Liquor Products Amendment Bill [B22B-2008]: adoption & Provision of Land & Assistance Amendment Bill [B40-2008]: Department of Land Affairs briefing

Agriculture, Land Reform and Rural Development

24 June 2008
Chairperson: Mr M Mohlaloga (ANC)
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Meeting Summary

The Chairperson noted that some amendments to the Liquor Products Amendment Bill had been amended by the Committee at a previous meeting. He tabled the amended version, and called for a vote. Members agreed to the Motion of Desirability and then voted to adopt the Bill. 

The Department of Land Affairs briefed the Committee on the Provision of Land and Assistance Amendment Bill, giving the context and noting that the implementation of the Pro Active Land Acquisition Strategy had highlighted various shortcomings in the principal Provision of Land and Assistance Act, which the Bill sought to rectify. One of the key concerns was that it was currently possible to acquire land, but not any of the rights linked to it, and broadening the legislation to allow for acquisition of rights such as supply agreements, shares and others would allow for beneficiaries to sustain operations on the land, alleviating the risk of failure. There were 2.8 million people living on commercial farms, and the Bill was aimed in particular at assisting and empowering them.

The Committee was sceptical whether the DLA had the funds or capacity to implement the new provisions in the Bill as the rural landscape was littered with failed land-redistribution projects,  but Mr Shabane assured the members that the Department had consulted closely with both Treasury and organised agriculture. Members requested an update on resuscitation of failed projects, and noted that there was a need to communicate accurately and not raise false expectations. Existing farmers would welcome neighbours who were able to manage their farms, as their concerns had been only that poorly considered land redistribution would lead to threats to their own land and farming. Members further commented that the Department would have to improve its current implementation of programmes before it could be trusted to implement others. The costing was queried, particularly in view of the incomplete estimations of costing in the past. Several Members also requested further information on the consultations, and the depth of that process. Other comments were that the Department should be aiming for poverty eradication, not just alleviation, and that splitting the process between departments may not be effective.  Members asked if there was adequate funding and whether funds made available to  provincial and local government would be ring-fenced to be used for land reform only. Many Members commented that government needed outside assistance to drive the redistribution process properly, and wondered if this Bill would address the problems around servicing of debt. Questions were asked on the plan to develop rural areas, asking if the State had the funds or land available.

Meeting report

Liquor Products Amendment Bill (the Bill): finalisation and adoption
The Chairperson noted that certain clauses of the Bill had been amended in a previous meeting.

Members voted to accept the Motion of Desirability.

Members then went through the Bill, clause by clause, and voted unanimously to adopt the Bill.

Provision of Land and Assistance Amendment Bill (the Bill): Department of Land Affairs (DLA) Briefing
Mr
Mdudusi  Shabane, Deputy Director General: Land Tenure Reform, Department of Land Affairs, was accompanied by Colin Brocker, Director of Legal Services:, DLA and Johan Havenga, Deputy Director, Legal Services, DLA. .

Mr Shabane gave the context of the Bill. He noted that when the Pro-active Land Acquisition Strategy (PLAS) was implemented in 2006, this had brought to the fore the limitations in the existing Provision of Land and Assistance Act (the principal Act). Sections 10 and 11 of the existing Act did not allow for adequate implementation of land redistribution, especially as it was currently possible to acquire land, but not the rights that were linked to the land. These rights included existing supply agreements, shares in or rights to any entity owning, controlling or administering property. There was also some doubt whether the Minister was able to grant full subsidies to qualifying indigent land reform beneficiaries, or administer an economic enterprise acquired through PLAS prior to transferring it to land beneficiaries.. Broadening the legislation would allow DLA to facilitate sustainable land reform, alleviating the risk of failure.

A survey of people living on commercial farms showed 2.8 million farm-dwellers. The Bill would empower the Minister to improve the living conditions of these farm-dwellers, many of whom were farm workers. The DLA estimated that in the Western Cape alone, 2 500 people could benefit from DLA taking a stake in their enterprise to help capitalise them. This would not necessitate the buying of land but would still empower the workers.

