Department of Rural Development and Land Reform on its Annual Performance; Valuer-General briefing, with Deputy Minister

Rural Development and Land Reform

03 May 2017
Chairperson: Ms P Ngwenya-Mabila (ANC)
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Meeting Summary

The Portfolio Committee on Rural Development and Land Reform was briefed by the Department on its 2017/18 Annual Performance Plan. The target for the year under review was 100% of valid invoices paid within 30 days of receipt, an unqualified audit opinion, 996 975 number of deeds and documents registered, 35 rural development plans facilitated for implementation, 204 maps of the national maps series produced or reviewed and 70% support provided towards rural economic transformation. Additional targets for the year under review were 120 infrastructure projects facilitated to support production, 53 agri-parks infrastructure projects facilitated, 6 612 skills development opportunities n rural development initiatives, 5448 job opportunities created in rural development initiatives.

Under land reform, 96 165 hectares was acquired and 50% of it was allocated to smallholder farmers and 10% to people living and/or working on farms. Another 18 farms in terms of the on Strengthening of Relative Rights Policy (50/50) were acquired and there were 5 000 households supported under the ‘one household one hectare programme’ while 384 Households were supported under the ‘one household two dairy cows’ initiative. The Department created 5 000 jobs were created, 1 434 labour tenants applications were settled and 686 state land parcels were confirmed as vested.

The Department’s final Estimates of National Expenditure (ENE) allocation was R10 billion. Administration had 16.9%, National Geomatic Management Services (NGMS) had 6.6%, Rural Development had 18.8%, Restitution was 31.9% and Land Reform was 25.8%.

Projected expenditure on filled posts was R2.1 billion and projected savings was R5.4 million. The implementation of the Strengthening of Relative Rights (50/50) programme was budgeted at R525 million. The ‘one hectare one household’ programme was introduced in 2017/18 with R106.2 million, R112.5 million and R118.8 million budgeted for over the Medium Term Expenditure Framework (MTEF). Project Management Unit was budgeted at R71 million and total transfers received amounted to R1.4 billion.

The Committee requested the Department to bring both the ‘one household one hectare’ programme and the ‘one household two dairy cows’ policies before the Committee as a matter of urgency to enable an adequate oversight functions. Members questioned whether the 18.8% of the budget allocation to rural development was sufficient. The Committee also questioned the amount of R24 million spent on overtime, the level of corruption in the Department and what the consequences for Department officials found guilty of corruption were.

The Committee was also briefed by the Office of the Valuer-General (OVG). The OVG came into operation on 15 August 2015. Land reform was defined by land development, tenure reform as well as land restitution. Issues of land reform had to be executed by the Valuer-General.The process of acquisition of land by government agencies and the assessment of compensation for dispossessed land owners under the Land Acquisition Act was administered by the Valuer-General. In determining the value of land, the Valuer-General will take into account five other factors in the Constitution, which were the use of a property, history of the acquisition target, market value, extent of direct state involvement and purpose of the acquisition.

Members wanted to know whether evaluations were based on the improvements on the land or on the turnover of the business. The Committee also asked whether the OVG had been made aware of the conflicts between farmers and officials of the Land Claims Commission, how long it took to evaluate state owned land and how the OVG was funded.

Meeting report

Opening Remarks 

The Chairperson welcomed the Deputy Minister Candith Mashego- Dlamini. She said today’s meeting was about the presentation of the Department’s operational plans which would assist the Portfolio Committee in terms of guiding the Committee in its oversight duties. Apologies were read from Honourable Minister Gugile Nkwinti who was away on official business as well as Deputy Minister Mcebisi Skwatsha who was on ministerial duties in George.

Deputy Minster Mashego-Dlamini said the operational plans had been divided in terms of the nine provinces. The Project Register was ready but could not be submitted because it had not been confirmed.

Ms Leona Archary, Acting Director-General, DRDLR, said the Department had been working on radical rural economic transformation for the last two years and this had dictated the programme DRDLR was driving at. The Department had aligned itself in terms of the 9-point plan. She added that rural development was a transversal function which cut across all spheres of government. The Department would continue to drive the agri-park programme; fast-track settlement of labour tenancy claims; accelerate the strengthening of relative rights (50/50) programme as well as the ‘one hectare one household’ (1H1H) programme. It will also continue to prioritise women, youth as well as people with disabilities. She announced that programme 4 (Restitution) would be omitted.

