Report of the Portfolio Committee on Rural
Development and Land Reform on Budget Vote 32: Rural Development and Land
Reform, dated 23 March 2010
The
Portfolio Committee on Rural Development and Land Reform, having considered
Budget Vote 32: Rural Development and Land Reform, reports as follows:
1. Introduction
1.1.
The briefing on Budget Vote 32: Rural
Development and Land Reform took place on 10 March 2010.
1.2.
The Director General (DG), Mr. Thozi
Gwanya, led the delegation from the Department of Rural Development and Land
Reform to appear before the committee for the briefing. The delegation included
the Deputy Director General (DDG) - Land Reform, Mr. Mdu Shabane; DDG - Rural
Infrastructure Development, Ms. Leona Archary; DDG - Support Services, Mr A van
Staden; Chief Land Claims Commissioner (CLCC), Mr. Andrew Mphela; Deputy Chief
Land Claims Commissioner, Mr. SS Gamede, Acting Chief Financial Officer (CFO),
Mr Vusi Mahlangu, and newly appointed CFO, Mr. PT Phili.
1.3.
The Department was also accompanied by
Judge Ngwenya, a Member of the Board of Trustees of the Ingonyama Trust Board
(ITB). The ITB is an entity under Budget Vote 32 and reports to the Minister of
Rural Development and Land Reform.
1.4.
The briefing session mainly focussed on the
strategic priorities for the MTEF with a focus on financial year 2010/11 and
budget allocation for the Department of Rural Development and Land Reform as
well as the Ingonyama Trust Board. Further engagements with regards to
Department’s operations and expenditures against budget allocation will be
entered into on an ongoing basis. The committee adopted the approach in order
to enable itself to monitor progress on programme implementation. To this
effect, the committee required that the Department submit its business and operational
plans.
1.5.
The committee took cognisance of the
background and context of under which the Department of Rural Development and Land
Reform has been operating and would continue to operate. Post 2009 national
elections, the new administration established the Department of Rural
Development and Land Reform. It incorporated mandate of the old Department of
Land Affairs and necessitated that it undergo a restructuring process in order
to ensure that it can deliver successfully on its new mandate. Rural development
and land reform portfolio, particularly the Comprehensive Rural Development
Programme (CRDP) is a strategic priority with the government’s Medium Term
Strategic Framework (MTSF). Nine months after its establishment, the Department
has made certain strides with regard to integrated programme for rural
development through the CRDP and those will be reflected elsewhere in this
report.
1.6.
This report provides a brief summary of the
strategic priorities of the Department and the Ingonyama Trust Board as per the
Department of Rural Development and Land Reform’s Strategic Plan 2010-2013 and
the Ingonyama Trust Board’s Strategic Plan 2010/11. It also provides an
overview of budget allocation for rural development and land reform, and the
committee’s responses to the priorities and budget allocations thereof and some
of the challenges confronting rural development and land reform. It concludes
by recommendations regarding the strategic priorities and budget allocation.
2.
Overview
of the strategic context for rural development and land reform
2.1.
The Director-General outlined the context within
which the Department established and located their strategic outputs. The strategic
outputs of are based on the Medium Term Strategic Framework (MTSF) outcome 7 - ’vibrant,
equitable and sustainable rural communities’. The Department of Rural
Development and Land Reform has been mandated to be the main driver for ‘Outcome
7’ referred to above.
2.2.
An agreed outcome for the Department is ’Vibrant,
equitable and sustainable rural communities and food security for all’; a
vision that requires a coordinated and integrated broad based agrarian
transformation. Subsequently, the Department of Rural Development and Land
Reform framed the following strategic outputs:
Ÿ
Sustainable land reform;
Ÿ
Food security;
Ÿ
Rural development and sustainable
livelihoods; and
Ÿ
Job creation linked to skills training.
2.3.
The strategic plan of the Department and
the framework upon which it rests draws mainly from the Cabinet Lekgotla
resolutions, the State of the Nation Address (SONA), the Budget Speech by the
Minister of Finance and lessons drawn from Department’s programme performance
over the last couple of years.
