Report of the
Portfolio Committee on Rural Development and Land Reform on Budget Vote 32:
Rural Development and Land Reform dated 25 May 2011
The Portfolio Committee on Rural Development and Land
Reform, having considered Budget Vote 32: Rural Development and Land Reform, reports
as follows:
1. Introduction
On 10 March 2011, the Department of Rural Development
and Land Reform (DRDLR) and the Ingonyama Trust Board (ITB) briefed the Portfolio
Committee on Rural Development and Land Reform about their respective strategic
plans and budget allocations for the period 2011-2014.
The Deputy Minister, Hon T Nxesi, led the delegation
from the Department of Rural Development and Land Reform (DRDLR). The delegation
comprised the Director General (DG), Mr. Mdu Shabane, Deputy Director General
(DDG): Support Services, Ms N Mashiya; Acting DDG: Rural Infrastructure
Development, Ms. L Archery; Acting Chief Land Claims Commissioner (CLCC), Mr. T
Mamphoto; Chief Financial Officer (CFO), Mr P Phili; Acting DDG: Land Reform Mr
V Mahlangu, DDG: Social, Technical, Rural Livelihoods, and Institutional
Facilitation (STRIF), Mr. M Swart. The
Ingonyama Trust Board (ITB) was represented by Nkosi KW Mathaba (Member of the
Board of Trustees), Mr A Mia (CFO) and Mr N Bhebhe (Chief Executive Officer)
and Ms B Benson (Head of Real Estate).
The briefing was mainly focussed on the strategic
priorities of the DRDLR for the Medium Term Expenditure Framework (MTEF) and
related budget allocation as well as the strategic priorities of the ITB and
budget allocation for the 2011/12 financial year. The approach of the Committee
was that the broad framework presented by both the DRDLR and the ITB should be
read with the relevant Annual Performance Plan (APP), hence presentations of
the APPs. It helped the Committee to obtain a holistic view of broad strategic goals,
specific planned outputs and how the DRDLR and the ITB had planned to achieve the
pre-determined objectives and monitoring their own performance. The Committee also
considered the approach as one of the ways to enable it to hold the DRDLR and
the ITB accountable, thus enhancing its strategy for oversight and monitoring
the implementation of the strategic and operational plans.
This report, therefore, accounts for the processes undertaken
by the Portfolio Committee during consideration of Budget Vote 32. It provides
a brief summary of the strategic priorities of the DRDLR and the ITB and an
overview of budget allocation. It further provides an overview of the observations
and highlights recommendations from the Portfolio Committee.
2. The
Department of Rural Development and Land Reform
2.1 Strategic
context for rural development and land reform and the key priorities
The presentation of the DRDLR outlined that the strategic
outputs of the DRDLR are based on the Medium Term Strategic Framework (MTSF) Outcome
7 that seeks to ensure realization of ’vibrant, equitable and sustainable rural
communities’ in
Government has identified job creation as a key focus during
the 2011/12 financial year. The SONA highlighted the strategic significance of
rural development and land reform as a lever for improving lives of the rural
people. It further showed that 500 000 jobs would be created in the rural
sector over the next 10 years. In that context, the DRDLR considered the New
Growth Path that provided strategies for creation of jobs and identified the
manners in which it could contribute towards job creation. It planned to
develop strategies and programmes that would create jobs specifically for rural
communities. Such programmes included the Comprehensive Rural Development
Programme (CRDP), Recapitalization and Development Programme (RADP) for land
reform projects, National Rural Youth Service Corps (NARYSEC) that targeted
skills development and employment of youth. Since 2009, the Department has
implemented the CRDP pilot projects. It also identified CRDP as a key
driver for the creation of jobs in rural communities and revival of land reform
projects, distressed farms owned by individuals as well as irrigation schemes. NARYSEC was launched in November 2010; the DRDLR
has already recruited 7000 young people from all the Provinces except
The 2011 Budget Speech highlighted that the focus of
government would be on reduction of the unemployment rate as well as the
vacancy rate within government. In addition, other initiatives that targeted
rural areas included the government’s plan to spend R2.6 billion
on water services in 2011. The priority areas identified for that initiative
were the rural Provinces of the
2.1.1
Vision,
The vision of the DRDLR is a “vibrant, equitable and
sustainable rural communities and food security for all’ and would require a
coordinated and integrated broad based agrarian transformation. The DRDLR
articulated its mission as that of initiating, facilitating, coordinating,
catalyzing and implementing an integrated rural development programme. A
programme for agrarian transformation that denotes “a rapid and fundamental
change in the relations (systems and patterns of ownership and control) of
land, livestock, cropping and community” has been identified as a strategy of
the DRDLR.
