ATC110525: Report Budget Vote 32: Rural Development and Land Reform

Rural Development and Land Reform

Report of the Portfolio Committee on Rural Development and Land Reform on Budget Vote 32: Rural Development and Land Reform dated 25 May 2011


The Portfolio Committee on Rural Development and Land Reform, having considered Budget Vote 32: Rural Development and Land Reform, reports as follows:


1.         Introduction


On 10 March 2011, the Department of Rural Development and Land Reform (DRDLR) and the Ingonyama Trust Board (ITB) briefed the Portfolio Committee on Rural Development and Land Reform about their respective strategic plans and budget allocations for the period 2011-2014.


The Deputy Minister, Hon T Nxesi, led the delegation from the Department of Rural Development and Land Reform (DRDLR). The delegation comprised the Director General (DG), Mr. Mdu Shabane, Deputy Director General (DDG): Support Services, Ms N Mashiya; Acting DDG: Rural Infrastructure Development, Ms. L Archery; Acting Chief Land Claims Commissioner (CLCC), Mr. T Mamphoto; Chief Financial Officer (CFO), Mr P Phili; Acting DDG: Land Reform Mr V Mahlangu, DDG: Social, Technical, Rural Livelihoods, and Institutional Facilitation (STRIF), Mr. M Swart.  The Ingonyama Trust Board (ITB) was represented by Nkosi KW Mathaba (Member of the Board of Trustees), Mr A Mia (CFO) and Mr N Bhebhe (Chief Executive Officer) and Ms B Benson (Head of Real Estate).


The briefing was mainly focussed on the strategic priorities of the DRDLR for the Medium Term Expenditure Framework (MTEF) and related budget allocation as well as the strategic priorities of the ITB and budget allocation for the 2011/12 financial year. The approach of the Committee was that the broad framework presented by both the DRDLR and the ITB should be read with the relevant Annual Performance Plan (APP), hence presentations of the APPs. It helped the Committee to obtain a holistic view of broad strategic goals, specific planned outputs and how the DRDLR and the ITB had planned to achieve the pre-determined objectives and monitoring their own performance. The Committee also considered the approach as one of the ways to enable it to hold the DRDLR and the ITB accountable, thus enhancing its strategy for oversight and monitoring the implementation of the strategic and operational plans.


This report, therefore, accounts for the processes undertaken by the Portfolio Committee during consideration of Budget Vote 32. It provides a brief summary of the strategic priorities of the DRDLR and the ITB and an overview of budget allocation. It further provides an overview of the observations and highlights recommendations from the Portfolio Committee.


2.         The Department of Rural Development and Land Reform


2.1        Strategic context for rural development and land reform and the key priorities


The presentation of the DRDLR outlined that the strategic outputs of the DRDLR are based on the Medium Term Strategic Framework (MTSF) Outcome 7 that seeks to ensure realization of ’vibrant, equitable and sustainable rural communities’ in South Africa. The DRDLR has been mandated to drive the implementation of that Outcome. The Committee appreciated that the planning processes of the DRDLR have also considered how it could contribute to Outcomes 4, 6, 9 and 10 as part of the top five priorities of government. The Committee further commended that the Strategic Plan also drew on the 2011 State of the Nation Address (SONA) by the President, Honourable Jacob Zuma, Budget Speech by the Minister of Finance, Mr. Pravin Gordhan as well as the various Cabinet Makgotla.


Government has identified job creation as a key focus during the 2011/12 financial year. The SONA highlighted the strategic significance of rural development and land reform as a lever for improving lives of the rural people. It further showed that 500 000 jobs would be created in the rural sector over the next 10 years. In that context, the DRDLR considered the New Growth Path that provided strategies for creation of jobs and identified the manners in which it could contribute towards job creation. It planned to develop strategies and programmes that would create jobs specifically for rural communities. Such programmes included the Comprehensive Rural Development Programme (CRDP), Recapitalization and Development Programme (RADP) for land reform projects, National Rural Youth Service Corps (NARYSEC) that targeted skills development and employment of youth. Since 2009, the Department has implemented the CRDP pilot projects. It also identified CRDP as a key driver for the creation of jobs in rural communities and revival of land reform projects, distressed farms owned by individuals as well as irrigation schemes.NARYSEC was launched in November 2010; the DRDLR has already recruited 7000 young people from all the Provinces except Kwazulu-Natal where a different programme was being implemented. It also reported it targeted to reach 22 401 youth by 2014. 