2.4.
During the SONA of 11 February 2010, President
Jacob Zuma announced the plan to roll out the CRDP projects to 160 wards over
the next four years, integration of land reform and agricultural support
programmes. The Budget Speech by Minister Gordon also outlined priorities
relevant to rural development with emphasis on the need for the following: reducing
joblessness; supporting labour intensive programmes; recapitalizing state
enterprises including land bank; and sustaining high levels of public and
private investment. The strategic plan of the Department confirms commitments
of the President and priorities set out during the Budget speech.
2.5.
The strategy of the Department reads thus; ‘agrarian
transformation, meaning the rapid and fundamental change in the relations
(systems and patterns of ownership and control) of land, land, livestock,
cropping and community’. In order to achieve the goal for vibrant rural
communities and food security for all, the strategy includes the following:
Ÿ
Social mobilization of rural communities to
take initiatives;
Ÿ
Strategic investments in economic and
social infrastructure;
Ÿ
Increased economic activity and rural
livelihoods; and
Ÿ
Sustainable land reform.
2.6.
The committee was briefed about an all
en-compassing strategy of Comprehensive Rural Development that will assist
government’s priorities for rural development, land reform and job creation.
Ÿ
With regard to sustainable land reform, the
Department has prioritised the production of the Green Paper on Rural
Development and Agrarian Transformation.
Ÿ
Job creation: The Department has also proposed
a shift in implementation of land reform. Land reform would emphasise and adopt
the CRDP principles that are central to achieving vibrant rural communities and
food security for all. The Committee was also informed that household profiling
by National Integrated Social Information System (NISIS) to determine skills
and employability of beneficiaries will assist with targeting training and
development in line with job creation opportunities. Examples of an approach
can be observed with the Muyexe housing project. The Department aims to achieve
placement of one member of household per job on a two year contract in line
with the Expanded Public Works Program (EPWP).
3.
Overview
of the budget
3.1. The Minister
of Finance, in his budget speech, made reference to the significance and
prioritization of rural development which would require more spending and
coordination. Subsequently, the budget for 2010/2011 allocated an additional
R860 million allocated in order to “improving the quality of life within rural
communities and broadening the base of agricultural production.” Additionally,
special allocation of R1.2 billion for rural household infrastructure grant to
support rural communities especially for on-site water and sanitation
infrastructure was made available for the Medium Term Expenditure Framework
(MTEF). The committee noted that this amount is located in the Department of
Human Settlement as the role for provision of water and sanitation has been
shifted to the Department of Human Settlement. The committee further believes that
for a better service to rural communities, an improved coordination of
government services is vitally important.
3.2.
A total of R6, 769, 555 has been allocated
for the 2010/11 financial year. The allocation shows an increase from R6.4
billion allocated in 2009/10. The allocation for rural development and land
reform accounts for only 1.47% of the total government appropriation by vote
(before direct charges).
3.3.
Between 2009/10 and 2010/11, the overall
budget of the Department increases slightly in nominal terms by 5.8%, However,
in real terms it decreased by 0.89%. The committee is concerned about the
slight increase in budget allocation for the Department for 2010/11
particularly considering that ‘Rural Development and Land Reform’ is among the
top priorities of the Government for the medium term and the cost of land
acquisition.
3.4.
The committee welcomes an increase in the
budget increase in the area of employees’ compensation from R954 million in
2009/10 to R1.1 billion in 2010/11. It is believed that an increase would help
the department create sufficient human resource capacity to deliver on its
mandate for rural development and land reform, particularly an implementation
of the CRDP.
4. Overview
of programmes
The DG
outlined the revised macro structure of the Department which would ensure that
the Department delivered on its mandate. Notable in the macro structure was the
creation of the Social Technical Rural Livelihoods and Institutional Facilitation
(STRIF) as well as the Rural Infrastructure Development (RID) branches. These
branches were introduced in order to address the new mandate of rural development.
In addition, a new consolidated branch of Geo-spatial services, technology
development and disaster management.
