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Presentation on the Status of Transformation in Agricultural Sector to Portfolio Committee on Agriculture, Forestry and Fisheries. by DAFF & AgriBEE Charter Council 05 November 2013. CONTENTS. Purpose Background - Major Milestones - PowerPoint PPT Presentation
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Presentation on the Status of Presentation on the Status of Transformation in Agricultural Transformation in Agricultural
Sector to Sector to Portfolio Committee on Agriculture, Portfolio Committee on Agriculture,
Forestry and FisheriesForestry and Fisheries
Presentation on the Status of Presentation on the Status of Transformation in Agricultural Transformation in Agricultural
Sector to Sector to Portfolio Committee on Agriculture, Portfolio Committee on Agriculture,
Forestry and FisheriesForestry and Fisheries
byDAFF & AgriBEE Charter Council
05 November 2013
22
CONTENTSCONTENTS
PurposePurpose Background - Major MilestonesBackground - Major Milestones What are the implications of the Section 9(1) AgriBEE Sector Code What are the implications of the Section 9(1) AgriBEE Sector Code How will AgriBEE Sector Code be enforced? (The Guiding Principles) How will AgriBEE Sector Code be enforced? (The Guiding Principles) What are the applicable Enforcement Measures for the AgriBEE Sector Code?What are the applicable Enforcement Measures for the AgriBEE Sector Code? How Permits are used to enforce the implementation of the AgriBEE How Permits are used to enforce the implementation of the AgriBEE
Sector Code Sector Code Important Principles applied during the allocation of Market Access QuotasImportant Principles applied during the allocation of Market Access Quotas How compliance to Code will be measured: Source of InformationHow compliance to Code will be measured: Source of Information Homepage of the AgriBEE IT Portal Status of Transformation in Agricultural SectorStatus of Transformation in Agricultural Sector Total Population of Commercial Agricultural Stakeholders and the Sampling
approach Estimated status of transformation & BEE compliance in agricultural sectorEstimated status of transformation & BEE compliance in agricultural sector Perceptions & viewpoints of agricultural enterprises on BEE & TransformationPerceptions & viewpoints of agricultural enterprises on BEE & Transformation Elements of Empowerment: Undertakings by Stakeholders DAFF’s contributions to the implementation of the AgriBEE Sector Code the AgriBEE Sector Code ConclusionsConclusions
PurposePurpose Background - Major MilestonesBackground - Major Milestones What are the implications of the Section 9(1) AgriBEE Sector Code What are the implications of the Section 9(1) AgriBEE Sector Code How will AgriBEE Sector Code be enforced? (The Guiding Principles) How will AgriBEE Sector Code be enforced? (The Guiding Principles) What are the applicable Enforcement Measures for the AgriBEE Sector Code?What are the applicable Enforcement Measures for the AgriBEE Sector Code? How Permits are used to enforce the implementation of the AgriBEE How Permits are used to enforce the implementation of the AgriBEE
Sector Code Sector Code Important Principles applied during the allocation of Market Access QuotasImportant Principles applied during the allocation of Market Access Quotas How compliance to Code will be measured: Source of InformationHow compliance to Code will be measured: Source of Information Homepage of the AgriBEE IT Portal Status of Transformation in Agricultural SectorStatus of Transformation in Agricultural Sector Total Population of Commercial Agricultural Stakeholders and the Sampling
approach Estimated status of transformation & BEE compliance in agricultural sectorEstimated status of transformation & BEE compliance in agricultural sector Perceptions & viewpoints of agricultural enterprises on BEE & TransformationPerceptions & viewpoints of agricultural enterprises on BEE & Transformation Elements of Empowerment: Undertakings by Stakeholders DAFF’s contributions to the implementation of the AgriBEE Sector Code the AgriBEE Sector Code ConclusionsConclusions
33
PurposePurposePurposePurpose
To brief the Portfolio Committee about the:
Status of the AgriBEE Charter and its implications.
Enforcement measures developed in order to fast-tract the implementation of the AgriBEE Charter.
Web-based system developed in order to facilitate the reports by the sector stakeholders’ BEE status.
Status of transformation in the agricultural sector.
DAFF’s contribution to the implementation of the AgriBEE Charter.
