely to improve, following the development of an integrated plan to food and nutrition security led by the Office of the DP as well as the implementation of the 9 point action plan.

14. Vulnerability to hunger and access to food, 2002–2008; 2010–2014 (GHS 2014, May 2015) There has been a reduction in % hhs vulnerable to hunger from 11.5% ( 2011) to 11.4% (2014), Stats SA GHS: May 2015

15. Food security -- opportunities in livestock (1) Number of h/holds rearing sheep Number of h/holds rearing goats Number of h/holds rearing pigs Source: StatsSA, 2012

16. Food security opportunities in livestock (2) Number of households rearing cattle Source: StatsSA, 2012

17. Food security - rural access A quarter of the rural population (25,5% ) have inadequate access to food.

18. Smallholder producers’ development and support for agrarian transformation (1)

19. Smallholder producers’ development and support for agrarian transformation (2)

20. Smallholder producers’ development and support for agrarian transformation (3) • Though the performance on number of smallholder producers receiving support is rated as green, there are areas of concern, namely; • Whereas the target is to provide support for new smallholders, the reported figures are for all smallholder farmers receiving government support, including existing ones. • Targets aimed at providing support to smallholders are pursued without a formal database of who is receiving what, where and what to the end. The issue is now receiving attention following DPME’s joint intervention with the Statistician General • Expenditure performance review (NT) on the Micro Agricultural financial Institutions of South Africa (MAFISA) found gross mismanagement. For instance, the Landbank’s Wholesale finance facility services new smallholder more cheaply than Mafisa

21. Growth of sustainable rural enterprises and industries – rural job creation (1) Though a total of 898 158 work opportunities and 300 475 FTE jobs were created through EPWP (cumulative impact from April 2014 till June 2015) the overall impact is minimal, given the rising levels in rural unemployment, or the little impact

22. Reduce rural unemployment (2) • Analysis • Agriculture is a catalyst for economic growth. The National Development Plan has identified primary agriculture as one of the key sectors for addressing food security, job creation and economic growth, especially for rural communities and small towns. • Current contribution to Gross Domestic Product (GDP) is 2,5% ( DAFF Budget Speech 2015) far below capacity of the sector. Overall, the sector contribute 12% to the GDP through value adding in related manufacturing and processing (DAFF budget speech 2015) • Employment in agriculture has increased by 200 000 year-on-year in Q1 of 2015/16 FY (StatsSA QLFS). Additional jobs (46 998) were created through rural development initiatives, and Land reform programmes. • However, employment in agriculture has declined, from 1.1 million in 2004 and 710 000 in 2009 to 638 000 in 2012 and 742 000 in 2013 and 869 000 in June 2015 (QLFS 2nd Q 2010; 2nd Q 2012; and 2nd Q 2015), above . This is contrast to the estimate in the NDP that agriculture has the potential to create 1 million new jobs by 2030

23. Reduce rural unemployment (3) Analysis • Of major concern is the decline in Agriculture’s contribution to GDP by 17,4 % from Q2 (QLFS Q2, Stats SA, 2015) • Perhaps the decline in share of GDP and employment reflects the changing structure of the country’s economy, as well as the growing efficiency of the farming sector, with fewer units on a larger scale (but may also be due to skilled farmers leaving the sector in SA) • Farms that are run as private companies (as opposed to those individually owned), make up 5% of all commercial farming units, but account for a third of commercial farming income. The sector is heavily dependent on a small but increasingly efficient group of large commercial farms • There are few new entrants to the sector and those who are farming are aging (average age of 58 years) • In addition, capacity to spent is limited with DAFF spending R 6,6 billion to the end of 2014/15 fiscal year out of a budget of R 6.7 billion, leaving funds unspent of R 78.7 m (QPR Q4)

24. Employment figures CASP conditional grant for 2014/15 (1)

25. Employment figures CASP conditional grant for 2014/15 (2) A total of 5 673 jobs were reported to be created comprising of 1 526 permanent (26%) and 4 188 temporary or seasonal jobs (74%). The males employed were 3 222 (57%) against 2 451 (43%) females employed. The youth represented 74% of total jobs created.

26. Management Performance Assessment Tool (MPAT)DAFF: 1.4 Results

27. The Context of MPAT The MPAT is one of the initiatives introduced (2010) that aim to give impetus to the entrenchment of monitoring and evaluation practices, with a specific focus on the monitoring of management practices within organisations The conceptualisation of MPAT was through collaborative effort from NT, DPSA, AG, OtPs and the OPSC The MPAT assessment process is designed to build internal monitoring and self-evaluation capacity. 100 per cent participation in the last 3 years – dept are seeing the value of MPAT, with 96% DG sign off in the MPAT 2014

28. MPAT Theory of Change Critical Review of Standards Improved Sectoral & Government Performance Develop system assessing progression in management capability, against explicit integrated standards A better life for all Comparison across departments to understand state of government management practices Facilitated horizontal learning across departments Departments are supported and real learning takes place Self-assessment by each department against management standards Accurate assessment & diagnostic of management practices Appropriate Improvement Plan Improved Management Practice Improved Management Performance Improved Departmental Performance Monitor & evaluate these relationships Review Public Management Policies and Requirements Activities Outputs Outcomes Impact

29. Performance Level Descriptions

30. Performance Areas • MPAT focuses on management practice in 4 key performance areas: • KPA 1: Strategic Management (SM) • KPA 2: Governance and Accountability (G&A) • KPA 3: Human Resource Management (HRM) • KPA 4: Financial Management (FM) • The tool monitors compliance with key prescripts namely PSA, PFMA, Protected Disclosures Act, PAIA, etc. • The systematic implementation of MPAT leads to a growing understanding of the ways in which management practices contribute to and enhance performance and service delivery in the Public Service.

