ATC190710: Report of the Portfolio Committee on Agriculture, Land Reform and Rural Development on Budget Vote 39: Rural Development and Land Reform, 10 July 2019
Agriculture, Land Reform and Rural Development
Report of the Portfolio Committee on Agriculture, Land Reform and Rural Development on Budget Vote 39: Rural Development and Land Reform, 10 July 2019
The Portfolio Committee on Agriculture, Land Reform and Rural Development, having considered the 2019/20 Annual Performance Plans and allocation of budget for the Department of Rural Development and Land Reform, the Commission on Restitution of Land Rights, the Office of the Valuer-General, and the Ingonyama Trust Board, reports as follows:
1. Background and introduction
This report accounts for the consideration of Budget Vote 39: Rural Development and Land Reform by the Portfolio Committee on Agriculture, Land Reform and Rural Development (the Committee). The Vote encompasses the Department of Rural Development and Land Reform (DRDLR), the Commission on Restitution of Land Rights (CRLR), the Office of the Valuer-General (OVG) and the Ingonyama Trust Board (ITB). The briefings on, and analysis of, strategic plans (2014-2019), annual performance plans (APPs) and estimates of expenditure formed part of the activities carried out by the Committee during the committee process. The Committee assessed the plans and resource allocation against key policy priorities drawn on the 2019 State of the Nation Addresses (SONAs), the National Development Plan (NDP), Medium-Term Strategic Framework (MTSF), the Estimates of National Expenditures (ENE) and the 2019 Budget Speech of the Minister of Finance.
The Committee recognizes that the Ministries of Rural Development and Land Reform, and Agriculture, Forestry and Fisheries have been merged. The DRDLR and the Department of Agriculture, Forestry and Fisheries (DAFF) will ultimately merge to form the new Department of Agriculture, Land Reform and Rural Development (DALRRD). For purposes of consideration of the 2019/20 Budget Vote 39, tabled in February 2019 before the announcement of the merger, the Committee has considered Budget Votes 24 & 39 separately and is tabling two separate reports according to the vote, hence this report accounts for Budget Vote 39 and the mandate of the DRDLR.
On 3 July 2019, the Committee held briefing session where the DRDLR, the ITB, the CRLR, and the OVG presented their APPs and the final report was adopted on 10 July 2019. The principal concern of this report is whether the key priorities of the DRDLR, CRLR, ITB, and OVG were clearly enunciated, supporting programmes were put in place and sufficient resources were allocated to give effect to the Constitutional imperatives to redress skewed land ownership patterns in Section 25 of the Constitution. Against this backdrop, this report proceeds as follows: It presents an overview of the strategic context and review the priorities as well as estimates of expenditure of the DRDLR and its entities discussed above; it documents key conclusions, taking into account the implementation track record of the DRDLR and its entities; and it concludes with recommendations for consideration by the National Assembly.
2. The Department of Rural Development and Land Reform
The mandate of the DRDLR is to create and maintain an equitable and sustainable land dispensation; and acting as a coordinator and catalyst in rural development to ensure sustainable rural livelihoods, decent work and continued social and economic advancement of all South Africans. The mandate draws on Sections 24, 25 and 27 of the Constitution of the Republic of South Africa, which is about sustainable development and use of natural resources, redress of racially-based property relations, and access to sufficient food and water. Against this backdrop, the vision of the Department is to ensure vibrant, equitable and sustainable rural communities. The mandate, mission and vision of the DRDLR is underpinned by agrarian transformation which is understood to mean a rapid and fundamental change in the relations (systems and patterns of ownership and control) of land, livestock, cropping and community.
- Strategic context, goals and the key priorities for the 2019/20 financial year.
The 2019/20 APP presented represented the final cycle for the 2015/16 – 2019/20 Medium-Term Strategic Framework in which interventions to address marginalisation and deprivation of the poor, especially those living in the rural areas, as per the Strategic Plan (2014-19). Marginalisation and deprivation of the black majority result from the legacy of apartheid’s spatial design. It excluded blacks from the mainstream of the economy and resulted in skewed land ownership patterns. The existing conditions of poverty, unemployment and inequality can be associated with the legacy of decades of segregation and apartheid policies. To what extent do plans presented to the Committee contribute to reversing such legacy?
A high level policy document that sets goals to reverse the legacy is the National Development Plan (NDP). The Committee assessed the APPs in order to ascertain if they were aligned with Chapter 6 of the NDP (inclusive rural economy). The NDP targets seek to ensure that, by 2030, there would be integrated rural areas where residents will be economically active, have food security, access to basic services, health-care and quality education. At the heart of the NDP is job creation to alleviate unemployment and poverty. Table 1 below (Alignment of the DRDRL Strategic Objectives with NDP and MTSF) demonstrate the extent to which the DRDLR attempted to align its strategic objectives to MTSF priorities. The Committee welcomed the alignment of programmes of the DRDLR to the MTSF priorities and the relevant SONA pronouncements. For example, increase the percentage of productive land owned by previously disadvantaged individuals from 11.5 per cent in 2013 to 20% by 2019 (or 16.2 million hectares) will make more land available and inclusive agricultural industry.
The 2019 SONAs, both February and June, place job creation high on the national agenda. Accelerated land reform, expansion of agricultural output and promotion of economic inclusion takes central place in these undertakings. The SONAs reaffirmed government’s resolve to accelerate land redistribution, not only to redress historical injustice but also to widen access to land in order bring in more producers into the agricultural sector. It also committed the State to making well-located state and public land available to human settlements. On the basis of the above, oversight of the release of such land is prioritised by the Committee. The Committee noted, however, that it was unclear how the DRDLR was going to deal with this matter. It requires coordination with the Department of Public Works and Infrastructure.
