Recapitalisation and Development Programme (RECAP): cost and successes

NCOP Land Reform, Environment, Mineral Resources and Energy

22 November 2022
Chairperson: Ms T Modise (ANC, North West)
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Meeting Summary


The Committee in a virtual meeting received a briefing from the Department of Agriculture, Land Reform and Rural Development (DALRRD) on the cost of RECAP to the Department, the success rate of the programme and its total cost to the land reform programme. The briefing included the details of farm assessments per province after RECAP was granted.

The Committee heard that the Recapitalization and Development Programme (RADP) contributed R3.36 billion (28%) of the R12.2 billion cost of land redistribution during the life of the RADP. The cost of the RADP to the Department was just over R2 billion. The impact assessment on farms after the RADP programme revealed that the RADP did not have significant impact on productivity. Of the 529 farms that received RADP, 132 (24%) produced at a medium commercial scale and the remaining 397 (76%) performed at either the livelihood level or were not productive. RADP played a modest role in improving farm infrastructure. The assessment also revealed that RADP farms performed slightly better than non-RADP farms.

The report conclusions were:
• Poor performance due to poor beneficiary selection and support confirmed by risk and limitation evaluation;
• Challenges can be addressed, through dedicated effort to address constraints in a collective manner, mobilising public and private sector resources;
• Performance on most PLAS farms can be improved through focused investment and support, matching prudently selected and supported beneficiaries with the right farms;
• Clear guidelines for sustainable land management and beneficiary selection and support detailed in report;
• Significant improvement is likely with sound beneficiary selection and integrated, coordinated support;
• Extensive capacity in the PLAS portfolio to make PLAS a model of collaborative innovation.

The Committee asked about the selection criteria for the farms assisted through the programme; how DALRRD assisted struggling farmers; what happens to dysfunctional farms purchased using taxpayers’ money; if DALRRD had a plan for collaborating with academic institutions, other departments and non-governmental organisations (NGOs) for providing training and its plans to improve the weaknesses it found in the programme.

Meeting report

Opening remarks
The Chairperson noted apologies from the Minister and Deputy Ministers. She expressed the Committee’s disappointment at the absence of the Minister and Deputy Ministers and trusted that the presence of the Director General would cover their place in the meeting.

DALRRD briefing on RECAP
Mr Ramasodi Mooketsa, Director General: DALRRD, apologised on behalf of Deputy Minister Skwatsha, who was out of the country attending to national geomatics related to Uganda. He introduced the team and said the RECAP funding that Department of Agriculture had before its merge with Rural Development and Land Reform was stopped and replaced with the Land Development Support, which was run by the current Department. The presentation would provide a report on RECAP and how it worked, as well the assistance it provided to farmers.

Mr I Ntsube (ANC, Free State) said the Committee had set a precedent that the political head of DALRRD must be present in Committee briefings to provide background to the presentation but they were not in the meeting and asked how the Committee would move forward with the meeting.

The Chairperson said she had requested Members to note the absence of the Minister and Deputy Ministers in the meetings and none of them responded, so she assumed they were fine with the DG’s presence and would allow the meeting to continue.

She asked if Members wished to continue with the meeting. No one responded, so she went ahead with the meeting.

Mr P Marais (FF+, Western Cape) said he is a member of the Western Cape Parliament who was invited to attend the meeting. If the people from DALRRD had all the information needed and were competent enough, they should be allowed to present, but if they knew nothing, then the meeting would be a waste of time.

The Chairperson noted that the DG had said he had a capable team and would be able to answer any questions. She asked DALRRD to continue with the presentation.

Mr Julius Mashaphu, DALRRD Provincial Shared Service Centre Head, said the report was based on the assessment and analysis that DALRRD commissioned through a service provider focusing on the Proactive Land Acquisition Strategy (PLAS) portfolio.The assessment commenced in 2016 and was concluded at the end of 2019. The scope of the project included all PLAS projects until end of August 2019 and the total portfolio considered was 2 235. Of this total, 2 062 were visited whilst 173 were not visited due to various reasons, which included access to or unavailability of farmers. Four categories were identified, including the commercially viable (1 158), medium scale (473), livelihood (193), and non-viable (132).