31. MPAT 2014 (1.4) Results • Analysis is based on the state of management practice at the close of self-assessment period 10 October 2014 • Peer moderation 3-7 November 2014 • Moderated feedback to all departments- 12 December 2014 • Engagement sessions held with all departments during February/March 2015 • Final scores sent to departments May 2015 • MPAT 2014 report to be presented to Cabinet – will be published thereafter

34. Main Findings Reasons for downgraded scores during MPAT 1.4: • Absence of evidence: • Strat Plan: A3 year strategic plan was submitted instead of 5 years as required by the Framework for strategic plan. • APP: The 2013/14 APP was not submitted • SDIP: No evidence provided for service charter • Management Structure: Minutes of meetings were not approved • Audit Committee: AC year plan, charter, process document was not submitted • Ethics: Financial disclosure was not completed by all sms • Fraud Prevention: Did not provide approved structure • Internal Audit : Did not provide the required evidence

35. Main Findings (2) • Absence of evidence continue • PAIA:Did not provide evidence of section • Recruitment & Retention: Recruitment policy was not approved, completed exist interviews, turnover analysis report climate surveys not provided • Diversity Management: Compulsory reports to DPSA and initiatives to address perceptions not provided. • Delegations:From HOD to performer levels not submitted • PMDS: Only the PA for DG provided • Submission/feedback to policy departments by due dates not met: • SMS financial disclosures: Secondary data indicated 91% submission of 114 SMS's of which 10 disclosures were not submitted • Disciplinary cases: DPSA secondary data indicates non compliance to timeframes

36. Managing Public Entities • There are five public entities accountable to the Minister (Agriculture Research Council, Onderstepoort Biological products, National Agriculture Marketing Council, Ncera farms and The Perishable Product Export Certification Board) • They play a vital role in support of the department and performance on Outcome 4 and 7. • These entities are generally not functioning and performing as envisaged, and have been criticised by industry players and academic institutions

37. Presidential hotline • Citizen Based Monitoring: Here people complain about access to information, conducts of officials, quality and reliability of service, infrastructure for service delivery and payment of staff and service providers • Total complaints registered = 137. Of these, 103 had been resolved while 34 remain unresolved. This translates to 75% the number of complaints resolved out of performance standard of 80%. Performance is below standard. • A major concern has to do with DAFF’s inability to resolve prioritized cases over time. These have been on the increase since 2013 (1 in 2009; 1 in 2012; 3 in 2013; 15 in 2014 & 13 in 2015) • Regarding the time taken to resolve complaints, average time by DAFF is 210 days instead of 25 days (norm) • Satisfaction rating for service is 39% (good to fair), which is below the 70% benchmark. • DAFF need to address how they communicate with the complainants, the time taken to resolutions and ensure the solutions are relevant.

38. Auditor-General’s findings: 2014/15 Report • Unqualified audit opinion for 2014/15 in respect of the financial information • The Auditor-General drew attention to the following matters: • Predetermined objectives (reliability of reported performance information, strategic planning and management) • Ineffective systems for data management • Targets need to be specific & measurable • Indicators need to be well defined with clear definitions • Ineffective Internal Audit • Non compliance with legislation • Internal control deficiencies • Procurement and contract management (e.g., quotations not obtained) • Expenditure management (to prevent irregular expenditure). and • Transfer of funds (funds not monitored as required by the Division of Revenue Act – DORA due to human resource capacity and formal database system).

39. Concluding Comments… • The disappointing growth of the sector and loss of jobs in the sector can be attributed in part to the global economic decline but DAFF has not been successful in addressing constraints to investment in the sector • Though the department has embarked on some strategies (such as mechanization) aimed at stimulating production by smallholders, the following concerns remain, and these are 1) DAFF’s programmes are not having significant impact on key indicators : • Transforming the sector through new entrants becoming successful commercial farmers. Some support packages offered by government tend to cause dependency. • Growth of the industry both in terms of contribution to GDP and employment • Household food security, and underutilisation of agricultural 2) Causes of the problem appear to include weak relationships between government and the industry, and high senior management vacancy levels 3) The Department is not working sufficiently closely together with DRDLRand is struggling with concurrency on conditional grants.

40. …Concluding Comments • A proper census on agriculture could assist with identifying the underlying causes of the relatively poor performance of the sector, but the department has terminated the agricultural census • The department should consider additional interventions as follows: • Strengthen collaboration with the established commercial farming sector to develop black commercial farmers • Use government procurement more to create opportunities for black commercial farmers • Review and accelerate initiatives to strengthen agricultural support to black commercial farmers • Hunger and extended periods of malnutrition not only devastate families and communities in the short term, but leave a legacy with future generations which impairs livelihoods, undermines human development and economic growth.

41. Thank you Go to http://www.thepresidency.gov.za/dpme.asp for PME documentsincluding narrative guide to outcomes approach, outcomes documents and delivery agreement guide 41