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The Basis for the New South African Agricultural Black Economic Empowerment (AgriBEE) Framework
Siphiwe F. Mkhize PhD
A paper prepared for the AfriCANDO 2004 Conference organized by the Foundation for Democracy in Africa delivered on Friday, September 17, 2004
Good afternoon Ladies and Gentlemen,
I want to thank the Foundation for Democracy in Africa for inviting me to take part in these discussions in this exciting conference with such a fitting theme: “Effective and Efficient Use of Agricultural Science, Technology and Research as Tools for Development in Africa”. As we know that the African Union (AU) has declared this decade as the “African decade for Agriculture and Water Resource Challenges and Opportunities”. The AU did not end by just declaring that it also took a step further when African Ministers of Agriculture in Mozambique last year declared that 10% of their budgets should be committed to Agricultural Research. Early this year the Ministers of Agriculture at the FAO Regional Conference in Johannesburg, South Africa adopted the Comprehensive African Agriculture Development Programme (CAADP).
The CAADP goal for sector is an agricultural led development that eliminate hunger, reduces poverty and food insecurity thereby opening the way for an expansion for exports and put the continent on a higher economic growth path within an overall strategy of sustainable development and preservation of natural resource base.
Well, I am here to explain the New South African Agricultural Black Economic Empowerment Framework (AgriBEE), which was launched by the Minister of Agriculture in July this year.
In his State of the Nation Address (SONA) equivalent to your State of the Union this year, President Mbeki spoke about two economies first economy for the South Africans better off and the second economy for the majority of South Africans who are not in a better off. Since 1994 South Africa has been moving towards Broad Base Black Economic Empowerment and as a result the following activities have been happening:
· General public discourse on Affirmative Action: Two Nations debate and Empowerment in general has been ongoing since 1994
· Broad Based Socio Economic Empowerment Charter for the South Africa Mining Industry adopted at end of 2002;
· At the Nation Economic Development and Labour Council (NEDLAC) Financial Sector Summit the Financial Sector committed itself to the development of a Black Economic Empowerment (BEE) Charter in August 2002; and
· Broad Based Black Economic Empowerment Act, (Act No 53 of 2003) passed by Parliament and assented to on January 7, 2004.
The AgriBEE framework is in line with existing government policy and legislation for redress of centuries of past racial discrimination and the consequences thereof. It is another step on the path we undertook when we defined the ideals of a non-racial, non-sexist society in our Constitution and understood the obligations that imposed on us. The AgriBEE framework establishes the guiding principles for broad based economic empowerment in agriculture in a manner that seeks to build on the experience of transformation efforts over the past decade. It is important to first understand that the aim for the South African Agricultural sector is the attainment of the vision of a United and Prosperous Sector and its main strategic goal is “to generate equitable access and participation in globally competitive, profitable and sustainable agricultural sector contributing to a better life for all”.
The vision for the sector implies sustained profitable participation in the South Africa agricultural economy by all stakeholders. It recognizes the need to maintain and increase commercial production, to build international competitiveness and to address the historical legacies and biases that resulted in skewed access and representation. It gives a clear picture of where South African agriculture wants to be in the long term. All this is underpinned by three key strategic objectives.
The strategic plan consists of three core strategies:
· Equitable access and participation. The objectives of this strategy are to enhance equitable access to and participation in agricultural opportunities; to deracialise land and enterprises ownership; and to unlock the full entrepreneurial potential in the sector.
· Global competitiveness and profitability. The aim of this strategy is to enhance profitability through sustained global competitiveness in the agricultural sector’s input supply, primary production, and agro processing and agro tourism industries.
· Sustainable resource management. This strategy aims to enhance farmers’ capacities to use resources in a sustainable manner and to ensure the wise use and management of natural resources.
Some elements of the core strategies are complementary and will contribute towards creating and restoring confidence in agriculture. With this in mind, a number of essential supporting and enabling strategies are identified as;
· Good governance
· Integrated and sustainable rural development
· Knowledge and innovation
· International cooperation
· Safety and security
OBJECTIVES
The objectives of the AgriBEE are to eliminate racial discrimination in agricultural sector through implementing initiatives that mainstream Black South Africans in all levels of agricultural activity and enterprises along the entire agricultural value chain by:
(a) Promoting equitable access and participation of Historically Disadvantaged Individuals (HDI) in the entire agriculture value chain;
(b) Deracialising land and enterprise ownership, control, skilled occupations and management of existing and new agricultural enterprises;
(c) Unlocking the full entrepreneurial skills and potential in the sector of HDIs;
(d) Facilitating structural changes in agricultural support systems and development initiatives to assist Black South Africans in owning, establishing, participating in running agricultural enterprises;
(e) Socially uplifting and restoring dignity of Black South Africans within the sector;
(f) Increasing the extent to which communities, workers, cooperatives and other collective enterprises own and manage existing and new agricultural enterprises, increasing their access to economic activities, infrastructure and skills training; and
(g) Empowering rural and local communicates to have access to agricultural economic activities, land, agricultural infrastructure, ownership and skills.
