REPORT OF THE PORTFOLIO COMMITTEE ON AGRICULTURE AND LAND AFFAIRS ON BUDGET VOTE NO. 29

The Portfolio Committee on Agriculture and Land Affairs, having considered budget vote 29, reports as follows:

 

  1. INTRODUCTION

Department of Land Affairs derives its mandate from Section 25 of the Constitution of the Republic of South Africa Act, 1996 (Act 108 of 1996), which protects property rights while placing an obligation on the State to implement land reform. Therefore, the Department has the responsibility of providing access to land and extend rights in land, with particular emphasis on the previously disadvantaged communities. The increased 2006/2007 budget reflect to greater extent the willingness by government to address, speedily, the issue of land reform and redistribution, especially restitution.

In the 2006 State of the Nation, the President indicated that the in the 2006/2007 financial year government will do the following:

* Review the willing-buyer, willing-seller policy.

* Review land acquisition models and possible manipulation of land prices; and regulate conditions under which foreigners buy land.

* Ensure that the land redistribution programme is aligned to the Provincial Growth and Development Strategies (PGDS) as well as the Integrated Development Plans (IDP) of municipalities, as well as attend to the proper use of the funds that have been made available for the productive utilisation of the land.

This directive has a significant impact on the budget of the Department of Land Affairs, as more resources must be made available to attain the given targets. The review of the willing-seller, ‘willing-buyer approach’ is likely to ease the budget of the Department, as land will be available at a reasonable price. In overall, this policy directive is likely to have an impact on the pace of the land redistribution programme.

On the 7th March 2006, the Department of Land Affairs and associated entities namely, the Khula Land Reform Empowerment Facility, the Commission on Restitution of Land Rights, and the KwaZulu-Natal IngonyamaTrust Board tabled appeared before the committee to table their budgets and strategic plans for 2006/07 financial year as required by Treasury Regulations.

Upon referral of the instruments by the National Assembly, the committee scheduled extended briefing sessions with the department and entities to present budgets and strategic plans for the ensuing financial year.

 

 

 

2. BUDGETS AND STRATEGIC PLANS FOR 2006/07

The committee completed the budget hearings process on the 15th March. Department of Land Affairs and entities were provided with an opportunity to present their plans, targets and challenges for the coming financial year.

  1. DEPARTMENT OF LAND AFFAIRS

The Director-General, Mr Glen Thomas assisted by programme managers presented 2006/07 budget and priority targets as relate to the strategic plan of the Department. The following are key priority programmes for the period 2006 to 2009 and targets for 2006/07:

 

Programme 1: Administration

The programme provide strategic and logistical support through executive and corporate services. Allocation for 2006/07 to this programme amounts to R358 970 million compared to R288 255 million for 2005/06. An increase is further anticipated for 2007/08.

Programme 2: Surveys and Mapping

The programme provides national mapping, aerial photography and other imagery and national control survey systems, in support of national infrastructure and sustainable development. Provide professional and technical services in support of land reform and other public services. Allocation for 2006/07 financial year to this programme amounts to R81 255 million compared to R84 501 for 2005/06.

Programme 3: Cadastral Surveys

The programme provides control of all cadastral survey and cadastral spatial information services. The allocation for the programme is R95 283 million compared to R84 543 million for 2005/06.

Programme 4: Restitution

The programme takes responsibility for settling land restitution claims in accordance with the provisions of the Restitution of Land Rights Act (1994), and provides settlement support to beneficiaries. For 2006/07 financial year, allocation for this programme amounts to R3.3 billion compared to R2.7 billion for 2005/06 and is anticipated to raise to R3.8 billion for 2007/08.

Programme 5: Land Reform

The programme takes responsibility for providing sustainable land redistribution programmes, tenure security for all occupiers of land in South Africa, public land information, and the management of state land. Programme allocation for 2006/07 amounts to R907 289 million compared to R704 699 million for 2005/06.

Programme 6: Spatial Planning and Information

Provides for national land use management, spatial planning and spatial information systems. For 2006/07 financial year, the allocation for the programme amounts to R28 215 million compared to R19 222 million in 2005/06.

 

Programme 7: Auxiliary and associated services

Takes responsibility for augmenting the registration of deeds trading account and for acquiring vehicles for departmental use and departmental capital works, and provide for a contribution to the Public Sector Education and Training Authority. Programme allocation for 2006/7 is R12 052 million compared to R10 219 for 2005/06.

