The Committee received submissions from the Langa Livestock Farmers Association, The Congress of South African Trade Unions and its affiliate, the National Education, Health and Allied Workers Union, the Legal Resources Centre and the Institute for Poverty, Land and Agrarian Studies on the second day of public hearings on the Recapitalisation and Development Programme (RADP).
Langa Livestock Farmers Association said it was initially started with a group of 70 members and was situated in the Hopefield district on the West Coast. Although in support of RADP, the procrastination of officials assigned as extension officers left much to be desired. The resulting loss of time and the negative impact on rotation planting was very costly. Furthermore the delays in approval periods for grant applications made it difficult, if not impossible, to plan ahead. Its recommendations included that the policy should revisit the question of huge groups, so that the current big groups be split into smaller 15-person groups and be assigned to available smaller farms. Policy should also allow the buyout option of dormant beneficiaries. Extension officers should be evaluated through oversight visits and the mentors assigned by the officers should appear before the Committee from time to time.
The Congress of South African Trade Unions (Cosatu) and its affiliate, the National Education, Health and Allied Workers’ Union (NEHAWU) said the “willing buyer – willing seller” principle had allowed current landowners, who were mostly white, to frustrate attempts to promote land distribution. This principle also ignored the realities of the capitalist economic system which limited the state’s role in price determination. Cosatu and Nehawu welcomed the ANC’s 53rd congress resolution to replace “willing buyer -- willing seller” with the “just and equitable” principle in the Constitution, where the state was acquiring land for land reform. It was estimated that more than 70% of the redistributed land had become unproductive. It highlighted the poor support mechanisms at different levels of government, and said the support initiatives in the post-apartheid era had ignored the negative effects of neo-liberalism. Farm workers continued to be exploited by employers and the protection of farm workers’ rights should be one of the key pillars of the land reform policy.
The Legal Resources Centre (LRC) highlighted the problems of implementation experienced since August 2013 in the case of commonage land. The challenges included the fact that potential beneficiaries had become lost in confusing bureaucracy for nearly ten years and were struggling to fit in with the envisioned profile of RADP beneficiaries. An example was the Stellenbosch Small Farms Holdings Trust -- a group of previously disadvantaged farmers on a 65 hectare allotment. The first application process had been started in 2006 under the commonage infrastructure grant. The application had been finalised in 2009 and had cost them R300 000. In 2011, the Department said the policy had changed and the application was returned for a ‘more detailed business plan’. This was funded by the Department at a cost of R500 000 and finalised in 2013. The Trust was then told that a strategic partner was needed. It meant that they would have to start the process for a third time and almost a R1 million had already been spent on the process. The Department had a high turnover rate with no institutional memory or ability to treat this project within its own context and history. Only 70% of the recapitalisation projects were generating income from agricultural production.
The Institute for Poverty, Land and Agrarian Studies (PLAAS) said RADP had been designed to fix failing or collapsed projects, and the requirements were to have a business plan plus strategic partner or mentor. Since the implementation of RADP, there had been a total of 1 351 projects with 437 strategic partners, involving 1 171 900 hectares and the total budget spent amounted to R2 146 407. A review by the Department of Planning, Monitoring and Evaluation (DPME) in 2013 had shown that nationally, efficiency – the ratio of investment to results -- was low. R2.9 million was spent per project, R463 284 was spent per beneficiary and R588 284 was spent to create one job. According to the review outcomes of the evaluation, RADP duplicated failed efforts of agriculture departments, resulting in an extra drain on the state fiscus, which should be a major point of concern for Treasury. In the Cacadu District in the Eastern Cape, research indicated that if one received a state-leased farm through redistribution, the only route to farming support was to get recapitalisation, which meant a commercial business plan was needed, and a mentor or strategic partner. The review proposed that the best and lasting solution would entail a redesign and overhaul of all public agricultural support programmes and doing away with existing silos of funding agricultural support services, including post-settlement support. This would entail the establishment of an all-inclusive fund to support land acquisition, extension and mentorship, agricultural finance and market access. Implementing the proposed ‘best solution’ would render RADP and similar programmes unnecessary, as they would be subsumed under a single programme for agricultural support.
There needed to be a debate on the DPME review recommendations to RADP and a call for the Department to stop people from ‘farming state subsidies’ and to set in place monitoring in each province. The Department should report on the actual distribution of RADP funds, because the extent of elite capture seemed staggering, yet Parliament was not informed of this. There needed to be differentiation between commercial ventures and people needing basic farming support, because RADP was inappropriate for those who did not want or need commercial business plans or strategic partners.
The Committee discussed specific cases highlighted by the submissions that dealt with the practical challenges experienced by emerging farmers. There was an overall consensus that the Department had several operational weaknesses, both within the RADP system and within the Department. The Committee urged presenters and the Department for detailed information on those cases so that they could be investigated and reported to the Committee.
