1. Select Committee on Appropriations Provincial Agriculture Grants
Presenter| National Treasury | 17 October 2017

2. Comprehensive Agricultural Support Grant (CASP)
Inception – 2004/05
The purpose of the grant is to provide effective agricultural support services, promote and facilitate agricultural developments by targeting beneficiaries of land reform, restitution and redistribution, and other black producers who have acquired land through private means and are engaged in value-adding enterprise domestically, or the export market; to address damages to infrastructure caused by floods.
Key outputs:
Farmers supported (subsistence, smallholder and commercial )
Farm infrastructure provided and repaired
Hectares under agricultural production
Beneficiaries of CASP trained on farming methods
Beneficiaries of CASP accessing markets
Jobs created

3. CASP
- Began in the 2004/05 financial year, with a total R200 million allocated to all provinces.
Spending on the grant has been historically poor, especially in the first few years. With the exception of 2012/13, spending has largely stabilised over the recent past, although grant allocations have never been fully spent.
Allocations grew consistently between 2004/05 and 2011/12. The significant addition in allocations from 2012/13 was because disaster allocations were included as part of the grant from 2012/13 onwards. The underspending in 2012/13 is mainly attributed to underspending on the disaster portion of the grant, especially the amount that was allocated to the NC for flood damages.
- Allocations have tapered off over the last three years due to fiscal consolidation and subsequent cuts to conditional grants. Grants are still however under spent.

4. Achievements - CASP

5. Achievements - CASP

6. Rollover - CASP
With the exception of 2012/13, the amounts rolled over is at relatively the same levels. The roll over in 12/13 is mainly due to funds that was rolled over for disasters in the Northern Cape (around R270 million) because the department was not able to fully. implement projects that addressed flood disaster. The main reason for the underspending was supply chain challenges.
Roll overs are an issue, however, because it means that departments are not planning adequately or lack capacity to spend funds within the financial year.

7. CASP issues
Challenges experienced in the implementation of infrastructure related projects as a result of the newly introduced IDMS processes requiring signing off of the professionals.
Spending in agricultural colleges has been woeful, with only 20 per cent of funds allocated in 2016/17 being spent. Monitoring has to be stepped in 2017/18 to ensure performance improves.
Poor planning in provinces, which results in poor performance, due to a lack of competent and dedicated staff to manage the grant.
Of late, drought experienced in many provinces negatively affected their planting of crops and the implementation of projects.
Monitoring by DAFF still needs attention, even though funds from the grant were redirected to enhance the monitoring capacity at DAFF.
The transfer of funds to provinces does not correspond with the activities and cash flow requirements in provincial business plan, hence the significant unspent funds in provincial bank accounts.

8. Ilima/Letsema Projects Grant
Inception – 2008/09
The purpose of the grant is to assist vulnerable black South Africans farming communities to achieve an increase in agricultural production and invest in infrastructure that unlocks agricultural production.
Key outputs:
Land under agricultural production (crops and livestock)
Hectares of land rehabilitated and expanded irrigation schemes
Yields per unit area
Beneficiaries/farmers supported
Jobs created

9. Ilima/Letsema
Inception 2008/09 with a budget of R96 million, with allocations to only three provinces (KZN,NC,NW). Was extended to all provinces from 2009/10 onwards.
Allocations from 2010/11 onwards has been quite substantial at around R400 million per year. Spending as a percentage of the budget Has been improving over the last four years.

10. Achievements - Ilima

11. Achievements - Ilima

12. Rollovers – Ilima/Letsema
The high roll overs recorded in 2008/09 is attributed to three provinces. As this was the first year of implementation, provinces struggled a bit and the unspent funds were rolled over to the following year.
There were however spikes in roll overs in 2011/12( GT and LP) and 2013/14 (KZN). The underspending was related mostly to supply chain issues and poor planning in the provincial departments.
Roll overs have however come down in the past three years as implementation and spending improves.

