Department of Rural Development and Land Reform on the Recapitalisation & Development Programme (RADP Policy): briefing

NCOP Land Reform, Environment, Mineral Resources and Energy

11 April 2011
Chairperson: Mr G Mokgoro (Northern Cape, ANC) (Acting)
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Meeting Summary

The Department of Rural Development and Land Reform made a presentation on the Recapitalisation and Development Programme.  There were two elements, namely financial assistance with capitalisation projects, and the development of infrastructure and the skills of emerging farmers.  Financial support was given over a five year cycle.  Intervention strategies included various types of strategic partnerships and mentorship. 

Members requested more details on the projects and their status.  Many farms were standing idle or were totally abandoned.  There was concern over how certain irrigation projects had fallen into disuse to the detriment of agriculture in the affected areas.

The Director-General was criticised for his lengthy absence.  The work of the Department had been affected.
He was cautioned that Parliament could not serve the nation if it was given incorrect information. The Acting Chairperson asked that the answers given to Members be confirmed in writing

The Department provided written answers to questions put to it at a previous meeting. The Director-General admitted that some of the information provided in earlier reports was inaccurate. 

Due to a lack of quorum, the Committee could not adopt the report at this meeting.

Meeting report

The Acting Chairperson apologised for the absence of the normal Chairperson, Ms A Qikani (Eastern Cape, ANC).  He asked who was ultimately responsible for service delivery.

Mr Mduduzi Shabane, Director-General (DG), Department of Rural Development & Land Reform (DRDLR) said that it came down to the Departments, and the respective Departments  would have to report to Parliament.

The Acting Chairperson said that Mr Shabane had been away from the DRDLR for some time.  However, it was unacceptable that the report should be delivered to Members at such short notice.  He nevertheless invited him to present the reports.

Department of Rural Development & Land Reform briefing
Mr Shabane gave an outline of the report to be presented.

The Acting Chairperson interrupted.  The content listed was not what the Committee was looking for.  It needed an executive summary.  It seemed that the report to the Committee would be no more than a recitation.  The Committee needed a comprehensive summary.

Mr Shabane countered that he was only pointing out the headings.  He would present a summary. 

Mr Vusi Mahlangu, Acting Deputy Director-General: Land Reform, DRDLR, said that 25% of the DRDLR budget was for the purchase of land for restitution.  The objectives of the Recapitalisation and Development Programme (RADP) were to increase production, guarantee food security, graduate emerging farmers to commercial farmers, create job opportunities in the sector and to establish rural development monitors.  The RADP covered past and future transactions.  Stringent conditions would avoid the creation of a culture of entitlement.  Not all farms would qualify.  There would be a selection process based on a business plan.

Mr Mahlangu said that there were two function of the RADP.  The first was the capitalisation element.  This was funded in 25% shares by the Proactive Land Acquisition Scheme (PLAS), household grants and the Restitution and Development Grant.  Other sources were the Restitution Settlement Grant and the Commonage Infrastructure Grant.  Strategic partners and other stakeholders were encouraged to complement the grants.  A business plan was in place that would help to identify strategic partners.  The other function was development.  There were three aspects to this, namely mentoring, capacity building and infrastructure development.  Measures were put in place to measure profitability.  Good governance would ensure that powers were balanced amongst the partners.  The Department of Agriculture, Forestry and Fisheries would be a key player.  Different farms would require different interventions.

Mr Mahlangu said that RADP interventions included strategic partnerships and mentorship.  Strategic partnerships could be with individuals or companies.  Risks such as capital investment should be shared.  The partner might make corporate assets available or merely provide goodwill.  The risk profile should be assessed diligently.  Types of strategic partnerships were co-management, share equity scheme farming, as happened mainly in the Western Cape (WC), and contract farming.

Mr Mahlangu presented the RADP funding model contemplated by the DRDLR.  Factors considered were risk sharing, equity, corporate governance, legal and audit compliance, and funding.  Funding would be over a five year cycle.  In the first year, the DRDLR would fully finance the project according to its business plan.  The contribution would decrease by 20 percentage points annually so that funding would cease after five years.  Strategic partnerships could be continued or not.  The DRDLR would still provide support in terms of monitoring, auditing, compliance and evaluation.  The model was necessary to assist emerging farmers.  They needed to gain proper access to markets in order to be viable.

