Land reform budget May 2021 and December 2021

The total budget appropriated to the Department for the 2021/22 financial year is R16.9 billion, a slight increase from theR16.8 billion that was initially appropriated and later adjusted to R15.2 billion in 2020/21.

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Refer to previous report:

Annual report 2019-2020

https://static.pmg.org.za/1/DRDLR_APP_2019_2020.pdf

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Portfolio Committee on Agriculture, Land Reform and Rural Development, 7th December 2021

https://www.youtube.com/watch?v=f1cBA3AUtx0

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Report of the Portfolio Committee on Agriculture, Land Reform and Rural Development on the 2021/22 Annual Performance Plans and Budget and Its Entities, Vote 29, Dated 11 May 2021.

The main aim of the Department of Agriculture, Land Reform and Rural Development is to provide equitable access to land, integrated rural development, sustainable agriculture and food security for all.  The Department’s legislative mandate is derived from Sections 24(b)(iii), 25, and 27(1) of the Constitution of the Republic of South Africa (1996) that deal with environment and natural resources clause; property rights and land reform clause; and health care, food, water and social security clause – a framework for comprehensive rural development.

The strategic focus of the Department in the current five-year strategic framework period is to accelerate land reform, catalyse rural development and improve agricultural production to stimulate economic development and food security.

The total budget appropriated to the Department for the 2021/22 financial year is R16.9 billion, a slight increase from theR16.8 billion that was initially appropriated and later adjusted to R15.2 billion in 2020/21.

The Department’s budget will increase at an average nominal growth rate of 4.5 per cent during the medium term expenditure (MTE) period. As the Department constitutes both national and concurrent functions, approximately 52 per cent of the total vote appropriation goes to transfers and subsidies; and some of these have been the source of repeat audit findings associated with poor accountability and monitoring of the utilisation of funds transferred to provinces.

While the purpose and focus of the Programme has not changed, there has been some re-arrangement of sub-programmes where Land Redistribution has been combined with Tenure Reform as one sub-programme and Property Management and Advisory Support has been removed as a sub-programme. Additionally, as has been a standard with some Programmes, the entities whose budget allocations are transferred through the Programme, have also been included as sub-programmes for budgetary purposes .

Programme 3 received the largest allocation of R8.8 billion, which is approximately 52 per cent of the Department’s total appropriation. About R7 billion of Programme 3’s total appropriation, which is equivalent to 81 per cent of the Programme’s total budget, is for transfers to provinces, entities and households.

Of the transferred R7 billion, approximately R3.4 billion is for households (48 per cent of R7 billion) covers grant funding for land acquisition and development support.   Further, about R2.2 billion will go to provinces and the rest of the allocation goes to entities and Departmental accounts.

The Restitution sub-programme, as discussed in detail in Section 4.1 of this report dealing with the Commission on Restitution of Land Rights, has been allocated R3.5 billion. It accounts for approximately 40 per cent of  Programme 3’s total budget (Table 3), followed by the Food Security sub-programme, which received R2 billion (23.5 per cent).    The allocation for Food Security is more or less the same amount it received in the previous financial year.

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Land Redistribution and Tenure Reform received an allocation of R965.5 million, a nominal increase of 14.7 per cent when compared to 2020/21. Whilst land redistribution remains a priority of government, a concern was expressed regarding the decrease in annual allocations over the next two years.

For the 2021/22 financial year, the focus will be on fast tracking land delivery, settling restitution and labour tenants’ claims (land tenure) and to ensuring adequate post-settlement support.

Some of the targets that the Department will deliver over the 2021 MTEF period are: Compliance with Communal Property Associations Act (Act No 28 of 1996), and 577 Communal Property Associations (CPAs) will be supported, and will increase by 100 in 2022/23. Over the MTEF period, 1964 CPAs would be having been supported to be compliant to the CPA Act.

