AgriBEE: Status Quo and Way Forward Theo de Jager Deputy President: Agri SA 17 September 2010

Approaches Formal Processes State led & funded Informal Processes Post Settlement in restitution LARP AgriBEE Charter & Council Recapitalisation Program Informal Processes Private initiatives Agri-Business FNB, Halls & Sons, GWK, etc. Commodity Org’s NWPO, MPO, SAPPO, Maize Trust Farmers Associations KWANALU, Agri-Limpopo

Formal Process Post Settlement LARP Recapitalisation 90% failure Community farming Will cost more to restore than original price No FA involvement LARP Limpopo, W-Cape, E-Cape, Gauteng, KZN Recapitalisation

Land reform policy in SA RDP, 1994 Reconstruction and Development Program 30% transfer of white-owned agricultural land to blacks by 2014 White Paper on Agriculture 1995 Broadening access to agriculture via land reform, with enhancement from adequate policy instruments, and supported by means of the provision of appropriate services BATAT, 1995 Broadening Access to Agriculture Thrust Basically a new financial assistance policy

Land reform policy in SA (cont) Agricultural Policy: Discussion Document, 1998 Supporting the emergence of a more diverse structure of production with a large increase in the number of successful smallholder farming enterprises Strategic Plan for the South African Agriculture, 2001. Three core strategies: Enhancing equitable access and participation in the agricultural sector Improving global competitiveness and profitability Ensuring sustainable resource management GEAR, 1996 Growth Employment and Redistribution Strategy Ambitious growth targets

Land reform policy in SA: Key policy initiatives, 2004-2009 Settlement and Land Acquisition Grant (SLAG = R16 000 cash grant) Land Redistribution of Agricultural Development (LRAD = minimum grant of R20 000, R5000 own contribution) Comprehensive Agricultural Support Program (CASP – support with on and off farm infrastructure – serious capacity constraints) Micro Agricultural Financial Institution of South Africa (MAFISA – Maximum loans of R100 000 – Forensic investigation) Land and Agrarian Reform Program (LARP, 2008) (A new Framework for delivery and collaboration on land reform and agricultural support. It created a delivery paradigm for agricultural and other support services – “One-Stop Shop” service centres

Charter Process Codes Process Consultation 31 March 2006 6 Dec 2008 Sector Participants Other Stakeholders (including relevant Government Department) Steering Committee Minister Establish Charter Council Meet Para 16 (Statement 10) Qualification Criteria Public Proclamation of Charter Process Consultation Meet BEE (Act (s12) Requirement Gazette as Transformation Charter Apply Generic Scorecard Dti Application for Gazette as Sector Codes Independent Third-Party Review Meet Statement 10 Mandate Negotiation and Drafting (Sector Specific Scorecards) Draft Technical Does not meet Charter Qualification Meet Requirements FLOW CHART PROCESS FOR GAZETTING SECTOR CHARTERS Codes Process Negotiation, Drafting, Publication 31 March 2006 6 Dec 2008

Reasons for slow pace Delays in publishing and appointing Revisiting of agreements Radical demands from government departments Conflict on recordkeeping, modus operandi, etc. No AgriBEE on Gazetted farms Incentives for compliance? Consider to stick to generic codes

Private Initiatives Farmer Development Conference Feb. 2010, Somerset West Commodity driven 73 Projects R200 million over 5 years Equity Schemes (WC, NC, EC) Agri-Businesses with local farmers Training institutions

Current Contribution Farmer Development Contribution: R200 million over 5 years Tenure: 2,8 mil cared for by 40 000 farmers 40% less on land values Schools, crèches, graveyards, sports fields, accommodation, food, health care, training, transport, skills development

Main Challenges Govt and Organised Agriculture working in silo’s; no cooperation, no trust Tendency not to restructure agriculture but to polarise it Corruption, nepotism, maladministration High expectations versus non-delivery Low profitability and high risk

Solutions Redesign Scientific, research based program Needs driven Real reasons for high costs Data bases for land reform and BEE Appoint capable drivers Localise reform – inclusive local forums Create SPV for development financing

Thank you