C Mokitlane: Free State Agriculture Prov Budget Vote 2006/07

28 March 2006

Speaker se hlomphehang,
Premier,
Ditho tsa Lekgotla la Phethahatso,
Ditho tsa Palamente ya naha tse teng kwano,
Le ditho tsa Lekgotla la Ketso ya Melao la Profensi,
Baemedi bohle ba Mmuso wa se-lehae,
Baemedi ba Ntlo ya Borena Foreisetata,
Borapolasi le basebetsi,
Baqolotsi ba Ditaba,
Bahlanka ba mmuso,
Batho bohle ba Profensi ya Foreisetata,
Ke re ho lona bohle,
Madume,

Honourable Speaker, re boetse re ema mona kajeno ka tshepo e tiileng ya hore
Ditekanyetso tseo re tlang ho di teka kajeno ke tse reretsweng ho beha
ntshetsopele ya setjhaba sehlohlolong.

Lefapha la Temo Free State le dumela hore ka ho lekanyetsa lefapha re itlama
hore Selemong sena sa Ditjhelete le Ditekanyetsong tse Teletsana (Long term
MTEF) re nka boikarabelo ba ho tsamaisa ditekanyetso tsa Lefapha ka tsela e tla
ntshetsa setjhaba pele, haholoholo boramapolasi ba tswelang pele. Re dumela
hore tsamaiso e ntle ya ditjhelete e ke ke ya phethahatsa merero ya Lefapha
feela ka ho nepahala, empa e tla e phethahatsa ka potlako, ka nako e
behilweng.

Our responsibility in providing food as the Department is important and
should be continuous and sustained because we will be unable to survive for any
length of time if we stop the continuum of food production.

The Department of Agriculture in the Free State occupies a more critical
position in food production because of its centrality and significance in the
food production industry, yet we have to contend with the irony that it is in
the same industry whose workforce, farm workers with blistered hands, salty
sweat pouring down from their brows, should do with meagre salaries while the
toil of their sweat is enjoyed by many of us who cannot hear them sing in
monotony their poignant song of pain and sorrow.

Many remain content with their low income by reasoning out that we must
balance the farm outputs with what the markets offer out there. I call upon all
farming communities, black and white, to seize the time to define for them what
they want to make of their shared destiny in order to make theirs a sector
immersed in equality and justice.

Honourable Speaker, I think we can do more to ameliorate the situation at
farms and other rural communities. Clearly, our intention is not only to
intervene in fighting poverty and creation of sustainable livelihoods but to
turn the rural communities into an effective economic powerhouse of the
province. It is therefore important that we include farm workers and other
rural communities in the process of creation of equitable wealth in the
province in which they also will enjoy the sweet fruits of our economy.

Die tyd het aangebreek dat ons die landbougemeenskap, die plaaswerkers en
ander wat op plase woon met hulle probleme help. Dié probleme is onder andere
behuising, water en sanitasie en gesondheidsgeriewe.

Ons almal moet nou saamwerk om ‘n permanente oplossing te kry sodat ons met
trots kan sê ons het ‘n ware bydrae gemaak tot die ontwikkeling en
transformasie van die landbousektor.

President Mbeki said “It will always be impossible for us to say that we
fully restored the dignity of our people as long as the overwhelming majority
of our people suffer under the burden of poverty and deprivation.” As
government we therefore call on all our social partners to join us in making a
difference in the lives of the farming communities.

Speaker, re utlwisisa hore karolo e kgolo ya moruo wa profensi ena ya Free
State e itshetlehile Temong, mme ke kahoo Lefapha le boelang le tsepamisa
maikutlo ntlafatsong, ntshetsopeleng le kgolong ya moruo wa dibaka tsa mapolasi
le dibaka tsa mahae. Re ke ke ra fihlela tokoloho, toka le teka-tekano e
phethahetseng ha feela baahi ba mapolasing le ba dibaka tsa mahae ba ntse ba le
maemong ao ba leng ho ona kajeno. Re ke ke ra re kgolo ya moruo e ntle ka hara
profensi ha lekeno la mapolasing le ntse le le tlase, bofuma bo iphile matla
mme le tlala e ntse e le ya boja dikata.

