COOPERATIVES WITHIN COMPREHENSIVE RURAL DEVELOPMENT FRAMEWORK

Presentation to the Portfolio Committee on Rural Development and Land Reform

23 April 2013

COOPERATIVES WITHIN COMPREHENSIVE RURAL DEVELOPMENT FRAMEWORK

• STRATEGIC OBJECTIVE: Integrated service delivery facilitated through the coordination of government and development stakeholders by 2014.

• There are 658 cooperatives that were registered by the Chief Directorate Institution Building and Mentoring.

Audit of Cooperatives

A PROCESS TO AUDIT COOPERATIVES INITIATED:

• to form part of the enterprise development programme and

• towards attending to in the Chief Directorates for Primary and Secondary and Tertiary Cooperatives. (as per plans)

AUDIT PLANObjectives Activities Estimated Regularity

Initiation activities Co-operative desktop analysis (658 cooperatives)Classification in terms of production areas and geographical distributionMembership verificationVerification of registrationVerify management systems and capacities Determination of functionality

Apr-Jun 2013

Provincial site visits, interaction and due diligence exercise with the existing co-operatives that can benefit most for final recommendation to the steering.

April-June 2013

Identify and list probable construction cooperatives that will flow from the NARYSEC Programme

April-June 2013

Business Plan development for small scale enterprises

Business Plans for the functional cooperatives selected in collaboration with the client

April – June 2013

Rural Cooperatives within the 23 Districts and CRDP Sites

RURAL COOPERATIVES

Vision

Towards a growing, sustainable and integrated cooperative sector,

supported by all stakeholders, contributing to economic growth,

poverty reduction and employment creation, as well as bringing

about economic transformation and equitable society.

Cooperatives Development Policy (2004).

Purpose: To facilitate rural cooperatives as vehicles that can contribute to job creation, poverty reduction through

income generation as well as contribute to economic growth

Legislative Framework: The legislative framework sets out the parameters for the registration and management of cooperatives in South Africa. The following instruments

form the basis for all the work relating to cooperatives and the Cooperative Development Strategy:

Cooperatives Development Policy of 2004Cooperatives Development Act, No. 14 of 2005

Cooperatives Regulations 2007Cooperatives Bank Act, No. 40 of 2007

PURPOSE & LEGISLATIVE FRAMEWORK

Status of Cooperatives in SADates Registered Cooperatives as per CIPRO (CIPC) Data

2007 - 2009 Total of 22030 registered cooperatives in the CIPRO data. More than 50% of these coops are in rural areas

2007 – 2009:Current Data The Dept of Trade and Industry baseline confirmed only approximately 2644 to be economically operating

During 2010 only 132 cooperatives complied with the requirements of submitting their financial statements to CIPRO

Source DTI Base Line Study

Provincial Breakdown Status of Cooperatives

Province

Data from CIPRO Register

No of surviving Coops

No of dead Coops

Survival Rate

Mortality Rate

KZN 8697 1044 7653 12% 88%

EC 4124 287 3957 7% 93%

WC 1003 69 934 7% 93%

NC 798 20 934 2.5%% 97.5%

Limpopo 1779 405 1474 22% 78%

Mpumalanga 1396 187 1309 12.5% 87.5%

Gauteng 2265 394 1971 17% 83%

FS 850 71 829 8% 92%

NW 1208 167 1090 13% 87%

National Total 22030 2644 19386 12% 88%

Overview of the Tasks in Rural Co-operative Development

Key Activities : Primary Cooperatives

• Receive referrals from knowledge unit• Identifies, establishes and registers• Facilitation of social cooperatives (burial societies, consumer and

savings coops )• Provide start-up support• Facilitate internal/coop governance, compliance, constitution• Facilitate Compliance with Cooperative legislation and policy and

liaison with relevant departments national and provincial• Facilitate internal planning (feasibility studies and business plans) • Facilitate access to Coop Incentive Scheme ( CIS) at DTI• Facilitate access to sector-specific training and other skills • Support agricultural and non-agricultural cooperatives(inputs,

production management, harvesting and storage • Ongoing support to primary cooperatives

