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What to expect from the amended Agri-BEE
BEE Sector Code

January 2018

“My business supplies fresh produce to a large retail food chain, who expects
us to remain BEE compliant at all times. What impact will the recently amended
Agri-BEE Sector Code have on my business and my ability to remain BEE
compliant?”

The Amended Agri-BEE Sector Code of Good Practice (“Agri-BEE Code”) was
gazetted on 8 December 2017 and is effective immediately. The Agri-BEE Code
expressly states that its targets are based on those contained in the Amended
B-BBEE Codes of Good Practice (“Amended BEE Codes”), as well as on
stakeholder inputs, comments and recommendations. Where no substantive
reasons for deviation from targets contained in the Amended BEE Codes were
put forward by stakeholders, targets have mostly remained aligned with those
contained in the Amended BEE Codes. Here are some important deviations by
the Agri-BEE Code from the Amended BEE Codes:
The entity classifications remain the same as in the Amended BEE Codes. An
enterprise with an annual turnover of less than R10 million is classified as an
EME, an enterprise with an annual turnover of more than R50 million is classified
as a Generic entity, and entities in between are classified as QSEs. EMEs and
QSEs which are at least 51% black owned automatically qualify as Level 2
contributors. However, where the Amended BEE Codes provides for the automatic
elevation of an entity with 100% black ownership to a Level 1 contributor status,
the Agri-BEE Code has reduced this threshold to allow entities with 75% or more
black ownership to automatically qualify as a Level 1 contributor. Such Level 1
or 2 status can be obtained through a sworn affidavit confirming annual total
revenue and percentage black ownership.
The targets and point allocation of the first three scorecard elements under
the Agri-BEE Code, namely Ownership, Management Control, and Skills
Development are essentially identical to those in the Amended BEE Codes.
The Ownership target remained at 25% + one vote and 10% respectively for
black ownership and black women ownership. The Skills Development element
does however contain the additional requirement that at least 85% of the total
recognised skills development expenditure must be on scarce and critical skills.
The priority elements are also identical to the Amended BEE Codes, with
Generic entities having to comply with all three priority elements, and QSE
entities having to comply with the Ownership element and either the Skills
Development or Enterprise and Supplier Development element in order to avoid
being discounted by one level.

There have been appeals that the Department of Trade and Industry should

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