Lengolo le Phatlalatsang Ditokelo tsa Tokoloho leo baahi ba mapolasing le ba
mahaeng ba ileng ba nka karolo ho le theha le ho le amohela Kliptown ka 1955,
le dula le ntse le re tataisa ka dinako tsohle. Ke lona le hlalosang hore batho
batla arolelana Leruo la naha, mme le tswele pele ka ho re, “… mobu o tla
arolelwa ba o sebetsang…” Re tataiswa le ho kgothatswa ke polelo tsena tse
monate tse re kgannang hore re phehella ho etsa haholwanyane ho tseka toka
sedikadikweng sa temo.

Speaker, the following departmental programmatic tasks are relevant and
today’s budget outlay has been interwoven in these needs. These programmes are
agricultural economics, veterinary services, farmer support and development,
sustainable resource management, structured agricultural training, technology,
research and development and administration.

Ours is a rural province. The Free State is well suited to a number of
agricultural activities. And this resonates well with what the Premier rightly
pointed out in her State of the Province address; that agriculture is at the
core of rural development. Agriculture occupies a central place in the Free
State Provincial Growth and Development Strategy (FSPGDS) because it is
relevant in all fields of the strategy. Agriculture is directly involved in
developing and enhancing infrastructure for economic growth, social development
and sustainable job creation.

Some of our programmatic tasks like training and food security answer to
some of the clauses of the FSPGDS in that they are directed at specific
targets, for example, the vulnerable and the food insecure sections of our
communities on whom we need to focus. The growth and development strategy
ensures poverty alleviation through human and social development.

Our interactions and relationship with other structures of government (law
enforcement agencies) and organised agriculture ensures a safe and secured
environment for all the people of the province

Land reform

Speaker, we hold firmly onto the Freedom Charter and shall in all our
activities be directed by its wisdom. The technical assistance that the
Department provides to a number of community projects in all the districts of
the province remains a testimony to our adherence to this glorious
document.

We are always inspired and guided in our journey of hope in building a
better sector and therefore let me share with you this inspiring verse:

‘You shall set the 50th year apart and proclaim freedom to all the
inhabitants of the land.’

‘En julle moet die 50ste jaar heilig en ‘n vrylating in die land uitroep aan
al sy bewoners. Dit moet vir julle ‘n jubeljaar wees.’

‘Le tla halaletsa jwalo selemo sa mashome sa mahlano, mme le tla tumisa
tokoloho naheng ya lona ho baahi ba yona kaofela, e tla ba selemo sa thabo ho
lona.’

For those who would like to know further about this good tiding, read the
Good News Bible, Leviticus, chapter 25:10

Selemo se fetileng e ne e le sa bo mashome a mahlano a ho keteka kananelo ya
Freedom Charter mme re lokela ho ikamahanya le yona ka mehla hobane ho yona re
bona tataiso e molemo.

The Freedom Charter says, “The Land shall be shared among those who work it.
Restrictions of land ownership on racial basis shall be ended and all the land
re-divided amongst those who work it to banish famine and hunger ….”

This is relevant to the programme of Land Reform. The provincial Department
of Agriculture will support the State President’s remark in his State of the
Nation address when he stated that the Minister of Agriculture and Land Affairs
will during 2006 “review the ‘willing buyer willing seller’ policy, review land
acquisition models and possible manipulation of land prices and regulate
conditions under which foreigners buy land”. He further stated that the
Minister and the Department will also ensure that the land redistribution
programme is aligned to the Provincial Growth and Development Strategies (PGDS)
as well as the Integrated Development Plans (IDPs) of municipalities.

Speaker, the Department of Land Affairs has distributed 22 720 hectare of
land benefiting 556 farmers on 49 projects in the province. In 2005/06 the
Department of Land Affairs in the province was allocated a budget of R45
million and for the 2006/07 this amount has been increased to R74 million. This
will assist the province to further settle black farmers on land to join the
mainstream agricultural economy.

The Department of Agriculture in partnership with the Department of Land
Affairs will ensure that land reform programmes are accelerated and most
importantly, the land so released, productively used to support economic growth
in the province. As a result the Department created a Land Reform Directorate
that will amongst other functions closely monitor progress pertaining to land
redistribution and ensure the disbursement of state-owned land in the
province.

