Provision of Land and Assistance Amendment Bill [B40-2008]: Department of Land Affairs briefing

Agriculture, Land Reform and Rural Development

18 August 2008
Chairperson: Mr M Mohlaloga (ANC)
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Meeting Summary

The Department of Land Affairs introduced the Provision of Land and Assistance Amendment Bill and explained that this Bill was intended as an administrative piece of legislation to supplement the provisions of the principal Act. Currently, in terms of that Act, the Department was authorised to acquire land, but was not authorised to acquire the immovable property essential to the proper use of that land – such as irrigation schemes, plant and equipment, farming implements or livestock. Without having those powers, the Department could not fulfil its functions properly. The Bill would also be dealing with the budgeting more clearly.

Members were outspoken in their criticism of the Department and the work that it was doing. They submitted that the Department was dysfunctional, never appeared to work to time frames, did not hold effective consultations between national and provincial offices, and was scuppering many willing-seller arrangements through its own inefficiencies, or causing real harm to actual or intended beneficiaries through its mismanagement. Several Members presented anecdotal evidence in support of their contentions. They accused the Department of having insufficient capacity and lack of continuity. They asked what was meant by maintenance, if there was sufficient budget, and how many individuals had been provided with farms. They raised objections to the wording of clause 10, suggesting that this provided excessively wide powers to the Minister, that the final responsibility was not clearly defined, and that the clauses on expropriation appeared to be contradictory. The question was also raised why it was necessary to include expropriation in this Bill, and the Department confirmed that it was to be withdrawn now that further legal advice had been taken. Questions were also raised on leases and the monitoring of them, whether there was consideration being given to establishing a central planning department, and whether it was possible to analyse the costs per hectare, the beneficiaries, and whether they had been consulted. The Department conceded that there were some problems but sought to explain how it was trying to address them, noting that transformation was a process and not a single event.

Meeting report

Provision of Land and Assistance Amendment Bill (the Bill): Department of Land Affairs (DLA) briefing
Mr Thozi Gwanya, Director General, Department of Land Affairs, noted that there was a current definition of acquisition of land, which was limited because the acquisition or purchase was deemed to relate only to the physical land itself, and not to all the accroutrements associated with farming enterprises. The main purpose of the Provision of Land and Assistance Amendment Bill (the Bill) was to expand such meaning, so that if, for instance, a dairy farm was acquired this would also include all the subordinate equipment necessary for the sustainable running of that farm, such as the dairy cattle, the milking sheds and the milking equipment. In short the Bill would allow for an operational plan. Associated with this was the budgeting, which meant that it would become clearer what activities were in line with operational plans without inviting unreasonable and unrealistic expectations. In essence the amendments proposed by this Bill were administrative in nature, and this Bill could be seen as consolidating legislation designed to strengthen the principal Act.

Discussion
Ms W Ngwenya ANC sought clarification on whether “movable” items included irrigation schemes and their supporting equipment, and whether this definition would over ride the rules and regulations of certain irrigation schemes, in terms of which certain farmers were precluded from drawing water, even to the extent of guards being used over this water, whilst badly-needed water was flowing through furrows on their land. She cited the Loskop Dam Irrigation Scheme as such a scheme, and asked whether the Bill was capable of being implemented.

Mr S Abram (ANC) strongly supported the Bill in principle but expressed equally strong concerns with the Bill and its principal Act. He said that pronouncements were made by either the national or provincial offices of the Department, which caused much favourable comment from those associated with them, but these pronouncements died a natural death as no action followed. There was, all too frequently, no correlation between the national and provincial offices. It was simple to pass legislation, but the administrative processes associated with that frequently could never deliver on the promises made or expectations raised. For instance, after taking a decision to purchase a farming enterprise, the administrative actions would result in the farm falling into disuse, meaning that subsequently large sums of money must be spent to rectify the damage resulting from bureaucratic bungling or delays,. He cited the example of certain recent transactions in Dordrecht, where the Munnik family had sold willingly and in a spirit of co-operation, but had become heartbroken to see how the farm that they had prized had been neglected, vandalised and was of no further use. This was happening too frequently to allow him to have any confidence in the Department or its ability to perform its functions. He knew that the DTI had had to regain possession of between 2 and 5 million hectares, simply because the Department of Land Affairs (DLA) had no capacity or willingness to perform its designated duties. Land Bank had to be taken over by the Department of Finance; this was not due to bad management but simply to complete absence of management and no delivery to the people who were intended to benefit from its activities.

