The Committee, with the Deputy Minister in attendance, heard from National Treasury that the Department had been very successful in spending its allocation. Under the Restitution Programme, a total of 130 000 new claims had been lodged since 2014, and the number was expected to increase to 397 000 claims during the extension period. As a way forward there would be engagements between DRDLR, National Treasury and the Department of Agriculture, Forestry and Fisheries (DAFF) on the overlapping functions between the DRDLR and DAFF. The Minister of Finance was in the process of engaging with the Ministers of Agriculture, Forestry and Fisheries and Rural Development and Land Reform on the development of an integrated funding and support model to land reform beneficiaries, smallholder farmers and emerging black commercial farmers.
The Committee asked what Treasury's attitude was to the 0.06% under expenditure of R60 million; how it felt about the duplication of services between DAFF and the DRDLR with the overlap in post settlement support; how long the new land claims processing would take and how much it would cost as the MTEF budget did not appear to cover this; what role Treasury was playing with the Ingonyama Trust Board; what an integrated funding and support model would look like generally and the timelines involved.
The Human Sciences Research Council (HSRC) noted in its analysis of DRDLR expenditure performance, that it research found there was an unequal spread of farmer support evidenced by some households receiving more than one type of farmer assistance package and that 33% of respondent rural households did not actively engage in agriculture. HSRC concluded that the impact of the investments had little impact on the living standards of rural households in the Department’s rural development programme. There had to be greater balance when it came to support packages and programmes. To achieve this balance required 'bottom-up' development strategies. The rural population had to be asked what they wanted and needed. 'Top-down' imposition of solutions, which was just getting rid of the budget by spending – would not get South Africa anywhere. The first step for radical rural transformation was to let rural voices be amplified and their needs had to be taken into consideration when interventions were made.
The Committee welcomed the presentation as a solid well researched input and the kind of information that was needed when policy was made. They asked for the research report. The Committee asked how the HSRC defined 'rural' and were told that in their constructs, it was referred to as rurality, because it was taken that all the areas had degrees of ruralness in them, and there were three underpinning concepts or indicators used for this:
population density; infrastructure development and the natural resource orientation of the economy. Members asked the HSRC how rural spend could have positive outcomes for rural families. Members heard that there were no department interventions that really transformed the living conditions and living standards of rural people on a broad scale.
National Treasury on Department of Rural Development and Land Reform expenditure
Mr Owen Willcox, Chief Director: Economic Services: National Treasury said that the Department of Rural Development and Land Reform (DRDLR) had been very successful in spending its allocation from National Treasury. The Departmental expenditure outcomes for 2009/10 – 2014/15 and the Ingonyama Trust Board expenditure outcomes for 2009/10 – 2014/15 were outlined.
Under the Restitution Programme, a total of 130 000 new claims had been lodged since 2014, and the number was expected to increase to 397 000 claims during the extension period. The National Rural Youth Service Corps (NARYSEC) sub-programme received an allocation of R1.3 billion (R425.9 million in 2016/17, R451.4 million 2017/18 and R395.1 million in 2018/1).
Response to the Committee’s Budget Review Recommendation Reports (BRRR) for 2014 and 2015 included:
for 2014 - Re-prioritisation towards the reopening of the lodgement of land claims; and
for 2015 - The Minister of Finance was in the process of engaging with the Ministers of Agriculture, Forestry and Fisheries and Rural Development and Land Reform on the development of an integrated funding and support model to land reform beneficiaries, smallholder farmers and emerging black commercial farmers.
The DRDLR planned to focus on:
- Recapitalising and redeveloping redistributed farms;
- Establishing agri-parks (R2 billion per year over 10 years);
- Extending the lodgement of land claims;
- The National Rural Youth Service Corps; and
- The implementation of the 2015 Extension of the Security Tenure Amendment Bill.
As a way forward there would be engagements between DRDLR, National Treasury and the Department of Agriculture, Forestry and Fisheries (DAFF) on the overlapping functions between the DRDLR and DAFF.
Mr M Filtane (UDM) recalled that last year the Department had an under expenditure of close to R60 million. He asked what the National Treasury's attitude to this was especially given that the reasons for the under expenditure in this case was poor planning. He asked what corrective measures Treasury would ensure are brought in when such occurrences took place.
Mr Willcox replied that obviously, underspending as a result of poor planning could not be condoned; at the same time R60 million was about .06% if its budget. This was less than one cent on the rand in terms of actual allocation. So it sounded like a large amount, but it was pretty much what was seen with most departments. These department were not targeted with under spending. R60 million was really not a large amount of money
Mr Filtane said he had heard about Treasury's concern about the overlapping services of DAFF and DRDLR which obviously incurred expenditure. He asked if from the coming financial year – 2017/18 – Treasury would make sure that there was no such a practice again.