Within the context described above, the DRDLR outlined
the following key priorities within the MTSF:
Improving
productivity of land reform projects through effective implementation of the
Recapitalisation and Development programme;
Expediting the
finalization of land claims;
Rolling out the
CRDP effectively so that livelihoods of rural communities are improved;
Improving corporate
governance and ensuring enhanced service delivery;
Implementing proper
change management and innovation strategies; and
Enhancing the
efficiency of information management systems.
The key priorities were further broken down into the
following eight (8) strategic goals:
Sound corporate
governance and service excellence through compliance with the legal framework
achieved by 2014;
Reformed policy,
legislative and institutional environment by 2014;
Effective land
planning and administration that is biased towards rural areas;
Institutional
arrangements for effective corporate governance and stakeholder participation
by 2014;
Increased access to
and productive use of land by 2014;
Improved access to
affordable and diverse food by 2014;
Improved rural
services to support sustainable livelihoods by 2014; and
Improved access to
sustainable employment and skills development opportunities by 2014.
The Department has planned for the following policy initiatives:
The Green Papers on Rural
Development and on Land Reform and Agrarian Transformation to be gazetted by
May 2011 and approved by Cabinet by May 2012.
The DRDRL further
planned to develop the following:
Policy on land access and ownership by
foreign nationals (2011)
Policy on the proposed Rural Development
Agency (2011)
Policy on the establishment of a Land
Management Commission (2011/12)
Policy on land valuation and the
establishment of a Valuer-General (2011/12)
Policy on Land Tax (2013/2014)
2.2
Overview of the budget allocations
The Department was allocated R8.1 billion in 2011/12
to address the pressing need for rural development and land reform. Table 1
highlights appropriations according to the five programmes.
Table 1: Programme Appropriations from 2010/11 to
2013/14
Source: National Treasury (2011)
- Vote 33 Rural Development and Land Reform.
As illustrated by Table 1, the overall appropriation
of R8.1 billion highlights a slight 6.3% real terms increases when compared to
the R7.2 billion appropriation for 2010/11. The increase was mainly driven by
the real increase of 88.7% allocation for the programme of Land Reform and 23%
for the programme of Rural Development. The
committee welcomed the increase in the two programmes and further noted that such
allocation symbolized the significance of the programmes. However, the budget
allocation for the programme of administration, geo-spatial and cadastral
services and that of restitution showed a decline in both nominal and real
terms.
The Committee expressed grave concerns with regard to
the drastic decline of the budget allocation for the programme of Land
Restitution. In 2010/11, the programme of Restitution was allocated R3,
574, 221 billion and reduced to R2, 497,293 billion for 2011/12, a decline
of 33.33 % in real terms. The concern was further bolstered by the fact
that Restitution is a constitutional imperative in terms of Section 25 of the
Constitution, the nature of rural land claims that were yet to be settled, huge
commitments and pending court orders to the tune of R12 billion, and the cost
of land acquisition under the market-based approaches. Based on the past
experiences, it had become evident the DRDLR was unlikely going to finalize all
the outstanding claims by 2014. Yet restitution was considered a crucial
programme, if properly funded and implemented, that could result in a redress
of skewed patterns of land ownership and assist the majority of the landless
poor and rural people access land on their own to produce food for themselves
and the Nation.