Table 1: Alignment of the DRDLR Strategic objective with NDP and MTSF
|
NDP & MSTF Priorities |
MTSF Activities |
Relevant Strategic Objectives |
|
Improved land administration and spatial planning for integrated development in rural areas |
|
Improved spatial planning.
Improve land administration for integrated and sustainable use of land for development. |
|
Sustainable land reform (restitution, redistribution, tenure reform and development) contributing to agrarian transformation.
|
Increase the percentage of productive land owned by previously disadvantaged individuals from 11.5 per cent in 2013 to 20 per cent by 2019 (or 16.2 million hectares).
|
Promote equitable land redistribution and agricultural development.
Promote sustainable rural livelihoods.
Restoration of land rights. |
|
Improved food security |
Reduce the percentage of households who are vulnerable to hunger from 11.4 per cent in 2013 to less than 9.5 per cent in 2020. |
Provide comprehensive farm development support.
Promote sustainable rural livelihoods. |
|
Smallholder producers’ development and support for agrarian transformation |
Increase the percentage of productive land owned by previously disadvantaged individuals from 11.5 per cent in 2013 to 20 per cent by 2019 (or 16.2 million hectares).
|
Provide comprehensive farm development support.
|
|
Increased access to quality infrastructure and functional services, particularly in education, healthcare and public transport in rural areas.
|
|
Facilitate infrastructure development to support economic transformation by 2020 Improved access to services. |
|
Growth of sustainable rural enterprises and industries characterised by strong rural-urban linkages, resulting in rural job creation. |
Reduce the percentage of the population living below the lower bound poverty line (R443 in 2011 prices) from 32.3 per cent to below 22 per cent. Reduce rural unemployment from the current 49 per cent to less than 40 per cent. |
Provide support to rural enterprises and development of rural industries.
Job creation and skills development in rural areas.
|
Table 2 below illustrates strategic objectives according to the five main programmes of the Department. The Committee noted that the strategic objectives of the Department largely remained unchanged since the tabling of the Strategic Plan (2015-2020). Appraisal of the priorities and strategic objectives, illustrated in Tables 1 and 2 demonstrates the extent of alignment of the programmes of the Department, the NDP and ultimately MTSF priorities.
Table 2: Strategic objectives of the Department of Rural Development and Land Reform
|
Programme |
Strategic Objective |
|
|
|
|
|
|
|
|
|
|
Source: DRDLR (2015) Strategic Plan 2015-2020
Analysis of the strategic objectives of the DRDLR, especially Programme 3 (Rural Development) and Programme 5 (Land Reform) creates potential for duplication of services rendered by DAFF. The Committee suggested that the Minister should consider, during configuration of the new department, bringing all aspects of farmer/settlement support under one branch for ease of coordination. Further, clear distinction must be made between support for smallholders and subsistence producers and support for large-scale commercial agriculture in order to avoid bias in favour of large-scale commercial agriculture and neglecting the land-based livelihoods of rural households.
2.2 Priority legislation and policies to be developed over the medium-term
Having noted policy initiatives planned for 2019/20, the Committee welcomed plans to produce a Revised White Paper on Land Reform and Land Redistribution Policy Framework. As the legacy report of the 5th Parliament Portfolio Committee on Rural Development and Land Reform shows, the absence of policy framework has been a major weakness in the DRDLR. Other policies that have been planned are –
- Unitary Land Tenure Policy
- Communal Land Tenure Policy
- Voluntary Land Donations Policy
- South Africa Land Administration Policy
- Deeds Registries Transformation Policy (Land Rights Registration Policy)
The Committee, however, noted that there have been challenges regarding capacity of the department to finalise different policies and legislation. The following policies initiatives appear to have been dropped, namely: Policy on Exceptions to the 1913 cut-off date and Policy on access to Historical Land Marks and Heritage Sites as pronounced by the President during the SONA of 2012. There has been lack of clarity with regard to –
- Policy framework: Review of the Deeds Registries Act of 1937 and geomatics functions;
- An operations policy to institute agricultural land ceilings;
- Policy contributions towards a land value tax; and
- An operations policy for evidence based policy research and development for rural development and land reform
With regard to legislative programme, the Committee observed that the DRDLR did not have any legislation that it plans to table in Parliament in 2019/20. Except 1, all the 7 pieces of legislation that were in the previous APP were not achieved and have been dropped from the Plans. Those are –
- Regulation of Agricultural Land Holding Bill, 2018;
- Communal Land Bill, 2018;
- Deeds Registries Amendment Bill, 2018;
- Sectional Titles Amendment Bill, 2018;
- Planning Profession Amendment Bill, 2018;
- Land Survey Amendment Bill, 2018; and
- Rural Development Bill, 2018.
3. Overview of the 2019/20 budget allocations and the Medium-Term Expenditure Framework estimates
The Medium-Term Expenditure Framework (MTEF) total allocation for the DRDLR is R33.2 billion. Of the total allocation, 10.8 billion (32.3 per cent) has been allocated to Programme 4 - Restitution and R8.7 billion (26.2 per cent) to Programme 5 - Land Reform. As would be expected, redistributive land reform takes the largest share of the total budget of the DRDLR. However, restitution and redistribution as priority programmes, receive modest annual real terms increases of 1.9% and 1.6% respectively. From these allocations, it is quite obvious that the number of hectares to be acquired would be affected.