The Committee wanted concrete proposals to address the challenges which would be considered when policy decision were made on RADP. The Committee also stressed that the Department should be accountable and a comprehensive report of the past two days would guide those policy decisions. The Department believed that with the Department of Agriculture, Forestry and Fisheries (DAFF), the DRDLR had the ability to come up with an approach to drive RADP forward. Part of the vision of land reform was to rekindle the class of black commercial farmers that had been destroyed by the Land Act of 1913. A plan would be developed and submitted to the Committee, and this plan would hold the Department accountable for their commitments.
The Chairperson welcomed everyone to day two of the public hearings and emphasised the importance of public participation and public input. The stakeholders would give their views on the implementation of the Recapitalisation and Development Programme (RADP). These views talked to the effectiveness of the programme, as well as the shortcomings, because cooperation was needed to ensure that the farms that had been restituted and redistributed were productive.
Langa Livestock Farms Association submission
Mr Nkosinathi Caso, from the Langa Livestock Farmers Association, said the Association was initially started with a group of 70 members. Farm land had been acquired through the Land Redistribution for Agricultural Development (LRAD) programme in 2009. Situated in the Hopefield district on the West Coast, approximately 54% of the 2 528 hectare farm was arable and the rest of the farm was used for natural grazing and habitation. Emphasis over the decades had been on farming livestock, but this had since been expanded to also planting canola and both sweet and sour lupine. The RADP, and the intent thereof as outlined in the National Development Plan (NDP), should be applauded. The opportunity given to the beneficiaries and other stakeholders to express where improvements needed to be made was commendable. However, procrastination from officials assigned as extension officers left much to be desired. The resulting loss of time and the negative impact on rotation planting was very costly. Furthermore the delays in approval periods for grants applied for made it difficult, if not impossible, to plan ahead.
Mr Caso gave a practical example and said the Department had issued a letter of approval for a capital grant of R10 831 100, a planning grant of R1 624 665, and a household grant of R1 668 900. The funds were approved in April 2009. The then Department of Land Affairs undertook to release further funding for the project pending the success of the initial grants. The Langa Livestock Farmers Association had been trying to get those funds from the Department since 2009, but to no avail. Part of the request for the funding was to address the question of water which was, and still not is, fit for human and live stock consumption. Instead of getting the funds, an irrigation system to the value of approximately R750 000 was installed without proper communication with the Project Management Team (PMT), and the installation of a borehole in 2013 which was still delivering salty water. Beneficiaries and farm dwellers had hoped for clean water that could also be used for human consumption. The project leader, who had since left the Department, had requested that another business plan for 2013/14 be drawn up, but there was no officer currently assigned to the projects, which further complicated matters. In order not to fail the Government and the beneficiaries, the entity had to explore various options to survive, including making loans, which had all been serviced.
The recommendations included that the policy should revisit the question of huge groups, so that the current big groups be split into smaller 15-person groups and be assigned to available smaller farms. Policy should also allow the buyout option of dormant beneficiaries. Extension officers should be evaluated through oversight visits and the mentors assigned by the officers should appear before the Committee from time to time. The Department, as well as the Department of Agriculture, should give advice on the Broad-Based Black Economic Empowerment (B-BBEE) compliant supply chain and the first right of refusal be granted to those who were compliant.
Submission by the Congress of South African Trade Unions (COSATU) and the National Education, Health and Allied Workers’ Union (NEHAWU)
NEHAWU Parliamentary Research officer: Policy Development Unit, Mr Neil Newman, presented the submission on behalf of COSATU and its affiliate union, NEHAWU. The submission focused on the post-apartheid land reform challenges which included the market-based principle, the poor support for land reform beneficiaries, the lack of structural reconfiguration, the exploitation of farm workers and the failure of empowerment initiatives. The submission also touched on the limited scope of previous legislation, communal tenure and the role of traditional leaders.
The “willing buyer – willing seller” principle had made it impossible to accelerate the process of land acquisition, because many individuals over-valued their land. Moreover, this approach was based on the willingness of current landowners, which were mostly white, who could reject any attempts to promote land distribution. This principle also ignored the realities of the capitalist economic system, which limited the state’s role in price determination. COSATU and NEHAWU had always opposed the use of this principle and welcomed the ANC’s 53rd congress resolution to replace “willing buyer, willing seller” with the “just and equitable” principle in the Constitution, where the state would acquire land for land reform. According to the Constitution, the amount of the compensation and the time and manner of payment should be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected. However, compensation would still be based on prices determined by the market and it effectively meant that efforts aimed at expropriation could be impeded by price inflation. It also reduced historical acquisition to the current owner, and this view of history did not take into account the systematic dispossession of land by colonialists.