4.1. Programme 1: Administration
4.1.1. The
Administration programme provides strategic and logical support through
executive and corporate services, the acquisition of vehicles for departmental
use, oversee departmental capital works and make a nominal contribution to the
Public Sector Education and Training Authority.
4.1.2.
Budget allocation for administration in
2009/10 shows an increase in the expenditure to accommodate new organisational
structure. The new structure was aimed at improving the administration of the
programmes of the Department. The 2009 budget was adjusted with a virement of
R178 million to mitigate projected deficits in the Property Management and
Corporate Services sub-programmes due to additional compensation and office
accommodation required for new employees.
4.1.3.
The Committee was briefed that over the
MTEF period was set to decrease to R634 million. In comparison to the 2009/10
appropriation, the 2010/11 budget allocation for administration decreased to
R577811 million, a significant decrease of 22.52% in real terms as a result of
the once off R178 million virement.
4.1.4. Key concerns
that have been raised by the committee included a decline of funds for staff to
implement programmes for land reform and restitution. However, the committee
welcomed efforts to reduce vacancy rate within the Department to enable it to
roll out the CRDP. The committee noted that the high staff turnover in the past
years had been a challenge for the Department; therefore, recruitment and retention
of qualified and skilled personnel should be prioritised.
4.1.5. The Committee
welcomed commitments of the Department to work towards a clean audit report
over the MTEF period. To this effect, the committee would further monitor the
systems and procedures put in place by the Department in order to attain
reliable financial reporting.
4.2. Programme 2: Geo-spatial and Cadastral
Services
4.2.1. The component
of National Geo-spatial Information is responsible for the national control
survey network, national mapping, aerial imagery programme and provision of
geo-spatial information services. The Department has set the following
priorities for the programme: support a roll out and ongoing monitoring of CRDP;
provide access to geo-spatial information to visually impaired persons through
a Braille atlas for each province over the next three years, Limpopo was
identified as a priority province; and assist in creation of an orderly and
sustainable rural settlements by ensuring alignment and harmonization of rural
development plans to existing planning frameworks including Provincial Growth
and Development Strategy (PGDS).
4.2.2. The programme
would deal with planning, analysis of baseline data including infrastructure,
socio-economic indicators, demography and existing planning documents.
4.2.3. The component
of Deeds Registration, amongst other functions, registers real right in land
and maintains a public land register. The key priority set for the component has
been to introduce an e-cadastre to achieve a reduction of turnaround times for
registration. The committee welcomed this initiative.
4.2.4. The committee
was informed that the programme received an amount of R283 550 million in
2010/11. Over the MTEF period, spending focus would be on mapping, registration
of deeds and developing new plans for new settlements in support of the CRDP.
4.3. Programme 3: Rural Development
4.3.1. The Rural
Development and Rural Livelihoods programme comprises the components of Social,
Technical, Rural Livelihoods and Institutional Facilitation (STRIF) and Rural
Infrastructure Development (RID). Institutionally,
the branches are located at both national and provincial office. The national
office would be responsible for formulation of policies and introducing
products and services for the effective implementation of the CRDP; and the
Provincial offices would provide support services for effective implementation
of the CRDP.
4.3.2. The
primary task of STRIF, as outlined during the presentation by the DG, is to
ensure social cohesion and the building of strong organizations in the rural
communities. The use of household profiling techniques would enable the
Department understands the needs of rural communities. The world around
building social cohesion would be driven by STRIF in partnership with the
programme of War on Poverty and Department of Social Development. The STRIF’s
main focus would be on food security, building of sustainable livelihoods and
skills training. Therefore, the STRIF branch has identified the following
priorities: social organization and mobilisation; technical support; skills
development; rural livelihoods and food security; and institution building and
mentoring.
4.3.3.
The primary focus of RID is
provision of strategic investment in social and economic infrastructure to
enable rural communities to first address their basic human needs; and also
progress to engagement with different economic activities. Key priorities for
the branch: namely; establishment of e-centres in all CRDP wards; focus
infrastructure delivery in areas of water, sanitation, health care, roads and
housing; establishment of the Rural Development Agency during the MTEF period;
and provide infrastructure for the recapitalization and development programme.