Table 3: Overall programme appropriations from 2018/19 to 2021/22
|
Programme (R Million) |
Budget (R’000) |
Rand change |
% change |
|||||
|
Nominal |
Real |
Nominal |
Real |
|||||
|
2018/19 |
2019/20 |
2020/21 |
2021/22 |
2018/19-2019/20 |
2018/19-2019/20 |
|||
|
Administration |
1 861.4 |
1 889.1 |
1 976.8 |
2 087.6 |
27.7 |
- 65.7 |
1.49 |
-3.53 |
|
NGMS |
677.3 |
712.8 |
762.3 |
817.8 |
35.5 |
0.3 |
5.24 |
0.04 |
|
Rural Development |
1 785.4 |
1 821.1 |
1 985.2 |
2 112.9 |
35.7 |
- 54.3 |
2.00 |
-3.04 |
|
Restitution |
3 363.8 |
3 608.2 |
3 336.8 |
3 552.2 |
244.4 |
66.0 |
7.27 |
1.96 |
|
Land Reform |
2 737.3 |
2 915.0 |
2 608.8 |
2 785.1 |
177.7 |
33.6 |
6.49 |
1.23 |
|
TOTAL |
10 425.2 |
10 946.2 |
10 669.9 |
11 355.6 |
521.0 |
- 20.1 |
5.00 |
-0.19 |
Source: Adapted from National Treasury (2019), Vote 39: Rural Development and Land Reform
Table 3 above shows that the total budget appropriated to the DRDLR has increased from R10.425 billion in 2018/19 to R10.946 billion in 2019/20, equivalent to a nominal increase of 5%. Yet in real terms, the budget decreased by 0.19%. Over the medium term, the budget allocation to the DRDLR decreases by an average rate of 2.4% in real terms. As was the case in previous years, the Committee expressed concern about the fact that the budget for land reform does not change in real terms as illustrated in Figure 1 below. Further, some budget for land reform goes to development support, a mandate that is closely link to DAFF. The Committee urged the Minister to ensure that reconfiguration of the departments addresses this overlap. Given the public outcry for land, National Treasury should consider prioritising redistributive land reform in budget allocation in order to give effect to the transformational provisions of Sections 25(5), (6) and (7) of the Constitution.
In terms of Economic Classification, the Committee noted that the main cost drivers are compensation of employees (COE) and Goods and Services under Current Payments, Departmental Agencies and Accounts as well as Households under Transfers and subsidies as illustrated in Figure 1 below. The Committee, however, expressed concerns that the items having direct impact on communities, especially the rural poor, had decreasing budget while compensation of employees and goods and services has shown steady increase. Nonetheless, Households still takes 35.31% of the total budget of the DRDLR, followed by COE and Goods and Services at 22.85% and 20.64% respectively.
Figure 1: Main cost drivers (economic classification 2018-2021)
3.1 Overview of programme allocation and performance plans
The mandate of the DRDLR, as outlined above, is carried out in terms of the five programmes, including the Commission on Restitution of Land Rights implemented as programme 4 of the Department. The five Programmes; namely, 1. Administration, 2. National Geomatics Management Services, 3. Rural Development, 4. Restitution (the CRLR), and 5. Land Redistribution and Development. The Committee noted that there was ongoing discussion about the autonomy of the CRLR, whether it should be under programme 4 or should be allocated under transfers so that it functions independently of the DRDLR.
Figure 2: Allocation of funds by Programme
3.1.1 Administration
Administration programme encompasses provision of leadership, management and support services to the entire Department. Table 4 below illustrates that the total appropriation for Administration nominally increased by a negligible 0.6% from R1 877.9 billion in 2018/19 to R1 889.1 billion in 2019/20. However, in real terms, it decreases by 4.38%.
Table 4: Administration Appropriations from 2018/19 to 2019/20
|
Sub-Programme R Million |
Budget |
Increase /Decrease |
%Increase/Decrease |
|||
|
2018/19 |
2019/20 |
Nominal |
Real |
Nominal |
Real |
|
|
Ministry |
47.8 |
46.5 |
- 1.3 |
- 3.6 |
-2.72 |
-7.53 |
|
Management |
207.4 |
215.6 |
8.2 |
- 2.5 |
3.95 |
-1.18 |
|
Internal Audit |
46.7 |
48.6 |
1.9 |
- 0.5 |
4.07 |
-1.08 |
|
Corporate Services |
456.4 |
423.8 |
- 32.6 |
- 53.5 |
-7.14 |
-11.73 |
|
Financial Services |
193.2 |
205.7 |
12.5 |
2.3 |
6.47 |
1.21 |
|
Provincial Coordination |
393.5 |
435.7 |
42.2 |
20.7 |
10.72 |
5.25 |
|
Office Accommodation |
532.9 |
513.2 |
- 19.7 |
- 45.1 |
-3.70 |
-8.46 |
|
TOTAL |
1 877.9 |
1 889.1 |
11.2 |
- 82.2 |
0.6 |
-4.38 |
Source: Adapted from National Treasury (2019) Vote 39: Rural Development and Land Reform
As has been the case in previous years, there is high vacancy rate at senior management level. For example, almost nine of the 12 top management position including the Director-General position, were vacant for a very long time. By the end of 2018/19, the vacancy rate of the DRDLR was 15%, a regression to the 2015/16 vacancy rate. The vacancies impact on the capacity of the DRDLR to meet its performance targets as delivery against the MTSF targets demonstrates. Some of the targets that the DRDLR have failed to meet are as follow. For example, failure to meet the targets for legislative and policy programme. For example, inability to conclude the 2011 Green Paper of Land Reform processes, and failure to produce overarching Policy on Rural Development and establish the Rural Development Agency.
The Committee noted that there have been various investigations being conducted either internally by the DRDLR or Special Investigative Unit (SIU). The Committee requested reports, management response, and progress report with regard to the implementation of SIU recommendations.
3.1.2 National Geomatics Management Services (NGMS)
The NGMS caters for the provision of geospatial information, cadastral surveys, deeds registration, spatial planning information and other technical services in support of sustainable land development. Its objective is to facilitate integrated spatial planning and land use management across South Africa through relevant legislation by 2020. The budget allocation for this Programme has increased from an adjusted appropriation of R657.6 million in 2018/19 to R712.8 million in 2019/20, a nominal increase of 8.4% whereas in real terms it decreased by 3.04%. The increase can be attributed to prioritisation of the Spatial Planning and Land Use Management sub-programme with a nominal increase of 25.9%. The Registration of Deeds Trading Account (RDTA) generates its own revenue and therefore, it does not receive any financial support. As show in Table 5, NGMS and RDTA accounts for close 99% of the total budget of this programme and play a key role in terms of spatial transformation of our cities and villages.