COMMITMENTS
All South African stakeholders commit to the underlying principles of the AgriBEE Framework and undertake to work to create an enabling environment for empowerment of HDIs by delivering on the following:
(a) AGRICULTURAL LAND
High potential and unique agricultural land is a critical but limited and scarce resource in South Africa. Stakeholders shall work together to ensure that HDIs have ownership, leasehold and or use high-potential and unique agricultural land.
[There are some specified targets which will be undertaken by the established industry and also some government undertaking].
(b) HUMAN RESOURCE DEVELOPMENT
Rapid changes in the global environment require that stakeholders work together to ensure greater attention is given to expanding the existing human capital pool through investing in people, employment equity, skills development and institutional transformation. Commercial viability in agriculture demands sustained productivity and high levels of entrepreneurship, long term commitment, resources and skills. Agriculture in South Africa has a low absorption rate of skilled and trained labour that is inconsistent with its needs. High levels of illiteracy in the country are also experienced within farming communities.
(c) EMPLOYMENT EQUITY
In keeping with Employment Equity Act and the Skills Development Act all enterprises in the sector undertake to:
[Figures]
These targets are geared toward achieving a representative management outlook in all enterprise by year 2014 which in turn will reinforce and consolidate the AgriBEE outcomes.
(d) ENTERPRISE OWNERSHIP AND EQUITY
Key to broad based black economic empowerment in agriculture is the ownership of assets and enterprise within the sector. Historically, the interpretation of ownership in agriculture has been understood to be dependant upon ownership of land. The AgriBEE framework makes a distinction between land and enterprise ownership. Stakeholders in the sector will work towards the development and implementation of a diversity of enterprise ownership models in support if AgriBEE.
(e) PROCUREMENT AND CONTRACTS
The success of the commitment in this AgriBEE framework is also influenced by the procurement and contractual behaviour of the retail, tourism, distribution and consumer sectors. In keeping with the spirit of this framework document all enterprises in the sector undertake to
(f) AGRICULTURAL SUPPORT SERVICES
Support services such as access to finance, infrastructure, information and knowledge systems, are core pillars of sustainable empowerment initiatives. The stakeholders recognise the fact that transformation challenges to overcome the history of dualism still exist in the agricultural sector.
The Established Industry undertakes to:
· Engage the Financial Sector in order to ensure that through its Financial Charter opportunities for Black Economic Empowerment in the agricultural sector are realized;
· Ensure meaningful access to and use infrastructure, assets and support services capacity that accumulated to them as a result of past apartheid policies to black enterprises in the sector by 2007;
· Comprehensively apply existing BEE principles and available opportunities to provide support services for the realization of AgriBEE.
Government undertakes to:
· Ensure the creation of enabling environment to support agriculture;
· Continue with the implementation of the Comprehensive Agricultural Support Programme (CASP).
Black people in the sector undertake to:
· Proactively participate in the processes that define the need for agricultural support services and the subsequent design in the delivery of those.
MONITORING, EVALUATION AND REPORTING
Monitoring of broad based BEE and codes of good practice is determined in the Broad Based Black Economic Empowerment Act of 2003.
· Each institution within the sector undertakes to fully disclose and report [within its annual report], progress towards achieving the commitments. The first such annual report will be for the 2005 financial year.
· Specific areas of reporting shall include the following: - % high potential and unique agricultural land disposal and transfer to HDIs; Human Resource Programmes in place; Employment Equity and Representativity targets achieved; BEE procurement spend; Agricultural Support Services initiatives.
· A scorecard will be developed as an integral part of the AgriBEE framework.
CONCLUSION
In November this year the Minister of Agriculture would review comments and inputs received and make necessary adjustments to this framework in order to take the document to Cabinet for adoption in line with Section 12 of the Broad Based Black Economic Empowerment Act of 2003.
Finally, in all government policies since 1994 the intention to confront the legacy of the past has been consistent; the experience with the development of appropriate policy interventions difficult and implementation of targeted programmes complex. The development of the discussion document and the framework for AgriBEE has drawn directly from the above general observation – let us now work to ensure its finalization and ultimate implementation is reflective of the fact that in the past ten years we have indeed undergone the mindset shift that we all agreed was critical in 1994.
Thank You!!! Muchas Gracias!!!