Speaker, the Department will pay particular attention to emerging farmers
regarding the land reform programme, including commonages and communal land.
This will be done in collaboration and partnership with municipalities. Last
year we informed this honourable House that the Department was in the process
of developing a commonage development policy. I am pleased to announce that
that policy has been finalised and we are in the process of rolling out its
implementation throughout the province. The Department is already implementing
a development initiative in the province to enhance capacity in this regard.
This is a partnership project with the Development Bank of Southern Africa
(DBSA) and South African Local Government Association (SALGA) where
approximately R4 million is being invested in capacity building for
agricultural development in the province and alignment between the Department
and municipalities.

The Land Claims Commission serves as a fulcrum in facilitating restitution
of land. The commission has settled a number of claims in the province in which
the Department of Agriculture took direct interest and provided immediate
support. In this case we can quickly mention the settlement of the Wittes
family at their original land, Blesbokfontein at Bultfontein. The Department of
Agriculture developed a business plan and provided funds for the development
and support of these claimants.

About 34 000 hectares were given back to the 700 households who are
descendents of Opperman in Xhariep. Our responsibility as the Department is to
develop further on their gains. For this reason we have committed ourselves to
the installation of an irrigation system in due course as part of our
contribution to the development of this area.

Farmer support and development

Speaker, the life of the farmer does not only end on settlement, it requires
timely support and continuous after care to ensure sustainable agricultural
business profitability and growth.

The Department of Agriculture has invested in infrastructure support to
emerging farmers through initiatives such as Comprehensive Agricultural Support
Programme (CASP), LandCare and the Provincial Infrastructure Grant (PIG).

We have in the past year expended funds allocated to the Comprehensive
Agricultural Support Programme (CASP) to respond to the needs of emerging
farmers for a total of 876 beneficiaries.

CASP and LandCare business plans for 2006/07 projects were developed late in
2005 and 34 CASP projects and six LandCare projects have subsequently been
approved by the national Department of Agriculture. An amount of R25 306 000
has been allocated for CASP projects and R3 150 000 for LandCare projects in
the next financial year.

Speaker, while there may have been some delays in the distribution of funds
in this category, we want to indicate to this honourable House and the people
of the Free State and emerging farmers in particular who need assistance, that
we have already embarked on a crusade to provide assistance to them as we
cannot reverse the ‘age of hope’ that is upon us.

The granary is full and there is an abundant hope that tomorrow will be even
better. The first emergent farmer has received assistance, the second one is in
the process of getting support and the third and the fourth are looking forward
with hope for they know that help is at hand soon.

A substantial number of farmers benefited from the Farmer Support and
Development Programme (FSDP). We have provided farming enterprises with
vouchers to purchase production inputs like diesel, seed and fertilisers and
this will still be continued in the new financial year.

Speaker, we continue to improve our stakeholders’ relations in order to fast
track service delivery. The Department through its Production Inputs Funds and
CASP, collaborated with some of its strategic partners to support farmers with
production inputs to the value of R3,9 million together with First National
Bank, we supported 114 farmers in the Maluti a Phofung District with dry beans
inputs while at Arlington the Department partnered with Vrystaat Koöperasie
Beperk (VKB) to support farmers with wheat production. We further assisted
Thaba Nchu farmers with the improvement of wool production. This we did in
partnership with the National Wool Growers Association (NWGA). The Department
also donated high quality animals to emerging farmers to improve livestock
production.

Food security

The level of agricultural support that the department provides must match
the demand of those who were previously disadvantaged and are now seeking
assistance to develop. A key tool for this is the food security budget to
support rural and peri-urban communities through poverty alleviation.

As part of its contribution to the Integrated Food Security and Nutrition
Programme (IFSNP), the Department will continue to implement the food security
programme for poverty alleviation.

