The Ingonyama Trust Board (ITB) presented its fourth quarter report and the Department of Rural Development and Land Reform (DRDLR) presented a status report on the Agricultural Land Holding Account (ALHA) to the Portfolio Committee on Rural Development and Land Reform.
On Land Management (Programme 2), ITB approved 150 land tenure rights in the fourth quarter. The annual target has not yet been achieved due to the clearing of backlogs. In terms of Programme 3 (Rural Development), one of the key performance indicators in the fourth quarter was the number of potential projects of high commercial value for partnership with private sector. ITB did not achieve this target due to the fact that the identified and approved site by the Board was not suitable and now the entity is working on fast-tracking site identification. One of the key performance indicators was the provision of training for traditional councils. This could not be achieved due to the fact that the training officer passed away resulting in under performance of the target. However, the training function will be outsourced to avoid under performance as per the new Annual Performance Plan (APP).
ITB under spent by 36.4% on Administration and there was gross under expenditure on the Rural Development programme (56.23%). Total expenditure amounted to R19 million. Total revenue generated for quarter 4 amounted to R14.1 million (excluding transfer payments), with the majority of the income coming from rental income. Transfer payment amounting to approximately R1.2 million was received and fully utilised in the fourth quarter, increasing total income amount R15.3 million.
Committee members raised strong concerns regarding the planning ability of ITB. If less than 10% of the total budget goes towards the core business of the organisation, he wanted to know how ITB hoped to achieve its core mandate and effect change in people’s lives if so little is spent on the core business. Goods and services and traditional council support are of a supportive nature to core business, but gets 90% of the allocation.
The Committee questioned the overall structure and reporting of ITB’s budget, its bursary allocations, the relationship with traditional councils and the long term capacity constraints of the organisation. The Committee outlined the areas of concern that the organisation need to look into such as the target shifting, delay in implementation of plans, under spending, and the finalisation of the policy.
According to the DRDLR, ALHA did not achieve its 370 000 hectares of land it targeted to acquire, however only managed to acquire 222 640 hectares. The target for hectares allocated to smallholders farmers was 185 000, but ALHA managed to allocate 102 287 hectares. The targeted hectares available for allocation to farm dwellers and labour tenants was 37 000 hectares, but only 9 313 hectares were allocated. In addition, ALHA underachieved in the number of pilot farms on Policy on Strengthening Relative Rights (SRR), but overachieved on the number of Proactive Land Acquisition Strategy (PLAS) farms identified for incubation and training of agricultural graduates. The budget was R3.1 and actual expenditure amounted to R2.9billion. In terms of land acquisition particularly hectares acquired, ALHA underperformed in this area in all provinces except in KwaZulu-Natal and Northern Cape in the 2015/16 financial year. Reasons for underperformance in different provinces vary across the provinces. In some provinces it is more expensive to acquire land than others. In the current financial year Limpopo was added to the list of the provinces that overachieved on targeted hectares acquired.
Members asked questions on the beneficiary selection process and the categories of people and asked what business criteria was used in the selection process by the Department to invest the taxpayers’ money to ensure that it is not the same people benefiting over and over again. Members also wanted to know about the technical capacity of the selection committees and also questioned the viability of the programme being headed by the Chief Financial Officer and therefore neglecting the social objective of the entity.
Committee Members raised the frustrations people on the ground had with the processes and questioned why recap has been, because people are given farms but those farms remain idle because people are technically unequipped to run the farms they have been given. Members asked about the selection criteria for strategic partners, how many of the acquired farms have been allocated and clarification on the budget allocated to AHLA.
Briefing by Ingonyama Trust Board (ITB) on its fourth quarter performance report
Dr Fikiswe Madlopha, CEO, ITB, presented the fourth quarter performance report and highlighted that one of the performance indicators that the entity could not achieve in the fourth quarter was the number of communication reports submitted to the Board. The target was three reports to be submitted, but the target was not achieved. This was due to the fact that the reports were not providing reliable information to the Board. The mitigation plan was to request the Board for guidance on how these reports should be structured. The Real Estate Manager and Deputy Manager positions were not filled, because these posts will be processed in the first quarter of 2017/2018. The Board was also commissioning a service provider to restructure the organogram.
