1.         Introduction


The Money Bills Amendment Procedures and Related Matters Act, 2009 (Act No.9 of 2009) requires that the National Assembly, through its Committees, conducts annual assessment of the performance of each national Department with regard to the medium term estimates of expenditure. This report accounts for the processes carried out by the Portfolio Committee on Rural Development and Land Reform (the Committee) during assessment of the performance of the Department of Rural Development and Land Reform (the Department). It further proposes the recommendations for a review of the budget for the Department.


1.1               The role of the Portfolio Committee on Rural Development and Land Reform


The Committee, as an extension of the National Assembly, is governed by the Rules of the National Assembly to oversee the portfolio of rural development and land reform. Therefore, it oversees the Department which is mandated to coordinate and implement rural development and land reform portfolio. The mandate is a transversal function that aims to create and maintain an equitable and sustainable land dispensation. Furthermore, the Committee oversees the work of the public entities and commissions that are linked to the department; namely, the Commission on Restitution of Land Rights (the Commission) established in terms of the Restitution of Land Rights Act, 1994 (Act 22 of 1994), and the KwaZulu-Natal Ingonyama Trust/ the Ingonyama Trust Board established in terms of the KwaZulu-Natal Ingonyama Trust Act, 1994 (Act 3 of 1994) amended by the National Act 9 of 1997.  The Committee considers legislation from the Department and its entities. It exercises oversight over implementation of the various programmes of the Department and related entities, facilitates public participation, considers departmental budget votes, enquires and makes recommendations about any aspect of the department, including its structure, functioning and policy. The Committee exercises its powers guided by the Constitution, statutes and the Rules of the National Assembly. 


In view of the mandate of the Committee and section 5 of Act 9 of 2009, the Committee has embarked on processes leading to this Budget Review Recommendations Report. The processes included the following:

Ÿ         analysis of the strategic plan of the Department(including the commission) and the Ingonyama Trust Board;

Ÿ         consideration of the financial statements and programme performance of both the Department and the Ingonyama Trust Board;

Ÿ         analysis of the relevant reports from the Auditor-General of South Africa; and

Ÿ         consideration of other performance reports such as the Management Performance Assessment Report from the Department of Performance Monitoring and Evaluation (DPME); and Public Service Commission’s Monitoring and Evaluation Report of the Department of Rural Development and Land Reform,

1.2         The Department of Rural Development and Land Reform


The mandate of the Department is derived from the priorities of government’s Medium-Term Strategic Framework (MTSF). It coordinates implementation of outcome 7 of the 12 outcomes that the government has set for the years between 2009 and 2014. Outcome 7 is mainly about rural development - creation of vibrant, equitable and sustainable rural communities and food security for all. The key outputs linked to this outcome are sustainable agrarian reform with a thriving farming sector, improved access to affordable and diverse food, improving rural services to support livelihoods, improved employment and skills development opportunities and enabling institutional environment for sustainable and inclusive growth.


The Department, through its strategic plan (2011 -2014) and the 2011/12 annual performance plan (the APP), adopted outcome 7 as its vision. These documents state that the vision of the Department is “vibrant, equitable, and sustainable rural communities” and its mission being to “initiate, facilitate, coordinate, catalyse and implement an integrated rural development programme”. The vision and mission of the Department is underpinned by the strategy of “agrarian transformation, interpreted to denote a rapid and fundamental change in the relations (systems and patterns of ownership and control) of land, livestock, cropping and community”. The strategy aims at contributing toward social cohesion and development. The department, in the APP, interpreted social cohesion and development to mean shared growth and development, full employment, equity and cultural progress.


The Department developed the strategic outcome-oriented goals for the Medium Term Expenditure Framework (MTEF) period. Those goals are as follows:


·         Sound corporate governance and service excellence through compliance with legal framework achieved by 2014.

·         Reformed policy, legislative and institutional environment by 2014.

·         Effective land planning and administration that is biased towards rural areas.

·         Integrated cooperative governance: Integrated institutional arrangements for effective cooperative 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 that support sustainable livelihoods by 2014.

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


2.         The 2011/12 strategic priorities and measurable objectives 


Both the strategic plan for the period between 2011 and 2014 and the APP have set out key priorities to ensure attainment of the strategic goals outlined above. Table 1 of this report (in the next page) outlines the overall strategic focus of the Department in five programmatic areas. The pre-determined objectives address the key priorities which can be categorised into three key areas; that is, land reform, farmer support, rural development and governance issues.


