The Department on Rural Development and Land Reform briefed the Committee on the recently concluded study on the Land Acquisition and Willing Buyer Willing Seller Principle. The research was conducted in 2009/10, it reflected on past experiences since 1994. The research paper tried to incorporate the solutions that emanated from the 2005 land summit. There were several resolutions taken at the summit, they were: the willing buyer-willing seller approach was a challenge and had to be rejected, the second as that the instrument for appropriation should be actively used, the compensation formula had to be reviewed and applied in a constitutionally compliant manner, the state had to intervene in the land market, land reform had to be decentralised, there had to be a people centred approach, equity had to be addressed through land reform, the cut off date and starting point for land restitution had to be revised and reconsidered. The research paper has been overtaken by the Green Paper on land reform that was released by the ministry. The Green Paper was divided into six work streams, they were the Land Management Commission ; the Office of the Valuer General; the Land Rights Management Board ; the three tier land tenure system; communal land tenure and legislation, restitution and communal property institutions. The Land Management Commission addressed the issue of improving of the overall governance of the land reform programme. The Office of the Valuer General sought tom address issues related to the willing buyer-willing seller approach; it sought to ensure that compensation was fair. The resolution taken at the summit that land reform had to be decentralised was dealt with by the Land Rights Management Board. The Land Rights Management Board had set up a committee that would also deal with this matter at local level. The Land Rights Management Board would also deal with issues relating to communal tenants on commercial farms. The three tenure system would address the willing buyer-willing seller approach. Some of the other issues were the one farmer on farm objective, land ceilings were being considered, land taxes, right to first refusal as well as expropriations. Foreign land ownership was another issue that was addressed in the report. Other matters that were outstanding such as the proactive involvement of the state programme were addressed immediately after the 2005 summit.
The Committee raised concerns regarding the research methodology behind the study and likened it to a desktop exercise. It was further said that this was not the type of research that should be done on such a critical issue as land reform and that the process around the Green Paper would address the inadequacies in the current research. The Committee touched on the failed transaction of the Mike Hutton chicken farm and said that it was another example where viable going concerns were purchased and ended up in a dilapidated state with the intended beneficiaries never benefitting because promises were made by the Department of Rural Development and Land Reform. A Member asked whether beneficiaries who were allocated farms were also taxed like white farmers. The Committee pointed out that The Expropriation Act was not a tool that was used sufficiently by government it was not an arbitrary piece of legislation and it could be used to reign in artificial land price increases. It further stated that where the Department could not arrive at a mutual evaluation then the Expropriation Act should be used. A Member was shocked that only a quarter of the 30% land redistribution target has been achieved, he further stated that it was also shocking to hear that the target was only going to be achieved after 54 years. Another Member of the Committee cautioned that even though the issue of land reform was a political one, too much politics on the matter should be avoided. There was agreement in the Committee that the willing-buyer willing-seller approach was not working. The Committee suggested that the resolutions of the 2005 summit have not been linked to the report and that the bigger issue was that land should be a socio economic right; the Constitution had to be enriched in order to facilitate for the security of land for beneficiaries.
The Committee briefly discussed its report on the joint oversight visits to the
Committee Report on joint oversight visits to the
The Chairperson tabled the report for consideration. The focus for the oversight was the Comprehensive rural Development Programme (CRDP), land reform programmes of redistribution, restitution and tenure reform.
The Committee made grammatical changes to the document.
Ms A Steyn (DA) said that nowhere in the summary of observations had it been mentioned that the Committee had asked questions on state land and the use thereof. When the Committee was in
The Chairperson suggested that the Member should draft what she wanted to be included in the report and it would be slotted in.
Ms P Ngwenya-Mabila (ANC) added that the Committee had made another observation whereby a school had been built but not occupied, there were houses built and vandalised before they could be allocated. Community members had also complained that there was not enough water where the houses had been built.
The Chairperson referred to page 8 and instructed the Committee Secretary to re-write the paragraph so that it began with the ‘need for improvement’ first as this was the Committees observation and then it should follow with the part that stated that ‘there had to be support to land reform projects’.
