Budget for Land Affairs: briefing

Meeting report

JOINT MEETING OF THE PORTFOLIO COMMITTEE AND SELECT COMMITTEE OF LAND AFFAIRS
23 February 1999
BUDGET FOR LAND AFFAIRS: BRIEFING

Documents handed out:
Department of Land Affairs Budget Presentation
Explanatory Memorandum on the Budget for Land Affairs

SUMMARY
The Department of Land Affairs presented a summary of their activity and progress in the past year and since 1994. MPs asked questions about specific aspects of the Department’s activity.

MINUTE
The Chair, Mr Holomisa (ANC), convened the meeting and said that the Minister of Land Affairs would be unable to attend the meeting as planned. The Deputy-General of the Department was available to present the Budget Vote. The Minister had also set up a Land Restitution Review Committee, which would give a briefing to the Committees tomorrow.

The Deputy-General, Mr Budlender, thanked Mr Holomisa for the chance to present to the Committees. He introduced other members of the Department who were present, including the Financial Manager, the Chief Director of Corporate Services, and the Deputy Director-General in the land reform implementation branch. The Director-General distributed a presentation which he said was an overview of what the Department had done since last year and since 1994. Following the presentation he said he would briefly discuss finances, but as the budget is very similar to last year he imagines he won’t need to spend much time on it.

The Director-General began his presentation by identifying the four core functions of the Department: Land Reform (covering redistribution, tenure reform, and restitution), Registration of Deeds, Cadastral Surveys, and Surveys and Mapping. The overall budget vote allocates R683,3-million to the Department, but they will be allowed to roll-over R50-million from the current year, bringing the true allocation up to R733,3-million. The Director-General pointed out that of that amount, R567,9-million was available for land reform, which constitutes just over 1/3% of the national budget. The Director-General said that the amount of staff available to land reform had increased by 75%, but that the absolute numbers were still relatively small at 697 people.

The Director-General then moved into a discussion of specific programmes, starting with redistribution, which is intended to help people who need land for a place to live or work. The increase reported in redistribution last year has continued, with 185 projects designated for transfer and 120 transferred in 1998 (compared to 76 designations and 50 transfers in 1997). The number of beneficiaries and the amount of land transferred has also increased in line with the number of projects. There are two reasons for the continued increase: they have been getting better at dealing with the process, and they have allocated additional staff resources to it. In terms of the amount of land redistributed, the number of hectares more than doubled from 1997 to 1998. A large percentage of the transferred land recently has been to meet the needs for commonage land in small municipalities.

The Director-General continued by describing several changes to the redistribution process in the past year. First, the grant size has been increased from R15 000 to R16 000. Also, the scope of allowable uses for the grant has been broadened to allow not just for land purchase but also for capital improvements. They had found that many people had purchased land but then could not actually do anything with it, because the grant scheme didn’t allow them to use grant money to cover start-up or capital investment costs. Another change was a shift in focus in terms of what types of projects the Department would encourage grant recipients to pursue. A monitoring directorate had been set up to evaluate the success of the redistribution programme, and they found that in some cases large projects had been very unsuccessful because a majority of the participants ended up being very passively involved. They would pool their money with a group of people to buy land, but wouldn’t actually move to it or use it in any way. These projects are less than ideal because land reform requires active involvement. The Department has moved towards saying two things: First, if the beneficiaries won’t be directly involved in the project then they won’t be given a grant, because otherwise they’ll just lose their money, and second, the Department does not encourage large projects in general, because most don’t provide benefits for all involved. The Director-General stressed that this did not mean that the Department would not allow any large projects to be pursued; he was only saying that for the most part they were not in the best interests of all the participants.

Another change that the Director-General mentioned was the creation of credit facilities for land reform beneficiaries. When starting a new project many people needed loans, but while getting started they would be unable to service their loans for several years, leading to an unwillingness on the part of most banks to offer financing. To address this problem the Department set up the Land Reform Credit Facility with KHULA. This credit facility arranges for the banks to loan money to land reform beneficiaries, and then KHULA loans money to the banks so that the banks can provide a five-year deferral of repayment on the loans.

The Director-General mentioned that another initiative is to develop a prioritisation process that works from the district level, because land reform needs can vary widely from district to district. In the past priorities have been set at a national level, and these priorities haven’t always been appropriate or supportable at the local level.