Mr Filtane asked how comfortable Treasury would be to allow budget allocation for the implementation of the Spatial Planning and Land Use Management Act (SPLUMA), when it was continually surrounded by so much controversy due to the implied exclusion of traditional leaders. He asked how comfortable Treasury would be to fund a programme surrounded by so much controversy.
Mr Willcox asked if he could defer this question to the Department of Rural Development and Land Reform.
Mr P Mnguni (ANC) expressed concerned about 'eligibility' of the presentation document. He said that this presentation was not a presentation.
Mr Willcox apologised wholeheartedly to the Committee regarding the eligibility of the presentation.
Mr T Walters (DA) said that the number of claims coming in was not going to be around 400 000. He asked for the actual benchmark figure as the real issue was not that claims could get registered, but if there was funding for them and what was in place going forward. He did not see funding for the research and the resolution of 400 000 claims in the Medium Term Expenditure Framework. He asked for feedback about the number of years it would take to fund that number of claims.
Mr Willcox asked if he could defer this question to the DRDLR as he was not too sure about the issue of the claims. The money received for restitution was used to research the claims. It was not able to end the backlog over the medium term as this was a long term issue. Departments would have to prioritise within their budgets and this might be happening with the slow growth of the Rural Development programme.
Mr Walters asked about the duplication of work between the Department of Agriculture, Forestry and Fisheries and Department of Rural Development and Land Reform. He was interested to hear if there was some type of cost assessment of what the cost of that overlap was. He asked if perhaps one Ministry had been considered and the costing for this.
Mr Willcox replied that the aim was to try and resolve this overlap as it had been a long standing issue. The combined budget for this between DAFF and DRDLR was about R2.5 million per annum. This did not mean that money was being wasted. DRDLR was supporting some farmers and DAFF was also supporting some farmers. The two schemes were very similar. What was just needed was better usage of that money in terms of who had the responsibility for it, and which department had to develop the capabilities to use that money effectively.
Mr Walters said that it was a problem if one had reasonably good progress in expenditure, but this was not matched with targets being achieved.
Ms N Magadla (ANC) asked for clarity about the average growth.
The Chairperson asked what role Treasury was playing with regard to the Ingonyama Trust Board (ITB) because the Committee had heard that the ITB had two to three accounts.
Mr Willcox replied that the role Treasury had been playing in this had been fairly small up to now, but it would be looked at in greater detail and a report back given to the Committee if the Committee desired this.
The Chairperson asked about surplus because there was a surplus each year. She asked why people on the ground were suffering.
Mr Willcox replied that this would also be looked into as surpluses should be used for service delivery.
The Chairperson asked about the overlap in post settlement support between DAFF and DRDLR. She asked about animal and veld management and if there was overlap in this between DAFF and DRDLR.
Mr Willcox replied that this would definitely be dealt with especially in terms of duplication and which department carried out which mandate. Animal and veld management would fall into this process.
The Chairperson said the Commission on Restitution and Land Rights (CRLR) was dealing simultaneously with old and new claims. The Committee's understanding was that new claims just had to be registered. The focus was on the old claims which had to be finalised first before processing new claims. With the budget increase of the Commission, viewing the challenges that the Commission was experiencing with claims not finalised, of new claims in court, and of claims being processed, she asked if the budget allocated to the Commission was sufficient for old claims.
Mr Willcox replied that it might be more appropriate for the DRDLR to answer this question as he was not sure what the Department's process was. He felt however that the Department was looking at growing funding for restitution and making funding for restitution more of a priority.
The Chairperson said that Treasury had said that DRDLR was able to spend about 90% of the budget. She asked for a comment on value for money here.
Mr Willcox replied that this was something that Treasury was concerned about, and would be engaging with the DRDLR about this to achieve much better outcomes.
Ms Magadla referred to the overlapping programmes in the two departments and asked what would happen to budgeted items while Treasury was still engaging DRDLR on this.
Mr Willcox replied that the intention was to try to resolve this by next year's budget.
Mr A Madella (ANC) asked for an inkling on what the integrated funding and support model would look like generally and the timelines involved.
Mr Willcox replied that it would have to include the Land Bank. The mechanism of providing agricultural support would mean that the duplication work had to be looked into so that one would end up with a clear sense of who was doing what and an overall feel for how agriculture could be supported. This would involve negotiation between departments and timelines needed to be finalised as soon as possible, hopefully before Budget 2017.
Human Sciences Research Council (HSRC) analysis of Rural Development and Land Reform budget
Dr Peter Jacobs, HSRC Chief Research Specialist in the Economic Performance and Development Research Programme (EPD) provided an overview of his research into the rural population and poverty in four priority district municipalities in 2012 to set the scene.
The recent DRDLR spending priorities according to the HSRC were reported as:
- Recapitalising and redeveloping redistributed farms;
- One Household, One Hectare programme;
- Extending the lodgement of land claims and
- National Rural Youth Service Corps.
Land reform spending, proactive land redistribution and the RECAP (Recapitalisation and Development) Programme were outlined which showed among other things that 62% of land reform expenditure was now allocated towards 'proactive land acquisition' by the state; and that direct land grant transfers to beneficiaries continued to fall.