13. Ilima issues
The current staff establishment in some provinces do not provide for dedicated staff or units to manage specific programmes.
Drawn out procurement processes still an issue, especially on inputs and repairs to tractors.
Drought experienced in many provinces negatively affected their planting of crops.
Non-attendance of training courses by beneficiaries who have indicated that they need the training, contributes to poor performance.
The transfer of funds to provinces does not correspond with the activities and cash flow requirements in provincial business plan, hence the significant unspent funds in provincial bank accounts.

14. Land Care Programme Grant: Poverty Relief and Infrastructure Development
Inception – 2001/02
The purpose of the grant to promote sustainable use and management of natural resources by engaging in community based initiatives that support the pillars of sustainability (social, economic and environmental), leading to greater productivity, food security, job creation and better well-being for all.
The key outputs of the grant include:
Hectares of rangeland protected and rehabilitated
Hectares of land where weeds and invader plants are under control
Kilometres of fence erected
Junior Care participants involved in the programme
Awareness campaigns conducted for land carers

15. LandCare
In the first few years, expenditure was erratic, as is with most new grants. However, since 2008/09 spending against budgets has improved and stabilised.
In 2012/13 and 2013/14, R50 million additional was allocated per year for fencing of land for beneficiaries of land reform and communal farmers. Provinces were not able to fully spend their allocations and surrendered R9.8 and R7 million for 2012/13 and 2013/14 respectively, mainly due to delays in procurement of materials and late deliveries

16. Achievements - Landcare

17. Achievements - Landcare

18. Rollovers - Landcare
Although the roll overs for landCare has been quite significant from , provinces have improved greatly after that. In fact there have been no roll overs approved in the last five years.
There has however been underspending, which is negligible

19. Landcare issues
Delays in the procurement process resulting in late appointment of service providers resulting and late delivery of materials.
Good summer rains in some provinces led to the proliferation of alien invasive species such as slangbos, which need more effort and inputs. On the other hand, construction of gabions for example were delayed.
Projects lists by provinces not fully thought through, hence requests to change projects list on a regular basis.
The transfer of funds to provinces does not correspond with the activities and cash flow requirements in provincial business plan, hence the significant unspent funds in provincial bank accounts.

20. Underspending and Rollovers per province

21. Eastern Cape

22. Free State

23. Gauteng

24. KwaZulu- Natal

25. Limpopo

26. Mpumalanga

27. Northern Cape

28. North West

29. Western Cape

30. Conclusion
Spending on all agriculture grants in the first quarter has been historically poor. The average spending in the first quarter of the past three years are as follows: CASP 11%; Ilima Letsema 8% and LandCare 6%.
Transfers to provinces over the same period averages: CASP 20%; Ilima Letsema 19% and LandCare 10%. This increases borrowing costs, as some of the transfer could have been delayed.
It seems quite clear that transfers made to provinces are made in block percentage, which do not align to planned activities in provincial business plans.
Most activity around the three grants occur in the third and fourth quarter, while business plans are aligned to this, transfers need to reflect this as well.
Drought has had a negative impact on performance with 8 of the 9 provinces declaring disasters. This has negatively affected performance as well

31. Conclusion continued
Procurement and the attendant delays continue to stifle performance and delivery, especially in the procurement of equipment and inputs.
Dedicated and qualified staff are lacking in some provinces, negatively affecting the timely implementation in terms of the business plan.
DAFF’s capacity for monitoring must be enhanced to identify weaknesses and support service delivery in provinces. Funds were allocated to DAFF to enhance capacity, but little progress has been made in filling posts.
Quarterly reviews are conducted with the DAFF to review performance and deal with challenges that provincial departments face.
National Treasury participates in the National Assessment Panel for agriculture grants which assesses projects and provincial departments’ readiness to implement. Although projects are deemed ready, procurement issues negatively affect implementation

32. Conclusion continued
Workshops are conducted annually, where DAFF and provincial departments of agriculture are workshopped on the granted frameworks, conditions and other compliance issues related to the Division of Revenue Act.
National Treasury as part of our monitoring responsibility, conducted provincial visits where the performance of agriculture grants, amongst others, is discussed

33. Thank you