With regards to Land Management (Programme 2), she noted that the Board approved 150 land tenure rights in the fourth quarter. The annual target has not yet been achieved due to the clearing of backlog. Moving forward the entity will ensure performance was monitored. In terms of the number of programmes conducted to prevent illegal occupation, there was only one targeted programme in the fourth quarter, and this was addressed by instructing attorneys to obtain relevant relief.
In terms of Programme 3 (Rural Development), one of the key performance indicators in the fourth quarter was the number of potential projects of high commercial value for partnership with private sector. ITB did not achieve this target due to the fact that the identified and approved site by the Board was not suitable and now the entity is working on fast-tracking site identification.
With regards to Programme 4 (Traditional Council Support), one of the key performance indicators was the provision of training for traditional councils. This could not be achieved due to the fact that the training officer passed away resulting in under performance of the target. However, the training function will be outsourced to avoid under performance as per the new Annual Performance Plan (APP).
Mr Devendra Heeralal, Senior Accountant, ITB, said ITB under spent by 36.4% on Administration and there was gross under-expenditure on the Rural Development programme (56.23%). Total expenditure amounted to R19 million. Total revenue generated for quarter 4 amounted to R14.1 million (excluding transfer payments), with the majority of the income coming from rental income. Transfer payment amounting to approximately R1.2 million was received and fully utilised in the fourth quarter, increasing total income amount R15.3 million.
Mr M Filtane (UDM) referred to the communication reports and asked why this guidance was not provided earlier. The contribution by government constituted less than 20% of the organisation’s revenue but government expected certain deliveries in the main. If less than 10% of the total budget goes towards the core business of the organisation, he wanted to know how ITB hoped to achieve its core mandate and effect change in people’s lives if so little is spent on the core business. Goods and services and traditional council support are of a supportive nature to core business, but gets 90% of the allocation.
Mr E Nchabeleng (ANC) said what is spent on the core mandate is less than what is spent on anything else in the organisation and this does not sit well. The last time the Committee engaged with ITB, there were two budgets: one for the Trust and the other one for the Board, but now it seem consolidated. He appealed to the organisation to be consistent in its presentations.
Ms S Mbabama (DA) said it is not clear what has been achieved during the year. She was curious about the communication the reports not providing reliable information. If it is linked to the stakeholder engagement strategy that was approved, there cannot be communication reports about that, because it has not been implemented. She referred to the target to facilitate economic development. It was said that the target is dependent on a third party and she asked who the third party is. She also wanted to know what the115.33% expenditure on compensation of employees entailed. She asked clarification on the transfer payment and the goods and services expenditure so that there can be a solid comparison of the costs against the budgeted amounts.
Mr A Madella (ANC) referred to the number of land and rights approved and asked what type of rights have been concluded and what type of benefits did the communities gain who lived on the land. The under spending is indeed a concern and he also referred to the audit that has been done to identify prime land. He asked where prime land for investment purposes was and if all of it had been allocated. On the educational awards, he said was no clear breakdown on whether learners with disabilities have been awarded any benefits or awards in this quarter.
Mr Nchabeleng stated that he was worried that there were 13 targets for the fourth quarter, but only six were achieved under the Administration programme. This was worrisome and a regression from the last financial year. He asked how many targets the organisation set for the fourth quarter.
The Chairperson said the delay in the implementation of some of the targets is a major concern. The annual targets were 12, the quarterly targets were three and from the first quarter to the fourth there was no report furnished to the Board. She asked what the organisation was seeking guidance from the Board on. Furthermore, the delay in the finalisation of policy is also another major problem and this was supposed to be finalised according to the fourth quarter report. Once again targets are being shifted to the following financial year. With regards to the vacant positions, it was said earlier during the presentation that the posts have been advertised and she asked which is which. The poor planning of the organisation is grossly affecting the performance. She referred to the passing of the training officer and asked why ITB would employ one training officer considering the vastness of the land. The plan is to outsource, whilst the President has outlined emphatically that outsourcing should be reduced due to the high unemployment rate in the country.