Our food security programme enjoyed significant progress and managed to:

* Provide 1 300 households with chickens (layers) in the last financial year
and chicken feed worth R1 429 255.00

* 1 929 households were provided with agricultural starter packages (such as
garden tools, seeds and fertilisers) to the value of about R1,2 million

* We are in partnership with the Department of Education to provide 50
schools with garden essentials as a pilot programme

* Infield water harvesting projects participants received agricultural
starter packs to improve on what they are presently doing. This was done in
partnership with the Agricultural Research Council (ARC)

* The World Food Day was successfully celebrated in Qwa-Qwa in October 2005,
with other Free State Provincial Government departments involved
throughout.

Agricultural economics

Speaker, ladies and gentlemen, major enterprises such as small grain
farming, maize farming, sunflower farming, large and small stock farming and
horticulture are practised in the province. The Free State Province is known as
the “Granary of the Country.” On average 36 percent of the wheat, 34,4 percent
of the maize, 53,1 percent of the sorghum and 44,7 percent of the sunflower in
the country is produced in the Free State. The estimated gross income earned by
Free State farmers during 2005 is R10 280 million. This means that there are
many unfolding opportunities and economic benefits for emerging farmers.

Mohopolo o mong o moholo wa Lefapha selemong sena sa ditjhelete sa 2006/2007
ke ho tsetela karolwaneng ya Ditaba tsa Moruo Temong (Agricultural Economics)
bakeng sa ntshetsopele ya kgwebo, haholoholo Matlafatso ya Batho ba Batsho
Moruong wa Temo (AgriBEE). Lengolo le Phatlalatsang Ditokelo tsa Banka karolo
Temong, mmoho le melawana ya teng (the Draft Sectoral Charter and Codes) di se
di tla phethelwa, mme di tla thusa haholo ho tataisa matlafatsong ya moruo ho
batho ba batsho ka hara profensi.

Teko ya mmuso ya ho matlafatsa batho ba batsho temong e bonahala hape ka
Setsi sa Tshehetso e Tlase ya Ditjhelete Temong Afrika Borwa (Agricultural
Finance Institute in South Africa), se tsejwang ka hore ke MAFISA. Mokgwa ona
wa tshehetso ya Ditjhelete o tla thusa boramapolasi ba tswelang pele ka
phumantsho ya tjhelete ya kgwebo ha bobebe le ka potlako. Lefapha la Temo Free
State le nka karolo ho kenya mokgwa ona tshebetsong.

Ntlafatso ya kgwebo le ho fana ka dikeletso ditabeng tsa moruo temong ho
bo-ramapolasi ba ntseng ba tswela pele ke mohato o mong wa ho eketsa sekgahla
sa tswelopele ya moruo.

Lefapha le tla tswela pele ka ho fana ka tlhahiso-leseding mabapi le
Agri-Black Economic Empowerment (Agri-BEE) le ditaba tsohle tse amanang le yona
ho bohle ba amehang.

Speaker, these envisaged capacity investments are aimed at enabling the
department to further increase its participation in leading activities to
create an environment to expand agro-processing in line with the Free State
Growth and Development Strategy (FSGDS).

The Department has in partnership with the Department of Communications and
the Universal Services Agency recently launched an Information Communication
Technology (ICT) Hub at the Department’s Weltevrede office in Maluti a Phofung.
The hub is intended to serve communities including farmers in that area. The
ICT hub will provide the following services: telephone, faxing, photocopying,
internet, e-mail and computing facilities, video conferencing, music and video
digital recordings. This shows the commitment of the Department towards rural
development.

Agricultural risk management

Speaker, for the past few years the province has been hit by one natural
disaster after another and in the previous financial year the province did not
escape the severe drought that swept over many parts of the country. As a
result the Department disbursed R16,9 million from the national Department of
Agriculture to farmers for the subsidisation of fodder and the transportation
thereof.

This intervention benefited 3 960 emerging farmers and about 34 000 of their
livestock. In support of commercial farmers in the province who play a critical
role in the economy, 2 615 commercial farmers benefited and about 39 000 of
their livestock were supported.

The severe drought of the 2004/05 summer cost water shortages on farms. Most
surface water sources dried up, boreholes delivery diminished and springs
stopped flowing.

The national Department of Agriculture also released R2 million for disaster
drought water supply.

This amount was spent by November 2005 to address the disaster where
drinking water for either humans or animals was not available. These disaster
funds were mainly directed at commonages, tribal villages and land reform
farms.

