1. 1 Province of the Eastern Cape DEPARTMENT OF AGRICULTURE CONDITIONAL GRANT AND CAPITAL EXPENDITURE THIRD TERM REPORT

2. 2 TABLE OF CONTENTS Situation Analysis - CASPSituation Analysis - CASP Situation analysis – Land CareSituation analysis – Land Care Agricultural Disaster Management GrantAgricultural Disaster Management Grant Capital spending third term reportCapital spending third term report

3. 3 SITUATION ANALYSIS - CASP BudgetBudget –CASP was allocated a budget of R57 061 000 for the year under review. A rollover of R5 986 000 is awaiting approval by the provincial legislature. Cash flow from NationalCash flow from National –R45 649 000 has been transferred to the province. ExpenditureExpenditure –R32 025 030 has been spent as at 31 December 2006 _R33 938 000 has been spent as at 6 February 2007

4. 4 SITUATION ANALYSIS - CASP CASP funded ProjectsCASP funded Projects –170 projects have been approved across the six District Offices and Head Office. Split per project typeSplit per project type Type of projectBudget ExpenditureCommitted FencingR 11,159,266R 6,684,550R 3,762,425 Stock Water DamsR 2,057,021R 891,440R 785,714 Dip TanksR 2,090,261R 160,447R 168,116 HydroponicsR 1,767,451R 315,754R 1,357,955 Production InputsR 900,000R364,630R 418 400

5. 5 SITUATION ANALYSIS - CASP Split per project typeSplit per project type Type of projectBudget Expenditure Committed Poultry HouseR 4,030,098R 2,311,302R 1,216,781 DairiesR 1,403,812R 96,378R 532,785 Handling FacilitiesR 150,000R 87,982R 83,991 Storage ShedsR 593,220R 177,737R 315,483 Shearing ShedsR 5,190,558R 2,292,695R 2,897,8646 Irrigation SchemesR 15,744,000R 15,744,000R 0 MechanizationR 14,130,766R 1,586,552R 12,586,552

6. 6 ANALYSIS OF CASP CATEGORIES The analysis shows more budget allocation for fencing, shearing sheds,irrigation schemes and mechanization.The thrust of the province is on food security, which requires fencing of arable lands and gardens,livestock improvement through introduction of better rams for wool improvement, which requires shearing sheds for wool classing and baling. The province has started resuscitation of six large irrigation schemes.Provision of small and large tractors assists farmers on LRAD and communal areas to be productive both under irrigation and dry land food production.The analysis shows more budget allocation for fencing, shearing sheds,irrigation schemes and mechanization.The thrust of the province is on food security, which requires fencing of arable lands and gardens,livestock improvement through introduction of better rams for wool improvement, which requires shearing sheds for wool classing and baling. The province has started resuscitation of six large irrigation schemes.Provision of small and large tractors assists farmers on LRAD and communal areas to be productive both under irrigation and dry land food production.

7. 7 SITUATION ANALYSIS - CASP ChallengesChallenges –Lack of financial capacity from the developing contractors –Socio-political problems within the communities retard the implementation of {Social conflicts, political differences, etc.} –Lack of project management capacity from the developing contractors resulting in projects being not finished on time.

8. 8 SITUATION ANALYSIS - CASP Remedial MeasuresRemedial Measures –Financial Institutions are in agreement to provide start-up capital to the developing companies at the presentation of approved orders from the provincial department of agriculture. –Social Mobilisation is being done to facilitate community involvement, participation and ownership where and when necessary to speed implementation and reduce social conflicts. –Emerging Contractors are being capacitated on project and financial management through the Extended Public Works Programmes of the department of Public Works.

9. 9 SITUATION ANALYSIS – LAND CARE BudgetBudget –LandCare has been allocated a budget of R6 675 000 for the 2006/07 financial year. –R737 000 rollover from the provincial treasury is awaiting approval by the provincial legislature. – An additional R4 375 000 for the implementation of a Land Care project in the Umzimvubu Catchment was approved the National Department of Agriculture. This amount is also awaiting approval by the provincial legislature.

10. 10 SITUATION ANALYSIS – LAND CARE Cash FlowCash Flow –R5 340 000 has already been transferred to the province. ExpenditureExpenditure –R5 277 000 has been spent as at 31 December 2006.

11. 11 SITUATION ANALYSIS – LAND CARE Land Care funded projectsLand Care funded projects –6 projects are funded by this Conditional. –All these projects focus on the following objectives Resource planning & Capacity buildingResource planning & Capacity building Infrastructure to enable resource planning e.g. FencingInfrastructure to enable resource planning e.g. Fencing Rehabilitation and protection resources, e.g. soil conservation worksRehabilitation and protection resources, e.g. soil conservation works

12. 12 SITUATION ANALYSIS – LAND CARE Land Care funded projectsLand Care funded projects Split by projectSplit by project ProjectBudgetExpenditure Mthatha Dam Catchment2 000 0001 606 000 Dlula Bedlala 50 000 50 000 Camdeboo 70 000 8 000 Sterkpruit Ward 42 500 000 1 780 000 Sidindi2 025 000 1 806 000 Ntseshe 30 000 27 000 6 675 000 5 277 000

13. 13 SITUATION ANALYSIS – LAND CARE ChallengesChallenges –The fact that the rollovers has not been approved yet poses a serious threat of under spending. –Capacity constraints to implement Land Care The Extension Officers of the department who are in constant touch with the communities are falling short when it come to broader capacity building in communities.The Extension Officers of the department who are in constant touch with the communities are falling short when it come to broader capacity building in communities. –The shortage of Resource Planners reduces the capacity of the department to effectively implement Land Care projects. –The department has a serious problem to recruit and retain engineering staff to design the infrastructure and supervise construction.

14. 14 SITUATION ANALYSIS – LANDCARE Remedial MeasuresRemedial Measures –The training of Extension Officers needs to extended to include community capacity building skills –The department is looking to apply some incentives to lure the scarce skilled personnel to the department

15. 15 AGRIC. DISASTER MANAGEMENT GRANT BudgetBudget –R12 403 000 was received as an additional funding from the National Department of Agriculture during the time of preparing for the 1 st Adjustment Estimates Cash flowCash flow –There were no cash flows for the period under review ExpenditureExpenditure –No expenditure yet as this funding is caught up with the delayed Adjustment Estimates which are yet to be approved by the provincial legislature.

16. 16 CAPITAL EXPENDITURE THIRD TERM Item Allocation Spent Variance Commitments R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 Assets 13 417 2 481 10 936 7 109 The capital budget of R13.417million,which is for computers, office furniture, office equipment and cabling of our offices, has experienced delays due to the lengthy process of procuring expensive capital equipment. However to date R9.590m has been spent and formally committed..

17. 17 THANK YOU