It was estimated that more than 70% of the redistributed land had become unproductive. It highlighted the poor support mechanisms at different levels of government and the support initiatives in the post-apartheid era had ignored the negative effects of neo-liberalism. The Department had tabled a strategic plan which would provide infrastructure finance, new technologies and increased access to markets for new entrants. This strategy failed to address the linkage between the agricultural and petro-chemicals sector, which provided critical inputs. Moreover, it paid minimal attention to the intersecting relationship between agrarian reform and trade and industry policy. COSATU proposed the provision of affordable inputs to agriculture and strengthening the links between agriculture and agro-processing. The strategies to transform the racial patterns of ownership in the sector were progressive, but the increase in black ownership needed to be complemented by the restructuring of the agricultural sector. The sector was dominated by large-scale commercial farms that supplied most of the country’s food and agri-products. The poor sustainability of small scale farming in South Africa was also caused by trade liberalisation and minimal state intervention. Research indicated that the accelerated development of small-scale farming was more conducive for employment, food security and rural development.
Mr Newman said farm workers continued to be exploited by employers and formed part of the most marginalised section of the country’s workforce. Research indicated that the new wages were not sufficient to cover the basic nutritional needs of workers, and farm workers continued to be evicted illegally. Occupational Health and Safety Standards were continuously ignored by employers despite the fact that the protection of farm workers’ rights should be one of the key pillars of the land reform policy.
It was estimated that the number of citizens evicted from commercial farms exceeded six million by 2004. This figure was alarming, especially considering there were two pieces of legislation which were meant to govern tenure. The Department had tabled the Extension of Security of Tenure Amendment Act in the National Economic Development and Labour Council (NEDLAC) in 2014. COSATU argued that government should introduce the procedural safeguards outlined in the 2010 draft Bill, and supported government’s proposal of establishing a Land Management Board and Land Management Committees to deal with the process of mediation and arbitration. Labour argued that owners were primarily responsible for maintaining dwellings, but occupiers should have the right to make minor improvements. The legislation implemented in the post-apartheid era had focused mainly on restitution, which did not resolve the underlying socio-economic problems. Restitution produced mainly positive results in urban areas and usually involved a transfer of cash, rather than land.
One of the key challenges in post-apartheid land reform was the role of traditional leaders in administering land distribution. The chiefs and traditional councils had unchecked authority, which undermined access to land. COSATU proposed to reject the proposal in the Green Paper for communal tenure to be treated separately from leasehold, freehold and precarious tenure, outside of the land reform programme. Residents of former homelands and bantustans were equally hungry for land and redress. COSATU also proposed that communal tenure should not be treated separately, and for improved access to land and agricultural support for women. Residents in communal areas should be involved in all major decision-making processes on land use. The rights of citizens living in communal areas should be defended and systems enhancing accountability within the traditional authority framework should be enhanced.
COSATU and NEHAWU remained firm supporters of the need for radical land reform and the Department’s efforts. Concern remained, however, over the cost inefficiency of RADP, insufficient support from DAFF, the imposition of unwanted strategic partners as a precondition for state support, and the extent of resource capture by a relatively small group of strategic partners, who were essentially farming state subsidies.
Legal Resources Centre (LRC) submission
Ms Wilmien Wicomb, an attorney at LRC: Human Rights Department, said LRC represented rural communities in navigating land reform in all provinces of South Africa. The presentation would focus on RADP and redistribution, and RADP and restitution.
She highlighted the problems of implementation experienced since August 2013 in the case of commonage land. The challenges included the fact that potential beneficiaries had become lost in confusing bureaucracy for nearly ten years and were struggling to fit in with the envisioned profile of RADP beneficiaries. Beneficiaries were also ‘forced’ into a strategic partnership model and experienced difficulties due to the limitations of a business plan template and a lack of understanding of the commonage programme as an aspect of land reform inside the Department. Despite the objective of improved food security and smallholder development and support for agrarian transformation, most of the funding went to large scale commercial farming projects. RADP neglected smallholder development, and small scale farmers had nowhere to go because RADP had replaced all previous funding sources.