Mr Mahlangu said that there were three Acts of Parliament which governed the RADP.  These were the Land Reform: Provision of Land and Acquisition Act 1993, the Restitution of Land Rights Act 1994 and the Extension of Security of Tenure Act 1997.

Mr Mahlangu outlined the flow of the process.  The first step was the identification of a distressed project.  The DRDLR would then engage with the beneficiaries.  Possible interventions would then be identified with beneficiaries.  The next step was the recruitment and appointment of partners.  An intervention or business plan would be the next step.  The business plan would then be presented and endorsed.  After this the contract would be signed.  A legal entity would then be created to manage funds.  Accountability was an important issue. After this grants would be released.  The proposed plan would then be implemented, which would be monitored and evaluated.

Mr Mahlangu said that the DRDLR had submitted a list of the projects to Parliament.  He provided Members with compact discs which contained all the information required.

The Chairperson was satisfied with the information provided. He asked how often the DRDLR conducted these checks.

Mr M Makhubela (Limpopo, COPE), asked how many projects had reached stage six.  He asked what the DRDLR did about distressed projects when identified.  He asked if it was just a matter of having meetings or if the Department followed up on the minutes of these meetings.

The Acting Chairperson asked if the document presented dealt with just one project.  He asked in what areas the projects were to be found.

Mr Mahlangu said that the detailed information was on the disc.  The project illustrated in the presentation was on a farm called Cecilia in the Free State.  Eleven beneficiaries were benefiting from this development.  There was a monitoring team who were active throughout the country.  There were about 1 400 projects.  These were monitored on a bi-weekly basis.  There were officials to deal with problems.  It was important to deal with issues of resolution.  Resolutions were needed to unlock funds.  New farmers needed to be baby-sat for some years before they could be financially independent.  The first step was to identify a distressed farm.  The intervention was different in each case.  Some could be done from the Department's budget, but in other cases strategic funding was needed.  Sugar cane was a prime example as there had to be agreement with the millers. 

Mr Makhubela posed the question of a farmer who started off under a project but fell by the way.

Mr Shabane said that the DRDLR worked on a five year basis.  In some cases the state held the title deed.  If the farmer dropped out, the state could lease the land to another farmer.  In some cases farmers refused to leave the land.

Mr D Worth (Free State, DA) had written to the Minister asking how many farms had been abandoned.  He believed there were 30 abandoned farms in the Free State alone and another 170 that were occupied but no farming was taking place.  This number covered a wide variety of farming enterprises.  He asked how long the DRDLR anticipated taking to deal with all the distressed farms.

Mr Shabane said that the RADP came from the realisation that many land recapitalisation projects were failing.  Various studies had been done.  In 2008 there was an assessment of all state-owned farms.  They were categorised as green (working, with some state support), yellow (needing some assistance) or red (project collapsed, farm abandoned).  Over 3 000 projects had been started and were at different stages.  The DRDLR had to work within its baseline capital.  The number was limited to 1 407 due to financial constraints.  411 projects had been assisted countrywide while the DRDLR had to focus on the balance of the 1 407 projects.  In many cases former farm workers found that the management of the farm was harder work than they had thought.  The DRDLR did have a database of where the funds were allocated.  The first step was identifying a project needing help.

The Acting Chairperson asked if the DRDLR would put more money into a struggling project.  If this happened, he wanted to know what criteria were used to fund a struggling project.  Strategic partners were important.  He asked how they were selected and what the criteria were for determining a strategic partner to be linked to a particular project.  He asked what monitoring measures were in place.