The Recapitalization and Development Programme (RADP) contributed R3.36 billion (28%) to the Land Reform/Redistribution programme in the nine provinces. The cost of the RADP to the Department was just over R2 billion. The impact assessment on farms after the RADP programme revealed that the RADP did not have significant impact on productivity. Of the 529 farms that received RADP, 132 (24%) produced at a medium commercial scale combined and the remaining 397 (76%) performed at either the livelihood level or were not productive. RADP played a modest role in improving farm infrastructure. The assessment also revealed that RADP farms performed slightly better than non-RADP farms.

Mr Marais said almost 50% of the country's food is produced in the Western Cape but the least attention was given to the province. He asked why Western Cape farms were the least supported by the programme. He asked for clarity on the non-viability of farms because all farms needed were well trained workers, good land and water, which was scarce in the Western Cape. He asked DALRRD what it had done to address water scarcity in the province. He asked how the new farmers were resourced and if they were given the necessary skills when they received land.

Mr A Arnolds (EFF, Western Cape) asked from where the money for further investment would be sourced by DALRRD and how much more resources would be directed to assisting struggling farmers. He asked for the details on the R3.36 billion support for the RADP and the selection criteria for the beneficiaries of the programme. He asked what would happen to all the dysfunctional farms that were purchased using taxpayers’ money.

Ms W Ngwenya (ANC, Gauteng) said the assessment report analysis of the 199 Gauteng farms found that about 47% of the PLAS farms that received RECAP had the potential to be commercially viable. Were there plans to assist the farms that were struggling to become commercially viable? If yes, what were the plans? Did DALRRD have a plan for collaborating with academic institutions, other government departments, and NGOs that provided training? What was the rate of success of the RADP project in Gauteng? What were the plans to improve on the weaknesses identified?

Mr C Smit (DA, Limpopo) said since became a Member of Parliament in 2014, the Committee had visited a lot of farms that were recapped at huge expense to taxpayers. According to the presentation, R2 billion was spent on the programme. How much of the R2 billion was effective in making the farms self-sufficient and sustainable and how many farms were self-sustainable?

Mr Arnolds asked if DALRRD would improve on spending the funds allocated to it.

The Chairperson said DALRRD must spend its allocated funds but not just for the sake of it, they must ensure that there is value for money. DALRRD said the total amount of RADP support was R3.36 billion and its cost to the provinces was just over R2 billion, which was a big difference in the value. Of the 28% of funds directed to farms, only 24% could operate at the minimum commercial scale while the remaining 76% reverted to subsistence farming. This raised questions about the quality of farmland purchased. Were the farms sub-optimal when they were first identified? Did the prolonged process of identifying farms earmarked for land reform and negotiating for their purchase result in a viable farm being run down by the time they were acquired? How many farms were in good order when they were handed over to the land reform recipients?

DALRRD response
Mr Mooketsa replied that the RECAP/RADP programme was stopped in 2019 and replaced by a new programme and they would provide the details to the members. He then handed over to his delegation to deal with the questions and he would summarise the points made and deal with policy issues.

Mr Magape Moshabele, DALRRD Director: RECAP, replied the data on the farms acquired across the country suggested that more farms were acquired in land and the distribution of the properties across the country were allocated in line with the different commodity classifications. Most of the farms allocated were for livestock and most of the land reform beneficiaries were given livestock farms, followed by crop, then fruit and poultry projects. The selection of the farms were given to provinces to do selection of projects that were deemed viable and needed support to stimulate job creation in the province.

When looking at non-viability as part of the classification done by the appointed service provider, one would realise that the non-viable farms were classified as part of four categories and they were the farms that could not be turned into profitable farms because of their nature unless an intensive operation could be done, such as livestock farms. The project moved away from converting farms away from their original allocated capabilities. The non-viable farms were supported not with a view of getting maximum impact, but to get a livelihood mode for the families that occupied them to be sustainable.

When the RADP programme was introduced, the Minister had requested industry to come on board as part of expert collaboration in pushing the emerging farmers into the sector for better commercial operation. There were some successes, as strategic partners such as Green SA assisted some farmers and when the programme was reviewed through the Department of Planning, Monitoring and Evaluation (DPME) in the Presidency, they found that there was a need to expand the scope. They changed the policy to introduce more strategic partners to assist. They introduced a mentorship programme where farmers would choose mentors to help them in their operations.

