Medium Term Budget Policy Statement: input from Departments of Provincial & Local Government; Water Affairs & Forestry; Land Aff

Meeting report

JOINT BUDGET COMMITTEE
27 OCTOBER 2005
MEDIUM TERM BUDGET POLICY STATEMENT: INPUT FROM DEPARTMENTS OF PROVINCIAL AND LOCAL GOVERNMENT; WATER AFFAIRS AND FORESTRY; LAND AFFAIRS, AND AGRICULTURE; AND NATIONAL AFRICAN FARMERS UNION.

Chairperson: Mr B Mkhaliphi (ANC) [Mpumalanga]

Documents handed out
Department of Water Affairs and Forestry Presentation
Department of Provincial and Local Government Presentation
National African Farmers’ Union (NAFU) Presentation
Department of Agriculture Presentation
Department of Land Affairs Presentation

SUMMARY
The Committee received inputs on the Medium-term Budget Policy Statement from the Departments of Provincial and Local Government (DPLG); Water Affairs and Forestry (DWAF); Land Affairs, and Agriculture, and the National African Farmers’ Union (NAFU).

Members raised questions about water provision to communities; the pace of land restitution; inter-departmental co-ordination and co-operation and the effects of "red tape" on farmers.

MINUTES
Mr N Nene (ANC) [Finance Portfolio Committee Chairperson] informed the Committee that the National Assembly Members would have to leave very shortly for the House as the State President was answering questions, and they would return as soon as that business was concluded.

The Chair stated that the Committee was aware of that, and that it would adjourn for a period after the first round of presentations, to make allowance for those Members. He encouraged the presenters to be as concise as possible with their presentations.

Department of Provincial and Local Government Presentation
Ms Mosa Molapo, DPLG Deputy Director-General: Urban and Rural Development Programmes, very rapidly briefed the Committee on the Medium Term Budget Policy Statement (MTBPS) priorities in relation to the Department’s Integrated Sustainable Rural Development Programme (ISRDP) and Urban Renewal Programme (URP). Specific focus was placed on the ISRDP and URP objectives, the 2014 development targets for government, the economic challenges that arose from the geographic disadvantage of nodes and the aims to achieve economic growth and development in the nodes, the interventions to fast-track growth and development and the ISRDP and URP medium term budget for 2005/2006.

Department of Water Affairs and Forestry Presentation
Mr Fred van Zyl, DWAF Senior Manager: Planning and Information, very quickly briefed the Committee on the Department’s programs, actions and involvement in the ISRDP and URP. He outlined the core business areas of the DWAF, the positioning of the business areas in terms of government’s medium term strategic areas, the support DWAF provided to the nodes and the DWAF forestry development opportunities.

At this point the Chairperson adjourned the meeting until the return of the National Assembly Members, at which point the discussion continued.

Discussion
Mr T Ralane (ANC) said that the availability of water in many areas was a problem, and so there had to be better coordination between the DPLG and DWAF to ensure that municipalities could deal with the problem.

Mr D Botha (ANC) agreed and said that water was a serious issue in his constituency.

The DPLG said that they would look into the issue of improving cooperation between Departments. They were aware that municipalities had to start delivering on the ground and they would assist them in this.

The DWAF said that they had a good working relationship with the DPLG and they had done a study of water resources to address the issue of supply in a cost effective way. In areas such as Limpopo, water supply was a problem as the water there was not in aquifers, and was difficult to locate. Studies were being done to deal with this.

NAFU Presentation
Mr M Matlala said that agriculture could create many quality jobs even though it continued to shed labour, which decreased output and led to huge tracts of unused arable land. As a result, the rural areas were depressed and urban squatter camps were exploding. The mini-budget trends were favourable as they projected an average annual growth for agriculture of 10.8% in the period between 2005/6 – 2007/8 which included increases in conditional grants for Provinces’ Comprehensive Agricultural Support Programs.

Some challenges remained however. The levels of spending in agriculture, water and land were not enough to achieve a 6% shared growth in agriculture or undo 100 years of apartheid in the sector as the delivery mechanism was too complicated. This explained the chronic under-spending in Government and it would make the R120 million allocated this year for drought relief inaccessible to NAFU members.

The strengths to build on were the excellent constitutional framework and legislation; well thought-out policies; increased budget allocations to land and agriculture; a well-designed decentralisation policy, ‘wall-to-wall’ municipalities and the increased political commitment to black farmers and land reform. The weaknesses were that progress was still too slow; the Government and consultants were driving the implementation and not its members; there was poor communication between Agriculture, Land Affairs; Housing and Provinces and black farmers were frustrated.

These problems were a result of there being no unified AgriBEE program including land distribution, farm and enterprise development and commercialisation. As a consequence, there were no unified budgets for broad-based AgriBEE at municipal, district and provincial levels. Efforts to coordinate measures had failed because of the different programs, rules and procedures that absorbed a lot of effort from Government and black farmers. The well-intended officials at district level did not support them effectively and black farmers were not allowed to implement their own programs. The political pressure to deliver on AgriBEE was mounting and there was a radicalisation of some of its members, calling for a ‘Zimbabwe solution.’