Table 1: 2011/12 predetermined objectives – Annual Performance Plan  


Strategic objectives 


Ÿ         Effective, efficient and fair human resource management practices provided and ensured

Ÿ         Legal services rendered to the entire department

Ÿ         Improved service delivery within the Department and rural communities through provision of ICT, Knowledge and Information management

Ÿ         A comprehensive result based planning, monitoring and evaluation that drives the organisation and ensure delivery on expected outcomes provided by 2014

Ÿ         Effectiveness and efficiency of corporate services improved by 2014

Ÿ         Effectiveness and efficient financial services provided by 2014

Ÿ         Develop rural development and land reform legislation by 2014

Geo-spatial and cadastral services

Ÿ         An integrated land planning and administration system that promotes equitable, sustainable land use and allocation

Ÿ         Surveyed and registered State and Trust land

Ÿ         Develop a comprehensive land register

Ÿ         Provide scarce skills training programme by 2014

Ÿ         Improve disaster management services

Ÿ         Compliance with land use management policies and legislation

Ÿ         National geospatial information and services in support of the national infrastructure and sustainable development provided by 2014

Ÿ         40% increase in technological innovations and indigenous knowledge systems harnessed in rural communities to improve food production

Rural Development

Ÿ         To reach all the poorest rural wards in all rural municipalities by 2014

Ÿ         Establish food gardens and agri-parks in CRDP wards by 2014

Ÿ         Rural communities and land reform beneficiaries skilled and capacitated in technical enterprise development trades

Ÿ         To develop innovative service delivery models to enhance food production and ensure food security

Ÿ         To increase the number of jobs created in CRDP initiatives by 2014

Ÿ         To provide economic infrastructure in rural areas effectively reducing special inequalities by 5%

Ÿ         To provide social infrastructure in rural areas effectively reducing spatial inequalities by 5%

Ÿ         To provide ICT infrastructure in rural areas effectively reducing inequalities by 5%

Ÿ         To establish village agricultural industries and enterprises by 2014

Ÿ         Establish and support Council of Stakeholders, cooperatives and community-based institutions in each CRDP site by 2012.

Ÿ         Establish partnerships for economic productivity on CRDP sites


Ÿ         Restitution of land rights or awards of alternative forms of equitable redress to claimants finalized within MTEF baseline allocation

Land Reform

Ÿ         1140860 hectares of strategically located land acquired and allocated within MTEF baseline allocation by 2014

Ÿ         Recapitalisation and development support provided to black farmers, rural communities and land reform beneficiaries by 2014

Source: DRDLR (2012) Annual Performance Plan 2011/12

During the period under review, the key priorities of the Department were to -  

Ÿ         roll out the Comprehensive Rural Development Programme (CRDP) to all rural municipalities;

Ÿ         improve productivity in land reform projects through effective implementation of the Recapitalisation and Development Programme;

Ÿ         expedite the finalisation of land claims;

Ÿ         improve corporate governance and ensure enhanced service delivery;

Ÿ         implement proper change management and innovation strategies; and

Ÿ         enhance the efficiency of information management systems.


For the 2010/11 financial, the Monitoring and Evaluation Report for the Department of Rural Development and Land Reform conducted by the Public Service Commission’s (PSC) found that Department complied with the norms and standards for development of the strategic plan. However, the PSC raised some matters that the Department should consider; for example, to ensure the measurability of some of the indicators. In similar veins, the Committee raised similar concerns when it considered the APP. During the 2011/12 financial year, the Committee still raised concerns regarding alignment of performance indicators with strategic objectives and further questioned the basis on which certain targets where arrived at. These concerns were also validated by the DPME which expressed concerns that the Department experienced significant compliance challenges in the areas of strategic planning, programme management, monitoring and evaluation. The DPME’s conclusions emanated from its analysis of the department’s Self-Assessment Results using the Management Performance Assessment Tool (MPAT) designed by the DPME.


