Department Strategic Plan Briefing & Stellenbosch University Response; Ingonyama Trust briefing

Meeting report

AGRICULTURE AND LAND AFFAIRS PORTFOLIO COMMITTEE
15 March 2005
DEPARTMENT STRATEGIC PLAN BRIEFING AND STELLENBOSCH UNIVERSITY RESPONSE; INGONYAMA TRUST BRIEFING

Acting Chairperson: Ms E Ngaleka (ANC), followed by Dr E Schoeman (ANC)

Documents handed out:
Department Strategic Plan 2005 –2010
Department Strategic Plan: PowerPoint presentation
Department Performance Review (Land Delivery)
Ingonyama Trust Board’s Strategic Plan 2005/06 and budget
University of Stellenbosch response: PowerPoint presentation

SUMMARY,
The Department of Land Affairs presented its strategic plan for 2005-2010, as well as land reform achievements to date. The University of Stellenbosch presented a response and made a series of recommendations to improve Department capacity, integration and impact. A delegation from the Ingonyama Trust Board then briefed the Committee on their strategic plans, budget, achievements and challenges.

Members highlighted the role of the Land Bank, financing for previously disadvantaged small farmers, the oversupply of land for restitution purposes, the possibility of using a leasehold system for new farmers, and whether the Ingonyama Trust Board’s expenses were reasonable.

MINUTES

Department briefing
Mr Glen Thomas, Acting Director-General, presented the Department’s strategic plan for 2005-2010. He explained that the plan was still in draft form, but would be finalised in the near future. Mr Thomas argued that land was one of the major driving forces for socio-economic development, and was thus a strategy for alleviating poverty and creating employment. The rural poor represented a ‘priority Department constituency’. The safety and security needs of farm-dwellers were of particular concern.

Land reform achievements to date included delivery of 3.5 million hectares to 1 million beneficiaries. Of this, 1.8 million hectares had been redistributed and 57 257 restitution claims had been settled. There were 28 046 outstanding claims. President Mbeki had committed the Department to concluding the land restitution process by 2007/08 in his State of the Nation address. According to the strategic plan, 18 238 outstanding claims would be settled in 2005/2006. 69.7% of the total medium term economic framework (MTEF) budget for land affairs had been allocated to restitution. Mr Thomas cautioned that land prices had increased beyond the MTEF forecasts.

5% - 7%, or 1.7 million hectares, of state land was made available for land reform. 773 000 hectares had been allocated thus far. Most of this was agricultural land; 30 000 hectares was disposed of for housing purposes.

Stellenbosch University response
Professor Mohammed Karaan proposed that the strategies developed by the Department should be reinforced by institutional innovation at three levels: access to land, access to support services and access to value adding mechanisms. Recommendations included making visible the results of a cost-benefit assessment of land reform to date, clearly communicating the closure of the land restitution process to the public, and tracking the private acquisition of land by black people – with the possibility of considering Department support to these new land owners. He proposed improved integration at all levels of land affairs policy and administration through the Comprehensive Agriculture Support Programme (CASP), both national and local, and consideration of tax incentives to land owners who were reluctant to sell. On the subject of capacity, he suggested that the Department review its role in resolving serious capacity gaps at local government level and encouraged the Department to shift back to a developmental mode of functioning instead of slipping into a bureaucratic mode. He raised the lack of alternative models available to collectives, farm owners, and the institutions that provided financing to farmers and suggested that the Department had a key role to play in developing innovative models on productive use of assets and institutional development. Lastly, he cautioned against opportunism in the sector, in the form of markets, sellers, and consultants.

Discussion
Mr S Abram (ANC) questioned whether the Land Bank was fulfilling its role as a provider of support services, citing concerns about inaccessible application forms and increased lending rates.

Professor Nick Vink (University of Stellenbosch) responded that the Land Bank provided loans for up to 40 years and played a vital role in land reform. Having participated in the Strauss Commission ten years previously, he agreed with Mr S Abrams that it was time for further reform of the Land Bank.

Mr S Abram suggested that the state should have the right of first refusal on land put on the market by willing sellers. Mr Thomas agreed that this was an option, and explained that Namibia had adopted this approach. However, it required more effective land administration capacity than was currently in place.

Mr P Ditshelelo (UCDP) requested information on the availability of financing to previously disadvantaged farmers. Mr Thomas responded that there were financing options, but acknowledged that this information had not reached many farmers. He committed the Department to enhancing communication on this matter.