Mr Shabane said that the DRDLR did have a database of where the funds were allocated.  The first step was identifying a project needing help.  A business plan would be developed bearing in mind the situation on each particular farm.  Due diligence would be exercised in determining how much it would cost to get each farm viable.  There were three types of strategic partners.  The first type was mentors, who were current farmers prepared to lend a helping hand.  The second type was the co-operatives which helped mainly white farmers.  These organisations were starting to help emerging black farmers.  The third type was the commodity companies.  A particular example was the sugar mills which needed successful farms in their areas to remain viable.  They guaranteed to buy the crops from the farms.  He hoped to see this type of partnership spread.  The DRDLR had to work within the constraints of the Public Finance Management Act (PFMA).  Experts were needed to provide support to farmers.

Mr Makhubela asked what would happen if a person came with a business plan involving a particular crop.  If this was the wrong choice, he asked if it was possible for the plan to be amended.

Mr Shabane said this was possible.  Many farmers were diversifying, planting crops matched to the type of land available.

The Acting Chairperson asked if Mr Shabane was noting the questions.  There was a suspicion that the DRDLR was not giving the true story.  He asked that the answers given to Members be confirmed in writing.  This would make things easier for the DRDLR. 

The Acting Chairperson asked for a summary of the written answers provided to previous questions.

Mr Shabane said that the DRDLR did not fund all Comprehensive Rural Development Programme (CRDP) projects.  Other Departments did help.  Other Departments would provide the services within their fields of expertise such as roads, housing and communications infrastructure. 

Mr Shabane said that it was true that there had been no projects in Gauteng at the time.  There were rural areas in that province, and some projects had since been identified in that province.  During the 2011-12 financial year (FY), some 1 800 household food gardens would be rolled out.  In areas where the CRDP projects had been piloted there had been a positive impact on the communities.  Basis needs were being addressed by the basic phase of the project.  The second stage would provide for further development such as job creation.

Mr Shabane said that the DRDLR did collaborate with provincial and local government.  Co-ordinating the different levels of government had been a challenge for the Department.  The Premier of a province became the champion at provincial level and likewise the District Mayor.  There were regular meetings between the national and provincial departments together with the local authority.  The reports produced went to Cabinet to report on progress.

Mr Shabane said that the next set of questions involved the National Rural Youth Service Corps (NARYSEC) project.  One of the payment challenges was the reluctance of some participants to open bank accounts due to distrust of banking institutions and the reluctance to pay bank charges. Banks closed accounts if there was a zero balance, leading to delays in making payments.  The teething problems had been sorted out.  The NARYSEC recruits were being taught various skills.  This made it possible for them to leave the NARYSEC ranks and enter the job market.  On the question of the lack of presence in KwaZulu-Natal (KZN), the province had been running its own youth programme.  There was a difference in the two programmes.  One of these was a higher stipend paid in KZN.  A roll-out of the NARYSEC in KZN was being planned.  The training was only presented in the Western Cape.  The only four Further Education and Training Colleges (FETs) available at the time were in the Western Cape.  FETs capable of providing training were being identified in other parts of the country.

Mr Shabane said that the DRDLR had not yet completed the land survey.  The office of the Surveyor-General had now identified all packets of land that were available for incorporation into the programme.  A desk-top analysis had been completed. 

Mr Shabane said that there had been under-expenditure of R495 million.  National Treasury had approved a roll-over.  This money had been set aside for court action.  The shifting of funds from under-spending to over-spending provinces was allowed by the PFMA.

Mr Shabane said that the accuracy of information on outstanding land claims was an issue.  The Land Claims Commission was verifying claims.  The Minister had instructed the DRDLR to set up a detailed project plan.  This would reach every province.  All claims would be identified.  All documents would be captured by scanning.  All the information would be captured electronically and the dependence on paper records would fall away.  The scope of this project would go beyond land claims.  The DRDLR wanted to report to Parliament accurately.  The project would cost R26 million.

The Acting Chairperson asked about the relations between the DRDLR and the lower tiers of Government.  No mention was being made of provincial and local government on land issues.  The Department of Defence (DoD) was the biggest landlord.  A number of people had been relocated to make land available to the DoD.  He asked if there had been an audit on Defence land.

Mr Makhubela felt that the written questions had been answered clearly.  In some cases plans should have been coupled to target dates. The lack of dates reduced the credibility of the answers.