Key Activities: Secondary and Tertiary Cooperatives

• Mobilise and facilitate the establishment of secondary cooperatives• Provide support to secondary cooperatives(registration,

constitution, build administrative capacity ( compliance), facilitate training and mentoring

• Facilitate the dissemination of market information and market linkages

• Facilitate training to capacitate secondary cooperatives to engage in bargaining at bulk buying practice

• Facilitate training in marketing and market development• Mobilise and facilitate the establishment of tertiary cooperatives• Build capacity to tertiary cooperatives to support the secondary

and primary cooperatives

Guide to Rural and Economic Development

Value Chain Approach

processing/industries

Primary coop 1

Primary coop 2

Local and external marketsSecondary /

tertiary coop

Coordination and Partnerships

RID(opportunities for the youth and infrastructure

requirements of cooperatives)

NARYSEC(opportunities for participation in economic activities) LAND REFORM ( Coop for land reform projects)

Government departments e.g DTI, DAFF, Provincial & Local government Public entities and agencies e.g Seda, DBSA, ARC Tertiary institutions, NGOs and Private Sector

INTERNAL

EXTERNAL

NARYSEC (NATIONAL RURAL YOUTH SERVICE CORPS)

•Current enrolment?•How many youth have been trained, where and on what?•Are there youth that are trained but currently not involved in any activity while receiving a stipend?•Are there any youth that have been recruited, receiving stipend t sitting at home and doing nothing and why?•An age analyses of the current intake i.e. how many are in the programme from its inception, when will they exit, same information for each of the groups.•How many per province and provincial distribution?•What projects are those that have been trained currently involved

in and where?•What is the Departments long term plan with the programme?•What are the challenges and what will be done to overcome the

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BACKGROUND TO NARYSEC

• Job creation and skills development of youth are national priorities.

• Unemployment of youth in rural areas even more serious.• The Comprehensive Rural Development Programme (CRDP)

was developed in 2009.• In response to the plight of youth in rural areas the National

Rural Youth Service Corps (NARYSEC) was established on 1 September 2010.

• Emphasis of NARYSEC is the development of the skills of rural youth.

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NATIONAL RURAL YOUTH SERVICE CORPS (NARYSEC)

Know Your People!Know Your Village!

Live Up To Your Responsibility!

THE OBJECTIVES OF THE NARYSEC PROGRAMME

• Nation building and community service through the initiation of district life skills hubs that serve as rural youth empowerment centres.

• Enabling rural youth to play a strategic and significant role in the transformation of rural communities by participating in the roll out and implementation of the CRDP.

• Creating a major countryside revolution for socio-economic freedom with special emphasis on rural areas.

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THE OBJECTIVES OF THE NARYSEC PROGRAMME

• Enhancing the spirit of ubuntu through whole-person self-development, economic participation, community values and personal empowerment among young people.

• Promoting a result oriented national rural youth service and thereby build patriotism, social cohesion and stable rural communities with viable institutions, sustainable economies and access to social amenities able to attract and retain skilled and knowledgeable people who will contribute to growth and development of the rural communities.

• Investing in the future by investing in the youth today.

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CLARIFICATION OF NARYSEC ROLES• DRDLR play role of Initiator and Coordinator.• Project is nationally led by the Minister of Rural Development

and Land Reform and led provincially by MEC with Rural Development function.

• Included in the delivery agreement with President.• Implementation at municipal level by synchronizing

community needs with the objectives of the municipalities.• Establish provincial project team to manage implementation. • Ward councilors, representatives council of stakeholders at

CRDP sites and community leaders form part of implementation structures at municipal level.

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PRESENT TARGET GROUP AND PERIOD

• Rural ward focused.• Age group 18 to 35 – (working age).• Completed grade 10 (std. 8) or higher (completed school). • Stipend of R1 320 per month.• Gender balance of 50/50 even though distribution in

provinces may be different.• Four years – can migrate to better employment or business

opportunities earlier.