Department of Rural Development and Land Reform on its Annual Performance

Ms Nomonde Mnukwa, Chief Director, DRDLR, briefed the Committee on the Department’s 2017/18 APP. The target for the year under review was 100% of valid invoices paid within 30 days of receipt, an unqualified audit opinion, 996 975 number of deeds and documents registered, 35 rural development plans facilitated for implementation, 204 maps of the national maps series produced or reviewed and 70% support provided towards rural economic transformation. Additional targets for the year under review were 120 infrastructure projects facilitated to support production, 53 agri-parks infrastructure projects facilitated, 6 612 skills development opportunities n rural development initiatives, 5448 job opportunities created in rural development initiatives.

Under land reform, 96 165 hectares was acquired and 50% of it was allocated to smallholder farmers and 10% to people living and/or working on farms. Another 18 farms in terms of the on Strengthening of Relative Rights Policy (50/50) were acquired and there were 5 000 households supported under the ‘one household one hectare programme’ while 384 Households were supported under the ‘one household two dairy cows’ initiative. The Department created 5 000 jobs were created, 1 434 labour tenants applications were settled and 686 state land parcels were confirmed as vested.

Ms Rendani Sadiki, CFO, DRDLR, said the Department’s final ENE allocation was R10 billion. Administration had 16.9%, National Geomatic Management Services (NGMS) had 6.6%, Rural Development had 18.8%, Restitution was 31.9% and Land Reform was 25.8%.

Projected expenditure on filled posts was R2.1 billion and projected savings was R5.4 million The implementation of the Strengthening of Relative Rights (50/50) programme was budgeted at R525 million. The ‘one hectare one household’ programme was introduced in 2017/18 with R106.2 million, R112.5 million and R118.8 million budgeted for over the Medium Term Expenditure Framework (MTEF). Project Management Unit was budgeted at R71 million and total transfers received amounted to R1.4 billion.

Discussion

The Chairperson said the Committee did not have the policies on the ‘one household one hectare’ programme and neither did the Committee know what the ‘one household two dairy cows’ initiative entailed. There were no details given by DRDLR and if the Committee was saddled with an oversight function, it should have details on the programme.

Mr T Walters (DA) said he was in support of the point raised by the Chairperson. The whole issue of the 50/50 policy had not actually come before the Committee. What did the Department mean when it said in the first presentation that 18 farms on Strengthening of Relative Rights Policy (50/50) were acquired? The Committee should insist that these policies should be presented to the Committee as a matter of urgency.

Mr K Robertsons (DA) asked if DRDLR thought that 18.8% of the budget allocation to rural development was sufficient. What was the allocation of the budget for skills development? Had there been an increase in the number of National Rural Youth Service Corps (NARYSEC) students this financial year compared to the previous financial year?

Ms N Magadla (ANC) asked for the number of agri-parks. If the number of infrastructure projects facilitated to support production were coming from the provinces, what did the Department mean by skills development opportunities provided in rural development initiatives? What were the criteria used under ‘one household one hectare’ and ‘one household two dairy cows’? She also asked for the meaning of state land parcels confirmed as vested under point 5.3 of the first presentation as it was not clear.

Mr A Madella (ANC) asked if all skills development programmes and NARYSEC were the same? Were there provisions for reasonable accommodation for disabled employees as there was no indication for this in the presentation? If this was not done, it would make it difficult for the government to achieve its 2% target for employment for disabled people.

Mr E Nchabeleng (ANC) said there had been a lot of negative media reporst on NARYSEC. Graduates had not received their certificates and some people did not attend classes and yet they have certificates. Why?

Ms S Mbabama (DA) asked if all the provinces would now do their own deeds. In the past deeds from Port Elizabeth were sent to the Western Cape deeds office. In most of the pages of the presentation, the Department had given numbers. What informed the figures across the provinces? Under number of maps of the Nation Map series produced both Gauteng and Mpumalanga had zero. Why? What was the rationale behind the allocation of numbers?

The Chairperson asked for the status of the mega cooperatives. The DRDLR had not reported on the Spatial Planning and Land Use Act (SPLUMA) for a long while and she wanted to know what the reason was. Looking at the report, a total of 148 employees had resigned. She asked why it was such a huge number and whether the Department was taking the employees wellness programme serious. After the passing of the Extension of Security of Tenure Amendment (ESTA) Bill, there had to be implementation. Where is the budget allocation for that? Most of the graduates of NARYSEC had no certificates. At the end of it all, these graduated were not employed. What then was the point in all the training that the graduates have had.

