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be more flexible with compliance with the three priority elements and also the
Socio-Economic Development as a fourth criterion, to allow QSEs to choose any
three out of these four elements. BEE

Despite the Socio-Economic Development not being a priority element, it has
received additional emphasis under the Agri-BEE Code. Unlike the target of 1%
of an entity’s ‘net profit after tax’ contained in the Amended BEE Codes, the
Agri-BEE Code has a higher target of 1.5% of the entity’s ‘net profit after tax’. This
element also counts for 15 points on the Agri entity’s BEE scorecard as opposed
to only five points under the Amended BEE Codes scorecard.

A major change relates to the target for Supplier Development, which has
been increased to 3% of the entity’s ‘net profit after tax’. The Minister of Trade
and Industry has indicated that the aim hereof is to create a pipeline of black
suppliers and black industrialists within the value chain of the South African
agricultural industry.
Because of the higher target for Supplier Development, which aims at creating
black suppliers, the target on the Procurement sub-element allocated to
procurement expenditure from 51% black owned and 30% black women owned
suppliers is targeted to be gradually phased in over five years, ranging from
10% for the first year up to 40% for the fifth year for procurement from 51% black
owned suppliers. For 30% black women owned suppliers the Procurement target
is set at 6% for years one to four, and then 12% from year five onwards.
The target for Enterprise Development is also slightly higher at 1,5% of the entity’s
‘net profit after tax’.

Given the scope of the Agri-BEE Code and the importance of developing your
own supply chain to meet the supplier development and procurement targets
set under the code, it is advisable to enlist the help of a BEE consultant to
update your planning and look at ways you can prepare your business to meet
the targets set under the Agri-BEE Code.

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