Table 5: National Geomatics Management Service Appropriations from 2018/19 to 2019/20
|
Sub-Programme R Million |
Budget |
Increase/Decrease |
%Increase/Decrease |
|||
|
2018/19 |
2019/20 |
Nominal |
Real |
Nominal |
Real |
|
|
NGMS |
497.5 |
512.8 |
15.3 |
- 10.0 |
3.08 |
-2.02 |
|
SPLUM |
152.5 |
192.0 |
39.5 |
30.0 |
25.90 |
19.68 |
|
RDTA |
0.0 |
0.0 |
0.0 |
0.0 |
0.00 |
0.00 |
|
SA Council of Planners |
3.7 |
3.9 |
0.2 |
0.0 |
5.41 |
0.20 |
|
SAGC Council |
3.9 |
4.1 |
0.2 |
0.0 |
5.13 |
-0.07 |
|
TOTAL |
657.6 |
712.8 |
55.2 |
20.0 |
8.4 |
3.04 |
Source: Adapted from National Treasury (2019) Vote 39: Rural Development and Land Reform
The Committee welcomed the allocation. However, there was a concern around oversight of SPLUMA because it was not yet clear whose primary responsibility to administer SPLUMA. It is understood that DRDLR, COGTA and DPME will all have joint responsibility in the administration of this legislation. The Committee sought clarity around roles and responsibilities.
3.1.3 Rural Development
Rural development programme is expected to contribute towards rural economic transformation, the growth of rural economies and the creation of job opportunities in rural areas, especially among rural youth through Agri-Parks and National Rural Youth Service Corps (NARYSEC). The strategic objectives make it clear that it focusses on livelihoods support, rural enterprise and industries development and support, as well as job creation.
Table 6: Rural Development Appropriations from 2018/19 to 2019/20
|
Sub-Programme R Million |
Budget |
Increase/Decrease |
%Increase/Decrease |
|||
|
2018/19 |
2019/20 |
Nominal |
Real |
Nominal |
Real |
|
|
RID |
835.0 |
875.0 |
40.0 |
- 3.3 |
4.79 |
-0.39 |
|
REID |
509.2 |
534.5 |
25.3 |
- 1.1 |
4.97 |
-0.22 |
|
NARYSEC |
443.0 |
411.6 |
- 31.4 |
- 51.7 |
-7.09 |
-11.68 |
|
TOTAL |
1 787.2 |
1 821.1 |
33.9 |
- 56.1 |
1.9 |
-3.14 |
Source: Adapted from National Treasury (2019) Vote 39: Rural Development and Land Reform
Table 6 above shows that the budget allocation for this programme nominally increased by 1.9% from an adjusted allocation of R1.787.2 billion in 2018/19 to R1.821.1 billion in 2019/20. However, if one considered inflationary adjustment, the budget has a real decrease of 3.14% The following points can be made about rural development: NARYSEC allocation decreases from R443 million in 2018/19 to R411 million in 2019/20, Representing a nominal decrease of 7.09%. The Committee expressed concerns about the unintended consequence of the decrease, especially ability to reach rural youth for skills development interventions. The Committee therefore called for a review of NARYSEC, as part of the ongoing reconfiguration of the DALRRD. Analysis of economic classification demonstrates that a significant amount under programme 3’s goods and services, about R453.7 million (57.8%) goes to consultants which gives rise to the question about the lack of internal capacity to implement programmes and projects.
3.1.4 Land Reform and Development
Table 7 below shows that the budget allocation to the Land Reform Programme has increased from R2 743.0 in 2018/19 to R2 914.9 billion in 2019/20, nominal (6.3%) and real (1%) increase.
Table 7: Land Reform Appropriations from 2018/19 to 2019/20
|
Sub-Programme R Million |
Budget |
Increase/Decrease |
%Increase/Decrease |
|||
|
2018/19 |
2019/20 |
Nominal |
Real |
Nominal |
Real |
|
|
Land Redistribution and Dev. |
422.3 |
298.2 |
- 124.1 |
- 138.8 |
-29.39 |
-32.88 |
|
Land Tenure and Administration |
446.5 |
443.6 |
- 2.9 |
- 24.8 |
-0.65 |
-5.56 |
|
Land Reform Grants |
386.3 |
603.6 |
217.3 |
187.5 |
56.25 |
48.53 |
|
KwaZulu-Natal ITB |
20.3 |
21.5 |
1.2 |
0.1 |
5.91 |
0.68 |
|
ALHA |
1 326.5 |
1 405.9 |
79.4 |
9.9 |
5.99 |
0.75 |
|
OVG |
141.1 |
142.1 |
1.0 |
- 6.0 |
0.71 |
-4.27 |
|
TOTAL |
2 743.0 |
2 914.9 |
171.9 |
27.8 |
6.3 |
1.0 |
Source: Adapted from National Treasury (2019) Vote 39: Rural Development and Land Reform
The budget allocation for the Agricultural Land Holding Account (ALHA) sub-programme has increased by 5.9 per cent in nominal terms or 0.7 per cent in real terms in 2019/20 compared to 2018/19. However, the budget for ALHA is expected to decrease at an average rate of 7.1 per cent over the medium term. This means less funds will be available over the medium term for the acquisition of land. The Department is expected to acquire 269 539 hectares of strategically located land over the medium term at a cost of R3.5 billion transferred to the ALHA. The Agricultural Land Holding Account sub-programme receives the largest share of the allocation, amounting to R1.406 billion in 2019/20, which translates into 48 per cent of the total budget allocation for Programme 5. It is followed by the Land Reform Grants sub-programme, at 21 per cent. Together, these two sub-programmes consume 69 per cent of the total allocation for Programme 5. This shows that these two sub-programmes are priorities for the Programme, as they are key to land acquisition and productive utilisation of redistributed land.