Ms N Magadla (KZN, ANC) said that there had been irrigation schemes in some areas.  Regions were dying despite the presence of young people.  She asked why unemployed youth could not be trained to work on the solution to the problems.

Mr Worth had noticed the same point on an oversight visit.  The land was desolate in some areas.  Buildings were run down.  However, there was a viable irrigation scheme in one of these areas.  He had seen aerial photographs in which the land was lush and productive.  He asked why this situation could not be restored.  It seemed that different Departments were passing the buck.

The Acting Chairperson agreed with Mr Worth.  Despite the Bantustan system of former years the rural areas had been prosperous.  Delivery had to be seen now and not just promised.  People wanted to see change and to see a difference being made in their lives. The Department's report indicated that very little was being done.  The report should be on what had been done, and not on plans that might never reach fulfilment.

Ms Magadla asked if the DoD had done an audit on its property.

Mr Shabane thanked the Members for their questions.  There was an implementation forum on which all three spheres of government were represented.  The Outcomes approach of government had only been introduced the previous year.  He expected an improvement in the situation.  Some DoD land was used for existing bases.  In some areas army bases were disused.  Some bases were the subject of land claims.  A team comprising the DRDLR and Department of Public Works (DPW), another major land owner.  Much military land was registered to the DPW.  This audit was ongoing.  He agreed that specific responses were needed with time lines.  The NARYSEC plan was to recruit four young people in each rural ward.  The intake was ongoing and the numbers would increase.  These people would be used to revitalise irrigation schemes.

Mr Mahlangu said that recapitalisation programmes cut across irrigation schemes.  There was great potential in the irrigation schemes.  The DRDLR had visited seven in the last FY.  There were problems in these communities.  Many service providers wanted to serve the communities.  In Mpumalanga there were two schemes.  Most of the farmers who would be serviced by the scheme were heavily in debt to the Land Bank.  Many farmers were forced to produce sugar cane although the land was not suitable. In another area the co-operative owned the water rights.  There was also an issue of poor communication.

The Acting Chairperson had also visited Taung. The Vaalharts Irrigation Scheme consisted of 500 white farmers, who were the beneficiaries of one of the biggest such schemes.  This was not an acceptable situation.  The Committee had made a strong recommendation that the situation had to be addressed.  Several issues could be touched on if people could be taught to use the land correctly and be provided with water.  The area had been productive.  Houses had been built on some of the most fertile land.  The Spitskop Dam was in the same area, but was on the other side of the Vaalharts River.  It was built on the side of the community.  It was a big dam but the community could not use the water.  The dam was solely to supply the farmers on the other side of the river.  There should be negotiations on the issue.  Smitdrift was another area.  This was the first community to claim land.  It was an issue of inter-governmental relations.  The Department of Water Affairs must come to the party.  Water was essential to the development of the rural areas.

Ms Magadla asked about the Malengi scheme in KZN.

Mr Shabane said that the DRDLR had come to realise that its information on the restitution process was inaccurate.  There was a project under way already to go to the DRDLR offices throughout the country to verify the number of claims lodged.  The figures in the report were not true.

The Acting Chairperson said that the DRDLR must not bring “thumb suck” answers to the Committee.  Government had a system of having Departments headed by DGs.  The Committee would pardon the DG for providing incorrect information, but if it happened again the DRDLR would be in trouble.  Parliament served the nation.  It would not tolerate being given unverified information.  The regular Chairperson might have been harsher in criticising the DRDLR.  The DG's six week absence had delayed the presentation of the report.  Although Ms Qikani was absent from this meeting, the Committee was still functioning.  Government machinery must still function despite the absence of any one official.  Mr Shabane's prolonged absence had affected the work of Government.  Lack of delivery put a negative light on service delivery.  The impeding factor was that there was not a quorum.  Members of the NCOP were stretched to the limit.  They were few in numbers but had many tasks.

The Acting Chairperson said that the Committee could not adopt the report due to the lack of quorum.

The meeting was adjourned.


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