Department of Rural Development and Land Reform on its Annual Performance Plan (APP): briefing

Standing Committee on Appropriations

07 June 2011
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The Department of Rural Development and Land Reform presented its Annual Performance Plan to the Committee after resolution of a misunderstanding that it was there to brief the Committee on its contribution to the Appropriations Bill. The Chairperson insisted that the Department needed to present the Annual Performance Plan as this was what the Committee had requested clearly in the invitation sent to the Department. The meeting took a 10 minute break while the Department organised itself with the right presentation.

The Department outlined its Strategic Goals, its sub programmes, budget, monitoring and evaluation framework.

Members found the format of the document hard to follow as the narrative and budget were in different places. One Member commented that the Department might find it hard to monitor implementation due to such a complex format and having a structure that was hard to follow.

Members found the issue of 346 court cases against the Department disturbing given that some of the claims were as high as R800 million for 13 000 hectares of land. The Members found this fact shocking as they claimed this was wholesale theft and that some of the pricing indicated purely money making schemes that needed to stop.

The Department explained that it was in a very vulnerable situation as a few claims could easily wipe out the entire Department’s budget. It also acknowledged that the land market in South Africa was completely unregulated.

Members also urged the Department to provide the Committee with outstanding request for the quantum of the land claims which had been outstanding for about a year. The Committee also expressed concerns about training given to farmers, saying that 99% of the farms given to people were not productive due to lack of skills and know-how to farm. This was threatening the food security of the country.

Meeting report

Chairperson’s opening remarks
The Chairperson welcomed the Members to the meeting. He said that there seemed to be a misunderstanding in the Department’s presentation as the Committee wanted to hear about the Annual Performance Plan (APP), and not about the Department’s contribution to the Appropriation’s Bill as reflected on the screens. He requested the Department to prepare the Annual Performance Plan to be presented to the Committee while the meeting took a 10 minute break.

Department of Rural Development and Land Reform: Presentation.
Mr Mduduzi Shabane, Director-General (DG), the Department of Rural Development and Land Reform delivered the Department’s presentation. He informed the meeting that the Department held the coordinating role for Outcome 7, one of the 12 that Government has adopted. There were five sub programmes : Administration, Geospatial and Cadastral Services, Rural Development, Restitution, and Land Reform. The Department’s key priorities included: rolling out the Comprehensive Rural Development Programme (CRDP), improving productivity in land reform projects through effective implementation of the recapitalization and development programme, expediting the finalization of land claims, improving corporate governance and ensuring enhanced service delivery, implementing proper change management and innovation strategies, and enhancing efficiency of information management systems.

The Department had eight Strategic Goals: corporate governance excellence; a reformed policy, legislative and institutional environment by 2014, effective land planning and administration that was 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 service to support sustainable livelihoods by 2014; and improved access to sustainable employment and skills development opportunities by 2014. Each of the strategic goals had strategic objectives.

The Department’s APP broke down the strategic goals into objectives and quarterly targets which the Department aimed to achieve 75% by the end of the financial year.

The Chairperson interrupted the presentation and asked the DG why the Department aimed to achieve only 75%, and not 100%.

The DG asked Ms Ntsiki Mashyia, Deputy Director-General (DDG): Corporate Services, to explain to the Committee what the targets meant.

Ms Mashyia explained that it was not realistic to state that the Department would reach 100% at end of the financial year and therefore 75% was more realistic. She took the meeting through the rest of the objectives and sub programmes.

Mr Protas Phili, Chief Financial Officer (CFO) then guided the meeting through the budget. For the year 2011/12 the Administration sub programme estimated expenditure would be R606 104 million; Geospatial and Cadastral Services R388 104million, Rural Development R441 276million, Restitution R2 497 293billion, and Land Reform R4 191 469billion. The total estimated expenditure came to R
8,124,246billion for the year 2011/12.

Discussion
Mr M Swart(DA) referred to page 45 of the document and noted that the Department had listed  387 farms  to be capitalized but that only 40 were being capacitated. He wanted to know what happened to the rest as the one of the biggest problems facing the country was that people were being put on farms and they could not farm. He also wanted to follow up on the Committee’s request the previous year for the Department to let the members know what the quantum was of the claims that were being brought against the department.

Mr G Snell (ANC) said that the APP discussed and the one presented the day before were different. He expressed frustration at the format of the document and how the budget and the narratives were not following each other closely.

Mr J Gelderblom (ANC) asked for clarification on the budget for Strategic goals 5,7 and 8 on page 40.

Ms R Mashigo (ANC) asked if, with reference to Programme 1, Point 1.6.4, just one was registered. She also asked if the offices referred to in the budget were existing ones or new ones.

The Chairperson asked the Department to clarify and specify its roles and explain how it was different from the Department of Agriculture, Forestry’s and Fisheries (DAFF) which was also carrying out similar activities.  The Committee had also met with the Public Works Department the day before and that Department was also acquiring land.

The Chairperson expressed his worries again about the Monitoring & Evaluation (M&E) strategy and the statement that the Department was aiming to achieve 75%, and said that he did not understand it fully. He was also worried about the constant referral of the Department to developing things as it was now the end of the first quarter of the year and things were still being developed.