The Director-General summarised the results by saying that through February 1999, 38 000 households had benefited from land reform, translating into 235 891 individual beneficiaries and 562 354 hectares.

The Director-General then spoke briefly about surveys and mapping. He specifically wanted to point out the National Spatial Information Framework, which would bring together government information on where all other service facilities were located. This would enable a planner to be able to see exactly where the schools, clinics, government offices, and so on were located in a certain area, which would help in making planning decisions.

The Director-General addressed the issue of representivity in the Department, showing a chart of staff positions split by race and gender. The chart showed that representivity was improving, but the Director-General said they were hoping to continue to make progress.

In terms of financial numbers, the Director-General said he would not go into detail at present. MPs who wanted more detail would find it in the explanatory memorandum which had been distributed.

The Chair said the meeting was open for questions. With respect to redistribution, he asked if the Director-General could tell him which areas were receiving the focus of attention, and what kind of land was most often involved – state land, private land, purchased land, etc.

The Director-General said that the largest number of projects is in the Free State, but they are mostly small projects in terms of people. In terms of hectares, Northern Cape is largest, followed by the Free State and KwaZulu-Natal. In terms of beneficiaries, most are in the Eastern Cape, Mpumalanga, and KwaZulu-Natal.

The Deputy Director-General (land reform implementation branch) added that not much of the land has been state land, as they are still in the process of understanding what exists in terms of state land.

The Chair asked how much land is at the disposal of the state.

The Director-General answered that the state has 750 000 hectares at its disposal for redistribution. The Department has made the most progress in redistribution of state land in the Northwest Province. They are starting to explore outsourcing the disposal of state lands as a more efficient option.

An MP commented that in most areas in the Northern Province, they have no way of knowing what belongs to the state and what doesn’t, and more land is continually being taken over by white farmers extending their fences. They need to know exactly who owns what.

An MP asked about the Department’s attitude towards large-scale group projects – is the Director-General saying they are unsustainable? And in any case, this experience proves that it is useless to give people money and just tell them to buy land; they must also be trained in land management and administration.

On the question of identifying state lands, the Director-General said that it is true that the slow pace of land redistribution leads people to use it in the interim, which causes problems. Another problem is that only some of the state land is overseen by the Department of Land Affairs, while the rest of it is under the Department of Public Works, and they have yet to develop an efficient joint decision-making process. On the issue of knowing who owns what, that is all easily identifiable through the Deeds Registry, and they have detailed information and maps on the location of state land.

Regarding the issue of large projects, the Director-General said they had not abandoned support for large-scale projects. They are only stopping projects where people are no more than passive shareholders and stand to lose their subsidies.

An MP asked whether there is a monitoring system to make sure that grants are being used appropriately.

An MP asked if there were examples from rural areas of people pooling their resources on a single project, and what the success rate of those projects had been.

An MP asked what caused the rollover of R50-million that the Director-General mentioned.

The Deputy Director-General addressed the question of grant monitoring, and said it is actually quite a difficult situation to deal with. The Department currently has agreements with various institutions through which the funding is administered, so at least they avoid a situation where they’re giving money directly to individuals. Ideally the institutions through which the grants are administered are able to monitor the use to a certain extent, as they are more involved at the local level than the Department can be. But the individual grants are small enough in size that they don’t justify the creation of an elaborate system for monitoring purposes, so to a certain extent they are relying on the good faith of the recipients.

An MP asked a follow-up question to the Deputy Director-General’s response. Given that the Director-General has said a priority will be to implement planning at a district level, would it really be all that difficult to set up a monitoring system at the district level to ensure that the money is used properly?

The Deputy Director-General answered that they hope the entire district planning concept will address the issue of grant accountability

The Director-General said that as they were running out of time, he hoped that MPs whose questions remained unanswered would remind him tomorrow to answer them. On the question of grant pooling, he said that it happens predominantly in rural areas, and that it is rare for individual grants to be used. He pointed out a slide in his presentation which showed that the average number of people involved in a single project was 41 (down from over 200 per project in 1994). He said the Department is not trying to prevent grant pooling, but rather to prevent excessively large projects that don’t benefit all the grant recipients equally.

The Chair thanked the Department members for their participation. He said that tomorrow the Committees would hear from the Land Claims Commission and the Land Restitution Review Committee.