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FINANCIAL EXPENDITURE

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DESCRIPTION 2011/2012 2012/2013Persal (stipends) 114 300 000 155 549 418 FET Colleges 115 600 000 74 617 343 Construction Tools 640 684 1 530 440 Uniforms 6 996 102 10 108 725 Logistic (venues & facilities, accommodation, catering and transport) 41 402 931 55 909 374 Practical training (Transport, accommodation and meals for participants)   40 000 000 Induction for new intake in Limpopo, North West and Western Cape in January 2013   10 500 000 Project management (DBSA NTSU)   6 000 000 Department of Defence (Character building training - NYS)   56 367 444 Total 278 939 717 410 582 744

GROWTH IN NARYSEC AND EXIT INFO

START DATE NUMBER OF YOUTH EXIT DATE

1 September 2010 7 956 31 August 2014

30 April 2012 8 041 29 April 2016

31 May 2012 9 371 30 May 2016

30 June 2012 10 478 29 June 2016

31 August 2012 11 140 30 August 2016

30 September 2012 11 540 29 September 2016

31 March 2013 12 881 30 March 2017

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CURRENT ENROLMENT:NARYSEC PARTICIPANTS PER PROVINCE

PROVINCE FEMALE MALE TOTAL

EASTERN CAPE 1 388 1 021 2 400

FREE-STATE 232 148 380

GAUTENG 1 171 673 1 844

KWAZULU-NATAL 931 530 1 461

LIMPOPO 1 166 793 1 959

MPUMALANGA 572 389 961

NORTH WEST 735 545 1 280

NORTHERN CAPE 582 343 925

WESTERN CAPE 990 681 1 671

Grand Total 7 757 5 124 12 881

YOUTH TRAINED WHERE AND ON WHAT

• Agriculture Fort Cox: 69 youth trained on Animal Production: NQF Level 2.

• 38 FETC nationally: 5057 youth were trained in the various fields of construction:– Building & Civil Construction: NQF Level 3.– Plumbing: NQF Level 2.– Welding: NQF Level 2. – Electrical Engineering for construction: NQF Level 2.– Community House Building: NQF Level 2.

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CONT,

• FETC: Business Administration Services: Level 2 & Level 4. • South African Wildlife College and Wilderness Foundation

trained 300 youth on Farm Management: NC Level 1.• StatsSA and Social Dev trained 4000 youth on HouseHold

Profilling.• SANDF trained 4700 youth in Character Building.• Bytes Technology trained 300 youth on Computer data

capturing.

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CONT,

• Chief Directorate Rural Disaster trained 88 youth on various courses: – Community based disaster risk management.– Disaster risks.– Handling of dangerous goods.– Basic Computer skills.– Communication.– Office Administration– First Aid course I and II.

These youth are based at various Thusong Centres.

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NEW SKILLS PROGRAMMES 2013 AND BEYOND

• NC: Animal Production: NQF Level 2 • NC: Automotive Repair & Maintenance: NQF Level 2 • NC: Building & Civil construction: NQF Level 3• FETC: Plumbing: NQF Level 4• FETC: Welding: NQF Level 4 • NC: Business Administration Services: Level 2 & Level 4 • Renewable Energy: NQF Level 3• Agri-business: NQF Level 3 • Solid Waste Management: NQF Level 3• Waste Water Management: NQF Level 3• Hospitality: NQF Level 3

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YOUTH TRAINED BUT NOT INVOLVED IN ANY ACTIVITY WHILE ON STIPENT

• Learnership and other skills programs require that after 30% training in theory at the College, a learner must undergo practical work training at a host employer to complete 70% work practical experience part.

• DRDLR does not have facilities to host learners as per their area of training.

• Initially this was a huge challenge to persuade relevant host employers to do the 70% practical training.

• This is a problem even outside the NARYSEC programme.• To date 80% of the participants who completed construction

training have been placed with host employers.• Sites for the remaining 20% are still sought.

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YOUTH RECRUITED, RECEIVING STIPEND BUT SITTING AT HOME, WHY?

• Although host employers are carefully selected conditions are not always conducive for youth to get practical experience. Such youth would be removed to avoid putting them at risk.

• FETC start programmes at set dates. Youth waiting to enroll would not necessarily be kept busy.