4.3.4.
The programme receives R256 million for
this year, an increase of 0.4% (i.e. declining in real terms). The allocation
is projected to grow at an average of 3.7% over the MTEF, to R293 in 2012/13.
4.3.5.
Given that rural development is the
priority of government, the committee is concerned that the allocation seems
very modest. However, the committee noted that there are budgets for land
reform lying elsewhere in other national and provincial departments and
municipalities. The committee’s major concern regards coordination of all the
departments to rally around rural development. With the current budget
allocation, the committee could not establish whether it was feasible for the
Department to scale up the CRDP beyond the small pilots already initiated and to
reach the 160 sites announced by the President of the Country.
4.3.6.
The CRDP depended to a greater extent on
funds and services from other government departments, provinces and
municipalities. As most of the costs were budgeted elsewhere, the extent to
which the Department has leverage over other departments is a worrying factor;
for example, R1.2 billion for a new grant programme for on-site water and
sanitation, as part of the rural housing programme and EPWP to target rural
areas for short-term employment in labour-intensive sectors.
4.3.7. The strategic
plan proposes an establishment of disaster management desk to facilitate rapid
response and mitigate against the effects of current surge of floods and
storms.
4.4. Programme 4: Restitution
4.4.1. To date, the
Commission on Restitution of Land Rights (CRLR) has managed to settle 96% of
the 79696 land claims lodged since 1994. Outstanding claims are all rural and
complex in nature and is estimated that it will require higher budget
allocation.
4.4.2. For the MTEF
period, the Department has prioritised to the following: to settle all the 3909
outstanding claims in line with the principles of the Comprehensive Rural
Development Programme; complete research on all outstanding claims by December
2011; clear monitoring for each project and establish early warning systems to
deal with challenges that may hinder effective implementation and management of
project; and recapitalization of farms restored under land restitution
(allocated R275 million).
4.4.3. In the
allocation for 2010/11, a total of R1.568 billion has been allocated for
restitution. In comparison with R1, 9 billion allocation for 2009/10, this
year’s allocation declined by 18%. The committee is concerned about the impact
of this decline on the Commission on Restitution of Land Rights’ priorities to
settle all the outstanding claims – whose majority are complex and rural in
nature. In fact the budget for restitution has been in decline for the
past 3 years.
4.5. Programme 5: Land Reform
4.5.1. The branch of
land reform includes both land redistribution and land tenure reform
components. Land reform is an integral part of the CRDP; therefore,
introduction of CRDP necessitated an overhaul of the existing approach to land
reform.
4.5.2. Among the major shifts on approach of the
Department to land reform is the following:
Ÿ
A plan to implement stringent criteria to
meet different land needs of beneficiaries; namely landless poor, small-scale
farmers and commercial farmers;
Ÿ
Recapitalization and development of all
distressed land reform projects implemented since 1994 through co-management,
share equity schemes, mentorships and strategic partnerships to provide
technical support to projects. The Department envisaged partnerships with other
entities and departments such as Agriculture, forestry and fisheries; Water and
Environmental Affairs, Land Bank and Social Partners in the private sector. The
DG informed that a key issue for the Department is to achieve a sustainable
land reform and food security for all.
·
Run a campaign that will mobilize social
partners, and forge partnerships to ensure that all available capacity in the
sector is galvanized to contribute to the success of this project
·
Strengthen security of tenure for farm
dwellers and labour tenants through provision of legal support to defend for
their rights, and introduce legislation that will strengthen the rights of farm
dwellers. (land access for this group can be considered under the different
categories of land reform beneficiaries)
4.5.3.
R4.083 billion has been allocated for land
reform, an increase of 18% from R3.455 billion allocated in the last
year. However, the target for the amount of land to be redistributed this year,
and over the MTEF, has been reduced by more than half. The Department also
reported that a certain percentage (25%) of the land acquisition budget would
be used for the recapitalization of failed land reform projects.
4.5.4.