Dr Madlopha responded and said on the communication plan and reports that it might be as a result of how these reports were produced historically. It was not a new target; it was a standing target for the past three years. The nature of reports that were presented in the past was mainly just cuttings and clippings in terms of trends on IT and land management issues rather than proper reports. The board reviewed these reports and concluded that it was not in a position to deal with those reports because they are not legitimate reports. The media person was mainly familiar with those kinds of reports. There would be indeed under-performance in this area due to the confusion between the secretariat and the change in the requirements of reports. It is only recently that a proper communication plan was underway looking at both internal and external communication. In the past these reports were accepted but now the organisation has indeed looked at how the problem is going to be dealt with. There has been no change on this item throughout the year because guidance had been sought after.
The mandate of ITB is mainly land management more than social services. In the process of managing land there are certain services that are rendered to the traditional councils, as well as through the leases to the communities. The budget that ITB gets as a transfer payment from the Department is mainly for administration and the rest of the budget comes from the Trust budget. The under-expenditure is mainly found in traditional council support because the budget held in trust for the communities. ITB was starting work with the communities to come up with business plans in order for those funds to be used. It was not easy to just disburse because the disbursements are guided by the viable projects on the ground and the capacity constraints in traditional councils were an issue that could impact accountability. She took note of the fact that ITB needs to begin a shift in its budget process to be inclined towards the development of communities and projects therein.
The third party referred to is the Agriculture Development Agency. ITB initially wanted to establish an MOA for the processing and beneficiation of the agricultural produce but the hurdles were on their side in terms of materialising and implementing the plan. Going forward the ITB is steadily looking for other agencies that it can partner with on this regard.
On the overachievement, she said the communities would benefit because some of those leases are commercial and any rentals that are collected thereof will be utilised for the benefit of the communities. With regards to people with disability, this is something that is still a challenge and the organisation is looking at it and in the future might approach the disability association in the province in order to assist ITB.
In terms of the delays in the implementation and target shifting, ITB had staff members that were on suspension and the capacity of staff in terms of policy formulation are not at a level that they can be able to draft or formulate policy.
The post of Real Estate Manager was reviewed and has since been advertised but as Land Manager not Real Estate Manager. The Deputy Manager on Administration post has also gone for review and the hope was that the organogram review process will definitively inform the correct levels of the posts and also address the capacity constraints issues.
There was one training officer post and the organogram review will address this issue and look into perhaps more training officers. A training officer needs an understanding of ITB in terms of training and legal requirements, because this person will assist traditional councils to develop community development trusts for the benefit of the communities. Therefore, someone was needed with a legal background to assist traditional councils with registration of the trusts.
Ms Mbabama asked whether it is wise to have a media liaison person handle board meeting reports rather than a board secretary as is usually the case with many boards.
Dr Madlopha responed on the over-expenditure on compensation of employees and said in the previous months there had been a project where ITB had which required more capacity in terms of personnel, particularly data capturers. A decision was taken to employ five data capturers and one senior data capturer on a short term basis in order to help clear the leases in terms of filing and capturing the information properly for auditing purposes.
The Chairperson shared concerns regarding the annual budget for Administration of R78 million while the quarter 4 budget was R44 million, but the actual spending was only R16 million and she asked the team to clarify this. Similarly the traditional council support annual budget was R30 million and the fourth quarter budget was R7.6 million, but the actual spending was R1.4 million. The PFMA is very clear on matters of under-spending and overspending and the Committee needs a detailed report on those data capturers that were appointed and how much each was paid that led to the 115% overspending. She mentioned how confusing the financial reporting was and wanted to know about what constitutes capital expenditure in the organisation. She asked for clarity on the fourth quarter board member remuneration that amounted to R1.6 million, as well as the travel and accommodation expenses that amounted to almost R1 million. She also asked about how many beneficiaries were paid out of the R1.2 million reflected in the financial report. With regards to bursaries, the R255 000 amount needs to be improved, because the cost of education is very high and she asked if ITB covered the full costs of education or just a portion of it. She requested a more detailed report on this.
Dr Madlopha replied that the bursaries vary, because there are two categories of bursary awards. There are those that come directly from the traditional councils based on the funds collected from their leases. The traditional councils would provide a list of the students that they believe qualify – this is based solely on the traditional councils’, including the amounts. For this quarter, there were five traditional councils that awarded bursaries and the amounts varied and this was based on funds available and collected for that particular traditional council. ITB board was not in the position to dictate how the traditional councils should disburse the funds and to which students.