• Over the MTSF period, the Department will acquire 900 000 ha of strategically allocated land by 2024. In 2021, it undertook to acquire 33,777 hectares of strategically allocated land, of which 16 888 would be allocated to women, 13 511 ha to youth, and 3 377.7 ha to people with disabilities. With regard to farm dwellers and labour tenants access to land, the Department plans to acquire 6 800 ha by 2023/24.
• The number of labour tenants’ applications settled will double up from 500 claims settled in 2020/21 to 1000 in 2021/22 and a total of 4 500 claims will be settled over the medium term. The Committee commended the initiative of oversight by the Special Master of Labour Tenants. What is required is a comprehensive national database on labour tenants’ applications, indicating the number of claims settled and the number of claims outstanding.
• The Transformation of Certain Rural Areas Act, No. 94 of 1998 (TRANCRAA), applies to 23 rural areas in four provinces; the Western Cape, Northern Cape, Eastern Cape and Free State.  Where land historically reserved for people of mixed Khoisan and European descent is held in trust by the Minister of Agriculture, Land Reform and Rural Development. There are 12 such areas in the Western Cape, eight in the Northern Cape, two in the Free State and one in the Eastern Cape.  In 2021, 12 areas would be transferred.

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Programme 4 focuses on the following three sub-programmes: National Rural Youth Services Corps (NARYSEC); Rural Infrastructure Development and Technology Research and Coordination.

For 2021, the programme allocation is R1.08 billion, an increase from an appropriation of R770.4 million in 2020/21. This increase is driven by a substantial increase of 92.7 per cent in the allocation to the Rural Infrastructure Development.

The allocation to the NARYSEC has nominally decreased by 39.3 per cent. The Committee expressed concerns about the impact of the decrease as it will affect skills development and creation of job opportunities for rural youth. As a result, there is a noticeable decrease in the targeted number of youths to be trained through NARYSEC; from 1 916 in 2020/21 to 1 409 in 2021/22. Of great concern, for the Committee, was the fact that there were no targets for 2022/23 going forward. In addition, little is understood about the NARYSEC programme impact due to weak monitoring and evaluation.

Narysec – government training – thousands

Narysec soldiers –  SA Parliament

Narysec training

Development Finance has been added as a standalone sub-programme under Programme 5; and the entity, National Agricultural Marketing Council, added as a sub-programme as its Parliamentary Grant is transferred through the Programme. Of the Programme’s total budget of R886.3 million for the 2021/22 financial year (Table 3), R530.5 million (59.9 per cent) will be allocated to the Agroprocessing, Marketing and Rural Industrial Development sub-programme and R216.5 million to the International Relations and Trade sub-programme (24 per cent).

Although approximately 60 per cent of Programme 5’s budget will go to the Agroprocessing, Marketing and Rural Industrial Development sub-programme, there are no specific targets for agroprocessing, through which the NDP expects the sector to create 1 million jobs by 2030.

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AgriBEE

The previous target that has since been abandoned, was training of agroprocessing entrepreneurs.

For the target on AgriBEE Fund applications that will be finalised, which is based on a percentage, there is no baseline to provide an indication of how many applications does the Department normally receives and finalise in a year, based on previous experience. This is important as a measure of its transformation interventions as some producers are not aware of the AgriBEE Fund or how to apply for it. In addition to what will be allocated to the Land Bank under Programme 3, the Department will transfer an additional R40.6 million to the Land Bank under this Programme for 2021/22 (a combined total of R139.3 million over the MTE period). The assumption is that the funds will be used for the AgriBEE Fund and Mafisa, which have been historically administered by the Land Bank. Mafisa provides loans to smallholder producers through intermediaries.

The budget allocation has decreased from an adjusted appropriation of R1.06 billion in 2020/21 to R758.2 million in 2021/22 due to a transfer of R358 million to the Deeds Registration. The NGMS received a largest share of the total programme allocation, accounting for 71.3 per cent in 2021/22. The NGMS and SPLU account for 98.5 per cent of the total programme allocation. The Committee, in welcoming the allocation, expressed a need for stringent oversight to ensure that improved land administration and spatial planning for integrated development could be realized, in particular, clarification of the roles of various national departments (DALRRD, COGTA and the Department of Planning, Monitoring and Evaluation) in the implementation of the Spatial Planning and Land Use Management Act (SPLUMA).