The available funding was relatively small; therefore the areas around seven
towns which were the hardest hit were prioritised.

The capacity of the Department to manage agricultural risk and disasters
will be increased during the 2006/07 budget year.

Speaker, we are also proud to announce that these interventions were
implemented in collaboration with organised agriculture namely National African
Farmers Union (NAFU) and Agri Free State.

In addition to the R16,9 million disbursed, we received a further R16
million from the national Department of Agriculture in November 2005 and as a
result have about 9 800 assessment forms from farmers who need assistance. The
funds will be directed to the worst affected areas which are Xhariep District
Municipality, the western part of the Lejweleputswa District Municipality as
well as a small portion of the Motheo District Municipality. The disbursement
of these funds will be done in the spirit of supporting Broad-based Black
Economic Empowerment (BBBEE) objectives.

Veterinary services

Speaker, the international and domestic demand among producers and consumers
to protect the health of animal and the safety of products of animal origin
continues.

As a result, Veterinary Services have been very active throughout the
financial year and much of its activities therefore fell in the animal health
arena. We saw sporadic occurrences of diseases in and beyond the borders of the
Free. Serious risk to human health was posed by the occurrence of rabies in the
province. Disease surveillance remains a major activity of the veterinary
unit.

We also launched a major campaign against Classical Swine Fever through
roadblocks in the Xhariep District in and along the borders of the Eastern Cape
and Western Cape. These roadblocks continued throughout the festive season and
we assisted these provinces in their efforts to contain the disease. Our
officials also assisted during the occurrence of the bovine foot and mouth
disease in Limpopo and Mpumalanga.

The participation of our officials in other provinces is an important
learning curve that would stand us in good stead should there be any outbreak
of such diseases in the province.

We are continually making a call to the private sector to partner with us in
combating diseases and we are pleased to say that there are some who have
responded to our call. A number of emergent farmers benefited from donated
vaccines of Newcastle disease and Brucellosis. We value your partnership and
your consciousness for social responsibility.

The following disease surveillances will continue in 2006/07 budget year,
where samples will be taken from animals for laboratory analysis: avian
influenza, mad cow disease, tuberculosis (TB), and classical swine fever.

Speaker, the importance of veterinary services cannot be over-emphasised, we
have taken conscious steps in strengthening the section. There are some custom
built vehicles outside here; these are mobile animal health clinics. The
purchase of these five mobile clinics to the value of R3,5 million will enhance
Veterinary Services considerably, especially to communities where there is no
access to these services.

The Department thus far has succeeded in ensuring that the province is safe
from outbreaks and we have risen to the challenges of increasing requirements
for safe international trade and domestic consumption of animal and animal
products.

Sustainable resource management

LandCare

Speaker, LandCare is another leg of support to farmers. We believe that
utilisation and management of natural resources is critical to sound
agricultural development. Land, water and vegetation form the epicentre of
agricultural practice and other environmental needs. It is from these main
three that the animal kingdom depends and forms part of the second level for
agriculture.

Land and water are very critical to successful agricultural enterprises.
LandCare is about the management of these resources.

Speaker, not only did the LandCare programme mount awareness campaigns in
all five districts but has as well contributed to the Expanded Public Works
Programme (EPWP) as many people took part in infrastructure projects, like the
erection of fences, erosion control and construction of reservoirs, dams and
the installation of windmills.

We have implemented 14 LandCare projects and 541 people benefited from these
projects. Over 857 learners took part in the Junior LandCare project. R3,5
million was spent on these projects. During the course of this year much has
been spent on water reticulation projects, as this is the cornerstone of
agricultural development.

Engineering services

Farmers need mechanisation to pursue successful economy within the sector.
The mechanisation portion of the annual production cost contributes between 25
percent and 50 percent of total production cost. This is impossible to afford
by any farmer without equipment. We have developed a policy that will help
developing farmers to derive maximum benefit from their mechanisation. The
policy will assist them with technical support, management and maintenance of
the mechanisation.

We have disbursed R1,9 million for implements in which 96 individual farmers
benefited and we have also used R5,5 million for eight mechanisation modules,
consisting of a tractor and implements. With this support we have also provided
training and mentorship on the use of these implements.