2.3 Overview
of programmes and related appropriations
This section draws on the presentation of the Strategic
Plan, budget allocations and the APP. It highlights some of the crucial responses
of the Committee with regard to the strategic priorities and the 2011/12 implementation
plans.
Programme 1: Administration
The programme provides strategic and logistical support
in the form of executive and corporate services. It also oversees capital works
of the Department and makes a nominal contribution to the public sector
education and training authority. The Department identified the following MTEF priorities:
improving corporate
governance and enhance service delivery;
implementing proper
change management and innovation strategies;
enhancing the
efficiency of information management systems; and
reforming the
policy, legislative and institutional framework.
As illustrated under Table 1, the budget allocation of
R 606,104,000 for the programme decreased significantly by 25% in real terms
between the years 2010/11 to 2011/12, a trend that the Committee had noted over
the past two years. Although the committee welcomed the high attention provided
to corporate services, it remained concerned about the impact that the overall decline
in allocations for administration would have on the crucial issues such as an objective
to provide efficient and effective human resource management practices; for
example, reduction of vacancy rate, performance monitoring and evaluation, and
corporate communication services. The Committee noted the critical elements identified
under this programme, namely risk management, ensuring effective and efficient
financial services that would result reduction on irregular, fruitless and
wastes expenditure and losses through criminal conduct.
Programme 2: Geo-spatial and Cadastral Services
The Geo-spatial and
Cadastral Services provides geospatial, cadastral
surveys, spatial planning information as well as technical services in support
of sustainable land development. Under
this programme, the Department identified improvement of efficiency of
cadastral surveys management, information services and registration of deeds as
a key priority and would be achieved through the reduction of the turnaround
times for the approval of cadastral documents; reduction of the time taken to
register deeds and documents; provision of land registration services and
information to support the government’s development agenda; and the reduction
of spatial inequalities in rural communities.
The committee noted a 23.9% decrease in real terms of budget
allocation for Geo-spatial and Cadastral Services, a decrease from R486.7
million in 2010/11 to R388.1million in 2011/12. The Committee commended the
Department in this programme for its work to ensure that turn around times for
examination of cadastral documents, and registering title deeds. However, a crucial
matter that emerged was the finalization of the surveys and registering of
state land. The DRDLR committed itself towards development of a Comprehensive
Land Register by 2013. The Committee
welcomed commitment to ensure an in-house capacity to deal with cadastral and
deeds registries, especially the in-house training programme facilitated by the
DRDLR.
A key legislation under this programme is the Land Use
Management Bill (LUMB). The Department has planned to achieve consultation and
adoption of the LUMB as well as introduction to Parliament during the 2011/12
financial year.
Programme 3: Rural Development
The purpose of the programme
of Rural Development is to initiate,
facilitate, coordinate and catalyse the implementation of CRDP that leads to
sustainable and vibrant rural communities. The key priorities determined are to:
roll-out the CRDP in all rural municipalities; improve food security in rural
communities by establishing food gardens and improving technologies for food
production; and to create jobs in rural areas through NARYSEC and other infrastructure
development projects. Key components/branches of this programme are: Social,
Technical, Rural Livelihoods and Institutional Facilitation (STRIF) and Rural
Infrastructure Development (RID).
The Committee noted an increase in budget allocation
for the programme of Rural Development, significantly increasing from R342.4
million in 2010/11 to R441.3 million in 2011/12, representing a real increase
of 23%. Such an increase was welcome by the Committee. The Committee noted that
the Department had set itself higher targets for rolling out of the CRDP to 180
wards by 2012 as compared to the 39 wards that were reached in 2010/11. The
Committee welcome the plan to ensure that it contributes to creation of 14000
jobs under the CRDP, including the 5000 jobs for youth under the NARYSEC
programme. The Department aims to create 53 000 jobs in all CRDP by 2014.
