Disappointment is the overwhelming emotion for some agricultural input suppliers in the Presidential Employment Stimulus Initiative (Pesi) programme in the Eastern Cape. The programme, which suppliers relied on to provide them with financial relief during dark, uncertain times, instead left them with high levels of surplus stock and for some, debt.
The Pesi programme launched in 2020, and offered subsistence farmers vouchers to buy much-needed farming inputs from government-appointed suppliers. The department of agriculture, land reform, and rural development oversaw the recruitment of suppliers.
In order to qualify, suppliers had to undergo an assessment and meet certain requirements.
Suppliers in the Eastern Cape told Food For Mzansi that, in order to meet the pre-conditions of the programme, they invested thousands of Rands into leasing new shop spaces, or extending their shop spaces. Some also got new company branding and most bought additional stock.
One such supplier who came forward asked Food For Mzansi not to use his real name, as he fears victimisation for speaking out. We are referring to him as Kwanele Maki.
Maki entered into a three-year contract with the department, but says he was removed from the programme within two months.
“We took a loan to build a shop [especially] for Pesi. We bought a lot of stock so that farmers will redeem their voucher and go with their stuff the same day. We prepared for Pesi because we knew the contract will [be] three years.”
Upon querying the supplier contract length with the department, spokesperson Reggie Ngcobo said that the contract period did not apply to Pesi suppliers. “The department has excluded PESI from the three-year supplier contracts.”
Shelf price vs. ceiling price
On 13 January 2022 the department made a shocking announcement that it suspended the programme to review, reengineer and redesign Pesi implementation. During this process some suppliers were notified by the department that their prices were too high.
Another supplier, who also requested anonymity and who we are referring to as Thato Nkosi, argues that the department had initially provided him and other suppliers with per item ceiling prices that they were not allowed to exceed. Suppliers were obliged to charge these prices, or less, in order to participate in the programme.
“Failure to meet these prices meant you needed to either motivate why it is higher or the item would be excluded from the list of items that you can offer to the beneficiary,” he said.
The suspension was lifted on 25 March 2022 but in early February 2022, Nkosi received an email from the department to revise the agreed upon prices to what they call “shelf prices”. These are prices the supplier would normally charge customers.
According to Nkosi it was the “middle men” suppliers and other shop owners who charged more for items than what they usually would.
“We personally were charging people the same, whether they were paying with cash or card, or coming to buy via the voucher. So, when we sent the revised shelf prices, our prices were the same,” he said.
Money wasted and owed
Despite sending his revised shelf prices, Nkosi was informed via email that he would not be reinstated because his prices were too high.
“The correspondence [came] back, they’ve reviewed the prices, and they regret to inform [me] that the prices have been deemed too high for the department,” he said.
He told Food For Mzansi that he now sits with surplus stock that he can’t sell.
“You must understand that the type of volume that the programme brings in, it needs you to forecast your buy in. So, you buy way more stock than you actually would need for your normal routine customers because you’re expecting this influx,” he said.
Nkosi discovered that he was not alone. Other suppliers confirmed receiving an identical message from the department.
He decided to query the reason for his suspension for a second time and was told by an official that the departmentdecided to only make use of suppliers with agricultural input shops.
Nkosi confirmed that he did have an existing shop before he signed up for the programme and felt disgruntled by the entire process.
He said his suspension from the programme did not make sense to him, especially after the department conducted an inspection on his facility and approved him as a supplier, knowing what his prices would be.
Subsistence farmers ultimately suffer
Another supplier, who also requested anonymity and is referred to as Sipho Dlamini in this article, said he invested in new branding for his company and leased a new shop space to participate in the Pesi programme.
Dlamini told Food For Mzansi that he was still waiting to be paid for vouchers redeemed at his store in 2021.
“Everything is at a standstill. The customers are on our back. But we can’t really give them [their goods] whilst we’re not being paid. I’ve got more than R300 000 outstanding in invoices that have not been paid off for products I’ve already given out.”
Dlamini added that, because he was booted from the programme, he is unable to access government’s Connected Farmer web portal which helped him track payments due.
“The [portal] showed you whom you redeemed, and when and how much. So now they have closed our access to that system. So, there might be more invoices that have not been paid, but [I] don’t know,” Dlamini explained.
He has since stopped releasing supplies to beneficiaries who ordered before he was removed from the programme. Many of the orders he had issued before the programmes suspension have still not been paid for, he said.
All of this, Dlamini admitted, inconvenienced beneficiaries of the programme.
He explained that due to a lack of transport and far-flung facilities, farmers often have to travel long distances to redeem their vouchers or make arrangements to have their goods picked up later.
“Individuals don’t have transport, so they would come, buy the stuff and then ask us to bring [it to] them on a certain day.
“But when [Pesi] started not paying us … we couldn’t give people their stuff [immediately] because now we’re not being paid,” Dlamini said.
What suppliers need to do
Food For Mzansi reached out to the department for comment regarding the supplier payments and contracts. Ngcobo explained that suppliers had to query payments with the relevant contact person, and that supplier contracts are confidential.
“Suppliers who have payment problems need to contact supply chain contacts in their respective provinces. Contractual agreements will be communicated directly to suppliers before being made public,” Ngcobo said.
At the time of publishing the department had not answered questions posed by Food for Mzansi on whether unpaid suppliers should fulfill pending orders and whether these suppliers would be paid for it. When that information is received, this article will be updated
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