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The health of agricultural State-Owned Entities

Reading the 100-year history of Land Bank, nothing has changed. White farmers still continue to enjoy the same privileges of access to loans whilst most deserving black farmers applications are declined on ‘technicalities.’

“Agricultural State-Owned Entities are the bedrock of the department of agriculture, land reform and rural development.

Ever since Minister Thoko Didiza took over the reins at agriculture, murmurs in the deep foretell that indeed it was not business as usual. Of all the SOE’s, a firm hardline posture was taken on Land Bank, Agricultural Research Council (ARC) and the National Agricultural Marketing Council (NAMC).

It was interesting why these 3 entities stood the tallest. Some industry professionals from government, business and unions partly believed that the reasons were due to misalignment and misunderstanding of their mandates. 20 years on, the 3 entities were still fighting the same battles.

Reading the 100-year history of Land Bank, nothing has changed. White farmers still continue to enjoy the same privileges of access to loans whilst most deserving black farmers applications are declined on ‘technicalities.’

Corruption at Land Bank throughout the years indeed crippled the credibility of the institution losing focus of its developmental task. TP Nchoncho managed to turn the ailing financial institution to sit with a book value of R42 billion but he too was often harshly criticised by black unions and government officials for not funding black farmers enough.

Land Bank has had an acting CEO for well over a year now. Executive decisions are stalling taking over a long time to even approve loans for farmers.

At the Agricultural Research Council, Dr Shadrack Moephuli its President and CEO has presided over massive overhaul – changing the complexion of a once mighty white institution to be now known as crème de la crème of black agricultural scientists.

A tour of ARC campuses however shows the waning infrastructure with some scientists complaining of broken laboratory equipment. Providing premier agricultural science research is ebbing away with the trained skills jumping into the private sector.

Despite these challenges, Dr Moephuli and his team have managed to ring in donor grants and revenue from patents. ARC is a unique case, difficult to summarily criticise. With just below 3000 employees, it does not receive state grants like other entities. Some government departments still owed ARC for work done on research and science.

However, it still does not waiver Dr Moephuli and his management shortcomings. The incessant labour strikes over management decision making, salary increases and bonuses were some factors that left no confidence in him.

Just recently, staff have been inundating each other with concerns over salary deductions going as far back as 2015.

The National Agricultural Marketing Council (NAMC) on the other hand has for years floated aimlessly. Farmers have been at odds with the supposed role NAMC should play in providing market access. Under Ronald Ramabulana, the NAMC managed to stay below radar executing its statutory measures function.  

Ramabulana laissez faire approach of being too generous and kind to agricultural industry trusts and associations over transformation were wasted years.

The entry of Zama Xalisa as CEO of NAMC was expected to bolster and speak the language of transformation. But within a year and some months into his role, he was placed on suspension by the NAMC Board over misconduct allegations.  

In truth, all 3 institutions bare the symptoms of old thinking and being stuck in progress.

Land Bank is misaligned to the priorities on the ground and those of government. At conferences, the bank will present and parade itself as a commercial bank than a development bank. A major problem at Land Bank was that almost the entire executive and senior management were bankers by profession than agriculturalists.

Bankers understood little about development explaining why their funding models for emerging farmers did not work.  

Dr Moephuli sympathizers or loyalists have on a number of occasions tried to persuade him to step down. Many believe that the ARC was not broken but it was the trust between employer and employee.

In analysing the MAP Act, NAMC outsourced its investigative functions to the industry trusts. Simply put, this meant that industry trusts where players and referees in the field in which they determined the rules.

NAMC relied on the reports submitted by the industries (on how levies collected were spent and distributed) but yet did not embark on investigating if that was the case. Therefore, the NAMC could be ill-advising the Minister and government altogether.

In summing all these arguments taken from thought leaders in the industry and former employees, fixing SOE leadership was crucial for the agricultural sector to succeed and not stagnate on the same issues discussed 20 years ago. “

Klaus Mkhonto

Disclaimer: The views and opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of Mzansi Agriculture Talk or its members.

The health of agricultural State-Owned Entities
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