Agri SA is concerned about the recently promulgated Codes of Good Practice on BBBEE 

11 December 2017  

Agri SA takes notice of the Department of Trade and Industry (DTI)’s recently promulgated Codes of Good Practice on Broad Based Black Economic Empowerment.

The AgriBEE Sector Codes are not compulsory, but mandatory for any farming enterprise that wants to do business with government.  

The Codes bring certainty to the agricultural sector in terms of what should be done to bring about transformation.

However, Agri SA has serious reservations in terms of the following:

We appeal to the DTI to be more flexible with compliance with the three priority elements (the criteria), which include ownership, enterprise supplier development and skills development. Agri SA is of the opinion that socio-economic development should also have been included as a fourth criterium. This would have enabled Qualifying Small Enterprises (QSEs, or the R10 to R50 million annual turnover bracket) to choose any three out of these four elements.

Farming enterprises, and especially the QSEs, face enormous challenges, which includes the drought and the struggling economy.

Compliance to priority elements such as ownership, skills development and enterprise supplier development pose particular challenges for QSEs. Farming management systems are not always run as corporate management systems and it would be difficult for many farmers to comply with the ownership criterium.

Agri SA also foresees serious challenges with the expectation that large entities (the more than R50 million annual turnover bracket) which operate in more than one province should 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, farmworkers 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 DTI to manage the process in a realistic and pragmatic manner.

We would have welcomed a greater understanding of the challenges faced by retailers that are dependent on AgriBEE compliant farmers. Undue pressure on these retailers will not help to grow the small number of black farmers who are currently able to meet the requirements of the formal market.

This kind of growth will require a collaborative effort between government and organised agriculture to ensure that black farmers become market-ready. The latter is a long-term process and the Codes place an emphasis on government’s role.  

Farmers who seek to comply with the Codes of Good Practice need to study the promulgated document, which was published in the Government Gazette this past Friday. They also need to engage with verification agents to ensure compliance.  Farmers can check whether a verification agency is accredited by visiting the website of the South African National Accreditation System (www.sanas.co.za).

Issued by Thea Liebenberg, Media Liasion Officer, Agri SA, 11 December 2017