There was an unequal spread of farmer support evidenced by:
- some households had received more than one type of farmer assistance package; and
- PLAS farmers were the dominant recipients of RECAP with almost 70% of them indicating that they had benefited from it.
Some of the challenges were:
- that there was uneven distribution of support for farmland use and on-farm production;
- 33% of respondent households did not actively engage in agriculture; and
- Land Reform farmers found it difficult to get a firm foothold in unstable farm-output markets.
The National Rural Youth Services Corps (NARYSEC) was listed as the core focus of the Rural Development programme. Dr Jacobs concluded that fragmented rural interventions persisted with ad hoc and weak institutional coordination.
Mr T Walters (DA) welcomed the presentation as a piece of solid well researched input. This was the kind of information which was needed when policy had to be made. He asked if it was possible to get the actual report.
Mr P Mnguni (ANC) also welcomed the presentation and wished that the Director-General was present.
Dr Jacobs said that all the papers underpinning this presentation would be made available. He would have made them all available if he had known before the presentation of the Committee’s interest. These reports contained more detailed answers.
Mr M Filtane (UDM) asked Dr Jacobs how he would define ‘rural’.
Dr Jacobs replied that the HSRC did not have a concept called 'rural' in their constructs, the HSRC referred to it as rurality, because it was taken that all the areas had degrees of ruralness in them, and there were three underpinning concepts or indicators used for this: population density; infrastructure development and the natural resource orientation of the economy. These three concepts were used to define rurality in status definitions. So this meant that the HSRC was defining rural in terms of poverty, poverty nodes and indicators.
Mr Filtane said that when the HRSC was making its assessment it had not assessed the spend on the outcomes for rural families. For him that was where the nub of the whole exercise lay. He asked many institutions so many times for information on the socio economic impact of the annual spend. It did seem that one was getting closer to this. He asked what attempts had been made by the HRSC and with what success in trying to get a budget to do this. Dr Jacob’s concluding remarks were that all expenditure the department was incurring was not actually yielding the desired result. But the HSRC had said that DRDLR was not spending money on rural development, so how did it come to that to that conclusion?
On how HSRC concluded that the impact of the impending investments had little impact on the living standards of households, Dr Jacobs replied that there was no study that proved the converse – that these interventions had really transformed on a broad scale the living conditions and living standards of these areas. In the absence of those studies, and if HSRC looked at the two fundamental issues that it was interested in, living standard and poverty trends as well as demographic trends in these areas, then one was bound to at least come to some initial conclusion that one cannot at this stage say precisely or conclusively that the existing investments have had positive returns for the communities in these localities. The HSRC was saying what Members were saying, that there should be investment in more credible research to get to firm conclusions about the state of rural development.
Mr Filtane said that DRDLR was spending a lot of its spend on agricultural activities but the basket should be broadened. He recommended that the Department move in that direction.
Mr A Madella (ANC) welcomed the presentation and agreed with Mr Mnguni about the Director-General's absence. The Department should seriously consider or somehow repeat this research that had been done in 2012. However the sample that was used had to be broader than the one used in 2012. The results would be significant in terms of what the Department was hoping to achieve.
Mr E Nchabaleng (ANC) thanked HSRC for the work that they had done and said that this should be the beginning of many such future engagements with the HSRC. He also asked for the research document.
Ms Magadla appreciated the presentation. She was pleased with the accuracy of the research. She asked how could training support be balanced with inputs. Infrastructural support was very sustainable so could it be balanced with training support and not only with inputs.
Dr Jacobs said that the HSRC concurred with the conclusion based on their limited survey that there had to be greater balance when it came to agricultural support packages and programmes. But their question went slightly beyond that and asked, so how could this balance be obtained, how could it get to this balance? And it said it required 'bottom-up' development strategies. What this basically meant was that the rural population had to be asked what they wanted and needed. 'Top-down' imposition of solutions, which was just getting rid of the budget, spending – would not get us anywhere. The deeper institutional dimension was what was not addressed. The first step for radical rural transformation was to let the rural voices be amplified and their needs had to be taken into consideration when interventions were made.
Mr Walters said that research and research interventions in the rural space were very important. He suggested that this should be addressed in future meetings.
The Chairperson thanked the HSRC for the very informative briefing. This was not the beginning as the HSRC was going to be invited to future meetings. The Department was thanked for attending this meeting.
The meeting was adjourned.
- Agrarian Reform & Poverty Reduction in South Africa: Phase 2 Research Report
- Human Science Research Council Support for smallholder farmers in South Africa: Challenges of scale and strategy
- Human Science Research Council Policy brief
- Human Science Research Council: Pro-poor rural development in South Africa?
- HSRC contributions to analysis of Rural Development and Land Reform Budget
- National Treasury on Performance & Expenditure patterns of Department of Rural Development and Land Reform
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