Structured agricultural training

Speaker, a person who does not want to pause and sharpen his axe because he
is too busy cutting the forest will continue to cut the forest with the blunt
axe, bringing down less and less trees in time. Whereas a wise man will take
time to sharpen his axe so that he is able to bring down more and more trees in
time and will continue periodically to sharpen his axe as he brings down the
forest.

The formal and non-formal training at Glen Agricultural Institute can be
delivered most effectively if it is done within the industry network. As such a
thrust for Glen College is to increase its partnerships with industry and other
institutions of higher learning. The University of the Free State and the
Central University of Technology occupy special place in this regard.

The Glen Agricultural Institute is made up of the agricultural college and a
farm. These two offer aspirant agricultural entrepreneurs and agricultural
practitioners the necessary knowledge and technical advice and skills. The
college has over the past year maintained a healthy pass rate of 87 percent in
which 28 diploma students passed. In year 2005/06, 237 farmers attended short
courses on crop production, farm management, farm finance, agricultural
marketing and tractor maintenance.

Speaker, we believe good performance requires suitable conditions for this
reason we have invested in renovating the institute. Currently renovations to
the male student hostel and dining hall are being undertaken to a value of R2,2
million. This improvement will have to be continued in the new financial year
on other facilities.

Partnership projects in areas such as applied research are imperative and
instrumental in solving farming problems including providing scarce skills for
the Department, such as veterinary and engineering skills. The Department could
be a valuable strategic partner to state institutions of higher learning to
enhance the quality of academic programmes especially post graduate studies
requiring research work and therefore be directed at solving critical
agricultural development challenges in the province, whilst promoting academic
excellence. After all, the reason for existence of any university is to find
solutions to the problems of its communities.

Technology, research and development

In order for the provincial strategic trajectory of agro-processing and
value adding to be realised including bio-fuels in particular, technology
research and development including the agricultural economics capacity of the
Department, will require appropriate capacity investments for 2006/07 budget
year.

The Free State technology research and development community will have to be
mobilised to form mutually beneficial partnerships and collaborative projects
that support agricultural business development, so that both small and big
business can benefit and objectives of BBEE attained.

Accordingly, the Department will lead and facilitate processes of
identifying agro-processing opportunities in the various districts of the
province. In this regard we count on the support of all our partners in
particular NAFU and Agri Free State, who have been very active in charting the
way forward on agricultural business development. Your valuable inputs and good
spirit are vital to turn the tide against poverty in the province.

Administration

Organisational revitalisation

Speaker, revitalisation and realignment within the Department is a necessity
for improvement in governance, service delivery and development impact, better
and faster service delivery.

Initiatives have already been started to intervene in critical areas of
organisational design such as developing a new strategic thrust and focus
around key issues to minimise bottlenecks in service delivery.

These key areas include capacity building investments in the following
priority areas:

* extension services
* agricultural economics
* agricultural risk and disaster management
* land reform and farmer settlement
* strategic communication
* internal audit
* supply chain management.

The capacity of the Department to implement the new thrust will be enhanced
through interventions in management systems and business processes, performance
management and improvements in people management. All these interventions are
expected to increase staff motivation and commitment.

A deliberate attempt will be made in 2006/07 to recruit staff for the
engineering, LandCare and agricultural economic functions of the Department.
The initial setbacks experienced with the implementation of the supply chain
legislation will also be addressed in an attempt to increase the spending rate
of the Department from conditional grants.

We have once more revealed our commitment to contribute to the efforts of
the National Skills Development Strategy (NSDS) and the FSGDS by focusing our
efforts on people development. For the 2005/06 financial year we started the
internship programme with 41 interns and of the 41, 11 have been employed.

Our learnership programme was a success. All eight learners who enrolled on
this programme have recently graduated and six of them have been successfully
employed. Our intention is to re-negotiate with the respective SETAs to fund
the learnership programme in an effort to improve the skills of the youths in
our province.

In line with people development as outlined in the GDS, the Department in
partnership with the Department of Education has managed to establish an Adult
ABET Centre at our Head Office, in addition to the Adult Basic Education and
Training (ABET) centre at Glen. This year we have enrolled a total of 113
learners.