Under Economic classification, Transfers and Subsidies receive the biggest share of the budget of Land Reform in 2019/20, amounting to R2.24 billion (77 per cent). Of this amount, the largest share of R1.569 billion (70 per cent) is for departmental agencies and accounts. The bulk of this is transferred to the ALHA, amounting to R1 405.9 billion (89.6 per cent).
4. Relevant entities
4.1 Commission on Restitution of Land Rights (Programme 5 of the Department)
4.1.1 Overview
The Commission on Restitution of Land Rights (Commission) was established in terms of the Restitution of Land Rights Act, 1994 (Act No. 22 of 1994). Its powers are to provide restoration of land rights and equitable redress in line with the provisions of section 25(7) of the Constitution of the Republic of South Africa of 1996. At time of reporting, the Commission had settled 99% of all the ‘old order’ land claims. However, there were about 18000 unfinalised and backlog claims. For 2019/20, the Commission has planned to settle 420 land claims and finalise 637 land claims. The Committee noted that CRLR was unable to conduct and finalise all outstanding research of claims lodged prior to 31 December 1998 (i.e. 916 land claims) by the end of the 2018/19 in terms of the Operation Phakisa for Agriculture, Rural Development and Land Reform.
The Committee also noted that the CRLR could not start to attend to new order claim because an interdict in terms of the so-called LAMOSA Constitutional Court Judgement. Further, the Court has placed new reporting requirement that the CRLR must bi-annually report to Court about the progress to settle ‘old order’ land claims. The Committee was yet to discuss the legislative implication and whether reintroduction of the Restitution of Land Rights Amendment Act was desirable, given multiplicity of policy discussion taking place, for example, the Constitutional Review, Presidential Advisory Panel on Land Reform, and the Speaker’s Forum High Level Panel Report.
4.1.2 Budget allocation and targets on strategic objectives
The allocation to the Restitution Program constitutes 32.3 per cent of the Department’s total allocation of R33.2 billion over MTEF period. The Committee noted that increase in the allocation was below the R30 billion required to finalise all pre-1998 land claims as per Operation Phakisa plans. Further, the Committee was of the view that if land reform is national priority, therefore its allocation should be increased significantly to address landlessness and provide justice for the dispossession of land rights for the majority of South Africans.
Table 8: Programme 4: Appropriations from 2018/19 to 2019/
|
Sub-Programme R Million |
Budget |
Increase/Decrease |
%Increase/Decrease |
|||
|
2018/19 |
2019/20 |
Nominal |
Real |
Nominal |
Real |
|
|
Restitution of National Office |
653.7 |
185.2 |
- 468.5 |
- 477.7 |
-71.67 |
-73.07 |
|
Restitution of Regional Office |
479.3 |
503.3 |
24.0 |
- 0.9 |
5.01 |
-0.18 |
|
Restitution Grants |
2 226.3 |
2 919.7 |
693.4 |
549.1 |
31.15 |
24.66 |
|
TOTAL |
3 359.3 |
3 608.2 |
248.9 |
70.5 |
7.4 |
2.10 |
Source: Adapted from National Treasury (2019) Vote 39: Rural Development and Land Reform
Table 8 above shows that budget allocation for the Restitution has increased from an adjusted appropriation of R3.6 billion in 2018/19 to R3.9 billion in 2019/20. It has increased both nominally and in real terms by 7.4% and 2.1%. The Committee welcomed an increase in the budget allocation for the Restitution Grants from R2.2 billion in 2018/19 to R2.9 billion. Restitution Grants takes 81% share of the total budget of the Restitution in 2019/20. The allocation was welcomed by the Committee on the basis that it covers transfers to households for finalising claims. The Committee noted that there has not been progress in the conversion of the Commission to be an autonomous body. Further, the plans of the Commission do not include this policy directive that was taken a few years ago and is in line with the Restitution of Land Rights Act.
4.2 Office of the Valuer-General
4.2.1 Overview
Since its establishment, the OVG, as an autonomous entity, tabled its first Strategic Plan and Annual Performance Plan. The Office of the Valuer-General (OVG) was set up in terms of the Property Valuation Act, No.17 of 2014. The OVG is responsible for: the valuation of properties identified for land reform purposes, as well as where a department has made a request for a valuation service to be rendered for purposes of acquiring or disposing of property; and developing criteria and procedures for the valuation of property that has been identified for land reform purposes and monitoring the proper, efficient and effective valuation of such properties based on set criteria and procedures. The intension was that the OVG would contribute to the government’s commitment to address the slow pace of redistribution of land which has partly been associated with the escalating market-based land prices that government pays when acquiring land. These hefty prices are being paid in spite of the constitutional provision for ‘just and equitable’ compensation. Given the policy decision to abandon the Willing Buyer, Willing Seller approach and implement a ‘just and equitable’ compensation, the OVG ought to play a central role in determining property values. However, the Committee was unhappy that the slow pace in processing valuations by the OVG was the cause of delays in finalising claims.
4.2.2 Strategic objectives and estimates of expenditure for the OVG
The strategic focus of the OVG can be categorised into three main areas; namely, support land reform (including restitution); develop criteria, procedures and guidelines to standardise valuation practice for land reform; and ensure organisational stability.
- Support land reform by conducting all land valuation requests from the DRDLR and the Commission within the agreed timeframes. The OVG will complete 995 backlog valuations by the end of the financial year. It commits to taking about 50 days to issue a valuation certificate for valid valuation reports. The Committee expressed concerns with regard to capacity of the OVG to achieve these targets. It recommended that the OVG must improve its capacity.
