Report of the Portfolio
Committee on Agriculture and Land Affairs on Budget Vote No. 29,
dated 28 March 2006:
1. Introduction
The Portfolio Committee on
Agriculture and Land Affairs, having considered budget vote 29, reports as
follows:
The Department of Land Affairs derives its mandate from
Section 25 of the Constitution of the
In the 2006
State of the Nation Address, the President indicated that in the 2006/2007
financial year, the government will do
the following:
1.1
Review the willing-buyer, willing-seller policy;
1.2
Review land acquisition models and possible
manipulation of land prices; and regulate conditions under which foreigners buy
land;
1.3
Ensure that the land redistribution programme is
aligned to the Provincial Growth and Development Strategies (PGDS) and the
Integrated Development Plans (IDP) of municipalities and to attend to the
proper use of the funds that has 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 Ingonyama Trust Board tabled their budgets and strategic
plans for 2006/07 financial year before the Committee 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 its budget hearings process on
the 15 March 2006. The
Department of Land Affairs and its entities were given
an opportunity to present their plans, targets and challenges for the
coming financial year.
The Director-General, Mr Glen
Thomas assisted the programme
managers who presented their 2006/07
budget and priority targets as related to
the strategic plan of the Department. The following are key
priority programmes for the period 2006 to 2009 and
targets for 2006/07 were mentioned as follows:
3.1 Programme 1: Administration
The programme
provides strategic and logistical support through executive and corporate
services.
The allocation for 2006/07 to this programme has increased from R288 255
million for 2005/06 to R358 970 million for 2006/07. An increase is further anticipated for 2007/08 financial year.
3.2 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. It also provides
professional and technical services in support of land reform and other public
services. The allocation to this
programme has increased from R81 255 million for 2005/06 financial year to
R84 501 for 2006/07.
The programme
provides control of all cadastral survey and cadastral spatial information services.
The allocation for
this programme has increased from R84 543 million for
2005/06 to R95 283 million for 2006/07 financial year.
3.4 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.
The allocation for
this programme has increased from R2.7 billion for
2005/06 financial year to R3.3 billion for 2006/06. An increase is anticipated
to R3.8 billion for 2007/08 financial year.
3.5 Programme 5: Land Reform
The programme
takes responsibility for providing sustainable land redistribution programmes,
tenure security for all occupiers of land in
The
allocation for this programme has increased from R704 699 million for 2005/06
to R907 289 million for 2006/07 financial year.
3.6 Programme 6: Spatial Planning and
Information
The programme provides for national land use management, spatial
planning and spatial information systems.
The allocation for this programme has increased from R19 222
million for 2005/06 to R28 215 million for 2006/07 financial year.
3.7 Programme 7: Auxiliary and associated
services
This programme takes responsibility for augmenting the registration of deeds
trading account and for acquiring vehicles for departmental use and
departmental capital works, and provides for a contribution to the Public
Sector Education and Training Authority.
The allocation for
this programme has increased from R10 219 for 2005/06
to R12 052 million for 2006/07 financial year.
The overall total
allocation to the Department for 2006/07 is R4.8 billion as compared to R3.8
billion allocated for 2005/06 financial year. It is anticipated to increase to
R5.6 billion for 2007/08 and to R5.9 billion for 2008/09.
4. Budget of Khula Credit Facility for 2006/07
Khula Land Reform Empowerment
Facility is a Section 21 company established by
Khula Enterprise Finance Limited in 2003. Its mandate
given by the Department of Land Affairs is to advance money received from
donors for the establishment of commercially viable projects on redistributed
land.
The project submissions currently in
progress are Smile Farmers Group Trust, Doringrug
Development Trust, Endulini Development Trust, Welgelegen Dairy Trust.
Its budget
income for year 2005 was approximately R20 million, in 2006 is R7.7 million
compared to R7.8 million for 2007.
In terms of its business plan, the company is gradually moving away from
concentrating on specific provinces when responding to the Committee’s concerns
such as, inequitable provincial spread; portfolio mix and capacity building.
