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The agricultural industry is a critical sector of the economy, responsible for the nation’s food security. Apart from global challenges such as climate change, the SA agri-sector is further burdened by the slow pace of transformation and land reform, barriers to entry for black commercial farmers and access to funding.
These challenges sparked robust discussions this September when agri-sector leaders from the private sector and government met at a Sanlam Gauge sectoral workshop to discuss the state of transformation.
Moderated by Andile Khumalo, co-founder of Sanlam Gauge — a report that measures the level of B-BBEE activity — the aim of the online gathering was to facilitate meaningful conversations that will improve transformation outcomes in the sector.
The Sanlam Gauge report reveals that the agri-sector is lagging behind most industries, particularly in the ownership and socioeconomic development (SED) weightings of the scorecards. Presenting the agri-sector outcomes, Lerato Ratsoma, MD of Empowerdex, commended all stakeholders for their commitment to transformation, but cautioned that more had to be done.
The industry weighting for black equity ownership was 19.4 out of 25 points. Management control was at 10.2 out of 19 points, below expectations for an environment that is considered casual, said Ratsoma. Skills development weighting was 14.9 out of 20 points, while other industries achieved above 15 points. For the enterprise and supplier development weighting it scored 35 out of 40 points.
The SED scorecard of 10.6 points out of 15 was, according to Ratsoma, an “anomaly” because most companies reached their SED goals a lot quicker. “We expected close to 100%, if not 100%, since this is basically CSI,” she said.
Panellists agreed that access to funding was an impediment to reaching industry goals and advocated for mixed funding models that consider the cyclical nature of agriculture. Mentorship and support for emerging black farmers across the value chain, skills development for broader youth participation and creation of nurturing work environments for black professionals were recognised as key enablers of transformation.
Agricultural Business Chamber of SA (AgBiz) CEO John Purchase lauded all stakeholders for the progress made to transform the agriculture and agribusiness value chain in the past 20 years. He stressed the importance of a proactive private sector that took charge of sectoral developments.
“I am encouraged to see Lerato’s presentation. It actually means we are on the right track. Many of our businesses have embraced B-BBEE. Obviously, it has to be sustainable and we have to ensure there’s a balance between competitiveness and transformation because if we don’t make it sustainable, we are going to lose our food security and our export markets,” he said.
AgriBEE Charter Council chairperson Margaret Mohapi said the government and the private sector had to recognise, encourage and support all SED initiatives implemented by farmers and agribusinesses.
“SED is one of the most important weightings with 15 points allocated to it. Irrespective of the scorecards, as the AgriBEE Charter Council we come across a number of initiatives in the sector and we took a decision to visit projects at grassroots level and see how we can upscale or upgrade them,” said Mohapi.
Agri SA CEO Christo van der Rheede called for a broader approach to B-BBEE and funding models. He said minister Thoko Didiza’s recent admission in parliament that 80% of the land transferred to black farmers as part of land reform was unproductive was proof that B-BBEE in its current format needed to be overhauled.
“We can dream up all kinds of schemes, but if we do not have sustainable funding in place then we are in more trouble. If we get cheaper funding in the form of grants then we will be able to establish a new cohort of black farmers that are highly successful and integrate them with our commodity organisations such as Grain SA and [National] Wool Growers [Association], who have massive investment for the development of black farmers and will transfer skills and also mentor them,” said Van der Rheede.
AgBiz chief economist Wandile Sihlobo said if the agri-sector was to achieve its developmental goal of moving to long-term crops that were labour intensive, it would require patient capital.
The industry knows what is supposed to be done by it but there is a lack of commitment to report
Dr Madime Mokoena, the director-general for B-BBEE charters compliance, strongly emphasised that the industry was not committing to the reporting process.
“We have a serious problem. The number of companies that report is about 37, a drop in the ocean when you look at how big the agricultural sector is. Since the AgriBEE code was accepted, there is no report on the status of transformation in the agricultural sector even though by law, every year, all sector charters report to the DTI and the BEE Advisory Council on their status of transformation. The industry knows what is supposed to be done by it but there is a lack of commitment to report,” he said.
Initiatives such as the Sanlam Gauge Report provide perspective at a sectoral level as well as for a collective SA Inc, but the onus is on all sectoral role players to follow through on these deliberations.
Judging from the robust conversations, agri-industry leaders are committed to transformation and its goals. But are they ready to roll up their sleeves and make work of this collectively? Only through purposeful action will this gathering bear the fruits we want to see in a transformed agricultural environment.
This article was paid for by Sanlam.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.