A key example was how RADP had replaced the Commonage Policy. Commonage was municipal-owned land used for the socio-economic needs of the community. In 2008, about one million hectares were available for redistribution and commonage had been identified as early as 1997 as a key land reform avenue. There was no need to acquire land and the land remained with municipalities into perpetuity and would be available for generations of small scale farmers as stepping stones, or food security hubs. In 2002, commonage accounted for most redistributed land, but today it was hard to find officials in the Department who knew about and understood commonage. It was a challenge because now municipalities had to apply for recapitalisation to upgrade infrastructure for generations of beneficiaries
Ms Wicomb said the Stellenbosch Small Farms Holdings Trust was a group of previously disadvantaged farmers on a 65 hectare allotment. The first application process was started in 2006 under the commonage infrastructure grant and the application was finalised in 2009. It cost them R300 000. In 2011 they received a reply from the Department saying the policy had changed and the application was returned for ‘more detailed business plan’. The second business plan development was funded by the Department at a cost of R5000 000 and finalised in 2013, but the Trust was then told that a strategic partner was needed. It meant that they would have to start the process for a third time and almost a R1 million had already been spent on the process. The Department had a high turnover rate, with no institutional memory or ability to treat this project within its own context and history.
Mr Henk Smith, an attorney at LRC, said the ad hoc committee on the legacy of the 1913 Land Act had made a number of observations and recommendations on RADP. Its evaluation illustrated that RADP lacked articulation with broader reform initiatives and discriminated against the rural poor. These observations stated that post settlement support should not be seen only in terms of the Farmer Support Programme or the RADP, which targeted farming with strategic partnerships. The committee asserted that the post settlement phase of land reform should be viewed in terms of broader land use and development support. However, the lack of visibility of programmes of the Department of Agriculture, Forestry and Fisheries in many of the land reform projects was identified as a key weakness. The ad hoc committee also observed that RADP had a pre-condition which coerced beneficiaries to enter into strategic partnerships and mentorships. However, the Department lacked a systematic process for monitoring and evaluation of those partnerships. There were long time lapses between the purchase of land and actual occupation. Related to these challenges, was the actual release of funds under RADP. Such delays had led to the collapse of many farms purchased for land reform purposes.
Recommendations included the restructuring of the land redistribution programme to enable citizens, especially the rural poor and farm dweller households, to acquire land that they could call their own, rather than being lessees on state-owned land. Such access to land should address their differential land needs for housing, small-scale subsistence production and heritage/religious purposes. A smallholder production model and relevant development support mechanisms should be developed that were not only pro-commercial production, as in the case with the RADP model of the Department.
The current RADP objective of “graduating small farmers into commercial farmers” ignored the fact that nearly all the farms being assisted, or intended to be assisted through recapitalisation, were independent commercial farming units that used to be farmed as family farms to their fullest commercial and production potential. These farms were all of substantial size and were much larger than any smallholding in the former homeland areas.
Only 70% of the recapitalisation projects were generating income from agricultural production and on average, R463 284 was spent per beneficiary, or R588 284 was spent to create one job. Category one farmers and restitution were being neglected, and redistribution benefited the few, while restitution was burdened by the expectations of land reform.
Mr M Nchabeleng (ANC) said the issue related to the Stellenbosch farmers was an old concern, and asked how many times this presentation would have to happen before the Department stepped in. An impression was created that it was a business of “creating business plans”, because it seemed the only people profiting were those creating business plans and not the beneficiaries of the programme. It was wrong, and the Department should respond to this matter and explain whether there were similar cases. It was wasteful expenditure to spend R800 000 on worthless business plans and the Department needed to be clear and honest about who was responsible for this project, whether negligence was the problem, and if people needed to be held accountable for what had happened. In terms of commonage, he asked why it was called ‘recapitalisation’, because it implied that something was being funded or refunded that had been already established. The Committee would need to really look at RADP and see if the programme was worthwhile and if the gaps could be closed through policy.
Mr M Filtane (UDM) said he thought it was unfair to pose questions to those who came to report the challenges they were experiencing, because almost all of the concerns raised were on the policies and the implementation thereof, which should be addressed by the Department. Both the Langa Livestock Farmers Association and the Stellenbosch farmers were examples of the failure of Department officials to service the very people they were employed to help. This was clear from the fact that both presentations highlighted the high staff turnover in the Department. COSATU’s angle was appreciated, because it focused on the challenges in social services and the social problems uncovered by RADP. He asked how soon the Department planned to resolve these problems. These matters were not beyond the capacity of the Department and could be resolved within a financial year if given serious attention. He asked the Department to apply their minds to these problems, because they undermined the Constitution. People had no effective occupational ownership of their land and were not benefiting from the land. R500 000 was way too much to spend on the creation of one job and it seemed the budget was flowing, but there were no services. Even with a high staff turnover rate, the Department should have prioritised those issues that had been dragging on for years.
Ms A Qikani (ANC) said COSATU should clarify whether they supported RADP.
Mr Newman said COSATU was not opposed to RADP in its totality, but felt there were issues that needed to be dealt with in terms of recapitalisation, rural development and the development of the farming sector.