On the amount of R225 000 amount, R25 000 was awarded per student provided by ITB, and it was approved by the board. The allocation was R425 000 and ITB would pay the initial amounts at the beginning of the semester and await confirmation of the balances by colleges or universities. Those balances have not yet been paid as the year end, subject to correction.
In terms of payments to community beneficiaries, a report will be forwarded to the Committee. With regards to the board remuneration, the stipulated amount to be paid to board members is stipulated by the Department. For the first time now, since 2015, the Board is full, so there are now new members that come from across various areas and the travelling costs contribute towards the remuneration and accommodation. This is where the vast increase stems from. The capital expenditure refers to any capital equipment nature, however in some instances this may be found overlapping with equipment in goods and services, because there are some goods that are used for capital purposes.
Ms Jabu Bhengu, Deputy Chairperson, ITB, clarified and said ITB overspent by 15% not 115% on the compensation of employees in terms of the budgeted amount. That overspending stemmed from the data capturers that were employed on a short term basis. Secondly, there are benefits to the people for the agricultural programmes that ITB has, but it is also a case of capacity constraints – there is no staff to go out to all the communities and offer the support for communities to have agricultural projects. Hence, the ITB focuses on establishing agreements with other agencies to mitigate the shortfall of staff members and assist.
The Chairperson asked why recruitments are not based on the vastness of the area to eliminate the travelling and accommodation costs. She also asked why ITB was not recruiting more personnel since they always complain about being under capacitated.
Dr Madlopha responded that the allocation from the Department is very minimal, and the monies that are collected are for the communities, it is purely budget constraints that hampered the ability to get more personnel.
Mr Heeralal responded on the high administration costs and said it was because of non-routine expenditure such as depreciation and provision for doubtful debt in the fourth quarter. Capital expenditure was tangible items such as equipment and non-tangibles such as software and website design. Items such as furniture and computers referred to the expenditure such as the licensing or general maintenance of computers. The rental income was so high due to high volume of leases that came through. ITB uses the standard template of accounting.
Mr P Nguni (ANC) referred to ITB’s financial reporting and said the standard chart of accounts (SCOA) has been in existence for over a decade at least and he was not sure why ITB found it so difficult to explain. National Treasury has a specific manual on SCOA systems of which ITB should be aware and there should be no duplication of items under goods and services and capital expenditure. He understood the distinction between software and hardware, but was not sure if this was really the problem. ITB could be supplied with the manual and there should be no compliance at the next meeting.
Mr Mbabama asked if the lease agreements were not expected and why was it budgeted for at such a low amount. The income was great, but the competency at budgeting was a concern.
Mr Madella shared his concerns about the costs of studies that are very high, and he suggested that perhaps the bursary information should have been reflected in much more detail in order for the committee to understand the allocation and where the money comes from and where it is going. The Board can look into increasing these funds, because R25 000 is too little for the cost of studies. On the remuneration, the fact that it comes from the Department is very worrisome and the information reported is not very clear. The over expenditure on salaries, notwithstanding that there was a specific project that contributed to this one, should not have happened considering that ITB is understaffed to begin with. Therefore, by default, there should be under-spending because there are funded posts that are not filled.
Mr Filtane stated that there is a critical shortage of appropriate planning at ITB, because 90% of the expenditure goes towards the administration and only 10% goes towards the actual core business. ITB complains about being short-staffed, however there is only one training officer and it is worrisome how one training officer would be able to cover the vast areas of the communities. He suggested that ITB should submit to the Committee its total operational plan and indicate where it will be short-staffed, and have the Committee indicate which critical positions need to be filled to get the ball rolling.
Dr Madlopha replied and said the plan had already been tabled on 9 May 2017. The ITB team takes note of the suggestion to increase the bursary amount and it will be taken to the Board for review and consideration. The vacant posts were only the Real Estate Manager and the Deputy Manager of Administration. On the high rental income she explained that some companies decided to pay once a year in terms of their annual rental for their leases whilst ITB has projected the income on a monthly basis.
In conclusion, the Chairperson outlined the areas of concern that the organisation need to look into, such as the target shifting, delay in implementation of plans, and the finalisation of the policy. Furthermore, under-spending on rural development is not allowed and cannot be tolerated by the Committee. The committee will also be awaiting outstanding information regarding the beneficiaries, the compensation of employees, as well as the review of ITB’s educational policies (and to have a tracking system for students). She mentioned the working relationship with the traditional councils, because if there was a good relationship ITB would be aware of their plans. This relationship needs to be improved to assist ITB with its planning.