44
The Background - Major MilestonesThe Background - Major MilestonesThe Background - Major MilestonesThe Background - Major Milestones
Gazette of the AgriBEE Transformation Charter in terms of Section 12 of the BBBEE Act 53 of 2003 – 20th March 2008
Inauguration of the AgriBEE Charter Council – 5th December 2008
Migration of section 12 AgriBEE Charter to section 9 AgriBEE Sector Code
Gazette of the Draft AgriBEE Sector Code in terms of Section 9 (5) of the BBBEE Act 53 of 2003 – 26th March 2012
Agricultural Sector stakeholders consultations during Draft AgriBEE Sector Code Public Comments 60-day period
Gazette of the AgriBEE Sector Code in terms of Section 9 (1) of the BBBEE Act 53 of 2003 – 28th December 2012
55
What are the implications of the Section 9(1) What are the implications of the Section 9(1) AgriBEE Sector Code AgriBEE Sector Code
What are the implications of the Section 9(1) What are the implications of the Section 9(1) AgriBEE Sector Code AgriBEE Sector Code
The Code has the same legal status as the Generic Codes of Good Practice (GoGP).
The Code is now fully implementable effective from that of publication, i.e. 28 December 2012.
The Code is now enforceable using government measures, i.e. licenses, incentives, etc.
Since the code is voluntary by nature, stakeholders have a right to choose whether to comply or not as they can not be prosecuted for not doing so.
66
How will AgriBEE Sector Code be enforced? How will AgriBEE Sector Code be enforced? The Guiding Principles The Guiding Principles
How will AgriBEE Sector Code be enforced? How will AgriBEE Sector Code be enforced? The Guiding Principles The Guiding Principles
The Constitution of the Republic South Africa1996
Section 217 (1); (2); and (3) of the Constitution of South Africa states that:
1.When an organ of the state in the national, provincial or local spheres of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost- effective.
2.Subsection (1) does not prevent the organs of the state or institutions referred to in that subsection from implementing a procurement policy providing for:
a.Categories of preference in the allocation of contracts; and
b.The protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination.
c. National legislation must prescribe a framework within which the policy referred to subsection (2) may be implemented.
77
The BBBEE Act 53 of 2003: Section 10 of the Act provide for All Organs of State and Public Entities to apply any relevant Legislation and applicable relevant Sector Code of Good Practice issued in terms of the Act in: Determining qualification criteria for licenses, concessions (grants). Developing & implementing a preferential procurement policy. Determining qualification criteria for the sale of state-owned enterprises. Developing criteria for entering into partnerships with the Private Sector.
Rules of the Game Government must buy from entities that contribute much to BBBEE. (Higher
BEE Recognition Level).
The Higher an entity’s BEE Recognition Level, the higher is its contribution/compliance to BBBEE.(Seven Elements).
When this occurs, there is ensured increasing market access by black companies.
The Guiding Principles (Cont….)The Guiding Principles (Cont….)The Guiding Principles (Cont….)The Guiding Principles (Cont….)
88
What are the applicable Enforcement What are the applicable Enforcement Measures for the AgriBEE Sector Code?Measures for the AgriBEE Sector Code?What are the applicable Enforcement What are the applicable Enforcement Measures for the AgriBEE Sector Code?Measures for the AgriBEE Sector Code?
Preferential Procurement Policy Framework Act Through the Supply Chain Management policies of DAFF
Water Licenses DWA’s policy water use allocations include compliance to
the AgriBEE Sector Code as a requirement
Agricultural trade permit (already implemented) The policy for the allocation of trade permits for imports and
exports of agricultural products requires compliance to the AgriBEE Sector Code
Fresh Produce Market Agents’ certification The amendments of the Agricultural Produce Agents Act
have aligned the certification of market agents to the AgriBEE Sector Code
99
How Permits are used to enforce the How Permits are used to enforce the implementation of the AgriBEE Sector Code implementation of the AgriBEE Sector Code
How Permits are used to enforce the How Permits are used to enforce the implementation of the AgriBEE Sector Code implementation of the AgriBEE Sector Code
AgriBEE Status Number of PointsLevel One Contributor 22
Level Two Contributor 19
Level Three Contributor 17
Level Four Contributor 15
Level Five Contributor 12
Level Six Contributor 8
Level Seven Contributor 5
Level Eight Contributor 2
Non-Compliant Contributor 0
Total 100% or Points
1010
1. Black Economic Empowerment is the primary requirement for the allocation of marketing permits – i.e. First round.
2. After the points have been allocated in accordance with the point system in section 2 above, the surplus quota can therefore be allocated starting with companies on level 1 to 8 up to the limit of the average historical market share for each company – Second round
3. The average market share system will only apply after the BEE point system has been applied and the market share system will be applied in terms of section 3.2 above.