• Youth are linked to local municipalities to work in community projects of Municipality as Community Development Volunteers.

• Not all municipalities utilise youth actively.

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AGE ANALYSIS OF THE CURRENT INTAKE AND EXIT INFORMATION?

• Intake into the NARYSEC Programme is of a rolling nature. • Provinces recruit at dates when different skills programmes

can resume.• The NARYSEC youth is contracted for four years from the

date he or she is enrolled into the programme.• The first intake of youth will exit from the programme at the

end of August 2014.

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CHALLENGES AND STRATEGIES TO MITIGATE

• The challenge remains in linking skilled young people to relevant job opportunities. Various institutions are in place to address this. The most significant intervention is the NARYSEC Technical Support Unit (DBSA). Their purpose is to oversee activities at colleges and at the various workplaces where youth are trained. The NTSU has now become fully operational.

• Municipalities not utilising youth lead to youth not being engaged. Although several engagements at especially Ministerial level took place progress is slow. These engagements continue.

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NARYSEC PROJECTS

• Ablution facilities Limpopo school.• Pack house Madzivandila.• Houses Malamulele.• Children's ward Addington Hospital.• Renovate nurses residences Addington Hospital.• Low cost housing Paarl.• Paving Beaufort West.• Household profiling.

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EARLY SUCESSES

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COLBERT MABASA LIMPOPO

• Colbert Mabasa completed his workplace training at the Malamulele construction site.

• Colbert did not think that the NARYSEC training would impact his life and that of the entire community. The local chief witnessed Colbert's contribution in job creation for some of his villagers and decided to offer him 5ha piece of land as a token of appreciation for community service.

• Colbert bought himself a brick making machine and started manufacturing bricks and selling them in his village. NARYSEC encouraged him to register his own business. He sells bricks in and around Malamulele area. He has currently completed building works for a clergy man in his community.

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MOEKETSI DEANE NORTH WEST

• Moeketsi Deane, a NARYSEC participant, formed a business with other participants in North West. They were awarded a sub-contract to build a Health Centre in Moretele in Bojanala District.

• 20 other community youth has been employed by the participants in the project.

• Low cost housing in Randfontein Johannesburg has been earmark to be built by the same NARYSEC participants.

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WENDY TSOTETSI GAUTENG

• Wendy Tsotetsi, is a NARYSEC participant who have formed an agriculture cooperative in piggery, vegetable production and cropping.

• These youth are based in Kaalfontein where they operate under Emfuleni Local Municipality.

• They also train members of the community on climate change and adaptation especially for agricultural purposes.

• They have planted maize for the first time this year and should harvest in May/June 2013.

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IMPACT

• Direct economic impact to unemployed youth through the stipend.

• Youth support between three to five people with the stipend, impacting on between 35 000 to 50 000 people.

• Youth who left the schooling system early is provided with a SAQA/ NQF accredited qualification.

• Community service is performed throughout the NARYSEC programme of action.

• Household profiling provides a national database of rural people with a rich potential of research to guide future activities.

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IMPACT

• The training programme by the Department of Defence instils discipline, patriotism, life skills, communication skills, leadership skills, etc.

• Enterprize development skills will assist the entrepreneurs to get a start in business.

• A well rounded young person will exit from NARYSEC with a qualification as well as a member of a cooperative.

• NARYSEC is still a young programme (two and a half years old) and the real impact will become evident over time.

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SALIENT POINTS

• The programme will evolve over time.• Community service is a key objective.• Household profiling will guide future direction of this project.• Skills development will include discipline, patriotism, life

skills, rights awareness and specific skills areas empowering youth to change rural areas.

• Current area of focus is construction in rural areas.

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LONG TERM PLAN WITH THE PROGRAMME

• In the short term the programme management is being strengthened by adding more staff and obtaining facilities.

• The concept of a pipeline has been developed meaning that youth is only recruited once the programme they will undergo is known.

• The utilisation of youth presently in the programme will be improved.

• Intergovernmental relations with local municipalities will be strengthened.

• During January 2014, 4 600 additional youth will be recruited.

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