Ms Mbabama said R24 million was spent on overtime and she asked what the reason for the overtime was. She wanted to know why the workers were not given days instead of money. What were the criteria used in ‘one household two dairy cows’ programme. The CFO had said there was a Project Management Unit which was made up of external people. Was there a programme for exchange of skills? If so, the budget in that area should be decreasing.

Ms Archary apologised for the number of policies that the Committee was not aware of. The Department would undertake to package all of the policies and send to the Committee. On the 18 farms acquired through the 50/50 policy, she replied that the farmers accepted to participate and the farmers came forward on the proposed models on how it should be done. It may not always be 50/50 but it allowed for equity between farmers and workers and some cases exceeded 50 in favour of the occupiers and workers. The Department had approved 18 and it was in the process of being transferred.

On NARYSEC, she replied that last year the Department had 2 700 as a target. This year the target was 2 132 because of the challenges at Technical and Vocational Education and Training (TVET) colleges. The number the Department was accounting for was the number it could certify within the period of time.

There were 11 agri-parks that were under construction and the Department will provide a detailed progress report.

On where the infrastructure projects facilitated to support production were coming from, she replied that it came from the provincial offices who had worked closely with the Department of Agriculture, Forestry and Fisheries (DAFF), smallholder farmers as well as communal areas. In KZN for example, there were more than 2 000 hectares brought into production.

In terms of rural disaster mitigation and why some provinces like Gauteng and Mpumalanga had zero, she replied that some of the provinces who had higher numbers had been trained in skills like waste management and fire fighting. The Department had just concluded more training in the last financial year which would be made available when the annual report was presented.

The criterion used for the ‘one household two dairy cows’ were aligned to agri-park programmes. This was not done in all the provinces because dairy was a specialised type of function and could not be done everywhere.

On the meaning of state land confirmed and vested, she replied that when South Africa became a democracy in 1994, there were land parcels in the name of the Republic South Africa. Such parcels had to be correctly vested now either with a province or a government department. Several applications had come to the Department to get them in the current place for development to happen on the land.

Skills development programmes and NARYSEC were not the same. There were different ways of measurement. NARYSEC was a 12 month course and others may be 2 weeks short courses. All of the programmes will however be accredited. The negative media especially in terms of TVET colleges in Mpumalanga was being investigated. The DRDLR had tightened controls on all the TVETS. The Department would confirm the registration of students that were attending and also ensured that the curriculum was designed jointly with the Department.

On the question of deeds office in Limpopo, she replied that when the process was started the deeds office was not open in Limpopo. The number of deeds Limpopo would have registered was clubbed with that of the deeds office in Gauteng. The Department was moving towards a fully automated electronic deeds management. The deeds office in Limpopo was still small but they would be able to register the deeds.

On rationale behind allocation of numbers, she replied that the Department considered the rural nature and type of intervention required in certain provinces. The Eastern Cape as well as KZN usually had larger allocations. DRDLR also considered the low levels of income in the areas. Different formulas were used but the allocation was largely linked to the poverty in those places.

SPLUMA legislation had moved to the Presidency, however the components which were within the Department would not move. DRDLR would support the Presidency as well as the Department of Cooperative Governance and Traditional Affairs (COGTA) as may be required. Because the ESTA Bill was in progress, there was no budget. When the Bill got approved within the course of the year, the Department would then take it within its programmes.

On the programme for the integration of graduates, she replied that last year, the Department brought on board 198 agriculture graduates. The process of making sure the graduates were taken in was continuing. The Department had a full list of the agriculture graduates in the country. In terms of certification of NARYSEC, she replied that the Department was not able to deal smoothly with all the certification as a result of the challenges with TVET systems, but the Department met regularly with the Department of Higher Education and Training (DHET) and the Skills Education and Training Authorities (SETAs) and was able to push more certificates out.

Ms Sadiki replied that the budget allocated to rural development increased by only R500 000, because there had not been much growth. The Department was using a lot of overtime, because it lost a lot of officials. The Department either paid the workers or the workers would not work. There was really no other option but to pay for the overtime. The Department had contracted the Project Management Unit for three years. A service provider had been engaged in March to ensure targets were met and there were monthly monitoring reports. The budget had remained constant for this financial year and the next. In 2019/20, the budget would have decreased as the training of the Department officials will be completed.