This
Commission was established in terms of the Restitution Act, 1994 (Act No. 22 of
1994). Its mandate is to provide equitable redress to victims of racial land
dispossession. It provides access to rights in land, including land ownership
and sustainable development; and to foster national reconciliation and
stability. It also 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. 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
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). The
KwaZulu-Natal Ingonyama Trust Amendment Act provided
for the establishment of the Ingonyama Trust Board.
Its core business is to
manage its 2,7 million hectares of land throughout
Ingonyama Trust Board fund income comprises of
income earned from leases, royalties and investments.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.
7.
Committee
observations on budgets for 2006/07
7.1 Department of Land Affairs
The Committee considered and
welcomed the budget and encouraged the Department of Land Affairs to consider
the following issues:
7.1.1 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;
7.1.2
To
what extent is the inter-departmental integration is being enhanced;
7.1.3
In
the past years, it was indicated to the Committee that there were
Sections
of the Department still facing transformation issues due to lack of
scarce skills, like land surveying - a
skill currently available to whites. It is still
not clear how the Department is planning to address this challenge;
7.1.4
For
the Government to allocate resources
efficiently, it is important for the
Committee 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;
7.1.5 The level of
co-operation between the Department of Land Affairs and the
Department of Public Works on
issues of State Land Disposal;
7.1.6
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). It is encouraged that the awareness of
the availability of such support must be upgraded;
7.1.7 Specific
services and support by the Spatial Planning and Information
programme to the land
redistribution programme; [delete – provide]
7.1.8 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 yea. It is not clear to Committee whether the estimation
is justified; and
7.1.9 The Committee
notes there is grey area between the White Paper on Land
Reform and the
Constitution of the Republic. The Committee seeks clarity
on this area.
The Committee further agreed that
with effect from the 1st April 2006, the Department will report on a
quarterly basis to Parliament through interaction with the Committee on all
issues relating to land affairs.
7.2 Khula Credit Facility
The
committee accepted the budget and the business plan for the ensuing financial
year, requested Khula Credit
Facility to consider the following issues:
7.2.1
It
is not clear what mechanism is used to determine where funds should be allocated;
7.2.2
The
relationship between Khula Credit Facility and the
Land Bank is not clear yet - their goals seems to be the same;
7.2.3
The
relationship of Khula and the community co-operatives
needs to clearly defined; and
7.2.4
The
spread allocation of money still favours the
The Committee
considered the budget and the strategic plan for 2006/07, and expressed the
following concerns:
7.3.1
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;
7.3.2
Government has often been accused for restoring
commercial viable land to beneficiaries without any adequate support, the
Committee is still very much interested to see a tangible post-settlement
support strategy;
7.3.3
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?
7.3.4
The President has indicated that the Government
will review the willing seller – willing buyer approach. In the context of restitution, the Committee is
interested to know what ways will that review affect the strategic plan of the
Commission, especially its medium –term targets?
7.3.5
Whether the budget of the
Commission addresses adequately the funding for anticipated expropriation;
7.3.6
Time and financial constraints that
expropriation may have on the settlement of the remaining claims; and
7.3.7
The capacity of the Commission to access and
evaluate business proposals developed by strategic partners for beneficiaries need to be closely monitored.
7.4
The
Committee accepted the budget and the business plan for 2006/07 of the Ingonyama Trust Board, and raised the following concerns:
7.4.1
The benefits from the privatisation
of forests and the impact of that privatisation to
communities;
7.4.2
There is a need to determine who is benefit most in terms
of the employment opportunities when deals are entered into with private
companies;
7.4.3
The Board must quantify the challenges posed by the
implementation of the Communal Land Rights Act and the extent to which
traditional authorities benefit from the income grant should also be quantified.
8.
Committee recommendations
The
Committee recommended the following:
8.1
To revisit and reconsider the issue of
forestry privatisation and assess the
impact thereof in relation to employment
opportunities and other benefits including ownership; and
8.2 To
look 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; and that 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.
9.
Conclusion
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.
For the financial year ending 31 March 2007, the Commission
on Restitution of Land Rights (CRLR) target 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.
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.
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.
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.