REPORT FROM THE AGRIBEE REPORT FROM THE AGRIBEE CHARTER COUNCILCHARTER COUNCIL

Mkhululi MankazanaActing Deputy Director General Agricultural Support Services and ChairpersonEmail: DDGSSP@daff.gov.za

PORTFOLIO COMMITTEE ON AGRICULTURE, PORTFOLIO COMMITTEE ON AGRICULTURE, FORESTRY AND FISHERIES 20 APRIL 2010FORESTRY AND FISHERIES 20 APRIL 2010

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INDEX BackgroundBackground

Overview of the sectorOverview of the sector

Scope of applicationScope of application

Mandate of the charter councilMandate of the charter council

Achievement to dateAchievement to date

Working group 1 achievementsWorking group 1 achievements

Working group 2 achievementsWorking group 2 achievements

Working group 3 achievementsWorking group 3 achievements

Outstanding issues and proposed way forwardOutstanding issues and proposed way forward

Future plan of actionFuture plan of action

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BACKGROUND

The AgriBEE sector Transformation Charter was gazetted on the 20 March 2008

On the 05 December 2008 the council was inaugurated

In terms of membership the council consist of the following members:

Mr. (Rev) O. Mbangula – National African Famers Union SADr T. de Jager – AGRISAProfessor J. de la Rey – Transvaal Agricultural Union SAMr. E. Mohlahlo – Landless People MovementDr J. Purchase – Agricultural Business ChamberMr. H. McBain – South African Agricultural Processors AssociationMr. K. Masemola – Food and Allied Workers Union (FAWU)

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BACKGROUND CONT…

Mr. N. Phungo – Youth in Agriculture and Rural Development (YARD)Ms C. Molo – Women in Agriculture and Rural Development (WARD)Mr. T. Masombuka – Department of Trade and Industry (the DTI)Ms Q. Filani – Department of Rural Development and Land ReformMs D. Mochotlhi – Department of Water and Environmental AffairsMs M. Mohapi – Department of Agriculture, Forestry and Fisheries (DAFF)Mr. Z. Bulbulia – The Presidency: Office on the Status of Disabled Persons

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OVERVIEW OF THE SECTOR

Size of enterprise

Number of enterprises (levy payers only)

Number of employees

Small 3 038 48 771

Medium 705 57 221

Large 468 353 124

Total 4 211 459 116

Entities in the primary and secondary agriculture

Source: AgriSETA data base

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entities in agroprocessing environmententities in agroprocessing environment

Size of enterprise

Number of enterprises (levy payers only)

Number of employees

Total number of enterprises

Small 1 300 22 200 4 490

Medium 272 23 500 482

Large 180 122 000 303

Total 1 752 167 700 5 275

Source: FoodBEV SETA data base

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SCOPE OF APPLICATION

The primary production of agricultural products;

The provision of inputs and services to Enterprises engaged in the production of agricultural products;

The beneficiation of agricultural products whether of a primary or semi-beneficiated form; and

The storage, distribution, and/or trading and allied activities related to non-beneficiated agricultural products.

The scope of the AgriBEE Transformation Charter shall include any Enterprises which derives the majority of its turnover from:

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MANDATE OF THE CHARTER COUNCIL

To align the AgriBEE transformation charter with the Codes of Good Practice in terms of a section 9 of the BBBEE Act no. 53 of 2003.

To provide guidance with respect to the implementation of the AgriBEE Charter.

To monitor the implementation of the AgriBEE Charter in the Agricultural sector as well as to review the charter.

To share information with sector stakeholders and approved accredited verification agencies.

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MANDATE OF THE CHARTER COUNCIL CONT…

To facilitate communication and popularisation of the AgriBEE Charter.

To advise the Minister of DAFF with regard to the matters of the

AgriBEE.

To report to the Minister of Trade and Industry and the BEE Advisory Council on the status of Broad Based Black Economic Empowerment within the Agricultural sector.

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ACHIEVEMENTS TO DATE AgriBEE Charter Council met three times to facilitate the move from Section 12 to 9

Council Members agreed on a clear roadmap to migrate the current Section 12 Charter to a Section 9 Sector Code.

Council agreed on the establishment of 3 Working Groups with the following mandates:

• Working Group 1: responsible for the alignment of the Sect.12 Charter with the final DTI Codes, check the 7 elements of the Generic Scorecard and their points’ allocation with the indicative AgriBEE Scorecards.

• Working Group 2: responsible for drawing up a Budget for the Activities of the Council.

• Working Group 3: responsible for the investigation and development of a cost-effective monitoring & reporting system on AgriBEE implementation.

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WORKING GROUP 1 ACHIEVEMENTS

NO EMPOWERMENTINDICATOR

AGRIBEE INDICATIVE

SCORECARD

VARIANCE GENERIC SCORECARD

1 Ownership (Land and Equity)

20 points 0 20 points

2 Management Control 10 points 0 10 points

3 Employment Equity 10 points - 5 15 points

4 Skills Development 20 points + 5 15 points

5 Preferential Procurement 20 points 0 20 points

6 Enterprise Development 10 points - 5 15 points

7 Rural Development, Poverty Alleviation and CSI

10 points + 5 05 points

• Agreed scorecard

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WORKING GROUP 2 ACHIEVEMENTS The working group met and agreed on the cost drivers and on

execution plan;

All funding requirements of the Council will be covered by the Department of Agriculture, Forestry and Fisheries up to the publication of the AgriBEE Sector Code in terms of section 9 of the BBBEE Codes.

A funding model will be developed once the AgriBEE Sector Code is in place.

Once the section 9 Sector Code is in place, there will be a structure with a Chief Executive Officer (CEO) and office staff members appointed.

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On the investigation with respect to the development of the AgriBEE measurement and monitoring system, consultations were made within the framework of the DTI’s BEE IT Portal.

A demonstration of the IT Portal was done by the DTI’s Service Provider and a foundation document developed for the IT database for AgriBEE purpose.

Work is on-going regarding the development of a monitoring and reporting system for AgriBEE implementation and measurement within the sector.

Working Group members reached agreement on alignment aspects of the Charter with the DTI’s Codes Framework and Scorecards.

WORKING GROUP 3 ACHIEVEMENTS

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OUTSTANDING ISSUES AND PROPOSED WAY FORWARD

Review of the thresholds for Exempted Micro Enterprises (EMEs) and Qualifying Small Enterprises (QSEs).

Threshold to be divided into primary agriculture and agribusiness.

Commission economic study to be funded by DAFF on behalf of the AgriBEE Charter Council.

Parallel to the study, invite Sub-sectors’ inputs on the Thresholds.

Expected time frame for completion of study – end September 2010.

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OUTSTANDING ISSUES AND PROPOSED WAY FORWARD CONT…

Land Ownership

Members to consult with their constituencies on the contribution of private enterprises towards Land Ownership.

A further option was tabled to make the Ownership element

mandatory for Qualifying Small Enterprises (QSEs).

There will be a report back from members after their consultations with their constituencies on the issues of Land Ownership.

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FUTURE PLAN OF ACTION

Process required to move from Section 12 to 9:

Draft Code to DTI for consideration.

Publishing Gazette as Section 9(1) for public comments (60 days).

Council and DTI work through comments.

DTI publish the final AgriBEE Sector Code Section 9(5).