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Broad-Based Black Economic Empowerment Transformation Charter for Agriculture

Category: Policy/Strategy
Binomial Name: Government of the Republic of South Africa
Date: 9 February 2007
Sub Category:Policy/Strategy (South Africa)
Location:Republic of South Africa
Alternative Names:
  • AgriBEE
  • Subject Matter:Agriculture | Collaboration / Partnership
    URL: http://www.nda.agric.za/
    Summary Information:
    The Broad-Based Black Economic Empowerment Transformation Charter for Agriculture ('AgriBEE') was prepared by the AgriBEE Steering Committee in consultation with key stakeholders. The foundations for AgriBEE were laid by various Draft Transformation Charters, and it takes into account the Codes of Good Practice for Black Economic Empowerment.

    AgriBEE provides a basis for the transformation of the South African agricultural industry to one which incorporates the principles of Black Economic Empowerment ('BEE'). BEE is one of the range of measures being used to counteract the economic effects of apartheid in South Africa.
    Detailed Information:
    Application

    AgriBEE applies to the entire South African agricultural sector, including primary production, distribution, provision of services, processing and allied activities. However, the Charter will apply in a qualified manner with regards to enterprises with a total revenue between R5 million and R35 million ('Qualifying Small Enterprises'), and enterprises with a 5 year moving average turnover of less than R5 million ('Exempted Micro Enterprises').

    The Charter was adopted under section 12 of the Broad Based Black Economic Empowerment Act 2003 on 9 February 2007, which renders it a statement of intent but does not create legally binding obligations.

    Purpose

    The vision of AgriBEE is of 'a united and prosperous agriculture sector designed to meet the challenges of constrained global competitiveness and low profitability, skewed participation, low investor confidence, inadequate support and delivery systems and poor and unsustainable management of natural resources' (AgriBEE, Introduction). Specific objectives of AgriBEE include achieving extensive change in the racial composition of ownership and management structures, as well as improved representation of black women, persons living with disabilities and youth in ownership and management of new agricultural enterprises.

    The seven key indicators included in the Charter are:
  • ownership;
  • management control;
  • employment equity;
  • skills development;
  • preferential procurement;
  • enterprise development; and,
  • rural development, poverty alleviation and corporate social investment.

    The 'Indicators' include specific obligations for government, farming enterprises and Agri-Industry participants (defined as established agribusiness and farming enterprises with a predominately white management, ownership and control structure).

    Implementation and the Scorecard

    The Charter will be monitored and implemented by the AgriBEE Charter Council ('the Charter Council') who will report to the Black Economic Empowerment Advisory Council. The scorecard, which will test compliance with the Charter, is an important component of the Framework. The scorecard shall determine a business' likelihood of attracting contracts. Qualifying Small Enterprises will be subject to a variation of the targets contained in the Scorecard.

    The Scorecard includes indicator targets under each BEE element. Targets include:
  • 25% exercisable voting rights by black people (including 10% by black women);
  • Contribution to achieving 30% land transfer, with one bonus point per percentage of land transferred above 30%;
  • 50% Executive Members of the Board who are black people (including 25% black women);
  • 80% black people employed by the enterprise at skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents as a percentage of these employees;
  • 2% investment in skills development spent on black employees as a percentage of leviable amount.

    The Sanlam Cobalt Website explains that although there will be no prosecutions for non-compliance, 'market forces will determine compliance as those agribusinesses that don't comply will increasingly be marginalized, and eventually be influenced negatively by the rest of the economy.'

    Criticism and Support

    According to a News 24.com report, the Draft Framework for Agriculture of July 2004 was criticised by TAU SA, a farmer representative body, who asserted that the Framework would 'destroy the principle of property rights and the free market system which will result in the loss of valuable assets to individuals and groups.' TAU SA viewed the use of the term black as 'blatant racism.'

    In contrast, AfricaNews reports that the National African Farmers Union (NAFU) President has praised AgriBEE and stated that coupled with the use of biofuels, AgriBEE presented an 'excellent opportunity to involve emerging farmers as crop producers and at the same time fulfilling black economic empowerment imperatives.'

  • Related Entries

    Organisation
  • Department of Agriculture (South Africa)
  • The Steering Committee for the Draft Framework of AgriBEE
  • National African Farmers' Union - Signatory
  • Black Economic Empowerment Advisory Council
  • AgriBEE Charter Council
  • Legislation
  • Broad-Based Black Economic Empowerment Act, 2003 (South Africa)
  • Constitution of the Republic of South Africa 1996
  • Policy/Strategy
  • Black Economic Empowerment
  • Apartheid
  • Broad-Based Black Economic Empowerment Codes of Good Practice

  • References

    Conference Paper
    Siphiwe F Mkhize PhD (17 September 2004) The Basis for the New South African Agricultural Black Economic Empowerment (AgriBEE) Framework
    Media Release
    Department of Agriculture (South Africa) (4 July 2007) The AgriBEE Steering Committee Finalises the Sector Transformation Charter
    Hon. Lulu Xingwana (MP) (4 April 2008) Speech by the Minister for Agriculture and Land Affairs, Hon. Lulu Xingwana (MP) Launch of the AgriBEE Sector Charter Gazetted on 20 March 2008, Pretoria
    Newspaper Article
    News 24.com (27 July 2004) AgriBEE Slammed
    Fidelis Zvomuya (20 September 2007) South Africa: Biofuels support AgriBEE
    Report
    Masiphula Mbongwa (2007) Annual Report 2006/07: Director-General's Overview
    Resource
    Sanlam Cobalt (2007) AgriBEE: Impact on Business
    Department of Agriculture (South Africa) AgriBEE Website
    AgriBEE Steering Committee (2 November 2005) AgriBEE Draft Transformation Charter for Agriculture
    Department of Agriculture (South Africa) (20 March 2008) Broad-Based Black Economic Empowerment Transformation Charter for Agriculture (AgriBEE)
    Publication
    Department of Agriculture (South Africa) (July 2004) AgriBEE Broad-Based Black Economic Empowerment Framework for Agriculture (Draft)

    Glossary

    Policy/Strategy (South Africa)

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