Mr Eugene Southgate, Deputy Director-General: Corporate Services, DRDLR, said the NARYSEC programme was budgeted for. The Department had a learnership as well as internship programmes. DRDLR tried to accommodate as many internship programmes at this stage because learnships required additional work of a supervisor and given the issue of lack of capacity, it could not do learnership programmes. Funds had been put aside to accommodate disabled employees and were released when it was required. Research had shown that the pool of employees who had experience in land reform were limited. If the Department wanted to accelerate the land reform programme, it would have to attract employees. The Department also battled with the private sector where people were offered very good salaries. The Department was looking for alternative ways of retaining the current staff members especially in middle management and senior management positions.

Ms Archary replied that DRDLR included mega cooperatives two years ago in the APP and it had continued to work on it. Originally, the Department had thought that it would go quickly to the highest level but DRDLR had not been able to. The Department was not continuing the recapitalisation and development and the numbers seen in the presentation was the one the Department was phasing out. The underlining issue would move to DAFF and DRDLR was closing up those where it had started support.

Mr M Filtane (UDM) said DRDLR got allocated a budget and through that budget the Department was expected to address job creation. With so much money set aside for agri-parks, how much business did the Department see coming from the agri-parks? What was the expected economic impact after the Department had set up the infrastructure in point 3.1 of the first presentation? He referred to 5.2 under land reform and asked whether the jobs expected to be created were of a permanent. What was the duration of those jobs? Did the Department have a programme of utilising the large numbers of graduates that came out of agricultural colleges?

Mr P Mnguni (ANC) asked how far the extent of corruption in the Department was. If an official was calling from a landline in the head office, would the number of the landline show on the telephone of the person who was called. The term equity seemed to be a spot on concept and it should reign supreme. In discussing equity, the Department must look at the disparity even within the provinces. How would the Department reach the poorest of the poor? Numbers should always follow the functions and be informed by reality of what was sought to be achieved. Equity was the way to determine these numbers. Ms Mbabama had a raised a very important point. The Committee had not had space to interact on the issue of 50/50. The Department should come back with a summary of what it had found in terms of the pilot and give the Committee the basis. The DRDLR should be able to tell the Committee the lessons from 50/50. The Committee wanted to be vigilant because this affected the people on the farms. Mr Walters said that in addition to the point raised by Mr Mnguni on the 50/50 pilot project, the DA supported the shared equity schemes as well as favouring people that were historically marginalised. What Mr Mnguni had said was important.

The Deputy Minister replied to the corruption issue and said the Department was dealing with some cases currently. People deliver things under the name of the Minister and there was a big scam in the Department. There was no idea of where the people involved got the data base from. If the Members of the Portfolio Committee came across such issues, the Members should endeavour to inform the Department. There was a socio-economic profile of all municipalities in the country and this information was used to assist the Department in the equity share. The Department also relied on its officials to filter all the communities so that the needs could be identified. On 50/50, she urged that the Members of the Committee should speak with the farm workers the next time they went on oversight in order to get the feel of these workers.

Ms Archary added that there was the Presidential hotline as well as the anti-corruption hotline that people were expected to call and report corrupt practices.

On the question on budget by Mr Filtane, Ms Archary replied that the Department could say how many businesses that could come from the agri-parks. It had undertaken a full impact evaluation and how the businesses were contributing to job creation. The Department was working towards the economic impact on each household, the average production increase of the farmers in KZN as well as access to schools and health care in the Eastern Cape. The 5000 jobs were those the DRDLR was able to account for but there were more. The Department would make the report on the 50/50 policy available to the Members as requested by Mr Mnguni.

Mr Filtane said he was not satisfied with the answers he had received from Ms Archary. He proposed that on a given date the Department should come to the Committee with the details of the socio-economic impact of the agri-parks infrastructure projects. The Portfolio Committee had been asking for this report for a long time. This Committee had been in Parliament for three years and it could not put its finger on anything that had been given in response to this demand. This was a crucial matter for the Committee. There was social turbulence out there and this was having a negative impact on the economy. A lot of money had been spent on agri- parks. The Committee would like to know more about what was happening in that sector

Mr Mnguni thanked the Deputy Minister for her commitment against corruption which she had indicated in her response. He asked if there would be consequences for those who were found to be involved in corruption.

