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AgriSA has 'serious reservations' about new BEE codes, calls for flexibility

BUSINESS LIVE / 12 DECEMBER 2017 - 06:09 / BEKEZELA PHAKATHI

The amended AgriBEE sector code will strengthen the drive towards creating black suppliers, black commercial farmers, and black industrialists, Trade and Industry Minister Rob Davies says.

However, on Monday, Agri SA, which represents small and large-scale commercial farmers, expressed "serious reservations" about the codes.

Trade and Industry Minister Rob Davies. Picture: TREVOR SAMSON

The government has been on an aggressive drive to transform the agricultural sector to allow more black people to participate. There are about 39,000 white commercial farmers and just over 5,000 black farmers, according to the African Farmers Association of SA. The sector has been identified as crucial for both transformation and job creation, which could add 1-million jobs by 2030.

The government also recently established the AgriBEE Fund, which aims to increase the number of black entrepreneurs in the sector.

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At the weekend, Davies gazetted the amended AgriBEE sector code for implementation by entities in both the public and private sectors. He said the sector code would serve as guidelines for the transformation of the agricultural sector. It replaces the old AgriBEE sector code, which was gazetted in December 2012.

"One of the key highlights of the amended AgriBEE sector code is an increase of the target for supplier development to 3% of net profit after tax (NPAT) [which is higher than 2% of NPAT of the generic codes]. The aim is to create a pipeline of black suppliers and black industrialists within the value chain of the South African agricultural industry," Davies said.

He said in addition to strengthening the drive towards creating black suppliers, black commercial farmers and black industrialists, enhanced recognition is given to initiatives that result in Greenfield ventures, job creation and beneficiation of primary products, support for land reform projects, and support for localisation of goods and services not being produced in SA currently.

Furthermore, and in support of the land reform process, the sector code makes provision for the current owners of land to transfer at least 30% of productive agricultural land to black people, under the ownership element. The 30% land ownership target is not static and therefore it shall be reviewed from time to time, said Davies.

Agri SA pointed out on Monday the AgriBEE sector codes were mandatory for any farming enterprise that wanted to do business with government. The organisation appealed to the Department of Trade and Industry to be more flexible with compliance with the three priority elements: ownership, enterprise supplier development and skills development.

"Agri SA is of the opinion that socioeconomic development should also have been included as a fourth criterion. This would have enabled qualifying small enterprises to choose any three out of these four elements ….

"Agri SA also foresees serious challenges with the expectation that large entities [the more than R50m annual turnover bracket], which operate in more than one province, only use national demographic representation in terms of management control. This poses a serious problem for a province such as the Western Cape, where coloured people are in the majority. This would lead to serious racial polarisation, is discriminatory and totally impractical to implement. For example, farm workers cannot simply pack up their belongings and move to another province."

"Given the challenges the agricultural sector faces, such as the extreme drought, Agri SA appeals to the Department of Trade and Industry to manage the process in a realistic and pragmatic manner."

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LINK - https://www.businesslive.co.za/bd/national/2017-12-12-agrisa-has-serious-reservations-about-new-bee-codes-calls-for-flexibility/

Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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