The 2011 Budget Speech highlighted that the focus of government would be on reduction of the unemployment rate as well as the vacancy rate within government. In addition, other initiatives that targeted rural areas included the government’s plan to spend R2.6 billion on water services in 2011. The priority areas identified for that initiative were the rural Provinces of the Eastern Cape, Limpopo and KwaZulu-Natal where there were still high numbers of people without safe drinking water.  Development of infrastructure such as water reservoirs, windmills and rehabilitation of irrigation schemes as well as fencing of grazing land was identified as one of the ways that could boost the agricultural sector. The jobs created under those initiatives could also enhance food security and create job opportunities for many rural people, especially women and youth.


2.1.1          Vision, Mission and strategic priorities of the DRDLR


The vision of the DRDLR is a “vibrant, equitable and sustainable rural communities and food security for all’ and would require a coordinated and integrated broad based agrarian transformation. The DRDLR articulated its mission as that of initiating, facilitating, coordinating, catalyzing and implementing an integrated rural development programme. A programme for agrarian transformation that denotes “a rapid and fundamental change in the relations (systems and patterns of ownership and control) of land, livestock, cropping and community” has been identified as a strategy of the DRDLR.


Within the context described above, the DRDLR outlined the following key priorities within the MTSF:

                    Improving productivity of land reform projects through effective implementation of the Recapitalisation and Development programme;

                    Expediting the finalization of land claims;

                    Rolling out the CRDP effectively so that livelihoods of rural communities are improved;

                    Improving corporate governance and ensuring enhanced service delivery;

                    Implementing proper change management and innovation strategies; and

                    Enhancing the efficiency of information management systems. 


The key priorities were further broken down into the following eight (8) strategic goals:

                    Sound corporate governance and service excellence through compliance with the legal framework achieved by 2014;

                    Reformed policy, legislative and institutional environment by 2014;

                    Effective land planning and administration that is biased towards rural areas;

                    Institutional arrangements for effective corporate governance and stakeholder participation by 2014;

                    Increased access to and productive use of land by 2014;

                    Improved access to affordable and diverse food by 2014;

                    Improved rural services to support sustainable livelihoods by 2014; and

                    Improved access to sustainable employment and skills development opportunities by 2014.


The Department has planned for the following policy initiatives:

        The Green Papers on Rural Development and on Land Reform and Agrarian Transformation to be gazetted by May 2011 and approved by Cabinet by May 2012.

The DRDRL further planned to develop the following:

        Policy on land access and ownership by foreign nationals (2011)

        Policy on the proposed Rural Development Agency (2011)

        Policy on the establishment of a Land Management Commission (2011/12)

        Policy on land valuation and the establishment of a Valuer-General (2011/12)

        Policy on Land Tax (2013/2014)


2.2         Overview of the budget allocations


The Department was allocated R8.1 billion in 2011/12 to address the pressing need for rural development and land reform. Table 1 highlights appropriations according to the five programmes.


Table 1:  Programme Appropriations from 2010/11 to 2013/14

Source: National Treasury (2011) - Vote 33 Rural Development and Land Reform.


As illustrated by Table 1, the overall appropriation of R8.1 billion highlights a slight 6.3% real terms increases when compared to the R7.2 billion appropriation for 2010/11. The increase was mainly driven by the real increase of 88.7% allocation for the programme of Land Reform and 23% for the programme of Rural Development.  The committee welcomed the increase in the two programmes and further noted that such allocation symbolized the significance of the programmes. However, the budget allocation for the programme of administration, geo-spatial and cadastral services and that of restitution showed a decline in both nominal and real terms.


The Committee expressed grave concerns with regard to the drastic decline of the budget allocation for the programme of Land Restitution. In 2010/11, the programme of Restitution was allocated R3, 574, 221 billion and reduced to R2, 497,293 billion for 2011/12, a decline of 33.33 % in real terms. The concern was further bolstered by the fact that Restitution is a constitutional imperative in terms of Section 25 of the Constitution, the nature of rural land claims that were yet to be settled, huge commitments and pending court orders to the tune of R12 billion, and the cost of land acquisition under the market-based approaches. Based on the past experiences, it had become evident the DRDLR was unlikely going to finalize all the outstanding claims by 2014. Yet restitution was considered a crucial programme, if properly funded and implemented, that could result in a redress of skewed patterns of land ownership and assist the majority of the landless poor and rural people access land on their own to produce food for themselves and the Nation.