4. If after the first and the second round there is still a surplus (i.e. surplus of surplus), the Third round would be to take the surplus of surplus and divide it by the number of all non-compliant companies.
Important Principles applied during the Important Principles applied during the allocation of Market Access Quotasallocation of Market Access Quotas
Important Principles applied during the Important Principles applied during the allocation of Market Access Quotasallocation of Market Access Quotas
1111
How compliance to Code will be measured: How compliance to Code will be measured: Source of InformationSource of Information
How compliance to Code will be measured: How compliance to Code will be measured: Source of InformationSource of Information
DAFF has developed the AgriBEE IT Portal, which is a web-based information system to be used by sector stakeholders when reporting their BEE status.
Training on the AgriBEE IT Portal was rolled out to all 9 Provincial Departments of Agriculture (PDAs) officials to assist farmers and agribusinesses to upload their valid BEE Certificates & Scorecard information into portal
DAFF and the AgriBEE Charter Council will utilise the information from the Portal to write annual reports on the actual status of transformation in the sector.
The Portal was tested in consultation with Agricultural Sector Stakeholders and is functional, URL: http://webapps.daff.gov.za/agribee/
1212
Homepage of the AgriBEE IT PortalHomepage of the AgriBEE IT PortalHomepage of the AgriBEE IT PortalHomepage of the AgriBEE IT Portal
1313
Status of Transformation in Agricultural SectorStatus of Transformation in Agricultural SectorStatus of Transformation in Agricultural SectorStatus of Transformation in Agricultural Sector
Currently, there is no actual information on the status of transformation in Agricultural Sector.
This is because reliable source, DTI BEE IT Portal, is no longer functional.
However, DAFF has commissioned a study through NAMC that has provided:
An estimated information on the status of transformation in Agricultural Sector.
Perceptions & viewpoints from agricultural enterprises regarding BEE and transformation
Obstacles and challenges to the implementation of AgriBEE
1414
Total Population of Commercial Agricultural Total Population of Commercial Agricultural Stakeholders and the Sampling approachStakeholders and the Sampling approach
Total Population of Commercial Agricultural Total Population of Commercial Agricultural Stakeholders and the Sampling approachStakeholders and the Sampling approach
14
Agro-ecological
zones
Sub-sector (across value chain) Subtota
l
Agri-
businesse
s
RESPONSE
SField
crops
Animal
products
Horticultur
e
Mixed
farming
Cape Fold Region
(WC, KZN) Sample size
RESPONSES
2,722
100
33
4,138
153
91
1,825
68
354
1,297
48
128
9,982
369
606
151
(151)
131737
Interior Region
(FS,EC)
Sample size
RESPONSES
1,762
57
10
7,621
248
266
1,181
40
47
839
27
51
11,404
372
374
98
(98)
32406
High Veld Region
(Gauteng) Sample size
RESPONSES
671
125
7
259
48
16
450
84
4
319
59
10
1,699
316
37
37
(37)
1855
Kalahari Limpopo
(Lim, NW) Sample size
RESPONSES
1,552
77
58
4,069
201
34
1,040
51
44
739
37
43
7,400
366
179
86
(86)
20199
Eastern Plateau
(Mpu)
Sample size
RESPONSES
1,062
103
12
1,285
125
29
712
69
27
506
49
17
3,566
346
85
59
(59)
388
Nama Karoo (NC)
Sample size
RESPONSES
496
33
16
4,302
286
89
333
22
14
236
16
7
5,367
357
126
28
(28)
21147
Total population 8,265 21,674 5,541 3,936 39,417 458
Total sample size 495 1061 334 236 2,126 (458) 2584
136 525 490 256 1407 225 1632
1515
Estimated status of transformation & BEE Estimated status of transformation & BEE compliance in agricultural sectorcompliance in agricultural sector
Estimated status of transformation & BEE Estimated status of transformation & BEE compliance in agricultural sectorcompliance in agricultural sector
1616
Perceptions & viewpoints of agricultural Perceptions & viewpoints of agricultural enterprises on BEE & Transformationenterprises on BEE & Transformation