Ms Steyn added that under observations it should be added that the Committee was concerned about the amount of money spent by the Department of Rural Development and Land Reform (DRDLR) for the replanting of certain sections of the Proactive Land Acquisition Strategy (PLAS) programme.
The Chairperson suggested that the report should be redrafted and include Member’s inputs. In the interim it would be approved and re-circulated after the amendments had been made for final approval. He then handed over to the Department for the presentation to be made.
Presentation: on the findings of a study Regarding a Review on Land Acquisition and Willing Buyer Willing Seller Principle
Mr Mdu Shabane, Director-General, DRDLR, said that the Department was going to share its findings on a study that it had conducted which highlighted key issues that were a stumbling block for land reform in South Africa (SA). The findings also touched on the willing-buyer willing-seller approach that had been adopted by government. A minimum target of acquiring 30% of white owned agricultural land was set by government after the 1994 democratic elections, the target date was 1999. The 30% target was part of the Reconstruction and Development Programme (RDP) which was established shortly after 1994. The 30% target was revised and extended from 1999 to 2014. It has been conceded that land reform was slow. In 2005 there was a national land summit where certain resolutions were taken.
Mr Hilton Toolo, Chief Director (CD) for Research and Legislative Development, Department of Rural Development and Land Reform, said that the research was conducted in 2009/10 and reflected on past experiences since 1994. The research paper tried to incorporate the solutions that emanated from the 2005 land summit. There were several resolutions taken at the summit, these were:
•the willing buyer-willing seller approach was a challenge and had to be rejected
•the instrument for appropriation should be actively used
•the compensation formula had to be reviewed and applied in a constitutionally compliant manner
•the state had to intervene in the land market
•land reform had to be decentralised
•there had to be a people centred approach
•equity had to be addressed through land reform
•the cut off date and starting point for land restitution had to be revised and reconsidered.
•the Communal Land Rights Act had to be expedited and the creation of a thriving rural community.
The research covered four identified areas of priority. However the research paper had been overtaken by the Green Paper on land reform that was released by the ministry. The Green Paper was divided into six work streams. They were the Land Management Commission (LMC); the Office of the Valuer General (OVG); the Land Rights Management Board (LRMB); the three tier land tenure system; communal land tenure and legislation, restitution and communal property institutions. The LMC addressed the issue of improving of the overall governance of the land reform programme. The OVG sought to address issues related to the willing buyer-willing seller approach; it sought to ensure that compensation was fair. The resolution taken at the summit that land reform had to be decentralised was dealt with by the LRMB. The LRMB had set up a committee that would also deal with this matter at local level. The LMRB would also deal with issues relating to communal tenants on commercial farms.
The three tenure system would address the willing buyer-willing seller approach. Some of the other issues were the one farmer on farm objective, land ceilings were being considered, land taxes, right to first refusal as well as expropriations. Foreign land ownership was another issue that was addressed in the report. Other matters that were outstanding such as the proactive involvement of the state programme were addressed immediately after the 2005 summit. Support to small scale farmers was addressed various programmes. The research was in fact a calling to
Mr A Trollip (DA) said that one of the objectives of the Department was for there to be a thriving rural economy. The research methodology was concerning in the sense that it was based on a desktop exercise filled with anecdotes. This was not the type of research that should be done on such a critical issue as land reform. Hopefully the process around the Green Paper would address the inadequacies in the current research. The Minister was on record stating that only a quarter of the 30% target had been achieved and land reform at that rate would take another 54 years before the target was reached. This did not follow suite, a lot of the work in the past 18 years was more preparatory. In the absence of an audit the claims made by the Minister were anecdotal. Land reform initiatives had to be taken with the Constitution in mind. The government initiative to address poverty amongst those previously disadvantaged through land reform had not been in line with set objectives an example of this was at Ncera farms where millions of rands had been invested for the benefit of about 1800 people. The results were miserable. Another good example was the Mike Huttton chicken farm outside Matatiele which the Department offered to buy; they did this now it was not running. This was a regular trend where viable going concerns were purchased and ended up in a dilapidated state with the intended beneficiaries never benefitting. Concepts such as one farmer one farm could never be determined in legislation as there were other factors that determined the size of farms such as climate change, market trends, topography and soil type etc.