Programme 4: Restitution
The programme of restitution deals with settlement of
land restitution claims lodged with the Commission on Restitution of Land
Rights (CRLR) in terms of the provisions of the Restitution of Land Rights Act,
No 22 of 1994 and to provide settlement support. For the MTEF period, the CRLR prioritized
reduction of the backlog of land claims and to settle all outstanding land
claims.
The Committee noted the drastic decline of the budget allocation
for the programme of Restitution, which dropped from R3.5 billion in 2010/11 to
R2.5 billion in 2011/12, representing a 33.3% decrease in real terms. The Committee
further noted that the budget for this programme had been in decline for the
past four years. The Committee remained greatly concerned about the future of
land restitution because of the decrease in allocation for restitution,
especially in view of outstanding R12 billion commitments already made.
Experiences from the previous years, especially the rolling over of R487, 5
million and shifting of R1, 5 million from land reform to restitution suggests that
the programme has been underfunded. As a result of the decline, the APP for the
Restitution showed that the Commission on Restitution of Land Rights will only
implement 360 backlog projects as well as settling 90 of the 650 targeted for
the MTEF period.
Programme 5: Land Reform
The purpose of the programme
of land reform is to provide sustainable
land reform programmes in
The budget for this programme increased from
R2.1billion in 2010/11 to R4.2 billion in 2011/12, reflecting a real increase
of 88.7%. It is expected to escalate over the MTEF period at an average annual
rate of 29.8% in normal terms. The Committee welcome an increase in the
allocation. It could help address the inequities in patterns of land ownership
through proactive acquisition of land for needy rural households and emerging
black commercial farmers. In addition, those farm dwellers and workers could
receive legal representation through the Land Rights Management Facility. Most
importantly is the provision for recapitalization and development of distressed
land reform projects/farms.
3. The
Ingonyama Trust Board
The Ingonyama Trust was established in terms of the
Kwazulu-Natal Ingonyama Trust Act (Act 3 of 1994). It functions as a
landowner-in-law of the
3.1 The mandate of the Ingonyama Trust Board
The vision of the ITB is
to improve the quality of the life of the people living on the
Ingonyama Trust land by ensuring land usage to their benefit of the residents.
The ITB work is guided by the following objectives:
To formulate and implement policy;
To provide an effective land administration
systems;
To create a climate which encourages
development; and
To extend security of tenure in accordance
with both customary and statutory law always subject to the Constitution Act,
1996.
3.2 An
overview of the context within which the Ingonyama Trust Board functions
The core business of the
ITB is land management and it can be regarded as a land management agency. It
strives to ensure that any commercial activity on communal land is
developmental in nature and that it benefits the affected local communities.
The ITB does not sell ownership of land.
The ITB reported to the
Committee that although it had been able to achieve its own targets, it still
had a limited staff capacity and therefore it needed to ensure that strategic
vacancies were filled so that enough capacity existed in order to execute all
the programmes of the ITB. At the time of the briefing, already 90% of posts
that appeared in the organogram of the ITB were filled. Further to the filling
of vacancies, the ITB had also relocated to their own property. A key
development was that the ITB has planned to decentralize its operations by
setting up satellite offices aligned to district municipalities.
The ITB has encountered
numerous challenges. Some of them are invasions and squatting on Trust land,
lack of clarity with regard the impact of the new legislation, the Mineral and
Petroleum Resources Royalty, Act No. 28 of 2008 and the Mineral and Petroleum
Resources Development Act, Act No. 28 of 2008, on the position of the ITB and
the issue of royalties. Although the ITB had addressed the National Treasury on
the matter, the Committee was informed that the matter had not been finalized.
Therefore, the ITB continued to experience challenges with regard to royalties
for affected communities.
3.3 Outline of the planned strategic
interventions
The ITB has planned to
focus on land management, communication and support to traditional communities.