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The CRLR was established as an autonomous institution by the Restitution of Land Rights Act, 1994 (Act No. 22 of 1994) to solicit land claims, investigate them and attempt to resolve them through negotiation and mediation. In 2021, unlike the period 2020, the Commission on Restitution of Land Rights tabled its own Strategic Plan and APP, though it still accounted under as sub-programme of Programme 3.  In terms of its plans, the total number of claims to be settled over MTEF are 1347, of which 240 will be settled in 2021/22. The Committee noted that the target was a decrease of four compared to the reduced target of 244 claims settled in 2020/21. Further, a total number of claims to be finalised over MTEF are 1 266, 316 of which would be finalised in 2021/22 – increase to the reduced estimated figure of 295 claims finalised in 2020/21.

Restitution allocation, under programme 3, received the largest share of the allocation for programme. Its allocation for 2021/22 is R3.51 billion, i.e. 39.8 per cent of the total allocation for programme 3. Whilst the allocation was R3.6 billion, it was however adjusted downward to R3.3 billion due to reprioritisation, a trend that continues until 2023/24. As it would be expected, Restitution Grants takes up 78.8 per cent of the total budget of the Commission because it covers funding for land acquisition and financial compensation.

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Ingonyama Trust Board (ITB)

For 2021/22, the ITB operations are organised into two Programmes; namely, Administration (including corporate services and financial administration sub-programmes) and the Land and Tenure Management. Whilst the ITB has presented its budget during the meeting of the Portfolio Committee, such budget was not included in the tabled Strategic Plan and the Annual Performance Plan (APP). The APP does not clearly articulate how the ENE’s 2021/22 allocation for the ITB, of which R23.5 million is transfers from the Department, would be spent.

The PowerPoint slides submitted for presentation shows that the transfers from the Department is R29.96 million. With interest of R41 thousand, the total funding for the Ingonyama Trust Board is R30 million. The allocation for administration of the ITB has been in decline over the last three years, especially salaries and Board Members fee. The Trust income is R79.2 million comprising rental income of R75.3 million, contractual royalty income of R1.2 million, servitude compensation and other R1.5 million, sugar cane sales of R1 million. The total expenditure for the Trust is R243 million.

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Office of the Valuer-General (OVG)

The Office of the Valuer-General (OVG) was set up in terms of the Property Valuation Act (PVA), No.17 of 2014. It is listed as Schedule 3A public entity in terms of the Public Finance Management Act, 1999. Its function is to conduct valuation of properties identified for land reform purposes, and to assist other departments that have requested valuation services for purposes of acquiring or disposing of property.

The OVG is funded through transfers from Programme 3 (: Food Security, Land Reform and Restitution). Transfers to the OVG decreases from R143.2 million in 2021/22 to R135.6 million in 2023/4 in line with Cabinet approved budget reductions. Of the R143.2 million transferred to the OVG in 2021/22, R12.4 million (8.7%) is for the Administration Programme, R56.8 million (39.7%) is for valuations and R74.0 million (51.7%) is for operations.

A large portion of the budget allocated to the Administration and Valuations programmes is for compensation of employees (COE). As an example, the allocation for COE is 71.8 per cent of the total budget for the Valuations Programme in 2021/22.

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  Agricultural Research Council (ARC)

The ARC was established in terms of Section 2 of the Agricultural Research Act, 1990 (Act No. 86 of 1990).For the 2021/22 financial year, the ARC has been appropriated an amount of R1.28 billion through the Department’s Programme 2.

The transfer constitutes baseline allocation for operational expenditure and capital expenditure(averaging R111 million per annum). The ARC is operating on zero budgeting and due to the constrained national fiscus, from the current financial year onwards, the entity is not expecting the additional funding it used to receive from the Department of Science and Innovation.

Personnel costs remain the highest cost driver, constituting 60 per cent of total expenditure for 2021/22 and consuming approximately 90 per cent of the Parliamentary Grant (PG) on average per year. The ARC plans to reduce costs by approximately R300 million over a period of 2 to 3 years.

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The Onderstepoort Biological Products (OBP)

The OBP was established in terms of the Onderstepoort Biological Products Incorporation Act, 1999 (Act No.19 of 1999). It is listed under Schedule 3B of the Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999), i.e. National Government Business Enterprise. It is governed by Act No. 19 of 1999, which should be read together with the Onderstepoort Biological Products Memorandum of Incorporation (MOI) and was declared as a National Key Point in 2007. The OBP does not get a financial transfer from the Department but funds all its operations from its self-generated revenue, mostly from sale of vaccines.  The entity’s total budget for 2021/22 is R190 million. The main focus remains ensuring a steady supply of vaccines and continued work on the modernisation of the vaccine manufacturing plant. Therefore, a significant proportion of the entity’s budget will go towards operations and production. The OBP will continue to implement its Turnaround Strategy that was developed in 2019 to address some of its key challenges, which include among others, lack of good manufacturing practice (GMP) accreditation due to aged infrastructure.