Mr Abram noted that his personal interactions with the Department there had not been one example where a matter was satisfactorily concluded. Even if there was interaction with a Director General, there was no guarantee that he or she would not soon have moved on, requiring further interaction with another individual. He did not think those who should benefit were gaining any benefit. The Department did not appear to work within time frames at all, let alone achievable time frames. Those interacting with the Department were businessmen or farmers, who could not wait for the “somnambulant” Department to arrive at a decision while their crops rotted in the fields. He suggested that the Department was impractical and dilatory, that it must sort itself out, and what legislation must be implemented to ensure that another LandBank situation did not occur. The track record was dismal, and he urged the Department to remember that it was dealing with living entities in the form of human beings, farming operations, plants or animals, all of whom could die while the Department delayed.

Mr J Bici (UDM) associated himself with the tenor of Mr Abraham’s remarks.

He wondered what was meant by maintenance, and also asked if there was sufficient budget.

Mr A Botha (DA) said he too was forced to agree with the sentiments of the previous speakers. His own personal experience confirmed that in 2000 a project was identified, finally was pronounced to be in order in 2004, but suddenly withdrawn because of change of policy. He noted that in one instance a seller was willing to sell, prepared to cooperate with the objectives and aims of the Department, but eventually had been unable to tolerate the inconsistencies and delays, and sold his farm to another private buyer, resulting in a lost opportunity. Finally, he concluded that another family had been trying to purchase a farm as beneficiaries, only eventually to discover that the willing seller was black, and that it was not departmental policy to buy from black sellers, but only from white sellers.

Ms B Ntuli (ANC)asked how many individuals had been provided with farms

Mr A Nel (DA) stated that he had an objection to the current wording of clause 10 of the Bill as he felt that this afforded the Minister powers that were too wide.

Adv S Holomisa (ANC) stated that he felt a weakness of the Bill was that it made no provision for training to the recipients of any settlements.

The Chairperson observed that there did not appear to be any person or department having final responsibility under the Bill. Clauses 6 and 12, regarding expropriation, seemed to be conflicting with each other. He asked which organs of society had been consulted. He too felt that the terms and conditions wording of clause 10 was too vague.

Mr A Nel (DA) pointedly asked why there was provision for expropriation in the Expropriations Act, the principal Act and this Bill. He felt that this was over-kill.

Mr Gwanya agreed that there were some difficulties. The Water Act required cooperative actions. Unfortunately the Department of Water Affairs and Forestry (DWAF) often did not co-operate with DLA. However, this should not stop the DLA from purchasing movable property.

Ms Ntuli said that there were too many instances where irrigation pipes and ancillary equipment were left lying in the fields, to be vandalised, destroyed, or sold as scrap, while decisions were not being expedited. Her own constituents indicated that they were losing confidence in the ability of Members of Parliament to achieve service delivery. She illustrated that one land claimant was instructed to have a specific land surveyor survey his farm, for which he had to payR15 000. When making enquiries as to progress, he was informed that the instruction for the survey came from a junior person at the Department who did not have the authority, and therefore the process of survey had to start again, for a further fee.

Mr Gwanya explained that the principal Act was currently worded in such a way that the Department had no power to purchase irrigation or other equipment, so it was correct that such equipment would lie unused on the fields. This Bill aimed precisely at rectifying this inconsistency. The DLA would cooperate with the DWAF regarding water rights. Co-operation between government departments was a national challenge. In direct response to Mr Abram, he noted that this Bill was of an administrative nature. However, he would concede that capacity was a major problem facing the Department.

Mr Gwanya stated that the Vaal Hartz and Taung irrigation schemes, which were at the time designed to alleviate the problems of poor whites at the time, took many years to become operational. This was because it took much work to empower the beneficiaries to use them properly. Transformation was a process, not an event. Whilst he could acknowledge that the Department did not have the capacity to achieve all that it should, it was obtaining further capacity. 1 022 posts had been identified as necessary posts. The cost was R450 million. National Treasury had advised that such posts could only be funded at a rate of 15% per year.

Mr Gwanya suggested that drawing strategic recovery plans was an essential part of the process of transformation and development. He conceded that many people might be frustrated by the process, and he recognised that. However, 50 % of the projects were working. It must also be remembered that initially the income was always less than the costs, until a break even point was reached, whereafter the income would exceed the costs. With regard to maintenance, he suggested that this included looking after equipment such as irrigation pipes and tractors. Land held by the DLA incurred costs that could not be ignored and that were related to land acquisition. His departmental activities were done on the basis of affordability, which was determined by the fiscus. This had identified 2.5 million hectares of land, at a cost of R3.5 billion. DLA was discussing the options with National Treasury.
 
Mr Bici said he understood the necessity of liaising with National Treasury but asked what alternatives were being considered if National Treasury could not help.

Mr Gwanya said that a person could buy commodities such as bread, milk and paraffin all at the same time. Such diversity should also be possible with movable and immovable properties.