2.3        Overview of programmes and related appropriations 


This section draws on the presentation of the Strategic Plan, budget allocations and the APP. It highlights some of the crucial responses of the Committee with regard to the strategic priorities and the 2011/12 implementation plans.


Programme 1: Administration


The programme provides strategic and logistical support in the form of executive and corporate services. It also oversees capital works of the Department and makes a nominal contribution to the public sector education and training authority. The Department identified the following MTEF priorities:

                    improving corporate governance and enhance service delivery;

                    implementing proper change management and innovation strategies;

                    enhancing the efficiency of information management systems; and

                    reforming the policy, legislative and institutional framework.


As illustrated under Table 1, the budget allocation of R 606,104,000 for the programme decreased significantly by 25% in real terms between the years 2010/11 to 2011/12, a trend that the Committee had noted over the past two years. Although the committee welcomed the high attention provided to corporate services, it remained concerned about the impact that the overall decline in allocations for administration would have on the crucial issues such as an objective to provide efficient and effective human resource management practices; for example, reduction of vacancy rate, performance monitoring and evaluation, and corporate communication services. The Committee noted the critical elements identified under this programme, namely risk management, ensuring effective and efficient financial services that would result reduction on irregular, fruitless and wastes expenditure and losses through criminal conduct.


Programme 2: Geo-spatial and Cadastral Services


The Geo-spatial and Cadastral Services provides geospatial, cadastral surveys, spatial planning information as well as technical services in support of sustainable land development.  Under this programme, the Department identified improvement of efficiency of cadastral surveys management, information services and registration of deeds as a key priority and would be achieved through the reduction of the turnaround times for the approval of cadastral documents; reduction of the time taken to register deeds and documents; provision of land registration services and information to support the government’s development agenda; and the reduction of spatial inequalities in rural communities.


The committee noted a 23.9% decrease in real terms of budget allocation for Geo-spatial and Cadastral Services, a decrease from R486.7 million in 2010/11 to R388.1million in 2011/12. The Committee commended the Department in this programme for its work to ensure that turn around times for examination of cadastral documents, and registering title deeds. However, a crucial matter that emerged was the finalization of the surveys and registering of state land. The DRDLR committed itself towards development of a Comprehensive Land Register by 2013.  The Committee welcomed commitment to ensure an in-house capacity to deal with cadastral and deeds registries, especially the in-house training programme facilitated by the DRDLR.


A key legislation under this programme is the Land Use Management Bill (LUMB). The Department has planned to achieve consultation and adoption of the LUMB as well as introduction to Parliament during the 2011/12 financial year.


Programme 3: Rural Development


The purpose of the programme of Rural Development is to initiate, facilitate, coordinate and catalyse the implementation of CRDP that leads to sustainable and vibrant rural communities. The key priorities determined are to: roll-out the CRDP in all rural municipalities; improve food security in rural communities by establishing food gardens and improving technologies for food production; and to create jobs in rural areas through NARYSEC and other infrastructure development projects. Key components/branches of this programme are: Social, Technical, Rural Livelihoods and Institutional Facilitation (STRIF) and Rural Infrastructure Development (RID). 


The Committee noted an increase in budget allocation for the programme of Rural Development, significantly increasing from R342.4 million in 2010/11 to R441.3 million in 2011/12, representing a real increase of 23%. Such an increase was welcome by the Committee. The Committee noted that the Department had set itself higher targets for rolling out of the CRDP to 180 wards by 2012 as compared to the 39 wards that were reached in 2010/11. The Committee welcome the plan to ensure that it contributes to creation of 14000 jobs under the CRDP, including the 5000 jobs for youth under the NARYSEC programme. The Department aims to create 53 000 jobs in all CRDP by 2014.