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The National Agricultural Marketing Council (NAMC)

The NAMC was established in terms of Section 3 and 4 of the Marketing of Agricultural Products Act, 1996 (Act No. 47 of 1996) as amended by Act No. 59 of 1997 and No. 52 of 2001.For the 2021/22 financial year, the NAMC will receive a Parliamentary Grant of R47.3 million through the Department’s Programme 5.  Approximately 73 per cent of the entity’s total allocation goes to compensation of employees. In order to streamline activities and strengthen its legislative mandate, the entity is undergoing a review of its organisational structure.  In addition to its legislated core mandate, the NAMC wasappointed in 2019 by the Minister of Agriculture, Land Reform and Rural Development to coordinate the process of compiling the Agriculture and Agroprocessing Master Plan (AAMP).

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 Perishable Products Export Control Board (PPECB)

The PPECB was established in terms of Section 2 of the Perishable Products Export Control (PPEC) Act, 1983 (Act No. 9 of 1983). In addition to the PPEC Act, it is also governed by the Agricultural Product Standards (APS) Act, 1990 (Act No. 119 of 1990). The PPECB does not receive a Parliamentary Grant but generates its own revenue through fees and levies charged for inspections done on perishable products that are due for export and issuance of export certificates. The entity realised a surplus of R10.3 million in 2020/21 due to reduced travel and training activities as a result of the lockdown.

The PPECB’s total budget for the 2021/22 financial year is R532 million. Due to the nature of the PPECB’soperations, approximately 68 per cent of its budget for 2021/22 will be spent on compensation of employees. The Committee commended the PPECB for its clear and well-articulated Annual Plan, the continued good work and the role that it plays in the export of perishable products from South Africa including capacity building of smallholder farmers for export market access.

READ MORE AT

https://pmg.org.za/tabled-committee-report/4548/

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Annual report 2019-2020

https://static.pmg.org.za/1/DRDLR_APP_2019_2020.pdf

*

Portfolio Committee on Agriculture, Land Reform and Rural Development, 7th December 2021

https://www.youtube.com/watch?v=f1cBA3AUtx0

*

Report of the Portfolio Committee on Agriculture, Land Reform and Rural Development on the 2021/22 Annual Performance Plans and Budget and Its Entities, Vote 29, Dated 11 May 2021.

The main aim of the Department of Agriculture, Land Reform and Rural Development is to provide equitable access to land, integrated rural development, sustainable agriculture and food security for all.  The Department’s legislative mandate is derived from Sections 24(b)(iii), 25, and 27(1) of the Constitution of the Republic of South Africa (1996) that deal with environment and natural resources clause; property rights and land reform clause; and health care, food, water and social security clause – a framework for comprehensive rural development.The strategic focus of the Department in the current five-year strategic framework period is to accelerate land reform, catalyse rural development and improve agricultural production to stimulate economic development and food security.

The total budget appropriated to the Department for the 2021/22 financial year is R16.9 billion, a slight increase from theR16.8 billion that was initially appropriated and later adjusted to R15.2 billion in 2020/21.

The Department’s budget will increase at an average nominal growth rate of 4.5 per cent during the medium term expenditure (MTE) period. As the Department constitutes both national and concurrent functions, approximately 52 per cent of the total vote appropriation goes to transfers and subsidies; and some of these have been the source of repeat audit findings associated with poor accountability and monitoring of the utilisation of funds transferred to provinces.

While the purpose and focus of the Programme has not changed, there has been some re-arrangement of sub-programmes where Land Redistribution has been combined with Tenure Reform as one sub-programme and Property Management and Advisory Support has been removed as a sub-programme. Additionally, as has been a standard with some Programmes, the entities whose budget allocations are transferred through the Programme, have also been included as sub-programmes for budgetary purposes .