Mr P Nguni (ANC) said it was clear, even from yesterday’s submissions, that certain challenges had deeper contextualised bases. Studies should be done, similar to the study by the University of Pretoria, to assess how far South Africa had come to determine the way forward. For the best part, the submissions did not offer alternatives and he asked stakeholders to come with propositions the Committee could put to the Department. Business plans were being critically discussed, but all state organs operated according to the guidelines of the Public Finance Management Act (PFMA), where all expenditure had to be linked. The question was why there were not public benefit organisations or even officials within the Department helping small scale farmers to develop business plans, because business plans should not be a constraint, but a tool to test viability. COSATU should make concrete proposals on legislation for the protection of farm workers.
Mr Smith said repeating the observations of the ad hoc committee were not regarded as unconstructive criticism, but it was becoming a real problem. The recommendations of the d hoc committee had not been addressed. RADP policy could not be scoped only for prized redistribution projects. The total number of redistributed, recapitalised and restored farms did not correlate with other reports. There was a total of 1 500 recapitalised farms, 1 800 restored farms and 1 400 redistributed farms. The question was what had happened to the 1 500 farms (redistributed or restored) that were not recapitalised, because post-settlement support was a given that needed to be provided for. The LRC would like to participate in scoping recapitalization, which was now the only support, to include those that were or felt excluded, which were small scale farmers, commonage and restitution. LRC spent a lot of time in assisting with the preparation of business plans because it was a necessary precondition of the PFMA -- sound planning and the courts also prescribed that there should be a post-settlement plan before there could be restitution. The business plan had been developed for three years, supervised by the steering committee involving the Department, DAFF, the community and even the land owners. After the three years, the response of the Department was that the implementation of the business plan could not happen because racapitalisation constraints applied.
Ms Wicomb said it was not the intention to not have a tool for testing viability, but the problem was about the strict template for business plans. Commonage land was not meant for a particular farmer, but rather for many farmers, and to have a business plan for one farmer would not be very useful. It was worth noting that under the commonage infrastructure grant there used to be development plans and grants available for the development of business plans.
Mr Caso agreed and said the problem was that the Department expected continuous resubmission of business plans, with confusing conditions. There had been assistance from the Department, but it had been a ‘cut and paste job’, because it even had the name of the entity spelt wrongly. It was understood that there should be financial accountability, and the association respected the PFMA.
Mr A Madella (ANC) said the Department should be capacitated to provide services to beneficiaries, and the need for business plans should not be used to delay much needed resources. The criticisms of COSATU were not directed singularly to RADP policy, but towards agrarian reform and the exploitation of workers. COSATU had a role to play and had to be more rigorous in mobilising farm workers. There was existing legislation on the protection of farm workers, but if the legislation needed to be tightened, COSATU needed to table the proposals so that Parliament could deal with the legislation. The Committee always held that the Department and DAFF should work more closely together and it should be assessed in the future if it was viable to have two separate entities whose work overlapped in many instances. It would also have been nice if the farmers themselves could have been present to speak for themselves, with the backing of LRC.
Mr Newman said COSATU did make concrete proposals, because COSATU was part of the NEDLAC process that discussed legislation or policy documents which had an impact on socio-economic issues. Currently there was a task team within NEDLAC that would be dealing with certain proposals on labour legislation. The difficulty was to link the problems of farm workers in this sector with that of the labour sector. It was very difficult to mobilise farm workers and COSATU had tabled the issue of labour brokers being used in the farming sector. At the NEDLAC labour conference the previous week, relevant topics had been raised that would be dealt with in 2015.
Ms Wicomb said the farmers would like an opportunity to come and talk to the Committee.
Mr Nchabeleng said it was clear that this was an activist Parliament and there should be a willingness among all the stakeholders and government to work together. There should also be a willingness by those that controlled the budget to commit to the resolutions taken. Most of the people attending the meetings were activists in the land reform movement. The presenter from the Land Access Movement of South Africa (LAMOSA) reported that she was approached by a Department official to apply for recapitalisation. It gave the impression that if a person wanted funding, one needed to be in partnership with somebody to get something in return. The Department should comment on what would be done and report back to the Committee, because it bordered on criminality. Steps needed to be taken because people came into this public space and said a Department official recruited them to defraud the government. There were recommendations made in some of the submissions and the Committee might engage with stakeholders again to discuss how those recommendations could be implemented.
The Chairperson clarified that it had been a consultant that had approached the presenter from LAMOSA and not a Department official. She asked COSATU to identify gaps in the existing legislation on the protection of farm workers, because the Department was in the process of amending legislation. She asked whether Langa Livestock Farmers Association received the capital grant in full, and who the Department official was that was assisting when the irrigation system was installed. She wanted to know whether the Association had a constitution that could assist them in dealing with dormant members because if the groups were working as a collective, a commitment should be made that everybody would be working the land. She asked that the profits on the farm activities be highlighted, and wanted to know whether the farm was sustainable.