- Implement valuation criteria, procedures and guidelines to standardise valuation practice for land reform. It was reported that the procedures were in place and the OVG will implement them 100%. However, it would start by developing an implementation plan.
The OVG has received a transfer of R142.1 million from the DRDLR in 2019/20, which is a slight increase of 0.7 per cent in nominal terms but translate into a decrease of 4.3% in real terms compared to the adjusted allocation of R141.1 million in 2018/19. This is of concern, since it is a new structure that needs to be capacitated to give effect to its responsibility of providing valuations of land earmarked for land reform and land restitution purposes in order to increase the pace of Land Reform.
4.3 Ingonyama Trust Board
The Ingonyama Trust Board (ITB) is a schedule 3A Public Entity and reports to the Minister of Rural Development and Land Reform. The Ingonyama Trust was established in terms of the KwaZulu-Natal Ingonyama Trust Act No 3 of 1994, amended by the National Act 9 of 1997 which provided for the establishment of the (ITB, hereafter referred as the Board). The Ingonyama Trust functions as a landowner-in-law of the Ingonyama Trust Land (previously owned by the KwaZulu Government). The land is owned communally and administer by Amakhosi. To date, such land was estimated to be 2,8 million hectares under some 1 600 individual titles in all of the 11 Districts of Kwazulu-Natal and eThekwini Metro. The main objective of the Board is to administer Ingonyama Trust Land for the material and welfare benefit of traditional authorities and communities residing thereon.
4.3.1 Overview
The Secretariat is the administrative component through which ITB discharges its mandate. The organogram of the Secretariat has been substantial reviewed to enable the Board to respond efficiently to the needs of the community. The separation of the Ingonyama Trust Board and the Ingonyama Trust presents challenges with regard to accountability of the entity to Parliament. The Committee urged the Minister to consider seeking legal opinion about this matter because it creates impression that it is the ITB that accounts to Parliament and the Ingonyama Trust does not. Having been established by an Act of Parliament, and further having taken ownership of land in trust for the residents of the Former KwaZulu, the Trust must account to Parliament.
On the basis of the separation, the total budget of the ITB is made up of transfer payments it receives from the DRDLR. The Ingonyama Trust receives its fund revenue income is earned from leases and investments. The internal administrative costs of the Board are met through a transfer payment from the Department. The ITB reported that transfer payment (baseline of 21 million) cannot cover the administrative costs of the ITB, estimated at R65 million. Therefore, the Ingonyama Trust covers the shortfall.
With regard to the Ingonyama Trust, all the activities of the Trust are funded by income self-generated by the Trust. Its disbursement policy states that 90% of the income earned through trading activities is for the material benefit of deserving communities. The Committee noted that separate budgets for ITB and Ingonyama Trust have been tabled since 2015/16, as these have recently been seen as separate entities. This, according to the Committee, is a matter that require clarification because there are different interpretations of law and must be resolved. There appears to be difference of legal interpretation by the Minister of Rural Development and Land Reform, the Auditor-General of South Africa and the Ingonyama Trust Board.
4.3.2 Medium-Term Estimates of Expenditure: Ingonyama Trust
The total estimates of expenditure for the Ingonyama Trust in 2019/20 is R165.6 million. It encompasses R52m allocated for administration (corporate services and financial administration), a shortfall from administration of the Ingonyama Trust Board. The allocation increases from R46m in 2018/19. The largest share of the Trust Budget is for Land Tenure Management Services which has been allocated R113.5m. It entails tenure management and planning projects (R6.6m), workshops (R4.9m), provision for rates on ITB land (R95m), bursaries (R650 000) and business or agricultural projects (R6.3m). The Committee expressed concern about the cost of workshops which in most cases do not target the rural poor but elite within communities. It was not clear what the business and agricultural projects’ allocation was for because the projects were not listed and quantified. Further information was required by the Committee.
- Medium-term Estimates of Expenditure: Ingonyama Trust Board
As discussed above, the ITB administers the affairs of the Ingonyama Trust and Trust Land for the material benefit of communities living on the Ingonyama Trust land. The total budget allocation for the ITB for 2019/20 amounts to R56.6 million. Given the baseline transfer of R21m, the ITB has shortfall for operative costs which is funded from the Ingonyama Trust revenue as discussed above. The Committee, since majority of the members are new to the portfolio, have agreed to give ample time to focus on the functioning of the Ingonyama Trust and the Trust Board, its existence, policy relevance in relation to the broader land ownership and land tenure policy for the entire country. In doing this, the Committee would reflect on other reports such as the HLP and Presidential Advisory Panel as well as the Communal Land Tenure Policy.
- Summary of key conclusions drawn on the deliberations on the Strategic Plan, the Annual Performance Plan of the DRDLR and the entities
Having deliberated the findings and observations on budget allocations and APPs of the DRDLR and entities, the Committee drew the following conclusions:
6.1 Department of Rural Development and Land Reform
ill affect the Department negatively.pproved by Cabinet, rtment. fdurther,various policies that have been created in the last f
Administration
- The programmes of the DRDLR are aligned to government priorities outlined in the NDP and MTSF priorities. Introduction of Operation Phakisa for Agriculture, Rural Development and Land Reform could assist in the accelerated programmes for settlement of land claims and redistribution of land.
- The continuous real terms decline of budget could potentially affect service delivery amid growing calls for acceleration of the redistribution of land through expropriation of land without compensation.
- The vacancy rate in the DRDLR poses a threat to the capacity of the DRDLR and entities to deliver on the mandate and ambitious targets they set for themselves. Such could further be compounded by the vacancy rate of 15% (5% higher than the acceptable 10% vacancy rate). The fact that 9 of the 12 top management positions are vacant, including the position of the Director-General, could be amongst the reasons for failure to deliver on MTSF targets. Some vacancies arise from suspensions related allegations of corruption.