Programme 3 received the largest allocation of R8.8 billion, which is approximately 52 per cent of the Department’s total appropriation. About R7 billion of Programme 3’s total appropriation, which is equivalent to 81 per cent of the Programme’s total budget, is for transfers to provinces, entities and households.

Of the transferred R7 billion, approximately R3.4 billion is for households (48 per cent of R7 billion) covers grant funding for land acquisition and development support.Further, about R2.2 billion will go to provinces and the rest of the allocation goes to entities and Departmental accounts.

The Restitution sub-programme, as discussed in detail in Section 4.1 of this report dealing with the Commission on Restitution of Land Rights, has been allocated R3.5 billion. It accounts for approximately 40 per cent of  Programme 3’s total budget (Table 3), followed by the Food Security sub-programme, which received R2 billion (23.5 per cent).    The allocation for Food Security is more or less the same amount it received in the previous financial year.

*

Land Redistribution and Tenure Reform received an allocation of R965.5 million, a nominal increase of 14.7 per cent when compared to 2020/21. Whilst land redistribution remains a priority of government, a concern was expressed regarding the decrease in annual allocations over the next two years.

For the 2021/22 financial year, the focus will be on fast tracking land delivery, settling restitution and labour tenants’ claims (land tenure) and to ensuring adequate post-settlement support.

Some of the targets that the Department will deliver over the 2021 MTEF period are: Compliance with Communal Property Associations Act (Act No 28 of 1996), and 577 Communal Property Associations (CPAs) will be supported, and will increase by 100 in 2022/23. Over the MTEF period, 1964 CPAs would be having been supported to be compliant to the CPA Act.

• Over the MTSF period, the Department will acquire 900 000 ha of strategically allocated land by 2024. In 2021, it undertook to acquire 33,777 hectares of strategically allocated land, of which 16 888 would be allocated to women, 13 511 ha to youth, and 3 377.7 ha to people with disabilities. With regard to farm dwellers and labour tenants access to land, the Department plans to acquire 6 800 ha by 2023/24.
• The number of labour tenants’ applications settled will double up from 500 claims settled in 2020/21 to 1000 in 2021/22 and a total of 4 500 claims will be settled over the medium term. The Committee commended the initiative of oversight by the Special Master of Labour Tenants. What is required is a comprehensive national database on labour tenants’ applications, indicating the number of claims settled and the number of claims outstanding.
• The Transformation of Certain Rural Areas Act, No. 94 of 1998 (TRANCRAA), applies to 23 rural areas in four provinces; the Western Cape, Northern Cape, Eastern Cape and Free State.  where land historically reserved for people of mixed Khoisan and European descent is held in trust by the Minister of Agriculture, Land Reform and Rural Development. There are 12 such areas in the Western Cape, eight in the Northern Cape, two in the Free State and one in the Eastern Cape.  In 2021, 12 areas would be transferred.

*

Programme 4 focuses on the following three sub-programmes: National Rural Youth Services Corps (NARYSEC); Rural Infrastructure Development and Technology Research and Coordination.

For 2021, the programme allocation is R1.08 billion, an increase from an appropriation of R770.4 million in 2020/21. This increase is driven by a substantial increase of 92.7 per cent in the allocation to the Rural Infrastructure Development.

The allocation to the NARYSEC has nominally decreased by 39.3 per cent. The Committee expressed concerns about the impact of the decrease as it will affect skills development and creation of job opportunities for rural youth. As a result, there is a noticeable decrease in the targeted number of youths to be trained through NARYSEC; from 1 916 in 2020/21 to 1 409 in 2021/22. Of great concern, for the Committee, was the fact that there were no targets for 2022/23 going forward. In addition, little is understood about the NARYSEC programme impact due to weak monitoring and evaluation.

Development Finance has been added as a standalone sub-programme under Programme 5; and the entity, National Agricultural Marketing Council, added as a sub-programme as its Parliamentary Grant is transferred through the Programme. Of the Programme’s total budget of R886.3 million for the 2021/22 financial year (Table 3), R530.5 million (59.9 per cent) will be allocated to the Agroprocessing, Marketing and Rural Industrial Development sub-programme and R216.5 million to the International Relations and Trade sub-programme (24 per cent).