Therefore, for 2006/07, the total allocation to the Department is R4.8 billion compared to R3.8 for 2005/06 and is anticipated to raise to R5.6 billion for 2007/08 and to R5.9 billion for 2008/09.

COMMITTEE OBSERVATIONS

The committee considered and welcomed the budget and encouraged the department to consider the following issues:

  1. Land Redistribution for Agricultural Development (LRAD) is a joint venture between the Department of Land Affairs and Department of Agriculture, yet the difficulty is who has the final responsibility of ensuring that provincial departments spend allocated money effectively.
  2. To what extent is the inter-departmental integration is being enhanced.
  3. In the past years, it was indicated to the committee that there were sections of the Department where there were still facing transformation issues due to lack of scarce skills, such as land surveying, a skill currently available to whites. Still it is not clear how the Department is planning to address this challenge.
  4. For government to allocate resources efficiently, it is important to ascertain and understand the impact of land reform programmes on the lives of the poor, however the committee still finds it difficult to understand how strong is the monitoring and evaluation capacity of the department to carry out this work.
  5.  

  6. The level of co-operation between the Department of Land Affairs and the Department of Public Works on the issue around State Land Disposal.
  7. A strategy must be developed to ensure that land reform beneficiaries have direct access to support from Comprehensive Agricultural Support Programme (CASP) and Micro-Agricultural Financial Institutions of South Africa (MAFISA) and the awareness of the availability of such support must be upgraded.
  8. Specific services and support by the Spatial Planning and Information programme provide to the land redistribution programme.
  9. There is an estimation that the restitution programme may spend only R1.9 billion of the R2.7 billion allocated budget by the end of the financial year, to the committee it is not clear whether the estimation is justified.
  10. The committee notes there is grey area between the White Paper on Land Reform and the Constitution of the Republic, and thus seeks clarity on this.

FUTHER AGREED THAT with effect from 1st April 2006, the department will report quarterly to Parliament and to the committee in particular.

 

3.1 KHULA CREDIT FACILITY

Khula Land Reform Empowerment Facility is a Section 21 company that was formed by Khula Enterprise Finance Limited in 2003 as mandated by the Department of Land Affairs, to advance money received from donors for the establishment of commercially viable projects on redistributed land.

Project submissions currently in progress are Smile Farmers Group Trust, Doringrug Development Trust, Endulini Development Trust, Welgelegen Dairy Trust.

Budget income for year 2006 amounts to R7.7 million compared to R7.8 million for 2007 was approximately R20 million for 2005.

In terms of the business plan, the company is gradually moving away from concentrating on specific provinces by responding to the committee concerns such as:

 

COMMITTEE OBSERVATIONS

The committee accepted the budget and the business plan for the ensuing financial year, requested Khula to consider the following issues:

  1. It is not clear what mechanism is used to determine where funds should be allocated.
  2. The relationship between Khula and the Land Bank is not clear yet the goal seems to be the same.
  3.  

  4. The relationship of Khula and the community co-operatives needs to clearly defined.
  5. The spread allocation of money still favours the Western Cape province.

 

    1. COMMISSION ON RESTITUTION OF LAND RIGHTS

The Commission was established in terms of the Restitution Act, 1994 (Act No. 22 of 1994). The mandate is to provide equitable redress to victims of racial land dispossession. Provide access to rights in land, including land ownership and sustainable development; and to foster national reconciliation and stability. Improves household welfare, underpinning economic growth, and contributing to poverty alleviation.

In the 2005 State of the Nation Address, the President extended the settlement of restitution by three years, until 2008. Much more, the directive for government was to allocate additional resources over the next three years to cover outstanding claims in the land restitution programme. To that effect, the Minister of Finance announced in the subsequent parliamentary speech a R6 billion increase to the restitution budget for the next three years. The budget of the Commission has been increased from R2.7 billion in 2005/06 to R3.1 billion in 2006/07 financial years. For the MTEF period the budget will amount to R9.7 billion. This demonstrates the political will to support Land Reform in South Africa.