The committee noted a departure from the
previous focus on quantitative targets, i.e. achieving redistribution of 30% of
white owned agricultural land by 2014. There is a substantial shift in focus,
ensuring that redistribution of land is matched by capital and technical
support to ensure productivity of farms and quality projects. The committee is
of an opinion that the Department is on track particularly with the focus on
food production and revitalizing the old collapsed projects.
5.
The
Ingonyama Trust Board (ITB)
5.1.
Judge Ngwenya
presented an overview of the priorities and budget of the Ingonyama Trust.
5.2.
The Ingonyama Trust
functions as a landowner-in-law of the
5.3.
The vision of the
Ingonyama Trust Board is “to improve the quality of the life of the people living on the
Ingonyama Trust land by ensuring that land usage is to their benefit and in
accordance with the laws of the land”.
5.4.
The legal mandate of the ITB is not that of a developmental
agency but of a land management agency which must ensure that any commercial
activity on communal land is developmental in nature. It ensures that activities
on that land must generate revenue that benefits local communities.
5.5.
The Ingonyama Trust Board identified ‘Land Management’ as a
key strategic objective. The committee was briefed about the following specific
outcomes linked to land management:
Ÿ
The optimum usage of land for the benefit
of communities and other parties including the state and municipalities
Ÿ
Extension of security of tenure, registered
leases can be used as security for funding of development and unlock employment
and equity opportunities;
Ÿ
To maximise the mining potential on the Trust
land for the benefit of communities including BEE/Joint Ventures;
Ÿ
Maximising the financial benefit to
communities from income of the Trust;
Ÿ
Subsistence and cash crop benefit to rural
communities;
Ÿ
Job creation and basic land management;
Ÿ
Identification and maintenance of immovable
assets; and
Ÿ
Optimum control and use of
5.6.
The total budget of the ITB, including
reserve funding equals an amount of R60 096 142. In comparison with the
allocation for 2009/10, that budget increased by 13.58%. Of the total budget,
R50 916 390 (84, 72%) comes from the ITB’s own fund which comprises income from
leases, royalties and investments.
5.7.
The functioning of the Board is funded by transfers
from the Department of Rural Development and Land Reform. In the financial year
2010/11, the Board will receive a total of R9 179 752 comprising current
estimated baseline, additional funding and investment income.
6.
The
Committee’s response to the Budget and Strategic Plan
The
committee focussed on challenges encountered by the Department and mechanisms
put in place to ensure that that department achieve on its strategic objectives
and key priorities for the period planned for.
6.1. The Committee
supports the initiative to bring all land acquired under land reform into
productivity in order to ensure food security for the nation. The allocation of
25% of the budget for land reform to recapitalization and development programme
is regarded as a step in the right direction. However, this meant that this
meant less amount of funds were available for acquisition of land and therefore
impacting on the amount of hectares the department could acquire, particularly
in consideration of the escalating land prices. Therefore, the committee support
the department’s view to continue seeking alternative methods of land
acquisition that will ensure redistribution of land at scale and bringing the
restitution process to an end.
6.2. Recent
reports about the extent of failure in land reform projects were a major
concern for the committee. The committee wanted to engage with the research
report that reported that 90% of all land reform projects were dysfunctional.
The extent to which the state will inject capital to these projects without
clear terms will be problematic. The committee therefore supported that the Department
should enter into firm contracts under terms that bind land reform
beneficiaries. The committee would also engage the Department on its monitoring
and evaluation plan for this intervention.
6.3. Recapitalization
of failed land reform projects should be implemented under stringent monitoring
mechanisms. This will enable the Department monitor how funds are being spent
and whether projects benefit intended beneficiaries.
6.4. The committee
is concerned that funds made available for transformation of the rural
landscape of
6.5. Tenure
security and living conditions for farm dwellers and farm workers remain a
concern for the committee. Whilst the committee commends the Department for
implementation of the Land Rights Management Facility (LRMF), it is still
concerned about the continued evictions, threats of evictions, poor living
conditions and underdevelopment in farm dweller/worker communities. The
committee requested a briefing from the Department on the principles for the
review of Extension of Security of Tenure Act.
