FSA queries Department of Agricultures’ move from a Voucher system back to a tender system

The Department of Agriculture and Rural Development MEC, Saki Mokoena and his EXCO decided that this mostly very successful voucher system that has been in use for the past few years will be replaced with a tender / procurement panel system using middle-men again. The motivation for this is job creation and to grow the Free State Economy using local procurement. This decision affects Agri-Businesses positioned to issue vouchers to the FS Department CASP beneficiaries, of which there are members of FSA.

Free State Agriculture (FSA) in support of our affected members and AFASA wrote a letter to the MEC querying this change with our biggest concern being, getting the inputs to the beneficiaries on time for the current planting season and why are changes to an already successful system?

In a meeting called by the MEC to address the letters from FSA and AFASA, after these resulted in a petition and articles in the press, it was clear that the decision had already been made and the meeting purely to say that stakeholders were consulted. A large number of additional stakeholders were also invited to the meeting, these being the new black farmer commodity organizations created after the split in AFASA at their last congress and black business organisations. The latter all approved the shift in the system of delivery of grants to new farmers.

FSA is of the opinion, and has publicly stated this and made inputs to this on many platforms, that grants should rather be replaced with subsidized loans, capped per beneficiary, and administered as was the old Agricultural Credit Boards in the past. The current blended finance system offered through the LandBank is portion grant and portion subsidized loan. Unfortunately, where there is a grant component coming from public funds there has to government oversight as to the selection of the beneficiary of the grant and this is where political patronage and corruption may slip in. Under a purely subsidized credit system the applicant is evaluated on merit and there is an obligation to pay back the loan including the subsidized interest, all be it under lengthened or easier terms.