Going forward, it would be better if much of the implementation was left to NAFU along with the resources to do it, as well as unifying budgets and programs and establishing a ‘one-stop’ AgriBEE shop at the municipal level. The introduction of the same appraisal and approval procedures, with the same proposal and funding deadlines with a single operational manual would be welcome. The AgriBEE council had to consist of the Departments of Agriculture and Land Affairs, Local Government, Water Affairs, Environment and Trade and Industry. There should also be Municipal Counsellors, banks, persons from organised agriculture and from civil society. The function of the council should be to disseminate information; receive, appraise and propose projects; keep inventory of available farms and monitor execution and ensure accountability.

The benefits of this would be a common program that treated everyone equally without favour including the rural poor; was easy to understand and use; was consistent and balanced rural and urban areas. Only through re-designing the implementation of the programs will there be an increase in spending and the share devoted to agriculture.

Discussion
Mr Ralane asked why the NAFU members were unable to access relief grants. Government was insisting on an integration of structures. Some of these matters could be dealt with by NAFU integrating and aligning themselves with some of these Government structures.

Mr Matlala replied that they were under the misconception that Government could not give public funds to NGOs. NAFU members could struggle to get funds as many of them were poor and illiterate and could not understand some of the complex procedures. They had to be simplified.

Mr N Nene (ANC) noted how NAFU saw bureaucracy affecting service delivery to emerging farmers. How was NAFU trying to overcome this problem? In the MTBPS, agricultural support had risen, but did some of these benefits accrue to NAFU members? How did the exchange rate affect them?

Mr Matlala said that the mini-budget pointed the sector in the right direction, but it was the manner in which the programs were implemented that was the issue. NAFU was having discussions with the Reserve Bank Governor with regards to the exchange rate and so could not really respond to this now.

Mr E Sogoni (ANC) asked if NAFU saw any other positive developments in the sector.

Mr Matlala said that they acknowledged the Department of Agriculture was trying its best, but some of the structural arrangements made it difficult for the Department’s officials themselves to help NAFU members. This is why uniformity in the whole system was needed. Delivery was too slow.

Department of Agriculture Presentation
Mr Malathse said that ensuring access to food, eliminating inequality in the sector and improving the state of natural resources were some of their aims. Some of their priority areas were AgriBEE, the Integrated and Improved Food Security Program and Research and Development. The Comprehensive Agricultural Support Program (CASP) and the Land Care Program were its main initiatives in agriculture.

The budget for CASP for this year was R250 million and it had been distributed to Provinces. The criteria used to determine its allocation were how ‘rural’ the Province was, the number of land reform beneficiaries and the extent of land distributed in that Province.

Department of Land Affairs Presentation
Ms S Choane, the Deputy Director-General, said that in the Department’s performance review, restitution had been able to settle 28 675 claims against a target of 40 466. Cumulatively, the target of settling 56 925 claims was exceeded by settling 59 345. In Land Redistribution, 448 085 hectares were transferred against 565 178 over the past three years. With a cumulative figure of 1.827 million hectares against the target of approximately 25 million by 2014, this was a cause for concern and one of the main reasons for the recent Land Summit.

The Department’s Strategic Framework would focus on ensuring that the State intervened and participated in the land market to accelerate redistribution and land-based integrated and decentralised land use and development planning and implementation. The Department wanted to focus on improving access to and/or land ownership of land by farm dwellers to improve their livelihoods and economic opportunities as well as the development of capacity building models and programmes for land reform beneficiaries and employees including those in other organs of state as well as the general public.

The implementation issues to deal with were the land acquisition and resettlement models, integrated rural and urban development models based on partnerships and participation and empowerment models for land reform beneficiaries and other stakeholders at the local level. The Department’s core strategic objectives were to redistribute 30% of white owned agricultural land by 2014; provide tenure security that created socio-economic opportunities for people living and working on farms; settle all outstanding land claims by 2008 and the implementation of restitution awards; to provide efficient land use and administration services and to provide efficient State land management that supported development.

As part of integrated planning, a joint proposal had been made by the Department together with the Department of Agriculture on the concept of Agricultural Development Corridors with a view to consolidate projects to increase impact as well as to increase delivery. The resource requirements would be included in the 2007 MTEF.

Discussion
Mr Nene asked the two Departments about their relationship. What was being done with state-owned land given that the Department of Land Affairs wanted to reallocate 30% of white-owned land, and were they going to meet their targets for settling claims by 2008?

Mr Malathse said that the Departments worked closely together in land reform and agriculture. Ms Choane said that the state-owned land simply was not sufficient to satisfy the demand and goals and there were capacity issues to deal with.

Mr Ralane asked for a progress report on MAFISA. There was under-spending in CASP but the figures did not accurately show how these projects had benefited farmers. The Department of Agriculture had to take the prime role in ensuring food security but they were not doing it locally or nationally and the Department of Social Development was picking up some of the slack. What progress was the Department of Land Affairs making in restitution?

Ms Choane said that Land Affairs’ progress in restitution had not been that good and stood at only 25% due to a shortage of financial skills to drive the program. The program was compounded by the fact that they were dealing with rural claims now, and these could be complex and there were problems with accessing some of the areas.

Mr Malathse said that MAFISA was currently screening applications so no money had been disbursed yet. The food security programs were inter-governmental functions and the Department of Agriculture was only concerned with the Household Food Production Program. With regards to dealing with the hungry, the Department of Social Development was responsible.

Mr G Schneemann (ANC) asked how the Department of Agriculture was budgeting and interacting with other Departments.

Mr Malathse said that the Department of Agriculture looked for funding for the programs they ran, and could only budget once programs had been identified as the funds and projects were demand-driven.

The meeting was adjourned.