The trusts in South Africa, as natural persons, operate in terms of the prescripts of the Trust Property Act (Act No. 57 of 1988).
However, the agricultural industry trusts operate within the mandates that are derived directly from the Marketing of Agricultural Products Act (Act No. 47 of 1996). The status report on agricultural industry trusts is an annual report by the National Agricultural Marketing Council (NAMC) in collaboration with the administrators of the industry trusts. This report aims to appraise the Minister of the Department of Agriculture, Land Reform and Rural Development (DALRRD) on the status of the trusts’ assets. The report further outlines activities that are performed with the proceeds of the investments, rental incomes and transformation as financed by each trust. The industry trusts have a mandate to ensure that the assets are protected and adjusted annually to cater for inflation while using the proceeds generated from the investments and rental incomes to fund industry activities such as research and development, transformation, industry promotion, and training aligned to enterprise development. There are currently 11 industry trusts, which are all managed to protect the asset base, which is currently sitting at over R2,3 billion.
However, this is a decrease of R132,1 million from the 2017/18 asset base of R2,4 billion to R2,3 billion in the 2018/19 reporting period. The unfavourable market conditions have resulted in the interest earned being minimal. There are currently 82 trustees with seats on the industry trusts, with 56 representing the industry and 26 (11 females and 15 males) representing the Minister. Important to note is that only the National Lucerne Trust and the Mohair Trust have youth (less than or equal to 35 years) representation on the Board of Trustees. The minimum age is 35 years and the maximum age is 80 years.
The industry trusts are key vehicles to drive transformation in the agricultural sector. The trusts are currently spending over R65,7 million on transformation, which represents an increase of 7,03 % from R61,4 million in 2017/18 and which funds key activities relating to enterprise development in line with the NAMC’s transformation guidelines published in 2018. The NAMC prescribes that an industry should spend at least 20 % on transformation, while the industry trusts spend over 30 % of their transformation budget allocation on transformation in key activities such as enterprise development and skills development. The industry trusts would be able to do more if the government were to match rand for rand on the funding of transformation to have a satisfactory impact. Furthermore, the tracking of transformation in the sector remains a major challenge, especially in terms of keeping records on the number of smallholder farmers and the volumes produced, as well as the distribution of volumes to the markets.
The same cannot be said for the commercial sector, however. The details hereof are outlined in the status report sections, which are subdivided as follows: ͧ Section one covers the activities of the NAMC with regard to the agricultural industry trusts; ͧ Section two covers general information relating to governance; ͧ Section three covers financial information; ͧ Section four covers transformation information; and ͧ Section five covers production and trade information. The status report1 on the agricultural industry trusts is hereby presented to the Minister of the DALRRD and the Portfolio Committee on Agriculture, Land Reform and Rural Development.
READ the Full REPORT on the link ABOVE
