The department of agriculture, land reform & rural development has suspended with immediate effect the use of vouchers, affecting more than 55,000 subsistence farmers as problems with suppliers and pricing cause bottlenecks.
An estimated R1bn was ring-fenced by the government to issue the production input coupons, capped at R9,000 per voucher on a seasonal basis as part of the Smallholder Farmer Disaster Relief Fund.
The department announced its decision to suspend all Presidential Employment Stimulus implementation with immediate effect until further notice while it reviews the voucher rollout with the aim of re-engineering and redesigning it to address challenges.
“There have been quite a number of complaints from the subsistence farmers pertaining to them when they get to the shops — either the inputs are not there or the pricing is not according to the government’s price list which has been distributed to them,” department spokesperson Reggie Ngcobo told Business Day.
“Farmers are sometimes being charged an additional amount, sometimes up to 45% extra, which we as a department don’t understand,” said Ngcobo, adding that at times farmers have not been able to get hold of suppliers allocated to their regions.
SA has 2.33-million agricultural households, according to a Stats SA 2016 community survey, with KwaZulu-Natal hosting the largest proportion — 27.9%. — of these agri-households.
The Smallholder Farmer Disaster Relief Fund was established to help small-scale farmers with annual turnover between R20,000 and R1m to survive and ensure continued food production, targeting producers via a voucher system for the purchase of inputs required to resume production activities.
According to the department, about 200,000 applications were received when the administration of the initiative began in April 2020. Only 55,000 farmers were granted relief, with 74,626 vouchers allocated to qualifying small-scale producers that serve local markets in peri-urban and rural areas.
Eligible farmers were to use the vouchers to cover a portion of their operational expenses and continue with food production as the coronavirus pandemic badly affected their smallholdings.
Targeting a threshold of 50% women, 40% youth and 6% people with disabilities, each seasonal voucher was capped at R9,000, with the government ruling that the grant not exceed R50,000 per farming operation.
Depending on the type of farming activity on each smallholding, the vouchers could procure day-old chicks, point-of-lay chickens, feed, medication and sawdust for poultry farmers. Seeds, fertiliser, pesticides, herbicides, soil correction and final spraying material for vegetable and fruit farmers could also be procured.
“We have decided to halt this process so that we can engage suppliers and find out, because the agreement with them is that you don’t charge the farmer, as it is us that contracted them, so whatever contractual issues they have must be brought to government and not the farmers,” said Ngcobo.
The government is expected to meet suppliers by Monday to assess the issues so it may resume the programme.
Ngcobo said in areas where pricing has been inconsistent with government lists, some suppliers reported that prices of goods had escalated since the initial price lists were made.
“But they can’t punish the farmers for their oversight,” he said.
The ministry also points at the issue of intermediary salespeople in the rural areas — business people charged with bulk buying of inputs for farmers in a designated area — as a challenge.
According to Ngcobo, those intermediaries also unlawfully charged farmers a surcharge for their services when it is the government who has deployed these individuals.
“These people would take the farmers’ vouchers and go to the suppliers and collude for higher prices and then also charge farmers for transporting their goods,” he said.
The labour-intensive agricultural sector, which contributes about 3% to GDP and is responsible for about 900,000 jobs, was one of the beacons of the economy during the height of the pandemic.
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