The Committee, however, commended the Department for comprehensively embracing outcome 7 in its plans. In terms of the plans, the three areas of strategic importance are land reform, restitution and the CRDP. The DPME, when it presented progress report on the contribution of the Department to the outcomes of government, stated that the Department was unlikely to meet the government’s target for land redistribution (redistribution of 30% of white-owned agricultural land by 2014). The Committee noted that the APP stated that the commission would finalize all land claims within the MTEF baseline allocation. As reported under the 2011 Budget Review Recommendations Report (BRRR), failure to include tenure reform in the department’s plans was a disservice to the vulnerable farm workers and farm dwellers.


3.         Analysis of the prevailing strategic plan and the annual performance plan


The prevailing strategic plan outlines the strategic focus of the Department for the period between 2011 and 2014. The strategic focus was revised through the 2012/13 APP which spelt out the planned performance for the 2012/13 financial year. In terms of the 2012/13 APP, the strategic goals of the Department embraced the five outputs of outcome 7 as discussed above. The 2012/13 APP further stated that the Department would upscale rural development programme as per the directives of the July 2011 Cabinet Lekgotla. The Cabinet Lekgotla further identified the 22 poorest districts in the country which rural development programmes should reach. In 2012/13, the Department planned to contribute towards initiatives to address the triple challenge expressed by the President of South Africa in the State of the Nation Address (SONA); namely, inequality, unemployment and poverty. The SONA further criticized the Willing Buyer-Willing Seller approach to land reform, stating that it is inefficient and has withheld the pace at which the state wished to redistribute land. It further observed that the restitution processes were very slow. According to the Committee, the state should find mechanisms that would address the constraints to the current land reform programme.  


The key priorities of the Department remained unchanged, except for certain key strategic objectives, as an attempt to ensure clearly defined objectives and measurable outputs. For the year 2012/13, greater emphasis of the Department has been on policy and legislation development. The Department reported that it would finalise the following key policy documents in 2012/13: the Green Paper on Land Reform, with intentions to develop legislation to guide in the establishment of institutions proposed in the Green Paper; and the Green Paper on Rural Development. The Department has further planned to produce 11 pieces of legislation and all of them were to be submitted to Parliament by October 2012. However, by the 24th October 2012 during consideration of this report, the Committee noted that only the Spatial Planning and Land Use Management Bill was tabled in the National Assembly and being processed by the Committee.


The strategic plan and the APP of the Department have factored in policy developments that could impact positively on its mandate and functions. Such developments included the diagnostic report and the national development plan of the National Planning Commission. Discussions between the Committee and the Department have also shown some attempt to align the proposals of the Green Paper on Land Reform and the National Development Plan. This particularly relates to the proposal in the national development plan to “enable a more rapid transfer of agricultural land to black beneficiaries without distorting land markets or business confidence, establishment of institutional arrangements to monitor land markets against undue opportunism, corruption and speculation”. For example, the green paper proposes establishment of the Office of the Valuer-General (OVG). The national development plan also recognises that land reform is a necessary mechanism through which the potential for a dynamic, growing and employment-creating agricultural sector could be unlocked. The Committee observed that the greatest challenge confronting the Department is lack of adequate capacity to coordinate activities of the various spheres of government to achieve rural development and land reform programmes that could result in inclusive economic growth and development. It further noted that the current Green Paper on Land Reform lacks clear proposals on tenure security, yet the national development plan recommends creation of tenure security for communal farmers, acknowledging that “tenure security is also vital to secure incomes for all existing farmers and for new entrants”. However, the Committee argued that the Department should ensure greater alignment between the green paper and the proposals of the national development plan.


3.1.       Performance and service delivery information (the 2012/13 Annual Performance Plan)


This section presents the key deliverables of the department, documented under the APP as follows: finalisation of policies and legislation which are aimed at reducing poverty and inequality; completion of the state land register and developing Spatial Development Plans for rural municipalities; deepening participation, improving skills, building enterprises and institutions and improving access to socio-economic infrastructure and roll out CRDP in the identified 22 poorest districts; settling and finalising claims on state land and financial compensation; and providing access to strategically located agricultural land and support emerging farmers.


·         Finalisation of policies and legislation which are aimed at reducing poverty and inequalities: The Department planned to table 11 pieces of legislation in Parliament by October 2012.


·         Completion of the state land register and developing Spatial Development Plans for rural municipalities: 2.7 million hectares of state land in the former homelands would be surveyed. It would also complete the state land register by the end of the 2012.