When the RECAP programme started in 2009/10, most of the farms acquired before had already been on a back foot in terms of viable infrastructure, so the investment made was intended at trying to correct the infrastructure to make the farms farmable. This is why the report indicated that there was little impact in terms of production, but there was good work in terms of infrastructure improvement to make the farms farmable. For the farms’ production level to improve, they needed assistance from government programmes and some extensions, but there were some farmers who still needed support even after they received the infrastructure. With the new programme, DALRRD introduced blended funding, which would allow farmers the ability to request production support.

On the selection of the farmers, the selection took its cue from the acquired farms and the analysis that was done which showed the level of capability of the farmers and the farm. After farms were selected, proposals were made and the analysis of the proposals determined how far the farmers would be assisted. After the selection was concluded, the farmers were put on the list and a business plan would be developed with the assistance of the partners and then presented for approval. The dysfunctional farms were sent back to DALRRD for reallocation as those occupying them were not right for the specific farms. There was not a comprehensive selection process in the acquisition of those farms. With the new process, DALRRD was trying to reallocate the farms to fit the purpose of the farms.

Mr Mashaphu replied that when farms were put on the market, the prices of the farms varied based on the province and the commodities, as well as the funds that would have been made available for the province for purchasing the farms, which determined the number of farms the province would be able to purchase. The R3.36 billion was the amount that was approved for DALRRD to use for the project. The R2 billion was the amount transferred to farmers to begin doing the work. The money that was approved was transferred to the farmers based on their implementation plans, and the difference was the money that DALRRD had not transferred because of the disputes with unresponsive farmers.

On the plans to assist the non-commercially viable farms in Gauteng, since the RECAP programme was stopped, DALRRD was looking at assisting the farmers in its new programme. Land Reform is a value chain because it starts somewhere and ultimately culminates in the support of the farmers. DALRRD was at the end of the value chain, which means that whatever happened before it came in, DALRRD had to fix. On collaboration, DALRRD sometimes had big expectations about their collaborative partners, but they were not always met with the desired results and they would have to refine their strategy to make their partnerships mutually beneficial and successful.

There were 24% self-sufficient farms supported by the Department, but farming has its ups and downs. During the period when the assessment was done, there was drought in some of the provinces. DALRRD had assisted and some of the farmers who were self-sufficient might have struggled because of that. DALRRD was working hard to ensure that it spent its budget allocations and it was working with partners to deliver support to farmers and improve the work being done in the sector.

He replied sometimes DALRRD observed that the maintenance of some of the farms was not up to par when they were going to be sold because the sellers did not invest in keeping infrastructure in good condition and the buyer would still have to invest more on infrastructure. DALRRD had noted that some of the new farmers needed full grant support and once that was provided, DALRRD graduated them to blended support to prepare them for self-sustainability.

Mr Nasele Mehlomakhulu, DALRRD DDG: Food Security and Agrarian Reform, replied that DALRRD had a technical task team with the Department of Water and Sanitation focused on tackling issues of water use entitlements and water rights to ensure land reform and water reform synergies were taken at the level they ought to be. DALRRD was looking at ensuring that the leases given to the farmers were registered which would enable the lessees the ability to try and source funding from outside of DALRRD to lower the burden on state coffers. The Land Development Support programme was designed try and eliminate the shortcomings of the RECAP programme using expertise from commodity organisations.

Mr Marais said the response he received was that farms in the Western Cape were very expensive to buy. However, he was not referring to buying the farms but was referring to farms that already belonged to the state. He listed examples of land that belong to the state and noted that he wrote to the Minister asking what she was doing with the land. She had replied that she must first have referendums in those areas to ask the people what must happen to the land. He asked what DALRRD was doing about the land, if it was budgeted for, and if it would be included in the Department’s new programme.