Although approximately 60 per cent of Programme 5’s budget will go to the Agroprocessing, Marketing and Rural Industrial Development sub-programme, there are no specific targets for agroprocessing, through which the NDP expects the sector to create 1 million jobs by 2030.

The previous target that has since been abandoned, was training of agroprocessing entrepreneurs. For the target on AgriBEE Fund applications that will be finalised, which is based on a percentage, there is no baseline to provide an indication of how many applications does the Department normally receives and finalise in a year, based on previous experience. This is important as a measure of its transformation interventions as some producers are not aware of the AgriBEE Fund or how to apply for it.

In addition to what will be allocated to the Land Bank under Programme 3, the Department will transfer an additional R40.6 million to the Land Bank under this Programme for 2021/22 (a combined total of R139.3 million over the MTE period). The assumption is that the funds will be used for the AgriBEE Fund and Mafisa, which have been historically administered by the Land Bank. Mafisa provides loans to smallholder producers through intermediaries.

The budget allocation has decreased from an adjusted appropriation of R1.06 billion in 2020/21 to R758.2 million in 2021/22 due to a transfer of R358 million to the Deeds Registration. The NGMS received a largest share of the total programme allocation, accounting for 71.3 per cent in 2021/22. The NGMS and SPLU account for 98.5 per cent of the total programme allocation.

The Committee, in welcoming the allocation, expressed a need for stringent oversight to ensure that improved land administration and spatial planning for integrated development could be realized, in particular, clarification of the roles of various national departments (DALRRD, COGTA and the Department of Planning, Monitoring and Evaluation) in the implementation of the Spatial Planning and Land Use Management Act (SPLUMA).

*

The CRLR was established as an autonomous institution by the Restitution of Land Rights Act, 1994 (Act No. 22 of 1994) to solicit land claims, investigate them and attempt to resolve them through negotiation and mediation. In 2021, unlike the period 2020, the Commission on Restitution of Land Rights tabled its own Strategic Plan and APP, though it still accounted under as sub-programme of Programme 3.

In terms of its plans, the total number of claims to be settled over MTEF are 1347, of which 240 will be settled in 2021/22. The Committee noted that the target was a decrease of four compared to the reduced target of 244 claims settled in 2020/21. Further, a total number of claims to be finalised over MTEF are 1 266, 316 of which would be finalised in 2021/22 – increase to the reduced estimated figure of 295 claims finalised in 2020/21.

Restitution allocation, under programme 3, received the largest share of the allocation for programme. Its allocation for 2021/22 is R3.51 billion, i.e. 39.8 per cent of the total allocation for programme 3. Whilst the allocation was R3.6 billion, it was however adjusted downward to R3.3 billion due to reprioritisation, a trend that continues until 2023/24. As it would be expected, Restitution Grants takes up 78.8 per cent of the total budget of the Commission because it covers funding for land acquisition and financial compensation.

*

Ingonyama Trust Board (ITB)

For 2021/22, the ITB operations are organised into two Programmes; namely, Administration (including corporate services and financial administration sub-programmes) and the Land and Tenure Management. Whilst the ITB has presented its budget during the meeting of the Portfolio Committee, such budget was not included in the tabled Strategic Plan and the Annual Performance Plan (APP). The APP does not clearly articulate how the ENE’s 2021/22 allocation for the ITB, of which R23.5 million is transfers from the Department, would be spent.

The PowerPoint slides submitted for presentation shows that the transfers from the Department is R29.96 million. With interest of R41 thousand, the total funding for the Ingonyama Trust Board is R30 million. The allocation for administration of the ITB has been in decline over the last three years, especially salaries and Board Members fee. The Trust income is R79.2 million comprising rental income of R75.3 million, contractual royalty income of R1.2 million, servitude compensation and other R1.5 million, sugar cane sales of R1 million. The total expenditure for the Trust is R243 million.

*

Office of the Valuer-General (OVG)

The Office of the Valuer-General (OVG) was set up in terms of the Property Valuation Act (PVA), No.17 of 2014. It is listed as Schedule 3A public entity in terms of the Public Finance Management Act, 1999. Its function is to conduct valuation of properties identified for land reform purposes, and to assist other departments that have requested valuation services for purposes of acquiring or disposing of property.