Land management: During the 2011/12
financial year, the ITB would be conducting land audits, developing land
management plan for exclusive land and reconciling the asset register;
Communication: The ITB would develop a
communication strategy and increase its awareness programmes to all its
stakeholders; and
Support to
traditional communities: the intention of the ITB was is to ensure that business opportunities
do address development and social needs of relevant communities.
3.4 Overview
of strategic priorities for the financial year 2011/12
During the 2011/12 financial
year, the ITB has planned to focus on four priority areas; namely, land
management, projects, partnerships in development projects, and enhancement of
capacity. The ITB summed up its priority areas within the following two
strategic goals:
3.4.1 Effective and efficient management of the
Trust land for the material benefit and welfare of communities living thereon;
3.4.2 Improvement of organizational capacity and
proficiency.
Further to the strategic
goals, the ITB formulated the following 11 strategic objectives:
To administer, manage and control Ingonyama Trust land;
To ensure the optimum usage of land for the benefit of communities and
other occupiers;
To ensure the optimum usage of land through development of appropriate
land management plans;
To enhance and improve the ITB’s proficiency through outreach programs;
To identify potential business and development
opportunities within communities on ITB land
To review and maintain policies;
To develop a comprehensive human resources and communication strategy;
To support communities for their material benefit and welfare through
disbursement of funds that accrues to the Trust;
To review of the ITB legislation; and
To enhance the ITB business.
3.5 Budget allocation
The total budget allocation for the ITB is R76, 207, 847.00
consisting of R6, 842, 860.00 from the voted funds and R69, 364, 987.00 from
the ITB own fund income. The transfer
payment from the Department of Rural Development and Land Reform makes 8.97% of the total income budget whereas the remainder comprises budget
income was earned from leases, royalties and investments. According to the
disbursement policy, 90% of the income earned from the trading activities
should be utilized for the benefit of the communities and 10% could be retained
for Board expenses.
4.
Observations by the Portfolio Committee on Rural
Development and Land Reform
4.1 Having
considered the strategic plan, APP and Budget allocation for the DRDLR, the
Portfolio Committee on Rural Development and Land Reform made the following
observations:
4.1.1 It commended the DRDLR for some strategic thinking around
addressing the challenges faced by the DRDLR, including the Commission on
Restitution of Land Rights, with regard to the backlog in land restitution, increasing
productivity of land reform projects through the Recapitalization and Redevelopment
Programme (RADP).
4.1.2 The APP was considered as a useful tool that would help the Committee
to conduct its functions relating to monitoring implementation of the Strategic
Plan and the overall programme for oversight. However, the Committee expressed
concerns with regard to some of the strategic objectives, targets and
performance indicators that were considered to be very broad. The DRDLR might
experience challenges relating to measuring its own performance.
4.1.3 The committee acknowledged the constitutional imperative for
addressing the historical land dispossession and
4.1.4 The view of the Committee was that CRDP had a potential to reach
the majority of the residents of the rural and remote areas of
4.1.5 The committee welcomed the rolling out of CRDP throughout all
the rural wards in
4.1.6
In view of the
current weather patterns - the floods and storms - that ravaged some of the
rural areas of
4.1.7
Integrated and
comprehensive approach to rural development enhanced by coordination with other
departments such as Department of Higher Education, Defence, Social
Development, Agriculture Forestry and Fisheries was welcome by the Committee.
4.1.8
The committee commended
the Department for shifting focus towards strengthening its corporate
governance arm. It is believed that such a shift would enable the DRDLR to deal
with existing governance challenges. One of the crucial issues was the
reduction of the vacancy rate to 8%.
4.2 Having
considered the strategic plan and budget allocation of the ITB, the Portfolio
Committee on Rural Development and Land Reform made the following observations:
4.2.1 The Committee
noted a trend in deviating from the original mandate of the ITB, acting as a
land management agency on behalf of the people/communities living on the Trust
land. In the opinion of the Committee, the ITB had become a development agency
that began to forge business deals with investors for the material benefit of
communities. It has become a catalyst for development in the areas of its
jurisdiction.