A Member raised a point about the rigidity with which officials imposed Departmental rules and regulations to the disadvantage of potential or actual beneficiaries. He also noted the need to have clear definitions failing which the Auditor General would not be able to audit the Department. He noted that only four of the nine provinces had not received adverse comment from the Auditor General.

Adv Holomisa asked whether the Auditor General’s report was now under discussion.

The Member replied that he was using the Auditor General’s observations to show his concerns about terms and conditions.

Mr Bici noted that the need for better action extended to leases, the monitoring of leases, the monitoring of rentals due in terms of such leases and the question as to why the Department was leasing and not selling land.

Mr Colin Brocker, Legal Specialist, DLA, replied that certain of the suggestions were not being implemented. The Department did have templates for all sales agreements, leases and contracts of a similar nature, but sometimes officials on the ground were either not using them, or were monitoring them inadequately. He assured Members that the DLA was very concerned about it, and that was the reason why it was looking to the private sector for assistance, either by way of public/private partnerships, or by monitoring of outsourcing. He said the Department would gain wisdom from its experiences. He stressed that this Bill was an attempt to improve upon the principal Act.

Mr Brocker noted that the private sector was more astute than the public sector. It could be that a farming enterprise might consist of a minimum of three legal operations; namely a land owning company, which leased the farm to a operational company, which would hand over produce to a farming or packing operation. Such proliferation of activities was designed to take advantage of tax provisions. However, if the Department wished to purchase the “farming enterprise” it could only currently only lawfully purchase the land, not the farming operations or the infrastructure. Farming operations also included contracts, which formed the “goodwill” element of the purchase. He agreed that the expropriation provisions were not included in the original version of the Bill. Cabinet had queried this point. The DLA had obtained further legal advice, and this provision was to be withdrawn.

Mr Vela Mngwengwe, Chief Director: Strategic Management and Technical Support Services, DLA, added that the main question was one of capacity building. There had been extensive consultation with the various entities in the organized agricultural sector.

Adv Holomisa wished to know whether the Bill contained a major policy shift or merely technical improvements.

Mr Gwanya explained that the Bill was intended to benefit all beneficiaries of the DLA’s beneficiary programme. He noted that the figures given by Mr Abram did not include all land provided to beneficiaries.

Ms Ntuli reminded Members that South Africa was a land scarce in water and other primary resources. There were opportunities, and although these came at a cost, the country needed infrastructure. She asked if there was a central planning department to take into consideration all the needs and requirements of the country as against the available resources, primarily the funding.

Mr Gwanya conceded that at a recent meeting of Directors General this point had been raised, and consideration was being given to having a Central Planning Organisation with powers over all departments.

Mr P Ditshitelo (UCDM) stated that he believed that the function of all departments was to cure previous imbalances. He wondered whether the DLA actually had the resources and will to do so. In addition he wondered whether there was any communication between the national and the provincial departments, as he suspected that lack of communication was a major cause of non-delivery.

Mr Botha and Mr Abram both remarked further upon the lack of clarity around clause 10, and the lack of skills.

Mr Abram said if the DG admitted to 50 % failure, that implied that 50% was being done correctly. He wondered if the Department, National Treasury or the Auditor General could or would give an analysis of the actual costs per hectare of the Department’s work. He asked that climate change and weather pattern changes be borne in mind in planning of future scenarios. Finally he urged against the raising of unrealistic expectations. An Eshowe farm manager had paid with his life for the dilatoriness of land reform. Finally he asked whether the prohibitions against sub division of agricultural land still applied.

Adv Holomisa wished to know how many of the beneficiaries were labour tenants, or labourers on farms, and whether there was consultation with such beneficiaries, or they were simply told what the outcome would be. He remarked that the Government was buying ongoing profitable enterprises, but questioned whether government had the capacity to maintain them. He suggested that people were tending to look to the government rather than the business for sustenance.

Mr Gwanya replied that Supply Chain Management was a term rooted in American business schools, but he preferred the concept of performance management. The Auditor General was moving away from purely-compliance audits to performance audits, measured against the budget and strategic plans. This would be difficult to monitor. He accepted that the work of government did not always equate to private business. However, he cautioned that there was a well-recognised lack of skills in South Africa, and he submitted that everything possible was being done to overcome them, including investigations into the failures to ascertain the reasons for them.

Mr Abram reiterated that more attention should be given to time frames and strict adherence to them. He asked who would be active on the farms, in light of the anticipated lack of food security facing the world.

Mr Gwanya replied that in the 1960s Africans in Kwa Zulu Natal had produced more than enough food for the country. This situation could and should pertain again, but in order to achieve it there must be identification of skills and implementation of programmes. 

The meeting was adjourned.

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