The OVG is funded through transfers from Programme 3 (: Food Security, Land Reform and Restitution). Transfers to the OVG decreases from R143.2 million in 2021/22 to R135.6 million in 2023/4 in line with Cabinet approved budget reductions. Of the R143.2 million transferred to the OVG in 2021/22, R12.4 million (8.7%) is for the Administration Programme, R56.8 million (39.7%) is for valuations and R74.0 million (51.7%) is for operations.

A large portion of the budget allocated to the Administration and Valuations programmes is for compensation of employees (COE). As an example, the allocation for COE is 71.8 per cent of the total budget for the Valuations Programme in 2021/22.

*

  Agricultural Research Council (ARC)

The ARC was established in terms of Section 2 of the Agricultural Research Act, 1990 (Act No. 86 of 1990).For the 2021/22 financial year, the ARC has been appropriated an amount of R1.28 billion through the Department’s Programme 2.

The transfer constitutes baseline allocation for operational expenditure and capital expenditure(averaging R111 million per annum). The ARC is operating on zero budgeting and due to the constrained national fiscus, from the current financial year onwards, the entity is not expecting the additional funding it used to receive from the Department of Science and Innovation.

Personnel costs remain the highest cost driver, constituting 60 per cent of total expenditure for 2021/22 and consuming approximately 90 per cent of the Parliamentary Grant (PG) on average per year. The ARC plans to reduce costs by approximately R300 million over a period of 2 to 3 years.

*

The Onderstepoort Biological Products (OBP)

The OBP was established in terms of the Onderstepoort Biological Products Incorporation Act, 1999 (Act No.19 of 1999). It is listed under Schedule 3B of the Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999), i.e. National Government Business Enterprise. It is governed by Act No. 19 of 1999, which should be read together with the Onderstepoort Biological Products Memorandum of Incorporation (MOI) and was declared as a National Key Point in 2007. The OBP does not get a financial transfer from the Department but funds all its operations from its self-generated revenue, mostly from sale of vaccines.  The entity’s total budget for 2021/22 is R190 million. The main focus remains ensuring a steady supply of vaccines and continued work on the modernisation of the vaccine manufacturing plant. Therefore, a significant proportion of the entity’s budget will go towards operations and production. The OBP will continue to implement its Turnaround Strategy that was developed in 2019 to address some of its key challenges, which include among others, lack of good manufacturing practice (GMP) accreditation due to aged infrastructure.

*

The National Agricultural Marketing Council (NAMC)

The NAMC was established in terms of Section 3 and 4 of the Marketing of Agricultural Products Act, 1996 (Act No. 47 of 1996) as amended by Act No. 59 of 1997 and No. 52 of 2001.For the 2021/22 financial year, the NAMC will receive a Parliamentary Grant of R47.3 million through the Department’s Programme 5.  Approximately 73 per cent of the entity’s total allocation goes to compensation of employees. In order to streamline activities and strengthen its legislative mandate, the entity is undergoing a review of its organisational structure.  In addition to its legislated core mandate, the NAMC wasappointed in 2019 by the Minister of Agriculture, Land Reform and Rural Development to coordinate the process of compiling the Agriculture and Agroprocessing Master Plan (AAMP).

*

 Perishable Products Export Control Board (PPECB)

The PPECB was established in terms of Section 2 of the Perishable Products Export Control (PPEC) Act, 1983 (Act No. 9 of 1983). In addition to the PPEC Act, it is also governed by the Agricultural Product Standards (APS) Act, 1990 (Act No. 119 of 1990). The PPECB does not receive a Parliamentary Grant but generates its own revenue through fees and levies charged for inspections done on perishable products that are due for export and issuance of export certificates. The entity realised a surplus of R10.3 million in 2020/21 due to reduced travel and training activities as a result of the lockdown.

The PPECB’s total budget for the 2021/22 financial year is R532 million. Due to the nature of the PPECB’soperations, approximately 68 per cent of its budget for 2021/22 will be spent on compensation of employees. The Committee commended the PPECB for its clear and well-articulated Annual Plan, the continued good work and the role that it plays in the export of perishable products from South Africa including capacity building of smallholder farmers for export market access.

READ MORE AT

https://pmg.org.za/tabled-committee-report/4548/