Opinion Piece

Preferential Procurement for farmers now!

“It is government policy to support the growth of small businesses and the jobs they create. Procedures that stand in the way of this, and which are also difficult for officials to interpret and implement, must and will be changed,” – National Treasury 2015 Public Sector Supply Chain Management Review.

This commitment by National Treasure has somewhat turned into a dream deferred, particularly for farmers. In my illustrious career as a policy advocate on farmer development, I have borne witness to the deliberate destruction of black farmers businesses by some government officials. 

Usually, this was done on purpose, to admonish or punish the farmer for being vociferous, also, using this fear as a tactic to strategically keep or circumvent other farmers from complaining. Most of black farmers I have engaged have coincidentally been turned beggars of note, charging to leave conditions as they are.

Others, yearning to shed away from government dependence, look for solace in formal markets. Squeezed between fighting generational relationships and contract farming, the farmers slowly begin to reconcile with a doomed future – all because government and private sector supply chain seem to collude against their progress.

I have attended numerous private sector agriculture events, and left impressed by their preferential procurement of food and beverages from white farmers and small agro-processors, both large and small.

The less could be said about agricultural government events the better, but I shall attempt to offer the root cause of this anomaly besides the inadequacy of officials.

Firstly, Section 217(2) of the Constitution and the Preferential Procurement Policy Framework Act (PPPFA) both provide for the ‘use of public procurement as a means of development and transformation’ however, for agriculture, I find that it is open season for all. Merry this to the construction industry, all contractors, big or small are forced to be registered or graded by the Construction Industry Development Board (CIDB).

For any of government construction RFQ’s or Tender issued, it is a prerequisite or requirement for that construction company to produce a CIDB grading certificate. Failure to submit the CIDB grading system it’s an immediate disqualification.

See where I am heading with this, why can’t the same tactic or logic be applied or reserved for farmers and agro-processors in the case of procuring or supplying food for government? Why?

But maybe the CIDB example is too broad or has no bearing to agriculture, however, there is no system to recognise farmers in government supply chain systems.

In this way, like it is the case for the construction industry, the agricultural sector may be in a position to set permanent procurement targets as part of transformation, and regularly publish a transformation monitor such as one like CIDB (see CIDB Transformation monitor for more https://www.cidb.org.za/contractors/business-trends/cidb-transformation/ , the National Agricultural Marketing Council (NAMC) or the AgriBEE.

The 2020 Agricultural Disaster Relief Fund by the Department of Agriculture, Land Reform and Rural Development was supposed to provide financially distressed farmers with vouchers for production inputs. A hail of complaints by farmers was dismissed by the department, only to be vindicated by the Auditor General (AG) who identified deliberate flouting of Supply Chain Management (SCM) processes. 

The AG Second Special Report flagged the following; unable to obtain sufficient evidence that all the applications were received before the closing date, identified some instances of beneficiaries not being scored correctly during the evaluation process, flagged beneficiaries whose eligibility for the relief should be investigated and, inadequate record keeping and voucher reconciliation to name but a few.

Eligible farmers missed on R500 million budgeted for them due to one but only, the unfriendly procurement system. Worse, the AG identified “113 applicants who were approved for the farmers’ relief but are employed by an organ of the state.” This deliberate insult to black farmers is no longer hidden but now glaring to an unassailable control.

DALRRD State Entities were not spared in this whole preferential procurement framework. For example, the Agricultural Research Council (ARC) called for a Panel of Catering Companies to supply food to all its 11 campuses spread across the 9 provinces. Like in previous applications, most agro-processing companies were not confident that they will be shortlisted by ARC SCM.

“If an agricultural entity cannot shortlist us, and we contribute to food production, why should we expect other non-agriculture departments to appoint us? Isn’t it here where the agriculture department, provinces and SOE’s are supposed to be our market and build our profiles in order for us to gather confidence to supply hospitals, schools and correctional services?” said a farmer friend.

This largely brings me to my second point, agricultural departments and SOE making it mandatory for their SCM processes to cater preferentially for farmers and agro-processing companies firstly.

A quick fact of agro-food processing industry which includes – milling, brewing, confectionery, animal, baking, soft drinks, vegetable oils, fish, meat, dairy, sugar, fruits and vegetables – contributes about 18% of manufacturing sales and employing approximately 14.5% of the total employment sector (Stats SA, 2017).

Considered altogether, the number could increase if this proposition suited the agriculture departments and SOE’s. DALRRD and SOE’s (on behalf of the state) could be directly involved in providing farmers with market access, lessening food waste and creating employment through this preferential procurement.

Based on the evidence on the vouchers, I doubt the department and its entities will have the guts to pursue such a bold policy amendment – maybe I could be proven wrong.

So where does this all lead?

The Office of the Chief Procurement Officer (OCPO) established by the National Treasury for me is the best answer. OCPO ensures that procurement of goods, services and construction works is fair, equitable, transparent, competitive and cost effective in line with the Constitution and all relevant legislation.

Already, it has done tremendously work in unearthing SCM tender irregularities at Eskom and Transnet – it will be best for farmers to report alleged tender irregularities by the agriculture departments and SOE’s if they feel aggrieved. As one African Philosopher Bishop Maponga put it: ‘Farmers, your voice is your invoice, so why not use it?”

Article by: Malapane Thamaga

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Mzansi Agriculture Talk.

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