Dr E Schoeman (ANC) asked whether the land reform targets were informed by research and whether specific land needs in different parts of South Africa were being identified and addressed through the land reform process. Mr Thomas explained that the Reconstruction and Development Plan (RDP) had set a 30% target as a political decision, not on the basis of research. The Department recently appointed a group of consultants to undertake a fiscal and economic analysis to enable the Department to set more accurate targets. Their findings were due in April 2005. He advised that a proactive land acquisition strategy had been drafted to engage local municipalities in the identification of local land needs. Once this information had been captured in the Integrated Development Plans (IDP), the Department could acquire land to meet those needs.

Dr E Schoeman recommended that the Department consider a leasehold system whereby the state retained ownership of land until the farmer renting the land had shown evidence of productive viability, after which the state could transfer the land. Mr Thomas reiterated that such strategies required more land administration capacity than was currently available.

Dr A van Niekerk (DA) affirmed his party’s support for land reform, but said that the DA advocated a different approach, which emphasised economic success over statistics of land transfer. Mr Thomas replied that the Department pursued statistics because of the land ownership ratio of 87% (white ownership) to 13% (African homelands) during the apartheid era. He explained that once land had been transferred according to set targets, then the Department became concerned with issues of sustainability.

Mr A Nel (DA) noted that 4% of the agricultural land in South Africa was put on the market each year and that this exceeded land reform needs. Mr S Abram (ANC) raised concerns about land prices being inflated by the willing buyer, willing seller policy. Mr Thomas agreed that the problem was not a lack of land, but a lack of resources to buy available land. He stated that land prices were pushed up when the state entered the market. Mr Thomas acknowledged that land purchase negotiations had been very protracted in some cases, but suggested that lack of co-operation from both landowners and organised agriculture was one of the challenges experienced by the Department. Mr Thomas drew attention to the fact that Section 25 of the Constitution of South Africa allowed for state intervention, which raised the option of expropriation. This option had not been followed to date in the interests of national reconciliation, but may need further consideration in light of the public interest in concluding the land restitution process. He referred to the approach adopted in Brazil, whereby the state set a price after a period of negotiation with landowners, and expropriated at that price.

Dr E Schoeman assumed the position of Chairperson from Ms E Ngaleka for the remainder of the meeting.

Ingonyama Trust Board briefing
Judge Ngwenya, Acting Chairperson of the Ingonyama Trust Board, announced that there had been significant improvement in the functioning of the Board since their first presentation to the Committee two years previously. He reminded Members that their mandate was to manage the land of the Trust to the benefit and wellbeing of the individual and communities living on the land. He introduced the 17 strategic objectives set by the Board relating to asset management and land transfer duties required by the Communal Land Rights Act, 2004 (CLARA). The budget for implementing these plans was R2.1 million received from government and R13 million generated by the Trust.

Another Boardmember, Advocate Robin Raubenheimer, commented on some of their challenges in the year ahead. Some municipalities had been slow to register towns in the former KwaZulu and that land transfer for state domestic purposes (such as schools and clinics on Trust land) had also been delayed by a tardy response from the respective government departments. The Trust had been supporting negotiations between the Department of Water Affairs and Forestry (DWAF) and two amakhosi to privatise state forests. All parties were committed to the principle that local communities should play a decision-making role in the ongoing management of this land despite the necessity to enter into partnerships with private consortia.

Ms B Ntuli (ANC) asked about monies disbursed to traditional authorities by the Board, and queried the collection of long-term outstanding debts by the Board. Judge Ngwenya explained that an amount of R11.8 million had been allocated to traditional authorities. This had been determined according to mining activities on Trust land. Royalties paid to the Trust Board were transferred to the relevant traditional authority on the basis of an approved business plan. Records of out standing debts were inherited from the KwaZulu government and concerned payment of land rentals. It was not clear whether rentals had been paid but not recorded. The Auditor General required the Trust Board to make provision for bad debt.

Mr D Dlali (ANC) asked for clarity on Board expenditure of R15 436 239. Judge Ngwenya stated that while this may sound excessive, he believed that Board members were frugal in their spending. Only King Goodwill Zwelethini and Advocate Raubenheimer claimed for their expenses, as all the other members were public servants. The Board met more frequently that the required six times per year.

Dr E Schoeman commended the Board on the visible improvement in their functioning and noted their pioneering role with regard to implementing CLARA. He suggested that the Committee would like to see a decrease in the state allocation to the Ingonyama Trust in future.

The meeting was adjourned.