The prevailing market conditions showed that tea production in South Africa was “unsustainable,� the Agriculture and Rural Development Portfolio Committee has told the Bhisho Legislature.
In a report on the budget of the Department of Rural Development and Agrarian Reform the committee says that this implies that “the department’s continued funding of both the Majola and Magwa tea estates is unsustainable�.
The report says that the manner in which Magwa continues to be funded constitutes “fruitless and wasteful expenditure�.
The committee has also expressed concern about the department’s participation in the multi-million Rand Cradock ethanol bio-fuels project.
The department’s participation in the project, it says, is in “jeopardy� because of the difficulties it is experiencing in raising its 16% stake that is worth R184 million.
The Industrial Development Corporation set April 20 as the deadline by which the department should have raised the funds.
The committee says it wants a report within 30 days on how the department plans to raise the R184 million.
The committee has also expressed concern about the fact that 80% of the department’s budget is used for compensation of employees “at the expense of goods and services�.
The result of this, it says, is “a negative effect on animal health and livestock improvement�.
In addition, it states, tick-borne diseases are destroying rural livestock, especially those in coastal areas “because of the ineffectiveness of medication supplied by the department to communities�.
The committee said it wants a report from the department within 30 days on how it planned to address this challenge.
The committee also criticised the department for what it described as “the poor relations� it had with organised stakeholders in the farming sector saying this needed to improve.
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Article source: http://www.news24.com/MyNews24/Continued-funding-for-Magwa-Tea-Estates-unsustainable-20120601