Mr Caso said the capital grant, the planning grant or the household grant had never been received. The Association had had to apply to ABSA Bank for a loan as an entity, and that loan had already been serviced. It did not mean that assistance was not needed, because the Association did not want to fail the government. The business started as an Association with a R500 joining fee as members. It was a decided that the Association should be a business entity. There was a communal spirit that wanted to operate as both a business entity and as a community, and it needed to change. It was proposed during the annual general meeting that the constitution should be amended to let members that had been inactive for 90 days go. The arguments from those members were that they were needed at the time to constitute the numbers required by government. Care was needed before the constitution was amended, to protect the Association. The initial Department official assigned by the Department was very helpful, but he had to ‘pass the baton to the younger generation’. The Department had then appointed Mr Anele Yekwa and the miscommunication had started with the borehole and the irrigation system. At the last PMT meeting in August 2014, Mr Yekwa informed the members that he was leaving the Department without any contingency plans for the projects.
Analysis of official data and findings from field research in the Eastern Cape: PLAAS
Associate Professor Ruth Hall, Research and Policy Advisor, Institute for Poverty, Land and Agrarian Studies (PLAAS), gave a presentation on the analysis of official data and findings from field research in the Eastern Cape.
The Department had identified that most land reform projects were not successful due to a lack of adequate and appropriate post-settlement support. The design of RADP was to fix failing or collapsed projects and the requirements were to have a business plan, plus a strategic partner or mentor. Since the implementation of RADP; there had been a total of 1 351 projects with 437 strategic partners, involving 1 171 900 hectares, and the total budget spent amounted to R2 146 407.
The RADP review by the Department of Planning, Monitoring and Evaluation (DPME) in 2013 had shown that nationally efficiency – the ratio of investment to results-- was low. It cost R2.9 million per project, R463 284 per beneficiary or R588 284 to create one job.
According to the review outcomes of the evaluation, RADP duplicated the failed efforts of agriculture departments, resulting in an extra drain on the state fiscus, which should be a major point of concern for the Treasury. It was found through research in the Cacadu District in the Eastern Cape that if one received a state-leased farm through redistribution, the only route to farming support was to get recapitalisation, which meant a commercial business plan was needed and a mentor or strategic partner. There were three clear patterns that emerged from field research in the Eastern Cape -- a stymied middle class, agribusiness securing supply, and abandoned farm workers. The stymied middle class was waiting on funds that had been promised to them in 2014; agribusinesses securing supply were negotiating their recapitalisation grant to receive a higher amount; and the abandoned farm workers did not want a strategic partner or mentor, but were told by the Department that leases were conditional on having a strategic partner or mentor. This meant that RADP was a precondition for land redistribution – not in policy, but in practice. The review proposed that the best and lasting solution would entail a redesign and overhaul of all public agricultural support programmes and doing away with existing silos of funding agricultural support services, including post-settlement support. This would entail the establishment of an all-inclusive fund to support land acquisition, extension and mentorship, agricultural finance and market access. Implementing the proposed ‘best solution’ would render RADP and similar programmes unnecessary, as they would be subsumed under a single programme for agricultural support.
Prof Hall highlighted various challenges from families receiving no support from government because of their unwillingness to comply with the preconditions of strategic partnerships and complicated business plans. Recapitalisation involved significant budgets but poor reach, and no system for rationing scarce public resources. Dramatic increases in public expenditure to support small-scale agriculture were highly unlikely, while further incremental increases would in themselves make little difference, thus excluding most people. A lot of the money that was already available was not well spent, with an imbalance between large amounts to support (a small minority of) badly conceptualised commercial projects at the expense of large numbers of black farmers in land reform and in the former bantustans.
There needed to be a debate on the DPME review recommendation to RADP, and a call for the Department to stop people from ‘farming state subsidies’ and to set in place monitoring in each province. The Department should report on the actual distribution of RADP funds, because the extent of elite capture seemed staggering, yet Parliament was not informed of this. There needed to be differentiation between commercial ventures and people needing basic farming support, because RADP was inappropriate for those who did not want or need commercial business plans or strategic partners.
Mr Nguni said the debate and discussion around the notion of mentorship should be centered on the assumption that there was no transformed black and historically experienced agricultural entrepreneur, because it had not been allowed by the previous dispensation. The mentor could not define or set the agenda and would rather be playing a technical role within the broader agenda. There were loopholes in the concept, but it was a concept that was applied right across governance. Once a business model was defined, he asked the Department how certain provisions of the grant funding could just be ignored. He asked what the risks would be if the provisions such as strategic partnerships or mentorships were simply bypassed in certain situations. The basis of mentorship was relatable, because it talked to transfer of skills. In terms of the high per capita costs, he asked if all other funding windows for the emerging agricultural entrepreneur were now closed. Engagements needed to happen to find common ground in resolving the concerns. It should be proven that it was only those that were ‘politically connected’ that got opportunities and those people should be exposed, because it was unfair to those people that benefited legally but got labeled as having been chosen as beneficiaries for being ‘politically connected’. The cases that showed people struggling to get support from the government should be brought before the Committee so that they could be assisted.