Speaker, the Department made a commitment last year to focus on the well
being of the employees who in actual fairness are the machinery of the State
for ensuring that service delivery takes place. I am pleased to highlight to
this House that the Department has indeed with the limited resources at its
disposal, achieved a lot in that regard. In compliance with the Occupational
Health Safety Act, the Department was also successful in undertaking periodic
examinations on 99 lower-level employees who are working in hazardous areas of
the department.

Speaker, a National Co-ordination Job Evaluation Forum (NCJEF) has been
established for the line function positions and the remuneration levels of
seven posts classes determined and approved in an effort to standardise the
salary levels within the sector and curb the brain drain to other provinces.
This will enhance the Department’s retainment strategies on scarce skills.

The Department has made strides in the development of service standards in
pursuit to improve service delivery.

Community Projects Fund Support Programme (CPF-SP)

The overall objective of the CPFSP programme is “to improve and enhance the
living conditions of the low income households in the rural and the peri-urban
communities of the Free State”.

To achieve this overall objective, the strategy used by the Department has
been to approve large numbers of viable and sustainable agricultural projects
which would provide sustainable income to the targeted groups consisting of
poor households, the unemployed, low income earners and subsistence farmers.
The targeted groups would eventually have complete ownership of these projects.
Since the inception of the programme the number of beneficiaries’ trained and
involved in 194 projects amounts to 2 764 people.

The Project Management Unit (PMU) is also facing the imminent closure of the
programme as the contract with the European Union (EU) expires early in 2007.
As a result the PMU will only be focusing on projects that are under
implementation and will not consider any new project applications in future.
Notwithstanding the closure of the unit, the Department will continue to render
support and aftercare to the established projects.

The investment capital of the Community Projects Fund Support Programme
(CPFSP) has over the past four years been funded from rollover funds after the
Department had been contributing to the capitalisation of the programme since
1998/99 financial year. These funds are now depleted and the programme will be
concluded in the latter part of 2006/07.

The PMU has with the assistance of National Treasury drawn up a structured
closure plan which will involve the following activities:

* completion of projects under implementation phase

* ensuring that outstanding suppliers/service providers’ accounts are
settled

* verification of assets in collapsed projects and moving them to identified
projects under implementation

* alienation of projects by giving beneficiaries full ownership of the
completed projects.

MTEF allocation

Speaker, I now want to deal with the expenditure proposals per our
standardised budget programme. The MEC for Treasury allocated an amount of
R223,557 million to agriculture in 2006/07 which represents a decrease of 0,89
percent compared to the voted funds for 2005/06.

It is envisaged that this allocation will further grow with 10,1 percent in
the second year and 6,9 percent to an amount of R263,323 million in the outer
MTEF year.

Speaker, in terms of the economic classification of expenditure the
allocation of R223,557 million will provide for:

* 65 percent (which amounts to R145,107 million) of total expenditure for
compensation of employees

* 24 percent (which amounts to R53,264 million) of total expenditure for
goods and services

* 0,9 percent (which translate to R2,071 million) of total expenditure for
transfers and subsidies

* 10,1 percent (which is R23,115 million) of total expenditure for payments
for capital assets.

Programme one: Administration

Speaker,

Programme one (administration) receives an allocation of R71,559 million
which amounts to 32 percent of the total budget of the Department.

Administration is structured to manage and formulate policy directives and
priorities and to ensure that there are appropriate support services to all
other programmes with regard to finance, personnel, information, communication
and procurement. The programme comprises of the offices of the Executive
Authority, Senior Management including Internal Audit, Communication, Legal
Services, Monitoring and Evaluation and multi disciplinary managers. Three
other supportive sub-programmes, viz Corporate Services, Financial Management
and the Community Projects Fund Support Programme also form part of the
programme.

The budget assigned to this programme is disproportionate to its direct
contribution to the core services of the Department, as a result of it hosting
a number of centralised internal administrative and financial functions on
behalf of the whole Department. Supernumerary staff, interns and all gratuities
are also paid from this Programme.

Programme two: Sustainable resource management

This programme will be allocated seven percent (R15,988 million) of the
total budget. This budget programme is structured to provide agricultural
support services to farmers in order to ensure that there is sustainable
management of agricultural resources. The key services to be performed are
those in respect of agricultural engineering, soil conservation and
LandCare.