Programme 4: Restitution


The programme of restitution deals with settlement of land restitution claims lodged with the Commission on Restitution of Land Rights (CRLR) in terms of the provisions of the Restitution of Land Rights Act, No 22 of 1994 and to provide settlement support. For the MTEF period, the CRLR prioritized reduction of the backlog of land claims and to settle all outstanding land claims.


The Committee noted the drastic decline of the budget allocation for the programme of Restitution, which dropped from R3.5 billion in 2010/11 to R2.5 billion in 2011/12, representing a 33.3% decrease in real terms. The Committee further noted that the budget for this programme had been in decline for the past four years. The Committee remained greatly concerned about the future of land restitution because of the decrease in allocation for restitution, especially in view of outstanding R12 billion commitments already made. Experiences from the previous years, especially the rolling over of R487, 5 million and shifting of R1, 5 million from land reform to restitution suggests that the programme has been underfunded. As a result of the decline, the APP for the Restitution showed that the Commission on Restitution of Land Rights will only implement 360 backlog projects as well as settling 90 of the 650 targeted for the MTEF period.


Programme 5: Land Reform


The purpose of the programme of land reform is to provide sustainable land reform programmes in South Africa. The Department prioritized improvement of productivity in land reform projects through the effective implementation of the Recapitalisation and Development Programme, and acquisition and allocation of strategically located land.


The budget for this programme increased from R2.1billion in 2010/11 to R4.2 billion in 2011/12, reflecting a real increase of 88.7%. It is expected to escalate over the MTEF period at an average annual rate of 29.8% in normal terms. The Committee welcome an increase in the allocation. It could help address the inequities in patterns of land ownership through proactive acquisition of land for needy rural households and emerging black commercial farmers. In addition, those farm dwellers and workers could receive legal representation through the Land Rights Management Facility. Most importantly is the provision for recapitalization and development of distressed land reform projects/farms.





3.         The Ingonyama Trust Board


The Ingonyama Trust was established in terms of the Kwazulu-Natal Ingonyama Trust Act (Act 3 of 1994). It functions as a landowner-in-law of the Ingonyama Trust Land. By 31 March 2011, the land in question comprised 2,705,229 hectares under some 1600 individual titles in all of the 11 Districts of Kwazulu-Natal and eThekwini Metro. The total number of people living on Trust land as at 2001 census was estimated at 4, 5 million. 


3.1        The mandate of the Ingonyama Trust Board


The vision of the ITB is to improve the quality of the life of the people living on the Ingonyama Trust land by ensuring land usage to their benefit of the residents. The ITB work is guided by the following objectives: 

                    To formulate and implement policy;

                    To provide an effective land administration systems;

                    To create a climate which encourages development; and

                    To extend security of tenure in accordance with both customary and statutory law always subject to the Constitution Act, 1996.


3.2        An overview of the context within which the Ingonyama Trust Board functions


The core business of the ITB is land management and it can be regarded as a land management agency. It strives to ensure that any commercial activity on communal land is developmental in nature and that it benefits the affected local communities. The ITB does not sell ownership of land.


The ITB reported to the Committee that although it had been able to achieve its own targets, it still had a limited staff capacity and therefore it needed to ensure that strategic vacancies were filled so that enough capacity existed in order to execute all the programmes of the ITB. At the time of the briefing, already 90% of posts that appeared in the organogram of the ITB were filled. Further to the filling of vacancies, the ITB had also relocated to their own property. A key development was that the ITB has planned to decentralize its operations by setting up satellite offices aligned to district municipalities.


The ITB has encountered numerous challenges. Some of them are invasions and squatting on Trust land, lack of clarity with regard the impact of the new legislation, the Mineral and Petroleum Resources Royalty, Act No. 28 of 2008 and the Mineral and Petroleum Resources Development Act, Act No. 28 of 2008, on the position of the ITB and the issue of royalties. Although the ITB had addressed the National Treasury on the matter, the Committee was informed that the matter had not been finalized. Therefore, the ITB continued to experience challenges with regard to royalties for affected communities.


3.3        Outline of the planned strategic interventions


The ITB has planned to focus on land management, communication and support to traditional communities.

        Land management: During the 2011/12 financial year, the ITB would be conducting land audits, developing land management plan for exclusive land and reconciling the asset register;

        Communication: The ITB would develop a communication strategy and increase its awareness programmes to all its stakeholders; and

        Support to traditional communities: the intention of the ITB was is to ensure that business opportunities do address development and social needs of relevant communities.


