Report of the Ad Hoc Committee on Agriculture and Land Affairs on Budget Vote 30—Land Affairs, dated 23 June 2004:

The Ad Hoc Committee on Agriculture and Land Affairs, having considered Budget Vote 30, reports as follows:

Introduction
The Committee examined the budget of the Department of Land Affairs (Vote 30) for the financial year 2004/5 financial year as well as the forward estimates for 2005/6/7 included in Estimates of National Expenditure.

Main features
The main features of the 2004/5 budget are:
a) The Department of Land Affairs is mandated to provide an equitable and sustainable land dispensation that promotes social and economic development. The budget for 2004/5 is amounted to R1,7 billion, while forward estimates anticipate it receiving R2,1 billion and R2,5 billion in the years 2005/6 and 2006/7 respectively. This compares to the R1,6 billion voted in the
previous year. The budget has increased in line with the previous estimation of R1,7 billion for 2004/5. The Department’s budget can thus be described as steadily growing. This trend is set to continue over the MTEF period, with a total expenditure of R2,5 billion by 2006/7.

b) The 2004/5 budget is divided into seven programmes, same compared to the previous year. These are: Programme 1 — Administration (10%); Programme 2 — Surveys and Mapping (4%); Programme 3 — Cadastral Surveys (5%); Programme 4 — Restitution (52%); Programme 5 — Land Reform (26%); Programme 6 — Spatial Planning (1%); and Programme 7 — Auxiliary and associated services (1%). These programmes are said to be broadly corresponding to the Department’s operational divisions.

c) This budget is an attempt to respond to Section 25 of the Constitution that establishes the constitutional framework and mandate for the Department of Land Affairs and Commission on
Restitution of Land Rights. The White Paper on South African land Policy was adopted to establish the broad policy framework for the work of the department and the commission on the issues of land reform, including restitution and tenure security. The key focus is to provide access to land and extend land rights, with particular emphasis on the previously disadvantaged communities, within a well -planned environment. Current activities are largely informed by the presidential directive issued in 2002 that the restitution process should be finalized within three years. The ministerial directive also stipulate that 30% of agricultural land should be redistributed by 2015.

d) Programme 1: Administration
The Administration programme is responsible for the overall management of the department. It covers policy formulation by the Minister and strategic leadership by the Director-General. Total allocation to programme 1 is approximately R187 million for 2004/5. The total expenditure is expected to rise steadily. The main cost drivers are the compensation of employees and expenditure on goods and services. The restructuring of support services by creating four shared service centers and establishing the policy unit in the DG’s office has also created the impact on
personnel costs. A further impact on personnel costs is the transfer of 45 posts from across the department to this programme.

e) Programme 2: Surveys and mapping
Through its single subprogramme of the same name, the programme maintains an integrated national control survey system, a national mapping programme, a national photography and remotely sensed imagery programme, and associated geo-spatial products insupport of orderly and sustainable land reform and development. The allocation for the programme is approximately R72,7 million with an increase of 4% compared to the previous year. The growth The growth in expenditure in recent years for the acquisition of aerial photography and updating geo-spatial information has leveled-off. For 2003/4 the personnel component of the programme was restructured in accordance with the decentralization process and reprioritizing to support land reform. The expenditure trends on compensation of employees sees an annual average increase of 6.4% between 2003/4 and 2006/7 to support wage increases and filling of vacant posts.

f) Programme 3: Cadastral Surveys
The cadastral surveys programme aims to ensure that accurate cadastral surveys are carried out, and provide cadastral information services insupport of land delivery and orderly development. The departmental budget for the programme is approximately R82,5 million for 2004/5 and is expected to increase to R87,2 and R92,7 million respectively for 2005/6 and 2006/7, an annual average increase of 6.2%. The increases in expenditure have been spread across the current payments, although the majority of expenditure is allocated to compensation of employees, reflecting the labour-intensive of nature of the work. Expenditure on goods and services is anticipated to increase by an average of 3,4% to R17 million in 2006/7.

g) Programme 4: Restitution
The programme aims to restore land and provide suitable compensation to victims of forced removals. The budget allocation for 2004/5 is approximately R933,2 million. A steadily increase
to R1,1 billion and R1,3 billion respectively is anticipated for the 2005/6 and 2006/7. The programme has seen very rapid increases in expenditure. This programme consists mainly of
transfers to households to settle restitution claims, and these are expected to constitute 87,4% of the total expenditure in 2006/7. The Restitution subprograme has seen the largest increase in
expenditure rising to an expected R1,1 billion for 2005/6 and R1,3 billion for 2006/7. The allocation to the Regional offices subprogramme has also seen rapid increases by an annual
average of 22,4%. The expenditure on compensation of employees has arisen significantly to an annual average of 33,1%.

h) Programme 5: Land Reform
The programme aims to develop, implement, co-ordinate, facilitateand manage land reform programmes and projects. The departmental budget for the programme for 2004/5 is R473,7 million and has increased by 26%. The programme consists of five subprogrammes: the national Office, the Provincial Offices; the Land Reform Grants; the KwaZulu/Natal Ingonyama Trust
Board; and Khula Land Reform Credit Facility. The majority of expenditure goes to the Land Reform Grants subprogramme, particularly to the LRAD scheme. Expenditure on this programme is expected to increase to R619,3 million for 2005/6 and R800,5 million for 2006/7. The budget of the programme is accounted for all the five subprogrammes.

