Agri-businesses that are ‘too white’ are indeed being threatened


The Department of Agriculture recently vehemently denied its intention to make BEE a requirement for exports. However, their confidential internal documents tell a different story.

The storm broke out following front-page reports in Rapport and City Press two weeks ago, stating that the government intended to prohibit white farms from exporting. The source was two notices in the government gazette, which were only partially misinterpreted. Instead of encompassing agricultural exports broadly, these notices only pertained to a relatively small set of tariff permits.

The Department of Agriculture seized upon this misinterpretation to forcefully refute it. The public, business community, and international stakeholders were all assured that the proclamations were nothing new, that no one was barred from exporting, and that BEE thresholds were not a requirement for participation in the agricultural value chain.

However, this was only a half-truth. Because where Rapport saw smoke, there was indeed fire.

Contrary to what the department has been trying to portray, it does have a stated plan to exclude agricultural businesses that are deemed too white – not just from accessing a few export permits, but much more.

Yet, evidence for these BEE plans cannot be found in the government gazette. Instead, it resides in two internal, confidential documents of the department, obtained by Sakeliga through a PAIA process and now released. These documents are the AgriBEE Plan and the AgriBEE Enforcement Guidelines, developed between 2015 and 2019, which today form the basis of the department’s unlawful and struggling BEE implementation programme.

The AgriBEE Plan was initially developed as a framework to enforce “compliance of sector stakeholders to the transformation programme of the government and in particular the agreed agricultural sector transformation plan, i.e. AgriBEE Sector Code.” It suggests that “before applicants or clients receive a service from the line function directorates (such as inspections, licenses, permits, awards, subsidies, and concessions), they must first be subjected to the pre-determined compliance criteria that are aligned to the AgriBEE Sector Code.” It also proposes that other government departments, provinces, municipalities, and state-owned entities should be cajoled into limiting their activities based on BEE levels including, “but not limited to water licenses, fresh produce agents licenses, statutory levies, etc.”

But how is this possible? Isn’t BEE voluntary? Yes, admits the department, BEE is voluntary, and they cannot compel anyone to comply with BEE. In a bizarre yet convenient argument, the department then develops its solution: instead of forcing businesses to meet BEE levels, it will simply withhold its “services” if they are not BEE compliant enough. The second document, the AgriBEE Enforcement Guidelines sets out how to do this.

The Enforcement Guidelines list 17 laws to which it applies, such as the Meat Safety Act and the Agricultural Product Standards Act. It identifies over 30 departments and state entities that must implement the guidelines. In all cases except one, it is stipulated that entities with a higher BEE level will receive preference and that no certificates, permits, funding, support, or licenses “should be issued to non-compliant entities.”

Although the Enforcement Guidelines date back to 2019, they are far from forgotten. Dr. Madime Mokoena, director of BEE Compliance for the Department, wrote as recently as July of this year that “The goal [of the AgriBEE Enforcement Guidelines] is to enforce compliance by stipulating any business that isn’t BEE compliant will not receive certification to export its products.”

Mostly, the department’s BEE plans are still in their early stages. An example is the issue of BEE certificates. Currently, the certificate requirement is not in and of itself a requirement for a particular level of BEE participation and might even appear to some a mere administrative formality. However, the industry information gathered through these certificates forms the basis for later BEE enforcement. Such certificates are now required at every turn, inside and outside the agricultural industry, and are anything but a harmless statistical gathering exercise.

In other cases, the progress is more ominous. For instance, the department’s Marketing Directorate has already developed a BEE point system for the ‘allocation of agricultural trade permits’, based on the ‘principle’ that ‘Black Economic Empowerment is the primary requirement for the allocation of marketing permits’.

Fortunately, the implementation of the veiled plan has been slow and unstructured over the past eight years – as government plans usually are. Otherwise, the high levels of agricultural activity and trade in South Africa would have hardly been possible. Ironically, it is good news that state failure and inefficiency at least help prevent harmful policy implementation. However, the plan poses significant medium-term risks for agricultural production, import, export, and food availability in South Africa. It is detrimental, against the public interest, and, importantly, unlawful.

The unlawfulness lies in the flagrant intention to divert the majority of permit and license requirements in the agricultural sector from their initial regulatory objectives to a race-based regulatory system. According to the plan, even a business that does not participate in BEE (typically those outside the state tender value chain) should be penalised when it comes to the allocation of quotas or permits, such as fishing and export licenses, or be entirely prevented from obtaining a permit, as evidenced in the plan’s treatment of wine and liquor export licenses. Regulations intended for maintaining food safety or access to water sources are turned into political mechanisms for the government to enforce changes in the ownership structure of all participants, whether companies, family farmers, or sole proprietors.

There are a few encouraging signs that at least some administrators and state entities seem unwilling to fully accept all of the department’s unlawful instructions (for now). For example, the Perishable Products Export Control Board (PPECB) has thus far raised pertinent questions regarding the legality of the department’s plans.

Until the department’s Enforcement Guidelines are publicly withdrawn, regulations or statements made by the department should be interpreted in light of those documents to gauge fully their possible implications.

A few weeks ago, the Department of Agriculture was eager to pretend it did not consider BEE a qualification criterion. It is now conspicuously silent since its confidential documents have been circulated.

The minister should immediately and publicly withdraw the AgriBEE Plan and Enforcement Guidelines.

This article originally appeared in the Afrikaans newspaper, Rapport under the heading Piet le Roux: Landbou-besighede wat ‘te wit’ is wél in gevaar. Click here for the original piece.