4.2.2 The ITB planned
to review the legislation that it derives its mandate from. According to the
Committee, the review would raise strategic questions about the existence of
the ITB and its role, whether it was performing the tasks it was meant for or
it had become something else than that which was originally envisaged in terms
of the existing legislation.
4.2.3 Wealth or
funds have been accumulated in the Trust Fund. However, over the last two
years, the ITB had reported in Parliament that there was a slow take up of
funds by relevant communities.
4.2.4 The ITB, an
entity in terms of Schedule 3 of the Public Finance Management Act, reported
directly to the Minister of Rural Development and Land Reform and to Parliament.
The committee noted that although the DRDLR had some relationship with the ITB,
it appeared that it had very little to do with the ITB. The Committee’s view
was that such relationship could be improved.
4.2.5 The Committee
noted some discrepancies regarding the total number of properties owned by the
ITB and number of properties according to the records of the Deeds office.
4.2.6 The plan of
the ITB to decentralize and create some district satellite offices that mirrored
the District Municipalities in
5. Recommendations
Having considered the Strategic Plan of the Department
of Rural Development and Land Reform 2011 -2014, budget allocation for the
2011/12 financial year as well as the accompanying Annual Performance Plan; the
Portfolio Committee on Rural Development and Land Reform recommends that -
5.1
The DRDLR together
with the Department of National Treasury reconsider the structure of funding
land reform programmes, especially the restitution funding structure that was
based on the assumption that the CRLR would have settled all land claims by
2011. The reconsideration of funding might assist the DRDLR to alleviate the
challenges of backlogs in payments for land acquisition and fast track payments
of all commitments made by the CRLR to landowners for settlement of land claims.
5.2
The DRDLR must fill
all the existing vacancies in the Department within the next two financial years
from the date of adoption of this report. Filling of vacancies would ensure
that the DRDRL establish required capacity to improve service delivery; for
example, risk management and performance monitoring and evaluation.
5.3
The Committee has
established a need for the Department to table both strategic plan and the
Annual Performance Plan and has noted that for this financial year it had to
request the APP. Future presentation of strategic plans should be accompanied
by an Annual Performance Plan so that the Portfolio Committee would have holistic
view of plans, set targets and how the DRDLR would measure its own performance.
5.4
The survey and
registration of state land should be completed within the next two financial
years from the date of adoption of this report. In addition, the Committee
recommends that the Department should establish a comprehensive and reliable
database of all land parcels registered in the name of the Government of South
Africa.
5.5
The DRDLR should submit
a report on the amount of jobs to be created with the R8.1 billion allocated
under the rural development programme. Furthermore, the Department should, on a
quarterly basis, advice the Portfolio Committee on progress made regarding
overall performance and spending patterns with regard to job creation and other
programmes.
5.6
The DRDLR should streamline
the processes of NARYSEC in KwaZulu-Natal in a manner that aligns it to the
national processes of the programme and should further advice the Committee on
plan of action and progress made within three months of adoption of this report.
5.7
Lessons learned from
the implementation of previous rural development interventions such as the
Integrated Sustainable Rural Development Programme as well as the War on
Poverty be integrated should be considered when the Department rolls out CRDP
across all rural wards. The Department should further submit a report in this
regard within two months of adoption of this report.
5.8
The ITB failed to
submit the approved APP to the Committee. However, it is important that the ITB
should function within the ambit of the Kwazulu-Natal
Ingonyama Trust Act (Act 3 of 1994) from which it derives its mandate rather
than expanding its mandate beyond land administration. There is a need for
critical discussion between the Ministry of Rural Development and Land Reform
and the DRDLR as well as the ITB on that aspect. The Committee recommends that
the Department convene this discussion and provide report to the Committee
within three months of adoption of this report.
The Portfolio Committee on Rural Development and Land
Reform supports the Budget Vote 32: Rural Development and Land Reform.
Report to be considered.