Mr Shabane noted the constructive engagement with National Treasury, which had helped to produce models to make land reform economically sustainable. He also noted that wide consultations with the public, organised agriculture and government had occurred.

Mr Shabane set out the objects of the Bill and noted that the suggested amended provisions of the Bill would be implemented within the strategic and operational plans, subject to a more detailed implementation plan approved by the Minister. The branch of Land and Tenure Reform would be responsible and the implementation would be accommodated within the current funding.

Discussion
Mr S Abraham (ANC) was pleased that the Bill seemed to provide for taking over of going concerns. He was however concerned that the DLA had not come up with a plan to address the existing failed land redistribution initiatives so far. He requested that the Committee be informed how those projects that had failed would be resuscitated. He said that the DLA should be careful to communicate accurately with farm workers and not create false expectations. They must be told upfront that they only received certain grants, not full loans. He continued that PLAS may be very late but it was, nevertheless, welcome. The DLA must, however, improve in terms of implementation of the various programmes if it was to be trusted in implementing new legislation. The inability of DLA to properly estimate the costing implications of new legislation had been poor in the past, and clear facts and figures were required before the Bill would be approved. Finally, Mr Abraham expressed a need for specific information regarding “consultations” made by the DLA.

Mr D Dlali (ANC) stated firmly that when PLAS was presented DLA did not properly consider the problems of implementing it. He expressed a certain scepticism that the same problem would hinder the current Bill. The problems with the implementation of the Communal Land Rights Act (CLARA) were a case in point. He also insisted that the DLA should set its sights higher and aim for poverty eradication, rather than alleviation. He also questioned whether DLA had the funds to implement the Bill, and whether funds made available to provincial and local government would be ring-fenced to be used for land reform only.

Mr A Botha (DA) agreed that something was wrong, citing the example of a farmer who tried for three years to get the DLA to purchase his farm as going concern. His offers of assistance and mentoring were turned down and the DLA insisted on taking it over. Tragically the farm was now disused and unproductive. It was imperative that the DLA, therefore, not be reluctant to rely on expert, skilled agencies to assist it. He also queried the depth of the consultation process, noting that the Gauteng Agricultural Union had only been contacted last week. He supported the view expressed by Mr Abraham that existing schemes should be fixed before new ones were implemented and noted that the vast majority of commercial farmers would welcome black neighbours. Their concern was that disorderly, poorly considered land redistribution would lead to disused, unproductive farms and worse: disorderly, poorly equipped farmers who would denude the land and increase the risk of veld fires and weeds spreading across neighbouring farms.

Mr Nel (DA) noted that if the Bill was accepted in its current form, the term “public interest” could become a Pandora’s box. Legislation should be so carefully framed that it should produce the right outcome irrespective of who was administering it.

Dr A van Niekerk (DA) insisted that land use was the ambit of another department and that DLA did not have the resources to guide and implement the process. His main concern was that in splitting the process between two departments there would be a process that did not work properly. He agreed with Mr Botha that most white commercial farmers acknowledged the need for sustainable redistribution of land, but only they had the expertise to drive the process with the assistance of government. It was a fact that the most successful redistribution schemes were all in the domain of the commercial farmers.

Mr H Maluleka (ANC) agreed with the sentiments expressed by the Members so far. He asked what funds and plans were in place to ensure that going concerns could be run well by their new owners.

Mr J Bici (UDP) noted that most land reform projects failed because of an inability to service debt, and he asked whether, if the land were leased from the State, this would alleviate the problem.

The Chairperson good-naturedly observed that the three pages of Bill had been filled with holes made by the members’ questions. He asked how long the whole process of redistribution took and how beneficiaries were identified. He was intrigued by the stated lack of financial implications for the Bill, and asked for a justification of this. He further inquired whether the Bill talked effectively to the Land Expropriation Bill and whether PLAS would make use of expropriation mechanisms.