An expenditure on consultants and special services is anticipated in 2004/5 financial year due to finalization of some 10 000 claims under the Labour Tenants Act.

i) Programme 6: Spatial Planning and Information
The central mandate of the programme is to create better land use systems through effective and efficient spatial planning, land use management and use of spatial information, in support of orderly development and land reform in South Africa. The Departmental budget allocation to the programme for 2004/5 financial year is R19,2 million, and is anticipated to increase to R20,2 million and R21,4 respectively for the subsequent years of 2005/6 and 2006/7. The budget of the
programme is accounted for two sub-programmes, the management and support services which co-ordinates overarching projects of national strategic significance; and the Spatial planning and Information which creates land use systems support by effective spatial planning and information.
Expenditure on the programme has seen significant fluctuations, falling from R12,3 million in 2000/1 to R6,9 million in 2002/3, and then a sharp increase to R18,1 million in 2003/4 and R19,2
for 2004/5. The movements are said to be driven by two main factors, first the curtailment of land development objective programme in 2000/1 and, second the increasing expenditure on the National Spatial Information Framework.

j) Programme 7: Auxiliary and Associated Services
The departmental allocation to this programme for 2004/5 is around R19,1 million and is anticipated to increase to R20,2 million and R21,4 million respectively for 2005/6 and 2006/7.
Expenditure of this programme has been uneven in the past due to its composition, fluctuating between R5,5 million in 2000/1, R4,5 million in 2002/3 and R16,8 million in 2003/4. It is projected to increase consistently over the MTEF period, rising to R21,4 million in 2006/7. This represents an average increase of 25,5% over the seven year.

In terms of economic classification the Departmental budget can be classified according to the following standard items: the compensation of employees is accounted for R374 030 million;
the goods and services for R296 096 million; the transfers and subsidies for R1,08 billion; and the payment for capital assets is R31 699 million. The total budget is around R1,7 billion.

Comments:
While the Committee accepted the budget report, it however REQUESTED FURTHER INFORMATION ON:
_ The way the Department of Land Affairs is dealing with issue of Black procurement in terms of the BEE Act;
_ The list of contact persons in Districts Offices because it became apparent to the committee that there were problems at District levels.

THE COMMITTEE FURTHER commended the Department of Land Affairs on the expenditure pattern as compared to the previous years.

COMMITTEE SUGGESTED:
_ A Social Cluster meeting that would involve all the relevant Directors-General in order to determine and identify the bottlenecks relating to land reform sustainability and structural development. The Committee had an opportunity to engaged on budgetary issues with entities that are associated or report to the Department, such as, the Ingonyama Trust Board; the Perishable Products Export Control Board; the Commission on Restitution of Land Rights; the Bala farms (Pty) Ltd; and the Khula Land Reform Credit Facility.

k) KwaZulu — Natal Ingonyama Trust Board
The Ingonyama Trust Board came into effect in October 1998 and its main aim objective is to administer Ingonyama Trust
land, which covers about 3 million hectares in the former KwaZulu Authority territory. The Board derives income mainly from permissions to occupy (PTO), the leases and royalties, and in turn redistributes this to the various beneficiary communities
in the form of funding for community projects.

A total income of R14,3 million is budgeted for the year 2004/5 and R11,9 million will be redistributed to the communities. The
Trust receives an allocation from the Department to cover the operating expenses of the Secretariat, and expected R2 million in
2004/5.

The following programmes, funded by the Board, will be implemented during 2004/5:
_ Transfer KwaZulu/Natal townships to local authorities, establishing township registers and upgrading tenure rights.
_ Extend security of tenure on trust land and provide income through rent to communities living on trust land, which although demanddriven is expected to be R8,2 million in 2004/5.
_ Finalise the registration of all vested assets in the name of the trust by appointing conveyancers to consolidate and register titles in respect of each traditional area at a projected cost of R0,1 million. The trust currently holds 1 478 titles.
_ Transfer land used for state purposes to relevant government departments and municipalities.

Comments:
The Committee accepted the budget report and REQUESTED TO BE GIVEN a breakdown of the expenditure on all the accounts of the Board such as profession and special services fees etc.

l) Perishable Products Export Control Board
The objective of the Board is to instill confidence in food by impartially performing food safety and quality assurance services.
The budget report of the Board shows from 1994 to 2003 there has been a steadily growth from both the income and
expenditure of the Board. However, 2004 shows a decline on both income and expenditure.