3.4        Overview of strategic priorities for the financial year 2011/12


During the 2011/12 financial year, the ITB has planned to focus on four priority areas; namely, land management, projects, partnerships in development projects, and enhancement of capacity. The ITB summed up its priority areas within the following two strategic goals:

3.4.1     Effective and efficient management of the Trust land for the material benefit and welfare of    communities living thereon;

3.4.2     Improvement of organizational capacity and proficiency.


Further to the strategic goals, the ITB formulated the following 11 strategic objectives:

                    To administer, manage and control Ingonyama Trust land;

                    To ensure the optimum usage of land for the benefit of communities and other occupiers;

                    To ensure the optimum usage of land through development of appropriate land management plans;

                    To enhance and improve the ITB’s proficiency through outreach programs;

                    To identify potential business and development opportunities within communities on ITB land

                    To review and maintain policies;

                    To develop a comprehensive human resources and communication  strategy;

                    To support communities for their material benefit and welfare through disbursement of funds that accrues to the Trust;

                    To review of the ITB legislation; and

                    To enhance the ITB business.

3.5        Budget allocation


The total budget allocation for the ITB is R76, 207, 847.00 consisting of R6, 842, 860.00 from the voted funds and R69, 364, 987.00 from the ITB own fund income.  The transfer payment from the Department of Rural Development and Land Reform makes 8.97% of the total income budget whereas the remainder comprises budget income was earned from leases, royalties and investments. According to the disbursement policy, 90% of the income earned from the trading activities should be utilized for the benefit of the communities and 10% could be retained for Board expenses.


4.                   Observations by the Portfolio Committee on Rural Development and Land Reform  


4.1        Having considered the strategic plan, APP and Budget allocation for the DRDLR, the Portfolio Committee on Rural Development and Land Reform made the following observations:


4.1.1     It commended the DRDLR for some strategic thinking around addressing the challenges faced by the DRDLR, including the Commission on Restitution of Land Rights, with regard to the backlog in land restitution, increasing productivity of land reform projects through the Recapitalization and Redevelopment Programme (RADP).

4.1.2     The APP was considered as a useful tool that would help the Committee to conduct its functions relating to monitoring implementation of the Strategic Plan and the overall programme for oversight. However, the Committee expressed concerns with regard to some of the strategic objectives, targets and performance indicators that were considered to be very broad. The DRDLR might experience challenges relating to measuring its own performance.

4.1.3     The committee acknowledged the constitutional imperative for addressing the historical land dispossession and South Africa’s commitment to settle all outstanding land claims was also welcome. However, the committee noted the increasing decline in budget allocation for restitution in the midst of escalating land prices and lengthy processes of land restitution. The greatest concern was financial commitments made by the CRLR and subsequent court orders that compelled the DRDLR to pay land owners for land to be made available for restitution.

4.1.4     The view of the Committee was that CRDP had a potential to reach the majority of the residents of the rural and remote areas of South Africa. The Committee would focus its attention on creation of jobs under the NARYSEC and CRDP, especially the sustainability of the 53000 jobs that the DRDLR has planned to create by 2014.

4.1.5     The committee welcomed the rolling out of CRDP throughout all the rural wards in South Africa. However, it was concerned about the availability of budget for that mammoth task as well as whether the DRDLR had reflected on the emergent lessons from the existing CRDP pilot projects, War on Poverty (WOP) and previous rural development initiatives such as the ISRDP.

4.1.6          In view of the current weather patterns - the floods and storms - that ravaged some of the rural areas of South Africa, disaster management within the DRDLR is a crucial issue and required to be prioritized. Such issues could be integrated with the plans of the DRDLR around the mitigation of climate change in rural areas. The committee welcomed the DRDLR the Disaster Management Plan.

4.1.7          Integrated and comprehensive approach to rural development enhanced by coordination with other departments such as Department of Higher Education, Defence, Social Development, Agriculture Forestry and Fisheries was welcome by the Committee.

4.1.8          The committee commended the Department for shifting focus towards strengthening its corporate governance arm. It is believed that such a shift would enable the DRDLR to deal with existing governance challenges. One of the crucial issues was the reduction of the vacancy rate to 8%.