·         Roll out CRDP in identified 22 poorest districts: In 2011/12, the Department planned to reach 180 rural wards. In line with the directives of the Cabinet Lekgotla, 22 poorest districts have been identified for CRDP interventions. The Department would focus on provision of water, sanitation, energy, and roads to rural households and enable those households to have access to food.


·         Settling and finalising claims on state land and financial compensation: The Department reported that it would finalize the land reform and restitution documentation control project in order to provide objectively verified statistics about restitution to date. However, it planned that 380 restoration of land rights or awards of alternative equitable redress would be finalized, whereas 133 land claims would be settled. Restitution continued to be confronted by complexities of restoration of rights on large and capital intensive farms, the cost of land acquisition and budgetary constraints, and identification of appropriate settlement models. 


·         Providing access to strategically located agricultural land and support emerging farmers: The APP states that the Department would acquire 321 122 hectares of strategically located land, 416 farms would be recapitalized, and 8 irrigation schemes would be revitalized. In terms of training, it would support 595 farmers and ensures creation of 324 jobs in land reform projects. 


The success of the Department in implementing an effective programme of integrated rural development that is linked with land reform depends, to a greater extent, on its ability to coordinate activities of other departments across the different spheres of government. Such departments include the Department of Agriculture, Forestry and Fisheries; Department of Water Affairs and Environment; Department of Cooperate Governance and Traditional Affairs; Department of Social Development and many others as well as various public entities, civil society organisations and private sector role players. The function of coordination and facilitation has been captured adequately in the mission of the department. However, the weaknesses in operations could be found in the fact that linkages between rural development and land reform have not been clearly conceptualised and spelt out. The evidence from the 2011/12 comprehensive oversight report of the Committee shows that both the Social Technical and Rural Livelihood Infrastructure Facilitation (STRIF) and Rural Infrastructure Development (RID) branches of the Department have not developed clear strategies to support restitution and redistribution beneficiaries. For example, the 2012/13 APP’s strategic objective (SO 5.3) states that recapitalisation and development support provided to land reform beneficiaries and rural communities by 2014, and 60 rural communities would be assisted with agricultural infrastructure and services. When comparing that performance indicator and the total amount of land to be acquired under both restitution and land redistribution, the Committee noted a mismatch between rural development and land redistribution/restitution.


4.       Analysis of expenditure trends


This section assesses the expenditure trends of the Department between 2009/10 and 2011/12. For the years under review, the Department had a slight increase in budget allocation and an improvement in the expenditure rate. Land reform and rural development programmes have been the main drivers of increases in the budget allocation. However, a notable change in 2012/13 allocation is an increase in the budget allocation for restitution whereas the allocation for land reform decreased.


The expenditure rate of the Department improved from 92 per cent in 2009/10 up to 98.3 per cent in 2011/12, representing a decrease of under expenditure rate from 8 per cent to 1.7 per cent. The under-expenditure rate of 8 per cent in 2009/10 related to the inclusion of rural development mandate to the Department which received its budget allocation later in the year (November 2009) and the changes in the strategic plan and structure to accommodate the new mandate. Therefore, there was little time available to roll out its new activities and to spend its allocated funds by the end of 2009/10 financial year. A particular concern is that during the three year period under review, the Department incurred an increase in irregular, fruitless and wasteful expenditure particularly in 2010/11 as indicated in Table 2 below.


Table 2: Irregular, fruitless, wasteful and unauthorised expenditure

Year Incurred

Irregular Expenditure

Fruitless and wasteful expenditure


R 10 384 000

R 4 864 000


R 4 177 000

R 2 728 000


R 45 536 000

R 73 406 000

Source: Auditor-General (2008/09-2010/11)



5.         Analysis of 2011/12 annual report and financial report of the Department


5.1               Programme performance of the department


The overall performance of the department, as found by the Auditor-General, shows that about 50 per cent of the targets were not achieved. This contradicts the 4th quarter report presented to the Committee. It showed that the Department had achieved 58% of its targets by the 4th quarter. It further showed that 36 per cent of the 62 indicators were achieved by the 4th quarter. The following sections discuss the programme performance against the predetermined objectives in the Annual Performance Plan 2011/12.