Mr Shabane replied that he believed that many of the questions had been answered elsewhere because many State and private organisations were involved in the process of land redistribution. There were other legislative frameworks guiding Black Economic Empowerment, and DLA would have to follow these in conjunction with other departments.

Mr Shabane then said that the questions around the plan for resuscitating failed schemes and improving the redistribution process would be answered on 30 June, when DLA would receive plans from various coordinating organisations, standing committees and CEOs of parastatals looking at land acquisition, increased production, trade and skills development. On 9 July a series of meetings would take place to interrogate these plans with MECs and land commissioners. These meetings would then be the basis of a bid for additional funding to support the Department of Agriculture (DoA), as DLA had more than enough money for acquisition of land, but DoA did not have enough budget to support the emerging farmers. A list of all land reform projects would be compiled and shared with the Committee. Land had already been identified in former homelands and there were projects specifically designed around collapsed projects (such as the defunct tea estates). Five to ten year plans had been developed and could be made available to the Committee.

Mr Shabane disagreed with the assertion that it was the norm for land reform projects to fail, although some had done so. DLA would work closely with DoA within the Agri BEE framework. No foolproof plan existed but what was proposed was an improvement on the strategy developed in the previous Bill. Provisions regarding the transfer of funds to municipalities existed, and DLA had learnt to avoid the pitfalls and identify well-managed municipalities that were capable of stewarding funds properly. Land reform was not a panacea for everything. However, DLA had secured buy-in from major banks, multinationals, organised agriculture and co-operatives to advise and help with all parts of the process.

Mr Shabane noted that the primary mandate of DLA was the redistribution of land and the facilitation of the process. It was merely the servant of the government and not the legislature. It could not arrest processes that had been put in motion. In response to the Chairperson’s question he said that the average turnaround time from identification of land to its acquisition was six months.

Mr Colin Brocker, Director: Legal Services, DLA, replied to the financial questions in general. Section 10 of the Bill addressed the complexities not recognised by current legislation, especially the hard-to-quantify supply agreements and intangible assets connected to land. The revisions would empower DLA to give new owners all the resources they needed. He believed that the Act indeed belonged in the domain of DLA as land was the constitutional mandate of this Department.

The Land Expropriation Bill had been discussed for many years but expropriation would only be used as a last resort, where negotiation and arbitration had totally failed.

Mr Brocker explained that the fact that the financial implications were stated as “none” meant that there would be no additional implications, as the costing of the Bill had been built into the Medium Term Economic Framework (MTEF) budget.

Mr Dlali was not convinced that Mr Shabane had answered the questions regarding cooperation with other departments adequately, or responded to the question of ring fencing funds paid out to local authorities in any detail. He observed that Mr Shabane had said that the DLA’s mandate was land redistribution, not land reform, and this raised the question whether land redistribution was merely “chasing numbers”.

Mr Botha asked where the DLA found the expertise required for turnaround of the failed projects and planning of the public-private partnerships proposed. He stressed that the private sector’s planning and implementation skills were essential if land redistribution was to be successful.

Dr van Niekerk said that the Committee would like to see more action and less talk from DLA.

Mr Bici asked the Department to elaborate on its massive plan to develop rural areas. He asked whether the State had either the funds or land available.

Mr Shabane was unaware if the Department of Public Works had been consulted. He said that the transfer agreements were regulated by National Treasury, which insisted on certain minimum requirements being met. Checks were not always done because of human error but only the Accounting Officer of the Department could sign off funds. He reiterated his previous acknowledgement of the need for expertise from outside government.

He also made mention of the fact that his department had audited 23 million hectares of land and now needed to analyse how it could be used for various purposes. Other departments had identified additional parcels of land and these would have to be consolidated into one database.

The Chairperson expressed the hope that deliberations on this Bill could be completed by 14 August.

The meeting was adjourned.

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