6.6. The
Comprehensive Rural Development Program’s success would also be dependant on
coordination with other Departments and municipalities. Integrated Development
Plans (IDP) and Local Economic Development (LED) programmes of the
municipalities should form an integral part of a local strategy for rural
development. The Components of STRIF and RID can play a critical role in this
aspect. A gap in terms of information on how the Rural Development Agency will
operate exists. The Committee believes that processes on the Green Paper on
Rural Development and Land Reform would respond to this question and many other
policy grey areas in rural development and land reform.
6.7. The
contribution of other departments such as the departments of Agriculture Forestry
and Fisheries (DAFF), Water Affairs and Environment (DWAE), Public Works (DPW),
Social Development (DSD), and others is central to the success of the Rural
Development and Land Reform programme. Since the Department has prioritised Recapitalization
and Development, further engagement with the DAFF is critical. There is a need
for a cluster of departments to coordinate and communicate with each other for
a better service delivery and realization of the success of CRDP.
6.8. The
institution of traditional leadership in rural areas is a significant
stakeholder that can never be ignored in rural development initiatives. One of
the challenges that confronted the Department was how it engaged with a range
of stakeholders. This would continue to be a critical area of work in view of
the nature of rural development work that needed to be done.
6.9. The
Department is a custodian of vast amount of land, including land in the former
homelands – commonly known as – communal lands, some land in the hands of
provincial departments and municipalities. The committee wanted further details
on the proposals for a State Land Management Board to be made available to the
Committee. As with other matters, the Department mentioned that the Green Paper
processes will address these matters.
6.10. The committee
would like further monitor the extent to which the Department is working
towards an establishment of a comprehensive public assets register. In
addition, the committee would monitor implementation of systems and procedures
put in place to ensure that the Department attains unqualified audit report and
eventually clean audit report.
6.11. The committee
commended the Department for interventions in areas of rural development and
land reform; however they noted lack of clarity regarding the manner in which
issues of climate change and renewable energy are included in the planning
model of the Department.
6.12. Categorization
of land needs of beneficiaries and matching land delivery with needs of the
beneficiaries is a significant step in South African land reform.
Categorisation should be complemented by planning processes that address the
needs of the people. There is a key and vitally important question around
sub-division of land so that even the landless people as a category to be
reached by land reform are catered for in terms of secure land access. The Sub-division of agricultural land act of
1979 requires to critical consideration during the overhaul of the legislative
framework for rural development and land reform.
6.13. The fact that
the Department sees itself as a catalyst, initiator and facilitator raises
critical questions about the leverage that the Department has on other government
departments. Failure to get other department’s support for CRDP projects may
render the initiative a failure. However, the Department suggested that this
concern was factored into the joint programme planning with sister departments
to enable their meagre resources to cover CRDP.
7. Recommendations
The
Portfolio Committee on Rural Development and Land Reform supports the budget of
the Department of Rural Development and Land Reform. However, the following
recommendations regarding the Strategic Plan and the Budget were made:
7.1. Due to the
nature of outstanding land claims lodged in terms of the Restitution of Land
Rights Act, No. 22 of 1994, the committee recommends that the Department
approach the Department of National Treasury for additional funding for
settlement of land claims. In addition,
this should be topped up with 25% of the total additional funds for the
purposes of development support.
7.2. Similar
requests should be made for the program of rural development, CRDP in
particular. Additional funds will enable the Department to move beyond a few
pilot projects.
7.3. The
Department and the Commission on Restitution of Land Rights engage with
stakeholders, and more importantly with the land claimants who lodge claims on
what is regarded as national strategic assets and other complex rural claims to
seek sustainable settlement of those land claims, with a feasible post settlement
plan and support.
7.4. Budget for
recapitalization and development of project is spent under stringent measures
of monitoring.
7.5.
The Department prioritise putting in place
systems and mechanisms to ensure that they achieve their plans for an
unqualified audit reports and eventual attainment of clean audit reports.
The Portfolio Committees on Rural Development and Land
Reform, having considered Budget Vote 32: Rural Development and Land Reform, pledges
its support of Budget Vote 32.
Report to be considered