COMMITTEE OBSERVATIONS

The committee considered the budget and the strategic plan for 2006/07, and expressed the following concerns:

  1. The Commission reported that only 2 922 urban claims remained unsettled by December 2005. In view of the challenges posed by the rural settlement of community claims, the committee is not sure about the practical strategy of the Commission in place to ensure that the target of settling all urban claims before the end of 2006/07 financial year is achieved;
  2. Government has often been accused for restoring commercial viable land to beneficiaries without any adequate support, the committee is still interested to see a tangible post-settlement support strategy.
  3.  

  4. Depending on the nature of the settlement, restitution beneficiaries are entitled to the Settlement Discretionary Grant (R3000 per household) and restitution Discretionary Grant (R1 140 per household), the concern is for how long has the amount of these grants remained the same and when the Commission intends to review these figures.
  5. The President has indicated that the government will review the willing seller – willing buyer approach, to the committee, in the context of restitution, in what way will that review affect the strategic plan of the Commission, especially its medium –term targets.
  6.  

  7. Whether the budget of the Commission addresses adequately the funding for anticipated expropriation.
  8. Time and financial constraints that expropriation may have on the settlement of the remaining claims.
  9. Capacity of the Commission to access and evaluate business proposals developed by strategic partners for beneficiaries.

 

    1. KWAZULU-NATAL INGONYAMA TRUST BOARD

The Ingonyama Trust was established in terms of the KwaZulu-Natal Ingonyama Trust Act, 1994 (Act No. 3 of 1994). The Act was amended by the National Act of 1997 (Act No. 9 of 1997). Amongst other things, the KwaZulu-Natal Ingonyama Trust Amendment Act provided for the establishment of the Ingonyama Trust Board. The core business of the trust is to manage its 2.7 million hectares of land, spread throughout KwaZulu-Natal, for the material benefit and social well being of individual tribe members.

Ingonyama Trust Board fund income comprises of income earned from Leases, Royalties and Investment income. The budgeted amount for 2006/07 is R14 151 077 million which makes up 86.2% of the total income budget. In addition to this amount, R2 242 000 million is received from the Department of Land Affairs as a transfer payment which makes up the remaining 13.80% of the total income budget.

In terms of the disbursement policy of the Board 90% of the income earned from trading activities is to be utilised for the benefit of the communities, and 10% of the income earned is to be retained for Board expenses. The total budget amounting to R16.3 million is a 6.2 increase on the budget prepared for 2005/06.

COMMITTEE OBSERVATIONS

The Committee accepted the budget and the business plan for 2006/07 of the Ingonyama Trust Board, and raised the following issues:

  1. The benefits from the privatisation of forests and the impact of that privatisation to communities.
  2. Need to determine who is benefit most in terms of the employment opportunities when deals are entered into with private companies.
  3. The Board must quantify the challenges posed by the implementation of the Communal Land Rights Act.
  4. The extent to which traditional authorities benefit from the income grant should be quantified.

RECOMMENDATIONS

  1. The committee will immediately reconsider the issue of forestry privatisation and assess the impact thereof in relation to employment opportunities and other benefits including ownership; and
  2. Whether the land in question (land being privatised) does not fall under claimed land and how would this relate to the Communal Land Rights Act, and the involvement of the traditional authorities.
  3. There must be a speedy implementation of the communal land rights act, with all stakeholders participating for the benefit of the communities as well as the business entities.

 

CONCLUSION

 

a) For government to achieve the 30% distribution of land to the previously disadvantaged people by 2014, the pace of land reform must be accelerated. Up to so far, the restitution programme is the only programme that shows a significant increase in pace, as more resources are made available.

b) For the financial year ending 31 March 2007, the Commission on Restitution of Land Rights (CRLR) targets to settle a total of 8 651 claims. While the process settlement of rural claims presented the Commission with various problems, the major challenge will be providing adequate support to land restored to restitution beneficiaries.

c) The target of the Commission is to ensure that all developmental plans are in place within six months of approval of claim by the Minister, of which, the Commission may not have the capacity to achieve this target.

d) The target of the Department is to dispose of 41 143 ha of State land to the land reform programme before the end of the financial. In total, the land reform programme aim to make 224 777 hectares available for redistribution. The review of the ‘willing-seller, willing buyer’ principle and the review of land acquisition models will have a significant impact on the availability of land for redistribution, which will in turn affect the land reform budget, and

e) The committee extends special appreciation to the Director-General of the Department, programme managers within the department, and all heads of associated entities for make time to appear before the committee.