Briefing by DRDLR on the Agricultural Land Holding Account (ALHA) – Fourth quarter report
Ms Rendani Sadiki, CFO, DRDLR, highlighted the overview of policies guiding the ALHA:
-give effect to the State’s constitutional obligation to undertake land reform;
-promote the sustainable use and development of land acquired by the state for land reform purposes;
-contribute to poverty alleviation; and
-promote economic growth and the empowerment of historically disadvantaged persons.
In light of the recapitalisation and development policy framework, the policy seeks to provide black emerging farmers with social and economic infrastructure and basic resources to run successful agricultural businesses with the following strategic focus areas:
-rekindle the class of black farmers destroyed by the 1913 and 1936 Land Acts
-combating poverty, unemployment and income inequality and
-reducing the tide rural-urban migration
Notably, the policy is particularly against the following:
-supporting people who have the means to develop their land
-Proxy farmers – people who run their own businesses in towns and cities, but employ managers to run their farms; and
-Failed commercial farmers who want to make fortune from disbursement meant to fairly compensate strategic partners for work done.
The State Land Disposal Act of 1961 empowers the Department to amongst other things to lease State land. With regards to the criteria, and processes for identification of farms to be acquired and the selection of beneficiaries – the identification process is a public process, where notices requesting expressions of interest are put up at municipal notice boards and public spaces, as well as advertisement in local media.
ALHA did not achieve its 370 000 hectares of land it targeted to acquire, however only managed to acquire 222 640 hectares. The target for hectares allocated to smallholders farmers was 185 000, but ALHA managed to allocate 102 287 hectares. Lastly, the targeted hectares available for allocation to farm dwellers and labour tenants was 37 000 hectares, and only allocated 9 313 hectares to farm dwellers and labour tenants.
In addition, ALHA under-achieved in the number of pilot farms on Policy on Strengthening Relative Rights, but over-achieved on the number of Proactive Land Acquisition Strategy (PLAS) farms identified for incubation and training of agricultural graduates. There was also an underachievement in the land reform farms, while 1 249 jobs were created through the land reform project.
The budget was R3.1 and actual expenditure amounted to R2.9billion.
In terms of land acquisition particularly hectares acquired, ALHA underperformed in this area in all provinces except in KwaZulu-Natal and Northern Cape in the 2015/16 financial year. Reasons for underperformance in different provinces vary across the provinces. In some provinces it is more expensive to acquire land than others. In the current financial year Limpopo was added to the list of the provinces that overachieved on targeted hectares acquired.
Mr T Walters (DA) referred to the beneficiary selection process and the categories of people and asked what business criteria was used in the selection process by the Department to invest the taxpayers’ money to ensure that it is not the same people benefiting over and over again. The beneficiary selection criteria refer to categories of people, but he asked what the personal criteria were that was used beyond what is mentioned in the presentation. There are various departments that are involved in rural development, and he wanted to know who was taking ownership of all the silos and projects to make sure that the beneficiaries are fully benefiting. There seems to be a cycle of money being spent on failures rather than successes. He asked how the same criteria are being used in the tenure reform objective. He asked what measures are in place on an ongoing basis to determine the business success of a project such as profitability ratios and investments ratios.
Mr Filtane asked about the technical capacity the selection committees have to make the right choices. Secondly, he was not so sure whether this department should be reporting to the CFO considering the objectives and the principles of the project. CFOs are particularly concerned about the balancing of the financial books in the organisation not the social impact. He asked if this was the right way of allocating functions if the impact is the main concern. He asked on what grounds the Minister would disapprove an application, because in some cases farms are allocated to sitting civil servants (as been reported by some members of the communities or people on the ground). He asked if there is a dedicated budget for this or not, because targets have been set and not achieved and he wanted to know if it was because of budgetary constraints. He appreciated the honesty that was displayed by Ms Sendaki during the presentation, because it encourages the committee to look beyond what is being said in a presentation.