The Chairperson said further that the Department was expected to complete its planning early enough so that by the time the new financial year rolled in, everyone in the Department understood what their role was and what they needed to do. He advised the Department that it really needed to curb the issue of underspending due to poor planning.

The Chairperson asked the DG to explain the core responsibilities of the Department as its name was Rural Development and Land Reform. Knowing the core responsibilities would affect the budget as the most important aspects could be under budgeted for.

Ms Mashigo was clearly frustrated as she told the Department that its explanations for the expenditure were not acceptable.

Mr Shabane said that he and his colleagues would try to answer the queries from the Committee. He explained that the Department had struggled with planning and had asked the National Treasury to assist it in the planning exercises. The Department has also gone through change by having Rural Development added to its portfolio. Then the Government introduced the outcome based approach and the Department had to find a way to balance all the new requirements and responsibilities and dovetail them. The Department had to deal with such issues using the old budget from the old Department of Land Affairs. The Department was able to table the plan and budget on time with the help of Treasury.

The Strategies being developed referred to the new Department as things were still happening based on the activities of the old Department.

The Department had a good relationship with DAFF and the two Departments were working together at the Ministerial as well as the DG and operational levels. There were interdepartmental teams who worked together on matters involving both Departments.

On the issue of compliance with court orders, the Department had 346 court cases against it and the Department had set out to try a new approach – to be proactive about dealing with restitution cases and not wait for the people to bring the Department to court. The Department had put together a team who would analyze the situation to see which cases it did not have a chance of winning and to start paying or making deals and negotiating with people.

The Department was not able to answer questions of quantum at this stage as it was related to the court orders

Mr V Mahlangu, Acting DDG: Land Reform, explained that Strategic Goal 5 on page 14 was a summary of what was covered on page 45. The reason why only 40 farmers were trained was that there were criteria for participating and graduating and the Department selected those who would be most successful in completing the programme.

Mr Phili explained that in March the Department was requested to provide the reasons why it was behind in its spending and an explanation was given. At that time, the Department was sitting at 67% completion instead of 75%, and an application was lodged with Treasury for a rollover of half a billion.  As a result, it pushed down expenditure. The Department received the money late and only had 3-4 months to spend that money. There were court orders awaiting payment and payment was approved at a very late stage. The offices being questioned were not new but existing offices.

In terms of the money allocation for Strategic Goals 5, 7, 8, even though there were five programmes, one programme would be responsible for different strategic goals. Strategic Goal 5 was land reform, Goal 7 was rural development, and Goal 8 was restitution. The money allocated in these programmes was presented in page 18 of the document.

Mr Swart expressed dissatisfaction that the Department still could not come up with the quantum as this was a long standing query from the Committee including the break down of such cases to say which ones were outstanding and which ones needed to be paid. Also, if the Department was training farmers, what was DAFF doing? Studies had found that 99% of farms transferred were not productive and this was threatening food security in the country.

Mr Snell remarked that in order to manage the programmes, one needed to understand the document in the format it was given. He was still struggling to link the budget to the relevant items. He asked the DG if an exercise had been done by the Department to determine whether some of what was in the plan was going to be achieved and which areas the Department needed to find funding for.

The DG apologized to the Committee about the nature and format of the document. He said that the Department needed to prioritise the backlog otherwise it would become a challenge. He urged the Committee to understand that, in the past, settling a claim did not mean finalization but only went to paying 50% of the claim. Hence the backlog of claims did not refer to new ones but had been in the Department’s books for up to three years.

The DG said that the Department was not comfortable with the budget. He knew that there were huge claims. One of the claims involved about R800 million for about 13 000ha of productive land. Amongst these court cases, it could be that two claims could wipe out the Department’s entire budget.

Mr Swart said requested the Department to please provide the Committee, by Monday, the quantum of the 346 cases. He still insisted that land should not be given away without training farmers.

Mr Snell said that he sympathized with the Department; some of the claims were really wholesale theft.  13000ha was not worth R800 million. He asked why the court was siding with the thieves as it was not viable. The Department needed to deal with the farmers and the officials who were making such deals.

Mr Gelderblom told of some cases in the same areas where claims went up to R7 000 per ha; when they came to auction, they went for only R1000/ha. The Government really needed to improve its negotiating tactics and deal with these matters pro-actively. 

Ms Mashigo foresaw violence and urged the Department to use the money for the benefit of the people.

Mr Swart said that farming was not a greatly profitable investment because production cost was very high at the moment.

The DG thanked the Members for the feedback and said that he appreciated that the Committee realized the complexity of situation as the land market in South Africa was totally unregulated. Sometimes the Department had to compete with someone paying in Euros or United States (US) dollars by buying farms on the internet from Dubai. The Government was currently looking at appointing its own valuator in order to curb the problem.

The Chairperson said that the something needed to be done with pricing issue and how the Department would go about mitigating it. He still did not understand the core duties of the Department as it was not clearly separated from the functions of DAFF for example to avoid duplication and budgeting and cost implications. The issues of land restitution and land reform were sometimes confusing but hopefully the Department would come up with a strategy on how to deal with this.

The Chairperson thanked everyone for their contributions to the discussion and thanked the Department for its presentation.

The meeting was adjourned.

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