4.2        Having considered the strategic plan and budget allocation of the ITB, the Portfolio Committee on Rural Development and Land Reform made the following observations:


4.2.1     The Committee noted a trend in deviating from the original mandate of the ITB, acting as a land management agency on behalf of the people/communities living on the Trust land. In the opinion of the Committee, the ITB had become a development agency that began to forge business deals with investors for the material benefit of communities. It has become a catalyst for development in the areas of its jurisdiction.

4.2.2     The ITB planned to review the legislation that it derives its mandate from. According to the Committee, the review would raise strategic questions about the existence of the ITB and its role, whether it was performing the tasks it was meant for or it had become something else than that which was originally envisaged in terms of the existing legislation.

4.2.3     Wealth or funds have been accumulated in the Trust Fund. However, over the last two years, the ITB had reported in Parliament that there was a slow take up of funds by relevant communities.

4.2.4     The ITB, an entity in terms of Schedule 3 of the Public Finance Management Act, reported directly to the Minister of Rural Development and Land Reform and to Parliament. The committee noted that although the DRDLR had some relationship with the ITB, it appeared that it had very little to do with the ITB. The Committee’s view was that such relationship could be improved.

4.2.5     The Committee noted some discrepancies regarding the total number of properties owned by the ITB and number of properties according to the records of the Deeds office.

4.2.6     The plan of the ITB to decentralize and create some district satellite offices that mirrored the District Municipalities in KwaZulu-Natal was noted.   


5.         Recommendations


Having considered the Strategic Plan of the Department of Rural Development and Land Reform 2011 -2014, budget allocation for the 2011/12 financial year as well as the accompanying Annual Performance Plan; the Portfolio Committee on Rural Development and Land Reform recommends that -


5.1               The DRDLR together with the Department of National Treasury reconsider the structure of funding land reform programmes, especially the restitution funding structure that was based on the assumption that the CRLR would have settled all land claims by 2011. The reconsideration of funding might assist the DRDLR to alleviate the challenges of backlogs in payments for land acquisition and fast track payments of all commitments made by the CRLR to landowners for settlement of land claims.

5.2               The DRDLR must fill all the existing vacancies in the Department within the next two financial years from the date of adoption of this report. Filling of vacancies would ensure that the DRDRL establish required capacity to improve service delivery; for example, risk management and performance monitoring and evaluation.

5.3               The Committee has established a need for the Department to table both strategic plan and the Annual Performance Plan and has noted that for this financial year it had to request the APP. Future presentation of strategic plans should be accompanied by an Annual Performance Plan so that the Portfolio Committee would have holistic view of plans, set targets and how the DRDLR would measure its own performance.

5.4               The survey and registration of state land should be completed within the next two financial years from the date of adoption of this report. In addition, the Committee recommends that the Department should establish a comprehensive and reliable database of all land parcels registered in the name of the Government of South Africa.

5.5               The DRDLR should submit a report on the amount of jobs to be created with the R8.1 billion allocated under the rural development programme. Furthermore, the Department should, on a quarterly basis, advice the Portfolio Committee on progress made regarding overall performance and spending patterns with regard to job creation and other programmes.

5.6               The DRDLR should streamline the processes of NARYSEC in KwaZulu-Natal in a manner that aligns it to the national processes of the programme and should further advice the Committee on plan of action and progress made within three months of adoption of this report.

5.7               Lessons learned from the implementation of previous rural development interventions such as the Integrated Sustainable Rural Development Programme as well as the War on Poverty be integrated should be considered when the Department rolls out CRDP across all rural wards. The Department should further submit a report in this regard within two months of adoption of this report.

5.8               The ITB failed to submit the approved APP to the Committee. However, it is important that the ITB should function within the ambit of the Kwazulu-Natal Ingonyama Trust Act (Act 3 of 1994) from which it derives its mandate rather than expanding its mandate beyond land administration. There is a need for critical discussion between the Ministry of Rural Development and Land Reform and the DRDLR as well as the ITB on that aspect. The Committee recommends that the Department convene this discussion and provide report to the Committee within three months of adoption of this report.    


The Portfolio Committee on Rural Development and Land Reform supports the Budget Vote 32: Rural Development and Land Reform.


Report to be considered.


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