Ms N Magadla (ANC) asked what the challenges or reasons are for debt not being paid by the farmers, and how is the policy in terms of recovering the debt amounts. She asked for clarity in terms of land tenure administration and Communal Property Associations (CPAs). She asked whether the recap is still with ALHA or the Department of Agriculture, Forestry and Fisheries (DAFF).
Mr Madella said he was confused about the criteria and the levels – it seems a bureaucratic process on ground level. In the area where he is deployed there are a number of people that are extremely angry with the department because people applied a long time ago and they have not received any response in terms of where they are in the queue. And people have complained about how they are treated by administration staff in the Department. Recap and the exchanging of the relative rights are very good policies but it undermines the ultimate objectives of the PLAS to acquire farms. From a planning perspective you would set a target that is achievable but at the end of the tenure that target is not achieved. Clearly the Department has admitted to that when the strengthening of relative rights has been conceived there was no money for it and the money had to be taken from the money set aside for ALHA. Then one has to ask why has recap been introduced, because people are given farms but those farms remain idle because people are technically unequipped to run the farms they have been given. If this continues in this fashion very soon the Department is going to be stripped off its functions and perhaps recap be transferred to DAFF. The report indicated that 144 farms have been acquired since 2009, and he then asked how many of these farms have been allocated and how many have not been allocated to individuals or groups of individuals. What have become of the farms that have been allocated but nothing has happened in terms of utilisation since the allocation? The land issue was widely popular and emotive. The patterns of land ownership need to be changed and the Department needs to strengthen its processes and procedures. He concluded by commenting that it does not seem people with disabilities are being prioritised by the Department.
Mr Nchabeleng concurred with Mr Madella that people with disabilities need to be taken seriously. The Department gives people money not knowing whether they will be able to account for it. Does the Department look at whether the people given the monies and the resources have the capacity to manage the money and use it appropriately? On slide 15, with regards to the average terms of lease and cost of leases, he asked what the figures represent exactly and what happens when a farmer owes more than they can afford to pay.
Mr Walters asked if the Department had looked at the venture capital approach where it starts off with seeding capital depending on the performance of the person and further funding is disbursed based on evidence of the ability to farm. It minimises the risk of the Department and it creates opportunity for more people to benefit from the resources. Investment in successful projects in itself attracts money for investment. He also asked about the criteria for the selection of the strategic partners.
Mr Mnguni asked for clarity regarding the performance of the provinces and what the numbers actually mean as outlined in slides 12 and 13. He refers to the nature and format of the reporting and said everything done in the public space can be fit to the Treasury reporting format.
Ms Sadiki responded that PLAS was developed there was no thought through that the land will continue to increase and a strategy will be needed to bring in efficiency. The strategy was developed and implemented in 2002 and it has been like that for many years and so it was not preconceived that challenges would have changed. The CFO heads the entity, because the personnel within the entity are financial management people. Operations are within the Department (under programme 5) and the personnel under programme 5 do not have the financial management skills, only technical. The Department was in the process of repositioning the entity. G-Tech had been hired and they are doing a feasibility study to ascertain how best these things can be repositioned and achieved. Due to the failure to follow through on the developed strategy, G-Tech was hired to come up with a strategy, because an entity cannot just have a financial section. In effect ALHA is not an entity, but rather a subdivision of the finance function. G-Tech will be giving the report at the end of June 2017 on the research they have done and this will determine the way forward. Currently the biggest challenge is the lack of a cycle in this entity with different functions.
There is a dedicated budget for ALHA and the CFO indicates what is for recapitalisation, land rights acquisition and strengthening of relative rights. The reasons of non-achievement vary depending on the environment because the provinces differ. In some provinces it is expensive to acquire land and some of the reasons could be ALHA’s own non-performance.
On whether monies are given to people without thorough check of whether they have the capacity to manage it, she alluded that the approval of the money is through the committees. It is difficult to balance and people must understand that the government has created a beneficiary state – everybody wants government to give them things for free. So unless government changes that mindset it becomes very difficult. This is something that needs to be driven from a policy perspective, and when one speaks of selection, the aim is to redress the 1913 and 1936 unjust actions. People need to be mindful that the entity is dealing with people that have not been in a position to manage or lack the capacity to manage accounting for the money that has been allocated to them.
The Chairperson suggested that perhaps the mitigation action is to first empower the people and build the required capacity before the provision of the grant and this will then ensure that the monies are utilised appropriately.