- There was still no overarching policy framework that creates linkages among various policies that have been created over the last five years. The inclusion of a Revised White Paper on Land Policy in the APP could assist the DRDLR on policy clarity which in turn could yield better results for land reform because of policy clarity and transparency.
- Further, the continued lack of provisional timeframes for submission of planned policies, albeit on a piece-meal basis, creates a challenge for Parliamentary oversight and holding the Executive accountable.
National Geomatics Management Services
- Lack of clear delineation of responsibilities amongst government departments responsible for the administration of SPLUMA is likely to affect the outcome of the programme. Without a platform for the Presidency, DRDLR and COGTA to coordinate interventions, the programme risks duplication of services as unintended consequences arising from lack of coordination shown by CRDP.
- The land audit report, and further audits of state land, is a welcome initiative which is necessary for the identification of strategic and well-located public and state land that should be released for redistribution. The DRDLR, together with DPWI, should prioritise releasing state land in a manner that could result in faster pace of redistribution and meeting the pressing urban land needs for human settlement.
Rural Development
- The real terms budget decrease of the programme has affected NARYSEC programme which aims to provide skills to rural youth. Therefore, fewer youth were going to receive training due to budget constraints. However, a programme assessment to verify programme effectiveness is vitally necessary. Given the reported complaints about the programme, revisiting the model and programme review could assist to provide relevant training programme.
- Agri-parks, if properly conceptualised and implemented, has a potential to transform the rural economy tremendously. The weakness of coordination in the Department, as seen with CRDP pilots, is likely to affect the effectiveness of the programme, especially as it relates to the role played by Department of Trade and Industry, Department of Small Business Development and the DAFF.
- Projects linked to revitalisation of agriculture and agro-processing should be best implemented by those with expertise in this area of work, mainly the DAFF and DTI. Configuration of the DALRRD which takes into account the existing duplication of services might save the State some funds which could be channelled to land acquisition.
Land Reform
- Expenditure of land reform as a percentage share of the total expenditure of programmes of the Department has been in decline in the last few years. However, the decrease in the budget allocation for ALHA, which has resulted in few hectares to be acquired in 2018/19 compared to 2017/18 might undermine the strategic objective to fast track land reform.
- Having been calling for proper budget for tenure reform on farms, the Committee concludes that focus on settlement of labour tenants’ claims, capacity building and support for CPAs, implementation of ESTA is likely to improve the lives of some of the most marginal people in our Society.
- The extent to which transfer of the implementation of the ‘recap policy’ to the DAFF could result in more efficient farmer support is yet to be seen. However, the configuration of the DALRRD could bring about dedicated integrated support mechanisms that have been called for over the last MTEF period.
- Weak legal services support for both land reform beneficiaries and farm dwellers/labour tenants, in terms of the Land Rights Management Facility, will not assist in the fundamental transformation of property relations in South Africa.
- Slow progress in the release of state and public land for land redistribution has contributed to the slow pace of land reform. Such land is available, in most cases, for immediate occupation by landless communities and individuals.
6.2 Commission on Restitution of Land Rights (Restitution)
- Failure to finalise the transition of the Commission on Restitution of Land Rights to being an autonomous entity reporting directly to the Minister meant that the Commission continued to operate as programme 4 of the DRDLR and is inconsistent with the legislative framework for the establishment of the Commission.
- The strategy of the Commission to deal with land claims on state land, including all forestry land, military land and other agricultural land, has not been effective. Many community claims on state and public land remains unresolved. If those claims are not attended as a matter of urgency, the could be mass land occupations.
- The impact of Operation Phakisa for agriculture, land reform and rural development places settlement and finalisation of land claims in high priority. Therefore, commission needs to improve research capacity, negotiations and conflict resolution in order to finalise outstanding claims without delay.
6.3 The Office of the Valuer-General
- Reported saving of the fiscus by regulating the valuations is a welcome development. It thus means that there is a need for further clarity on how the OVG determine the property value, and whether the values for compensation are “just and equitable” in line with the Section 25(3) of the Constitution.
- The under-achievement by the Commission to meet the target on the number of phased projects processed has been attributed to late appointment of valuers. If the OVG does not attend to capacity constraints without delay, the office could become one of the factors that slows down the pace of settlement of land claims, an unintended consequences of the establishment of the OVG.
6.4 The Ingonyama Trust Board
- Lack of performance indicators and targets relating identification of community and development projects, which are part of the main aims of the existence of the Board, is a cause of concern and could create an impression that the ITB does not exist for the material benefit of the deserving communities on the ITB land.
- There has been the delay in finalising engagements between ITB, Auditor-General, the Department and National Treasury about the qualified audit opinion as well as engagements regarding royalty revenue with the Department of Mineral Resources. If not addressed, these issue would continue to result in negative audit opinion.
- Given the performance track record in policy development, an increase in the number of policies to be developed and reviewed does not inspire confidence in the capacity of the ITB to deliver on such policies. It appears that ITB is developing policies every year, it should therefore submit the list of policies it developed and those to be developed
- Recommendations
In view of the observations and key conclusions discussed above, the Committee recommends that the Minister of Agriculture, Land Reform and Rural Development should –
General
- Ensure policy coherence across different branches of the DRDLR, and ultimately the new DALRRD, and other government policies and legislation, especially in dealing with communal land tenure policies and development support for smallholder farmers.
- Ensure that the configuration of the new department pulls together different forms of farmer and post-settlement support under single branch, including but not limited to, Recapitalisation and Development Programme, MAFISA, and CASP, in order to establish a comprehensive post-support programme that targets farmers across a continuum of scales, especially smallholders and subsistence farmers in the former homelands.