Mr Mooketsa replied that DALRRD was aware of the Transformation of Certain Rural Areas Act (TranCRAA) of 1998 and in its Annual Performance Plan, it showed its intent to ensure that the land was returned to its rightful owners. This was done through engagements and consultations with the incumbents in those areas. With each transfer, DALRRD must always indicate the kind of development support it seeks to give to the land. This was not part of the funding of the programme that was presented in today's meeting, which was the Proactive Land Acquisition Strategy (PLAS) for individual farmers. TranCRAA had a different process of engagement and funding. The Minister had stated that when land was being reallocated or given to its rightful owners, there needed to be an equal way of ensuring that there was funding support to go with it.

DALRRD underspending was due to two critical spending points: 1) compensation of employees during the restructuring of the Department and 2) Presidential Employment Stimulus Initiative. Both were receiving attention from the Department. DALRRD noticed that the Presidential Employment Stimulus Initiative spending continued to be low and it was devising a way of ensuring the money was spent, especially in the summer rainfall areas to ensure that the money was used for farmers to plant and for those in the livestock industry to get medication for their animals. DALRRD was confident that it would be able to spend that money. Part of the low spending in DALRRD was caused by money being allocated late in the year but there was plenty that was needed and DALRRD had asked for rollover funding.

On compensation of employees, DALRRD had concluded the National Macro Organisation of Government (NMOG) process and was currently filling the vacancies which would enable good spending of its budget. The other DALRRD programmes would require rethinking especially because of the outbreaks of diseases and the different climate change effects such as floods and rural roads being eroded. DALRRD was considering spending some of its budget on those issues.

Mr Mooketsa replied that the land that DALRRD had bought in the past was not as strategically located as they would have liked. The programme it currently had, as well as the social compact team it had with private sector, labour and the communities ensured that through the Agriculture and Agro-Processing Masterplan, they could identify corridors where strategically located land could be obtained so that they could produce commodities and grow value chains. This would ensure that the land they bought would be productive land that would assist DALRRD and the sector towards having sustainable inclusivity and transformation within the sector.

In 2020, Cabinet approved the allocation and the beneficiary selection policy, which served two distinct purposes, first to ensure that land was allocated so that there was transformation with a clear target that 50% of the land procured by DALRRD would be for women, 40% for the youth and 6% for people with disabilities. If those groups were targeted without ensuring that there was proper beneficiary selection, they would run the risk of losing the farms, so the proper beneficiary selection included training those groups to be able to use the land.

On financial support, Mr Mooketsa replied that the country would not be able to sustain the provision of grants to push agriculture in the long run. DALRRD was looking at what kind of mixture it could use to ensure that as it commercialised, it would deal with ensuring there would be financial sustainability on the farms funded by government. The Minister launched the Agri-Industrial Fund in 2020 with the Industrial Development Cooperation where over the MTEF, government would be receiving money to ensure that there is transformation in the sector and farmers are assisted. DALRRD encouraged its farmers to take the opportunity with both hands so that the sector could move forward.

Mr Mooketsa said that the Minister had launched engagements with the Land Bank on blended funding where government would provide grant funding, and the Land Bank would provide loan funding amounting to R3.2 billion so that they could look at the other avenues that could be used by the farmers. DALRRD was finalising talks with commercial banks for blended funding to ensure that the farmers could be able to access funding. DALRRD was optimistic about the options it had. There was an ongoing discussion on the Comprehensive Producer Development Policy and how the policy was meant to address the areas of farmer development and categorising farmers according to different levels.

On farmer support, DALRRD had the extension support which sought to provide maximum support to the farmers and reduce the level of extension support to farmer ratio considering the 40 000 commercial farmers, 250 000 small holder farmers and over two million households that were involved in agriculture in the country. With these policy interventions, DALRRD would be able to move into a space where there was sustainability on the farms.

He thanked Members and noted that they would provide the Committee with a detailed report on the assessment done on the farms procured by government through the RECAP programme.

Mr Marais asked how often such meetings would be held between DALRRD and the provinces because the meeting was very informative. A lot of issues would be ironed out about land reform if such meetings could be held more regularly with the provinces.

The Chairperson said it was the duty of the Committee to invite DALRRD to present information and not the Department’s duty. She assured Mr Marais that the Committee would extend an invitation to him in the future. She thanked the DALRRD team for the presentation and response to questions.

The Committee Secretary said the Committee would not be able to adopt its minutes as it no longer had a quorum as one member had left the meeting.

The meeting was adjourned.

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