The black economic empowerment in the animal feed milling industry in South Africa

Abstract

Broad base black economic empowerment redresses historical and social inequalities in a manner that does not have a negative impact on existing enterprises. Transforming existing agribusinesses create opportunities for black businessmen to contribute to the economy of the country. The Balanced Feed Manufacturers Association was established in 1945 when the need for better structuring in the industry and a mouthpiece for the feed industry to liaise with inter alia the government, was identified. The Association was closely involved in various aspects of the feed industry. The animal feed industry forms part of the agricultural sector which has a set of rules to ensure Black Economic Empowerment in the industry. The AgriBEE framework was established in July 2004. This draft AgriBEE framework therefore, is intended to assist all existing and potential future stakeholders and partners in the Agricultural Sector to engage in a meaningful dialogue and course of action. This will, in the shortest time possible, enables the erasing of the negative effects of our history of a dual sector and achieve outputs that can contribute to the higher society ideal of a better life for all. It also intends to assist black citizens who may have lost hope of ever participating in the agricultural sector as a consequence of alienation with a comprehensive framework for approaching new opportunities that now exist (Department of Agriculture July 2004). AgriBEE is based on two core sets of interventions. The first is related to the use of various Government instruments to promote empowerment. The second is the establishment of partnerships with the private sector. AgriBEE is neither possible nor sustainable without effective partnership. Government's strategy for black empowerment equity looks beyond readdressing past inequalities and aims to position B-B BEE as a tool to broaden the country's economic base and accelerate growth, job creation and poverty eradication. This is achieved using a balanced approach that includes contributions and measures that readdress ownership, management, employment equity, skills development, preferential procurement, enterprise development and other residual elements of the B-B BEE scorecard. Thereupon it draws attention to the fact that South Africa's economy performs below its potential because of the low level of income earned and generated by the majority. No economy can grow by excluding any part of its people, and an economy that is not growing cannot integrate all of its citizens in a meaningful way. As such, this strategy stresses a B-B BEE process associated with growth, development and enterprise development and not merely the redistribution of existing wealth. B-B BEE is a specific government policy to advance economic transformation in order to enhance the economic participation of black people. There is a danger, recognized by the government, that B-B BEE will simply replace the old elite with a new black one, leaving fundamental inequalities intact. At the centre of transformation, is situated a B-B BEE strategy. It must seek to readdress the imbalances of the past by distributing ownership, management and control of the country's economic resources among the majority of citizens and to ensure broader and meaningful participation in the economy by black South Africans. The success of this endeavour is required to achieve sustainable development and prosperity for all.