The PPECB objectives/outcomes for 2004/6 are:
_ To build confidence in services
_ To minimized risk in supply chain
_ To be the custodian of industry information
_ To customized services on demand
_ To focus on international expansion (Africa/trading countries); and
_ To be able to integrate SA food safety policy and legislation (authority).

Comments:
The accepted the budget report and AGREED THAT:
_ At some stage the Committee will have to take an in depth analysis into the activities of the Board;
_ Secondly there was need to develop further contacts with the Board;
_ The Board should appear before the Committee from time to time in order to exchange views and share information;
_ The Committee undertook to visit the Offices of the Board in the near future.

FURTHERMORE, the Committee requested to be given a break down of the employment equity figures of the Board; AND the Board was requested to use its influence to ensure that employment equity in the industry is applied.

m) Commission on Restitution of Land Rights
The allocation for the Commission for the 2004/5 financial year is R933 million. The classification of the budget in terms of the
standard items is as follows: R775 million is allocated for Transfer payments; Goods and services allocated R75 million; the Compensation of employees will receive an estimated R81 million; and the R1,5 million is allocated for payments of capital
amounts.

The Commission complained to the Committee that the financial allocation for the 2004/5 financial year is inadequate by an
estimated R500 million. While one of the challenges of the Commission is that the integrated development approach to
restitution requires a further injection of capital to ensure sustainable settlement. The restitution budget for 2004/5 has been increased to R939 million. However, the Commission need not less than R200 million for 2004/5 to enable restitution
beneficiaries to make optimal use of the restored land, which is in line with the provision of section 42C of the Restitution Act.
The Commission also reported that it has a staff compliment of 390 out of 511 funded post. Recently the Commission has
witnessed a high staff turnover and this is linked to the fact that the staff has five- year contracts ending December 2005. The
Commission requires a staff compliment of 724 to be able to meet the Presidential directive of 2005.

Comments:
The Committee ACCEPTED the budget report and RESOLVED:
_ To ensure that both the Department of Land Affairs and the Commission are committed to the Presidential deadline;
_ To undertake provincial visits in the second term in order to inspect the current problems relating to the restitution cases;
_ The Committee will ensure that it leave no stone unturned to ensure that the integrated and sustainable land reform is attained; and
_ To undertake to call upon other relevant Departments to avail resources to ensure development;
_ To call upon the Commission to submit to the Committee its IMPLEMENTATION PLAN which will include financial figures;
and

COMMITTEE FURTHER REQUESTED:
_ The Commission to provide information with regard to the Sandford Land Claim which is currently being attended to by
Mpumalanga Regional Land Claims Commission.

n) Bala Farms (Pty) Ltd
The main purpose of Bala Farms (Pty) Ltd is to dispose of its properties that were acquired before 1994 during the previous
political dispensation, to historically disadvantaged persons in terms of Government’s Land Reform Policy.

The immediate outcome that is strived for is to dispose of its properties and to deregister the company in the year 2004. All
efforts are being made to accomplish this goal. Failing to achieve this goal will mean that the company’s life span will have to be extended for another year or until such time that all the properties have been disposed of.

Comments:
The Committee ACCEPTED the report and REQUESTED a list of all farms that have been disposed of with a view of visiting such farms in order to establish whether the residents were given preference and whether such farms were productive and sustainable or not.

o) Khula Land Reform Credit Facility
The Department of land Affairs signed the Agency agreement with Khula in December 1998. The purpose is to leverage private
sector funds into financing BEE projects in both agriculture and eco-tourism sectors. The sources of funding were the Department of Land Affairs, the European Union and the Danish International Development Agency. The Department of Economic Affairs and tourism joined the programme in August 2001 to support Eco-Tourism projects.

The financial statements of the agency shows that as at the 31 March 2004, the agency had an amount of R153,8 million in
the fund balance, when Loan Repayment (Capital and Interest) and Investment income are added, the agency had total cash
inflow of R209,6 million. The Admin costs, the Equity Grants and Loan Disbursements results to total cash outflow of R87,7
million. The Fund Balance as at 31 March 2004 was R121,9 million. The Committee was told that one of the strategic focus
was to encourage private/public partnership arrangement to accelerate land Reform delivery process. It was also indicated
that the pre-requisite was that projects should deliver Broad-Based Black Economic Empowerment.

Comments:
The Committee ACCEPTED the report and RAISED THE FOLLOWING CONCERNS:
_ The manner in which the money is channeled does not seem to benefit Black people in large numbers because this money was accessed through Commercial Banks which in turn put also certain percentage;
_ There was a need for Khula to develop a strategy of representation per Province;
_ The Committee was not convinced about the way the agency ensured the economic development of the country and the manner of allocating resources to different Provinces; and
_ Khula should provide the Committee with Statistics per Province that indicated the Transformation of Agriculture.
THEREFORE AGREED THAT there was a need for further contacts with Khula.