The Chairperson said there had been many investigations on corruption but nothing had been done against the offenders. What was the status of the Director-Genera’s suspension? She said the reason for the many questions from the MPs on 50/50 was as a result of the lack of policy that had been presented to Parliament on that issue. The demand out there was very huge but the target of the Department remained the same. What were the challenges since the Acting Director-General assumed that office? What was the success story? For how long were the reports on corruption going to lie on the shelves gathering dust without any action being taken by the Department?

Ms Archary replied that there had been a lot of charges made by the Department in this regard and a number of disciplinary cases were ongoing.

Mr Southgate added that there were reports but none was gathering dust. There were close to about 283 cases. An official had been dismissed. The Department would provide a report on actions that had been taken so far on these cases. The officials involved had the right to ask for the postponement of these cases and this was where the challenge laid.

Ms Archary said the Department would supply a report on the disciplinary measures that had been taken against offenders. On the question by Mr Filtane, Ms Archary replied that as soon as the Department had concluded on the agric-paks, it would be made available. There would be a breakdown of the jobs that were permanent and those that were not. In terms of graduates raised by the Chairperson, Ms Archary replied that the graduates were receiving training at the moment. There were 203 of graduates in this financial year. In terms of the high school programme, it was done under one of the employment schemes and would be rolled out in the target in the APP. It was a successful programme and the Department would continue with it. If officials were found guilty of corruption there would be consequences.

On the question raised by Mr Mnguni on equity, Ms Archary replied that the Department had done a detailed analysis. The Eastern Cape for instance was given more money on rural roads than any other province. On the suspended Director-General, Ms Archary replied that there had been two sittings in that regard. The first was on 24 January and the second sitting had been yesterday.

Briefing by the Valuer-General

Mr Christopher Gavor, Valuer-General, Office of the Valuer-General (OVG), also briefed the Committee about his Office. He said the Office of the Valuer-General came into operation on 15 August 2015. It was new and he was the first to be appointed into that position. Since that date the Office had had to navigate its way. Land reform was defined by land development, tenure reform as well as land restitution. Issues of land reform had to be executed by the Valuer-General. Three officials of valuation were transferred to the OVG and the budget of the OVG was managed by the deeds office. The process of acquisition of land by government agencies and the assessment of compensation for dispossessed land owners under the Land Acquisition Act was administered by the Valuer-General. In determining the value of land, the Valuer-General will take into account five other factors in the Constitution, which were the use of a property, history of the acquisition target, market value, extent of direct state involvement and purpose of the acquisition.

Discussion

Mr M Filtane (UDM) remarked that the government was a willing buyer from expensive sellers and asked why that was so. When evaluations were done by the OVG, were such evaluations based on the improvements on the land or on the turnover of the business?

Ms Mbabama said there had been conflicts between farmers and officials of the Land Claims Commission. Was the Valuer-General aware of that and what the OVG intend to do about that? Was the OVG going to use productive value or management of the farms to determine the value of the land?

Mr Nchabeleng asked how long it took to do evaluation of state owned farms and who funded the OVG.

Mr Mnguni said Parliament cannot accept willing buyers and expensive sellers. The office of the Valuer-General should not let Parliament down but should endeavour to save money for the state. All state assets should be valued by the OVG and the strategic direction of the OVG should be defined.

Mr Gavor replied that government was not a willing buyer. There were lands that the government must of necessity buy of which there were no other options than for the government to buy. On whether valuations were based on improvements on land, he replied that it was based on the value of the property which was the legal interest on the property. Section 25(3) of the Constitution took into account the use of the property which was based on the balance sheet of the business. Generally, the accounting sheet of the business would give an indication of the health of the business. The OVG received its funding from National Treasury. The law provided for that. It was only the evaluation done for other Departments that were paid for. The OVG would give an evaluation report as well as a quality assurance on state owned lands within 50 days. Savings was not the OVG’S primary objective. The primary objective was to support and assist land reform. In the process there might be savings. Valuations were done in terms of the law and there were guidelines for that.

The Chairperson thanked everyone and said if the Department did not take action against those implicated, the issue of corrupt practices would continue. The Committee demanded a report on the investigation of officials and actions should be taken on the report.

The meeting was adjourned. 

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