Perceptions & viewpoints of agricultural Perceptions & viewpoints of agricultural enterprises on BEE & Transformationenterprises on BEE & Transformation
I am not considering a BEE strategy I am not considering a BEE strategy for my businessfor my business
I first want to “test waters” and “see I first want to “test waters” and “see where things are heading” before where things are heading” before committing myself to a BEE strategycommitting myself to a BEE strategy
I first want to “test waters” and “see I first want to “test waters” and “see where things are heading” before where things are heading” before committing myself to a BEE strategycommitting myself to a BEE strategy
I am considering the implementation I am considering the implementation of a BEE strategy as soon as possibleof a BEE strategy as soon as possibleI am considering the implementation I am considering the implementation of a BEE strategy as soon as possibleof a BEE strategy as soon as possible
491(30%)
775 (47%)
157 (10%)
209 (13%)
I have already developed a detailed I have already developed a detailed BEE strategy and have to implement it BEE strategy and have to implement it in my core businessin my core business
I have already developed a detailed I have already developed a detailed BEE strategy and have to implement it BEE strategy and have to implement it in my core businessin my core business
1717
Obstacles & challenges to the implementation of Obstacles & challenges to the implementation of AgriBEE Sector CodeAgriBEE Sector Code
Obstacles & challenges to the implementation of Obstacles & challenges to the implementation of AgriBEE Sector CodeAgriBEE Sector Code
Nu
mb
er
of
res
po
ns
es
1818
Pages Element Agri-IndustryUndertakings
GovernmentUndertakings
12-16 Ownership (Land and Equity)
Sell equity to black peopleMake land available for sale or lease
Fund black people to buy equity in enterprisesImplement land reform
16 Management Control Promote black people to board and management positions
Enforce the Implementation of the Employment Equity Act
14 Employment Equity Employ black people at management positions
Enforce the Implementation of the Employment Equity Act
14-20 Skills Development Spend 85% of total skills spend on core, critical & scarce skills
Enforce the Implementation of the Skill Development Act
20-21 Preferential Procurement Procure goods & services from BEE companies
Enforce the Implementation of the Preferential Procurement Policy Framework Act
21-24 Enterprise Development Spend 3% of NPAT on ED Fund ED initiatives using CASP, MAFISA, etc
24-26 Rural Development, Poverty Alleviation and CSI
Spend 3% of NPAT on SED Support SED initiatives
Elements of Empowerment: Elements of Empowerment: Undertakings by Stakeholders Undertakings by Stakeholders
Elements of Empowerment: Elements of Empowerment: Undertakings by Stakeholders Undertakings by Stakeholders
1919
DAFF’s ContributionsDAFF’s ContributionsDAFF’s ContributionsDAFF’s Contributions
Implementing the AgriBEE Fund to support Black ownership of equity in the commercial enterprises.
Implementing CASP Fund to support enterprise development for Black people.
Piloting an incubation project in Limpopo were 50 smallholder women tomato farmers are undergoing through the mentoring programme.
This incubation pilot project is the collaboration of DAFF, LDA and SEDA (Timbali Incubator).
2020
ConclusionsConclusionsConclusionsConclusions
The AgriBEE Sector Code is the law and has the same status as GoGP.
The AgriBEE Sector Code has the “teeth” which are aligned to the Constitution and the BBBEE Act 53 of 2003.
AgriBEE IT Portal is fuctional and the sector stakeholders can now report their BEE status.
Estimated status of transformation suggest that the agricultural sector is on level 4.
The Department is currently implementing:
CASP to improve enterprise development in the sector. AgriBEE Fund to improve equity ownership on Black people in
the entire agricultural value chain. Skills development in Limpopo through incubation of farmers.