Mr Trollip stated that some of the proposals for taxation were concerning. Punitive taxation would break the economy of a province like the
Mr Shabane replied that the report merely reflected options. The Department had not exercised any of the options. The research was ongoing and it was much more comprehensive than the report that had been presented. The Department was not relying on the study only. The Department was proposing for the creation if the LMC for purposes of a land audit. It was a commendable point made by Mr Trollip that the past 18 years have been preparatory. The Department would always be guided by the Constitution in its measures including expropriation. The Department was not solely responsible for driving prices. There was a whole range of key players in this. There had been a growing trend in increased prices for land reform transactions where land owners relied on state agents who worked for commission and lumped this onto the selling price. There was more work to be done on finding a solution where beneficiaries were identified, given the land and support. It had also been established that not every trainee farmer was always going to be successful. The right of first refusal would be explored. At any given time there would always be more land than government could ever buy and not every piece of land was financially viable. Some of the land on the market was not viable and farmers sold the land because they had failed, why would the state purchase such land and give it to a land reform beneficiary?
Mr Shubane argued that the issue of decentralisation had to be pursued. Government was not necessarily a willing buyer, sometimes a community would identify land that they wanted at all costs because their ancestors were buried there and not necessarily for commercial gain. This limited the state’s options and the Department became a captive buyer putting the seller in a stronger position.
Mr Vusi Mahlangu, Deputy Director General, DRDLR, said that the case in Matatiele was about the Department trying to work with sellers. The Department tried to ensure that there was continuity in terms of farming by negotiating with the seller/farm manager for beneficiaries to stay on the farm. In this case it was hoped that the seller would agree to mentor the beneficiaries, the Department could not reach agreement on what the business plan would look like. The seller than decided to pull out of the transaction. The transaction was a difficult one. The seller was also more interested in selling the land and concluding the transaction. The Department was more interested in a package that benefited everybody.
Mr S Zulu (ANC) said that he was shocked that only a quarter of the 30% target had been achieved. It was also shocking to hear that the target was only going to be achieved after 54 years.
Mr S Ntapane (UDM) said that the issue was a political one however too much politics on this matter should be avoided. The pace of land redistribution was slow and ineffective. The figure quoted in the report for redistributed land already allocated was too little, why? The Department had been using the willing-buyer willing-seller approach, it had to be agreed that this was not working. Nation building and social cohesion could not be a talking point when the majority of the people in this country were landless. There was a need for commitment and flexibility from all the stakeholders. This was a ticking time bomb.
The Chairperson said that the reports were a contribution to an ongoing process. The research methodology however was questionable. The resolutions of the 2005 summit had not been linked to the report. Why were South Africans shying away from the collective responsibility? If land redistribution was a socio economic right then it would definitely have been dealt with differently. The Department had to find a mechanism that protected land that was redistributed. The bigger issue was that land should be a socio economic right; the Constitution had to be enriched in order to facilitate for the security of land for beneficiaries. The former Minister had used the Expropriation Act and the court found in her favour, the Expropriation Act could be used but it was not. Land re-distribution was not given enough funding and resources. South Africans should be removed from the
Mr Trollop said that agricultural land was a finite resource and was bound to escalate in price- this was an international phenomenon. The use of estate agents was optional and mitigated risk for the seller. Conveyincing was a cost that entailed the transfer of ownership and was well known, there had to be no addition of these costs to the purchase price that the government had to pay. The attitude of the seller hardened because of broken promises from the Department in the Mike Hutton case. Everything was delayed including the date of sale and payment. The seller lost confidence and the Department lost the knowledge of a valuable partner. Delivery commitments were important; if the Department reneged on its commitments then potential partners would be lost. What was interesting was that nobody had talked about whether the 30% target was appropriate; the important thing was reconciliation, redress and effecting restitution.
Mr Shabane thanked the Committee for the invitation and the opportunity to have the discussion. The establishment of the National Reference Group was a good decision. The Department would ensure that it reported to the Committee and update it regularly.
The Chairperson said that the Committee wanted to continue engaging with the Department.
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