Prof Hall said mentorship was dependent on what people were mentored on. Some beneficiaries had noted that they did not want do the same type of farming being pushed by the mentors. Land reform had always been about challenging not only land model systems, but also to allow people to use land differently. Mentorship was crucial if people wanted to grow crops they had never grown before, or wanted to access markets they had never accessed or known about. A strong distinction should be drawn between mentorship versus a strategic partner. Case after case showed that the so-called beneficiaries had legally registered trusts but did not even have bank accounts. They were basically signing things they did not know about or understand, and had no understanding of what it meant for them to be beneficiaries. It was hollow transformation, where lots of money was spent acquiring land with no real distribution of wealth. If you were not the owner, or were controlling the recapitalisation money with no input on production or dividends then the question was, how much money went from the public purse in the name of beneficiaries to existing agri businesses or individual strategic partners and mentors? It was not disputed that there were strategic partners and mentors that were absolutely supportive and creative and committed to transformation. Based on the initial results of this analysis, PLAAS had come across very worrying stories, and the Committee should be alerted. It was not known how representative the results would be, and that was why engagement with the Department was so important. These types of engagements would identify how resources were distributed and how many restitution and redistribution projects were not getting any recapitalisation.
Mr Filtane said it was quite a comprehensive and thought-provoking study and it opened eyes and minds to a number of elements in the budgeting process. He asked what name should be given to the programme, because ‘recapitalisation’ implied refunding rather than start up funding, or funding from scratch. It was also raised in the presentation that government should have a separate budget for restitution, rather than taking the budget from RADP, and he asked if it really mattered to the person on the street at what level they got assistance from. The goal was to reverse the unjust legacies by giving people land and at the same time capitalise those people to help them get real social benefits out of the land. He referred to the presentation slide that stated that RADP was duplicating failed efforts of agriculture departments, resulting in an extra drain on the state fiscus, which should be a major point of concern for Treasury. He asked if the implication was that in all the cases where government had funded projects, it was because of a previous failed venture.
Prof Hall said the University of Pretoria report initially said RADP should be scrapped. Loans were a possibility, but it should be clear what the proper function and expertise of institutions such as the Department, in collaboration with DAFF, were as a co-competency to provide agricultural support. For people to get basic support without going through long negotiations with strategic partners, this could be achieved if people’s tenure rights were accurate. The issue of tenure security was a precondition for proper agricultural support. Policy decisions that were being made in the rural development and land reform space were fundamentally shaping people’s access to resources. Also there was no ‘cap’ on the amounts the Department could spend on land, with no policy guidelines that spoke to the extent individuals could benefit from public money. Part of the vision of land reform was poverty alleviation and addressing the crucial situation of farm workers. Also part of the vision of land reform was enabling black families to commercialise, but it had to determine at what cost it could be achieved. Recapitalisation by putting money into failed projects was justifiable as long as a new plan was also in place, because that was what the recapitalisation was initially established for. If the land was bought and some sort of support provided and it was clearly not enough, more money should be invested.
Mr Madella asked what the alternatives to RADP would be, and whether Prof Hall agreed with the recommendations from the study done by the University of Pretoria that a portion of the grant should be transformed into a loan facility. It was important that those cases brought before the Committee should be detailed for follow-up purposes, especially in the light of the claim that people received benefits unduly through their political connections. Such claims should be backed up with concrete details. The case highlighted of the family in the Eastern Cape that were struggling, but doing well under the circumstances, should be detailed so that the challenges they faced could be addressed. He asked how it was possible for someone to sell their farm for R34 million and then rent it back from government -- and be given recapitalisation funds on top of it.
Prof Hall said it was essential to have a more comprehensive and clear approach where everybody was eligible for at least a certain level of minimum support. It was even more concerning, because now that the rental was under the State Lease and Disposal Policy, rental was 5% of the projected net turnover. Strategic partners would then project their net turnover at 0% for the next five years. It meant you could sell, not pay rent and then also get recapitalisation.
Mr Nchabeleng said the Department would need to answer why some beneficiaries had to struggle to get very little from the Department, in comparison to what other beneficiaries seemed to be able to get. All these cases needed to be reviewed and the Committee should be updated on all the outstanding issues and the progress made with Langa Livestock Farmers Association, the Stellenbosch farmers and the cases in the Eastern Cape.
