ATC200730: Report of the Select Committee on Land Reform, Environment, Minerals & Energy on the Adjusted Budget Vote and Annual Performance Plan 2020/21 of the Department of Agriculture, Land Reform & Rural Development (Dalrrd) – Budget Vote No 29, Dated 28 July
REPORT OF THE SELECT COMMITTEE ON LAND REFORM, ENVIRONMENT, MINERALS & ENERGY ON THE ADJUSTED BUDGET VOTE AND ANNUAL PERFORMANCE PLAN 2020/21 OF THE DEPARTMENT OF AGRICULTURE, LAND REFORM & RURAL DEVELOPMENT (DALRRD) – BUDGET VOTE NO 29, DATED 28 JULY 2020
The Select Committee on Land and Mineral Resources having considered Budget Vote: 29 and Annual Performance Plan 2020/2021 of the Department of Agriculture, Land Reform reports that the committee met with the DALRRD on 21 July 2020 and was briefed on the matter.
Although the funds referred to were not included in the revised budget presented to the committee, the department included a reference to the President’s Employment Stimulus Package. The Department informed the committee that agriculture and rural development has been identified as one of the sectors capable of stimulating the economy. It was therefore deemed important to support the sector with funds from the President’s Employment Stimulus Package. The total amount of funds allocated was R688 million. The Department stated that it would direct the funds at subsistence farmers, targeting 50 000 subsistence farmers to support. The Department later highlighted that about 40 000 farmers did not qualify for support under the Farmer’s Assistance Programme, and that around 21 000 job losses were recorded in the formal agriculture sector during the first quarter of this year. The full impact of the Covid-19 pandemic and the required lockdown response is yet to be felt in the formal and informal agriculture sector, but it is clear that the number of farmers and farm workers requiring support during this period is significant, and is growing.
The following departmental entities had their budgets reduced:
- The Land Holdings Account: R443.6 million
- The Office of the Valuer-General: R44.5 million
Total reductions to departmental grants were presented with provincial breakdowns.
- Ilima/Letsema: Reduced by R120.7 million;
- CASP Infrastructure: Reduced by R156 million;
- CASP College Upgrades: Reduced by R66.5 million;
- CASP Extension Services: Reduced by R100.6 million.
The Ilima/Letsema and various Comprehensive Agriculture Support Programme (CASP) allocations are critical for the support, development and marketing of developing farmers in provinces. Departmental investment in producer support are heavily concentrated within FSPU developments, and with support for these infrastructure projects significantly reduced, there is a concern that provincial farmer support capacity will be reduced over the medium term. Support includes mechanisation support associated with FPSU as well as extension support from departmental officials stationed at FSPUs.
The Department further outlined where budget adjustments to its programmes were made. Even though the Department is identified as a critical economic sector, it did not escape significant budget reductions in critical programmes supporting land reform and the support and development of the emerging farming sector. It was troubling for the committee to note that budget reductions were most significant in provincial grant allocations to provinces.
For Programme 3: Food Security, Land Reform and Restitution, the following targets will no longer be met or have been reduced:
- Number of smallholder and medium-scale producers supported through Blended Finance Scheme – target removed, resulting in support withdrawn from 150 smallholder farmers;
- Number of TRANCRAA areas transferred: Reduced from 21 to 10;
- Number of land claims settled: Reduced from 454 to 244;
- Number of land claims finalised: Reduced from 479 to 295;
- Number of hectares of Strategically Located Land Acquired: Reduced from 50 000 ha to 23973 ha;
- Number of farms supported through the land development support programme (PLAS Farms): Reduced from 200 to 146;
In Programme 4: Rural Development, the following reduction was highlighted:
- Number of FPSU supported with infrastructure projects: Reduced from 24 to 15;
For the same programme, the Department indicating that it is increasing its target for Number of NARYSEC youth trained from 1416 to 1916. The Department did not elaborate on how training opportunities will be increased under lockdown regulations.
Additional to this increase, the Department highlighted the following increases in programme allocations:
- R112,6 million to the Land Administration Programme (Programme 6);
- R150 million to the sub-Programme Registration of Deeds (6.3).
There were no target increases associated with the additional allocations. The Department explained that entities associated with this programme are normally self-funding, and that increased allocations were required to provide staff of the entities with salaries during the lockdown period.
The committee expressed concern as the adjusted budget cuts made by the department affected key programmes such as restitution, food security and land reform. The Committee further requested clarity for increases in the budgets of Land Administration and Registration of Deeds, and whether these increases were in order for the Department to respond to Covid-19 related matters. Discussions also focused on the current ban on alcohol sales and its impact on the wine industry. The Committee wished to know whether or not the department was engaging the stakeholders in the wine industry and how the industry’s interests were represented by the Minister at the Covid 19 Command Centre and other economic cluster platforms.
The department’s response to questions focused on the programmes that had budget reductions were that cuts were effected by National Treasury and that the DALRRD was instructed to adjust the programmes accordingly. The department assured the committee that discussions are currently underway to ascertain how to assist those that have lost their jobs, and those that did not qualify under the farmer assistance programme. With regards to the alcohol ban and engagements with the liquor industry, the department informed the committee that the Minister has had numerous engagements with the wine industry, and will continue to represent their case to meetings with the economic cluster and the Covid 19 National Command Council, reiterating the major job losses looming in the sector.
In responding to the committee’s concerns regarding the impact that budget reductions will have on the Department’s capacity to reach restitution and redistribution targets, the department, through the Chief Land Commissioner, agreed that provinces such as Limpopo still had a large number of outstanding claims. The Department stated that the budget reductions experienced as a result of the Covid-19 response did not impact as heavily on the completion of old claims, as the reason why claims were proceeding slowly was due to court action, which is not dependent on the departmental allocations. The Commissioner did acknowledge that some claims offices had to close due to staff testing positive for Covid 19, but that the impact on the finalisation of claims would hopefully be temporary.
With regards to the department’s vacancy rate, the committee heard that prior to the lockdown, key, highly skilled posts were vacant and that with the current budget adjustments, further posts also had to be frozen. The department seeks to remedy the situation during the next budget allocation.
The DG reaffirmed the position of the department stating that they are fully aware of the medium-term impacts that the Covid 19 pandemic will have on the economy, and that discussions are underway to ascertain what types of intervention would be required to address the economic fallout from the pandemic across the entire sector as well as functions of the department, its programs and entities.
In closing, the Chairperson suggested the following:
- The Minister should drive the review and update of the 1995 White Paper on Agriculture, developed under for Minister Dr A.I. van Niekerk, to reflect the new Department, and national priority areas and international agreements. Specifically, land issues, climate change, and others. This will help in guiding future operations of the department, reprioritisation of budgets and critical areas that need to be prioritised.
- The Department should work optimally to utilise the budget and market access to ensure that food security and employment of farm workers is not severely impacted by the budget adjustments and COVID-19.
- The Department should consider an impact-based approach to their interventions, this would assist the Committee in determining the impact budget allocation has and identify areas that need to be addressed.
The Select Committee on Land Reform, Environment, Mineral & Energy having considered Budget Vote: 29 and Annual Performance Plan 2020/2021 of the Department of Agriculture, Land Reform & Rural Development, reports that the Committee has concluded its deliberations thereon.
Report to be considered.
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