Ms Sadiki responded to say that ALHA already has a structure in place that does that work. The people are given a strategic partner and an accountant and there are also project officers that run those things. There are success stories but the majority are unsuccessful. Surely people need to be empowered on how they can utilise the money, and how to account for the money that has been allocated to them. The truth is there are those that are successful and are able to make use of the money. There is a policy issue here with regards to this beneficiary system and it is not working – this challenge needs to be approached from a policy perspective. Furthermore, Recap was introduced by the current Minister, and when it was introduced there was no allocation by National Treasury. ALHA reduced its allocation to cater for Recap, about 25% of the appropriation. Some of the money meant for land acquisition was transferred to do this part of recapitalisation, and DAFF wants to take the function, but the money is the baseline of the Department because there was no money. They however want the consideration of section 33 of the PFMA – the transfer of a function to another department to be transferred with the capacity and appropriation. Treasury stated that it will use its prerogative on this because the function cannot be moved without the money and so there has not been a final conclusion on this.
The SRR policy is a good policy initiative but she agreed with the sentiment that it does undermine the objectives of ALHA in terms of land acquisition. When it was initiated, the appropriation was initially R1billion now it has decreased by half and targets will not be left.
She noted that ALHA is not allowed to allocate farms to civil servants but she was unsure how this comes about or had occurred, and she is not aware of any farms that have been allocated to civil servants. The average term of lease is 30 years and the issues of CPAs; she was unable to answer because the personnel that works with CPA was not present to comment on that. The policy to recover the monies from bad debts stems from Treasury regulations. As far as ALHA implementing the policies to attempt recovering the monies it has indeed taken those steps. When the entity implements the controls and policies, the public views it in a negative light and officials need to be empowered to do their work. National Treasury reduced the budget by R130 000 for this financial year. This money was given to Land Bank for soft loans to test the market.
Mr Bonginkosi Zulu, Acting Deputy Director-General, DRDLR, said of the R1 million, R525 million went to SSR and just over R400 million was left for the normal acquisition. That made a dent, because SSR does not only focus on land acquisition but also other issues beyond the acquisition of immovable assets. There are provinces that are constantly underperforming and that information can be provided in much more detail to the Committee in writing.
The issue of allocation of land to people living with disabilities is noted and those people are part of the target groups in the policies, it just need to be enforced in the systems. The system of disbursements of the grants (allocation of funds to beneficiaries) has been reviewed and the gaps have been looked into in terms of accounting for the money that has been disbursed. The commitments now of disbursing the funds reflect the changes that have been made in the system. With regards to the beneficiary selection and their capacity, when the entity started the roll out of the District Land Reform Committee which was in previous financial year upon their establishment, the entity then established the sub-committee (District Beneficiary Selection Committee) but a gap was noticed in training which must be constantly provided. The code of conduct has been developed for them but there is still some subjectivity in the final allocation of land. These committees cannot be chaired by a government official; they must be chaired by a commodity organisation person with knowledge on that particular commodity in that particular district.
In terms of the soft loans, currently ALHA is engaging with the Land Bank for the provisions of soft loans and the organisation can come back and present to the Committee the details of that agreement when it has been finalised. The farmers will have access to soft loans as a form of access to credit facilities and not limit them to only grants. The categories and target groups are very well defined in the policy, but because the selection committees now look at the skills capabilities of an individual, and the farms allocated in the past three years are better than the farms allocated since the inception of PLAS. On the selection of strategic partners, he said the Department advertised for strategic partners or the applicant can identify a mentor, who had to be approved by the Ministerial Legal Audit Committee (MLAC) in both circumstances.
In terms of the Minister disapproving the applications, the Minister does not approve or disapprove applications. The approvals are done by MLAC. He asked for details of civil servants getting farms, because it was not allowed, even for spouses of civil servants.
The Chairperson said whatever has not been covered needed to be addressed at the next meeting. This programme was established land ownership of the previously disadvantaged. It is important that these opportunities be made available in the home language of applicants. The amount of land needs to be scaled to the proven ability to manage and adjusted as the skills level improves. More needs to be done for farm dwellers and labour tenants. Any revised policy needs to be circulated to the Committee. Beneficiaries should first be empowered before there can be any money.
The meeting was adjourned.
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