Speaker, in the new financial year we will see the implementation of bulk
water supply from the Gariep River to farmers through the 3 000 hectare Water
Rights Project.

Programme three: Farmer support and development

The budget of the current financial year allocates R77,328 million for the
farmer support and development programme. This allocation constitutes 35
percent of the total expenditure of the Department.

Speaker, this allocation will help the Department to ensure support for
emerging farmers with mechanisation and agricultural inputs in the form of
implements, tractors, fertilisers, livestock and animal vaccine.

In order to achieve growth and development in the province, we will continue
to provide farmers with infrastructure for agricultural development. This will
include sheds, animal handling facilities, water reticulation structures, etc.
The Department will also continue to support farmers with production inputs
such as fertilisers, seeds, diesel, livestock, etc.

Programme four: Veterinary services

About 11 percent of total expenditure which amounts to R25,153 million will
be directed towards this programme. This allocation will be used to facilitate
and provide veterinary services such as disease control, veterinary public
health and veterinary laboratory services in the province.

Programme five: Technology research and development

This programme will account for nine percent of the total budget of the
Department in 2006/07, with a proposed expenditure at R19,935 million.

The Department will ensure that technology research and development is
implemented to support farmers with the latest technology in agriculture. The
Glen Agricultural Institute will partner with all research institutions to
ensure the implementation of a co-ordinated research and development strategy
in the province.

Programme six: Agricultural economics

This budget allocates over one percent R2,629 million for 2006/07 financial
year. The long-standing shortage of staff in agricultural economics has been
addressed adequately to deal with the increasing demand for professional
services. Access to markets is crucial for any farming enterprise to reach
fruition this includes the identification and dissemination of information on
marketing opportunities for value adding and to provide farm economics support
to other programmes and clients.

Speaker, the Department will facilitate the growth of the bio-fuels
industry, targeting job creation though Accelerated and Shared Growth
Initiative for South Africa (AsgiSA) and ensure the finalisation of a bio-fuel
strategy and business plan. We will also ensure the finalisation of the
Integrated Agricultural Development Plan (IADP) in the new financial year. This
plan will amongst other things assist the Department to oversee the conducting
of agricultural marketing research to promote and support access to
markets.

We will intensify assistance to Qualifying Small Enterprises (QSEs)
previously known as SMMEs and operationalise the sector BEE Charter, codes and
structures. We will finalise and implement a strategy for financial and
non-financial support to co-operatives and enterprises.

Programme seven: Structured agricultural training

R10,965 million that constitutes five percent of the total budget will be
channelled towards the facilitation and provision of education to all
participants in the agricultural sector, in order to establish a knowledgeable
and competitive sector.

Speaker, through this allocation we will ensure the provision of non-formal
training to emerging farmers and land reform beneficiaries.

Conclusion

Speaker, these collective allocations made here today form the basis of our
commitment to a people driven government that is free of fraud and corruption
based on good governance and administration as interpreted by the ‘Batho Pele
principles’ and other moral rearmament mechanisms.

Our responsibility is to translate the budget into a social and economic
movement that will ensure full benefit for the poor of this province.

I am sure the officials of the Department see in this budget what a huge
task awaits them ahead. To them I say there will be little time for rest.

Many of them are already hard at work in making the Department win the
battle against poverty; I urge them to do even more. The rewards for their hard
work is due and out of their grimace will come a true smile of contentment as
Kahlil Gibran reflects in one of his many wise sayings; “Is it not the cup that
holds your wine the very cup that was burned in the potter’s oven. And is it
not the lute that soothes your spirit the very wood that was hollowed by
knives?”

The Department of Agriculture acknowledges the following strategic
partners:

ABSA Bank,
Agricultural Research Council,
Central University of Technology - Free State,
Country Bird,
First National Bank,
Free State Agriculture,
Land Bank,
Milk Producers Organisation,
National African Farmers Union,
National Wool Growers Association,
Scheling Plough,
Senwes,
Standard Bank,
University of the Free State.

I thank you!

Issued by: Department of Agriculture, Free State Provincial Government
28 March 2006