Prof Hall said several people had stated that they would be happy to share much more detail. Some of the project participants were in regular contact with PLAAS and kept PLAAS updated on their negotiations with the Department. Also, if researchers from Parliament would like to get involved, this would be supported by all involved.
Closing remarks: Director-General of Rural Development and Land Reform
Department of Rural Development and Land Reform Director-General, Mr Mduduzi Shabane, said he believed that with DAFF, the Department had the ability to come up with an approach to drive RADP forward. The Department would follow up on the cases submitted to the Committee and would take each and every submission into consideration in the policy decisions to be made. The Department was appreciative of the positive experiences that had been shared. Many farmers came from incredibly humble backgrounds but were hugely successful in their projects. Those success stories should be captured, as case studies to be replicated across the country. Part of the vision was to rekindle the class of black commercial farmers that were destroyed by the Land Act of 1913. The average age of a commercial farmer today was 64 years, and if a new cadre of commercial farmers was not built now, there would be no one to provide food security in this country in the next 10 to 15 years.
The weaknesses in the policy had to be corrected if this was to be achieved. There were glaring and operational weaknesses in the system and in the Department. These weaknesses were especially in the implementation of RADP and the interpretation of RADP policy, lack of communication, and poor turnaround times that were very costly. Recapitalisation was premised on a strategic partnership model, but from the submissions it was clear that there was a misconception that strategic partners and mentors were viewed as two separate things. Mentorship was a subset of the broader strategic partnership framework, and it was one of the three or four approaches to strategic partnerships.
Various pieces of legislation would be tabled to respond to some of the issues on foreign land ownership and communal tenure, as well as legislation on the working and living conditions of farm workers as presented by COSATU. The Deputy President was running a parallel programme that focused on the working and living conditions of farm workers across the country, but with a focus on the Western Cape. The Department would engage with PLAAS on the findings of the study done in the Eastern Cape outside of this meeting to find a way to respond to the very serious challenges that were raised.
The state had very strong levers at its disposal and those levers should be used to change the structure of ownership of the sugar, agriculture, grain and fruit and vegetable industries. It generated massive export revenue in the African continent, but had only 1% black ownership. There should be trade-offs, because collaboration and cooperation with organised businesses were important. It was a myth that support for people on commonages had been abandoned, and a number of commonage farmers had been funded over the last four years. Some had moved on from commonages and had been given farms by the government. It was also a myth that recapitalisation had become the panacea for agricultural development in South Africa. It was influenced by the continued view of the mandate of the Department through the prism of the old Department of Land Affairs, which focused only on land. The Department had various other projects, like the revitilisation of various irrigation schemes in the former homelands, as well as other agricultural projects.
Restitution had to focus on the settlement of claims and there was no item on the Department’s budget for post settlement support, only for settlement of claims. The proposal to remove conditions for restitution for development purposes needed to be reviewed. The biggest wastage in recapitalisation was the failure to give farmers their money on time, which could be curbed by creating a disbursement calendar with the help of the industry. The Department would present a comprehensive plan based on these engagements and that plan could be used by the Committee to hold the Department accountable.
The Chairperson said a lot of issues had been raised and they would be taken into consideration. Every consideration would be reviewed to see whether the policy could be amended to assist in the implementation of RADP. Mr Nguni was asked to reflect on the issues that were raised during the two days of public hearings and to also touch on the way forward.
Mr Nguni said the Committee would meet and look at the report of the two days of public hearings. The Committee welcomed and appreciated the submissions, and all the input, recommendations and evaluations from all the relevant stakeholders would be considered. The land question inherent to South African society rested firmly on a clearly articulated colonialist history fraught with wars and unjust laws. The 1913 Land Act had been mentioned over the past two days and it had its own legacy that impacted every aspect of the ‘land question’ in South Africa. The ruling party’s programme sought to articulate the broad roadmap within which to understand and hence to move South Africa forward. Measures to resolve the land question needed to be firmly located within this broad context for consistency and coherence.
The submissions of the previous day were highlighted, such as the constraints that included imperialism in the sector, as well as the lack of gender equality. The ruling party’s upcoming policy conference in June 2015 could be an opportunity for positive recommendations. It was clear that the design of RDAP would need to be assessed. The cases that were put forward through the submissions would be investigated by the Department, and the Committee also welcomed the ‘good stories’ by some of the beneficiaries. Important focus areas for the Department were those cases that seemed to ‘fall through the cracks’ by the Department’s inability to create ‘institutional memory’ in assisting with projects, tightening management of project, integration of the value chains and the alignment of RADP with other policies. Oversight needed to be coordinated with DAFF so that there was adequate agricultural support. These were just preliminary observations and every view would be considered for integration.
The Chairperson thanked everyone for their participation and input.
The meeting was adjourned.
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