1. REPORT FROM THE AGRIBEE CHARTER COUNCIL Mkhululi Mankazana Acting Deputy Director General Agricultural Support Services and Chairperson Email: DDGSSP@daff.gov.zaDDGSSP@daff.gov.za PORTFOLIO COMMITTEE ON AGRICULTURE, FORESTRY AND FISHERIES 20 APRIL 2010

2. 2 INDEX  Background  Overview of the sector  Scope of application  Mandate of the charter council  Achievement to date  Working group 1 achievements  Working group 2 achievements  Working group 3 achievements  Outstanding issues and proposed way forward  Future plan of action  Background  Overview of the sector  Scope of application  Mandate of the charter council  Achievement to date  Working group 1 achievements  Working group 2 achievements  Working group 3 achievements  Outstanding issues and proposed way forward  Future plan of action

3. 3 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 SA Dr T. de Jager – AGRISA Professor J. de la Rey – Transvaal Agricultural Union SA Mr. E. Mohlahlo – Landless People Movement Dr J. Purchase – Agricultural Business Chamber Mr. H. McBain – South African Agricultural Processors Association Mr. K. Masemola – Food and Allied Workers Union (FAWU)

4. 4 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 Reform Ms D. Mochotlhi – Department of Water and Environmental Affairs Ms M. Mohapi – Department of Agriculture, Forestry and Fisheries (DAFF) Mr. Z. Bulbulia – The Presidency: Office on the Status of Disabled Persons

5. 5 OVERVIEW OF THE SECTOR Size of enterprise Number of enterprises (levy payers only) Number of employees Small3 03848 771 Medium70557 221 Large468353 124 Total4 211459 116 Entities in the primary and secondary agriculture Source: AgriSETA data base

6. 6 entities in agroprocessing environment Size of enterprise Number of enterprises (levy payers only) Number of employees Total number of enterprises Small1 300 22 2004 490 Medium 272 23 500 482 Large 180122 000 303 Total1 752167 7005 275 Source: FoodBEV SETA data base

7. 7 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:

8. 8 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.

9. 9 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.

10. 10 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.

11. 11 WORKING GROUP 1 ACHIEVEMENTS NO EMPOWERMENT INDICATOR AGRIBEE INDICATIVE SCORECARD VARIANCE GENERIC SCORECARD 1 Ownership (Land and Equity) 20 points0 2Management Control10 points0 3Employment Equity10 points- 515 points 4Skills Development20 points+ 515 points 5Preferential Procurement20 points0 6Enterprise Development10 points- 515 points 7Rural Development, Poverty Alleviation and CSI 10 points+ 505 points Agreed scorecard

12. 12 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.

13. 13  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

14. 14 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.

15. 15 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.

16. 16 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).