- Submit management response to the SIU findings and recommendations as well as progress report on the implementation of the recommendations, and systems put in place to ensure prevention of the recurrence of maladministration and corruption.
- Streamlining food security initiatives by both DRDLR and DAFF in order to maximise food availability and stability. Submit quarterly progress reports in Parliament focusing on primary production activities including yields for both crop and livestock production systems, funding instruments and resource allocation for each activity.
Administration
- Finalise all disciplinary matters in the DRDLR within 90 days. Further submit a report, within 30 days after the finalisation of the disciplinary matters, outlining the outcome of each matter. In the event that some matters could not be concluded as recommended here, a time-bound plan on conclusion of all investigations and disciplinary processes must be submitted to the Committee.
- Submit a revised legislative and policy programme outlining realistic targets for tabling of planned pieces of legislation in the National Assembly as well as finalisation of the proposed policies.
- Enhance capacity of the policy and legislative drafting section of the DRDLR, ultimately the new DALRRD, in order to ensure adherence to the legislative programme and achievement of the set targets.
National Geomatics Management Services
- Draw and submit coordination and implementation plan for SPLUMA in conjunction with COGTA and the DPME in the Presidency.
- Finalise the next phase of land audit which must unpack the ownership of all land under the ownership of Trusts and Companies and finalise survey of all land in the former homelands and any other areas in South Africa. Further, submit a budget allocation for both the audit and the survey.
- Submit a report on the identification of well-located and strategic land in cities and peri-urban areas to be released for redistribution to landless people. Equally, development same plan for rural state land to be released for restitution and redistribution.
Rural Development
- Conduct a review of the NARYSEC programme to assess if the programme has achieved, the intended outcomes over the last five years, highlight the challenges encountered, and the implications for future programme implementation. Further, skill development under NARYSEC should be linked to the mandate of the new Department.
- Together with the National Treasury, Department of Agriculture Forestry and Fisheries, and other relevant government departments, review all programmes under rural development, especially those linked to revitalisation of agriculture and agro-processing as well as small business development, in order to minimise duplication of services.
- Ensure that all agricultural support programmes are coordinated under the same branch in the newly configured DALRRD.
Restitution
- In line with the set times for reconfiguration of Cabinet, fast-track reconfiguration of an autonomous Commission on Restitution of Land Rights in order to ensure alignment with the founding legislation and other legal prescripts.
- Work with the Minister of Justice and Constitutional Development to ensure that the Land Claims Court is well capacitated with permanent judges and all relevant operational support mechanisms required to speedily deal with all the matters before it without delay and clear backlog of claims before it.
- Ensure that reports that are submitted to the Land Claims Court bi-annually are also referred to the Committee in order to ensure alignment and the consistency on issues reported before the Land Claims Court and Parliament.
- Continuously engage National Treasury about increasing allocation of funding for restitution to clear the commitment register of settled land claims and to accelerate the finalisation of the land claims as outlined in Operation Phakisa initiative.
Land Reform
- Conduct enterprise analysis and socio-economic impact assessment of a representative sample of farming enterprises under the Recapitalisation and Development Programme, Strengthening of Relative Rights Programme and other post-settlement support initiatives under the Agri-Parks programme. The impact assessment should be geared toward assessing if government funds invested under these programmes were yielding viable and sustainable farming businesses and ultimately having livelihood impacts on members of projects or beneficiaries.
- Ensure that the Department, working with the OVG, must develop a policy position regarding expropriation of land in the public interest, taking into consideration the SONA pronouncement around expropriation of land without compensation in a manner that does not harm the economy and food security. Further explore the modalities with which such policy pronouncement could be implemented.
- Ensure capacity of the Department to monitor land reform projects, especially an interface of strategic partnership and mentorship programmes and distribution of rewards or dividends to beneficiaries.
- Conclude, without delay, the finalisation of the Integrated Funding Model for post-settlement support.
- Working with the Minister of Justice and Constitutional Development, facilitate discussion between the Department and the Legal Aid Board aiming at strengthening the provision of legal services to land reform beneficiaries (CPAs and Trusts) and the vulnerable landless people, especially the farm dwellers and labour tenants who confront the brutality of illegal evictions from their homes on farms as well as violation of tenure rights for people living on communal land in the former homelands.
The Office of the Valuer-General
- Ensure that the capacity of the OVG is enhanced in order to support faster delivery of quality support service to land reform, especially acceleration of settlement of land claims.
- Submit progress report on implementation of the existing organogram focusing on funded posts, both filled and vacant, and positions that are additional to the establishment. Further identify capacity constraints in the OVG and plans to address those constraints.
The Ingonyama Trust Board
On the basis of the legal opinion obtained by the Minister of Rural Development and Land Reform, facilitate discussions between the Auditor-General, the Ingonyama Trust and the ITB, and the Department to develop a common understanding on the nature of the Ingonyama Trust and the Ingonyama Trust Board (whether the ITB should been seen as an independent entity from the Ingonyama Trust and the auditing complexities).
- Facilitate resolution of key questions and concerns raised by the Auditor-General in relation to the value of the ITB’s land/property so that the ITB could move toward achievement of an unqualified audit. Further, submit quarterly progress report on implementation of the remedial measures set out by the Auditor-General in order to ensure that the ITB is compliant with all the relevant prescripts.
- Conduct a comprehensive socio-economic impact assessment on the performance and existence of the Ingonyama Trust/ITB and how the beneficiaries have socio-economically benefited from the programmes.
- Submit a report that outlines the Constitutional and legislative imperatives for the existence of entities like the Ingonyama Trust and the Ingonyama Trust Board in Kwazulu-Natal and not in other parts of South Africa.
The Committee further recommends that, within the three months after the adoption of this report by the National Assembly, the Minister must submit responses and progress report on the implementation of the above recommendations.
Report to be considered
Documents
No related documents