5.1.1          Administration


This programme prioritised the two main strategic goals, namely, sound corporate governance and service delivery; and reformed policy legislative and institutional environment by 2014. Of the 12 targets, the Department managed to achieve 3; that is, 25 per cent of the targets were achieved during the period under review. It was able to achieve the targeted 75 per cent implementation of the strategy for Performance, Monitoring and Evaluation, 75 per cent implementation of the communications strategy and ability to approve and implement Risk Management Strategy. 


5.1.2          Geospatial and cadastral services


The strategic objectives of this programme are illustrated in Table 1 of this report. Of the 11 targets planned by the department, only 5 were achieved. This represents 45 per cent achievement on targets for the year 2011/12. The highlights of this programme include introduction of e-cadastre system, reduction of turnaround times for registration of titles in the Deeds Office to 7 days, digital scanning of the microfilm record which would facilitate alignment of the deeds registries and enhance accuracy of information in the registration, successful audit of 54 per cent of state land, that is, 623 078 of 1 155 508 of land parcels were verified and updated in the comprehensive land register and approval of the Spatial Planning and Land Use Management Bill by the Cabinet. Some of the shortcomings under this programme include failure to reduce the average number of days to examine cadastral documents from 18 days to 14. However, the Committee noted that the number of days increased to 21 days. Although the programme for skills accreditation was initiated, the programme failed to achieve accreditation during the year under review. The programme also achieved only 66 per cent survey of the unsurveyed state land.  None of the 25 rural Spatial Development Frameworks planned for were completed.


5.1.3          Rural development and rural livelihoods


The key priority for the programme was to roll out the CRDP strategy linked to land and agrarian reform. The main aim of the CRDP was to eliminate poverty and food insecurity in rural areas by maximising the use of natural resources to create vibrant, equitable and sustainable communities. It addresses the specific needs of rural communities such as running water, sanitation, electricity, housing and development support. During 2011/12, the programme established 947 food gardens in different CRDP sites, created 10 049 job opportunities in all CRDP initiatives (including the 5 460 jobs created through the NARYSEC programme) and provided skills training to 3 819 CRDP beneficiaries in technical enterprise development trade. A total of 464 enterprises, including 27 Council of Stakeholders and 437 co-operatives, were established. It also assisted in provision of clean drinking water to 3 058 households and provision of sanitation units to 564 households. In summary, of the 27 targets set by the programme, only 16 were achieved. Some of the targets that could not be achieved include profiling 57 instead of 60 rural wards, establishment of 1800 food gardens instead of 1918, no establishment of agri-parks, and establishment of 1 village agricultural industry instead of 4. The greatest challenge identified by the Department is lack of capacity to coordinate government programmes across different spheres to support rural development.


5.1.4          Restitution


During 2011/12, the commission had targeted to finalise 800 backlog claims but the target was adjusted to 380 claims in an attempt to align it with the allocated budget. Similarly, the target for new claims was reduced from 150 to 90 claims. By the end of the financial year, a total of 416 new claims were settled, that is, 223 rural and 193 urban claims, exceeding the target to settle 90 new claims. The commission further dismissed 61 claims because they did not comply with the requirement in terms of the Restitution of Land Rights Act. With regard to backlog claims, the commission finalised 209 backlog claims instead of the planned 360, thus failing to deal with 151 backlog claims.


Table 3: Number of claims settled and dismissed





Eastern Cape




Free State




















Northern Cape




North West




Western Cape








Source:  CRLR (2012) Annual Report 2011/12


5.1.5          Land Reform 


The strategic objectives of this programme indicate clearly that the focus of the programme has been on redistribution and provision of support through the Recapitalisation and Development Programme. It appears that the objective to strengthen security of tenure for farm dwellers and labour tenants through provision of legal support to defend their rights was not a priority for the period under review. The highlights of the programme during the period under review were: it redistributed 392 852 hectares of strategically located land which benefitted 1 211 beneficiaries and it capacitated 277 farmers through agricultural training programmes, exceeding the target of 40 farmers planned for the year under review. However, the programme recapitalised 257 farms instead of the planned 387 distressed farms. It was reported that the main challenge was that the programme could not attract experienced strategic partners and mentors. The cost of land, availability of strategically located agricultural land and insufficient budget for the Recapitalisation and Development Programme hampered progress in this programme. In addition, the model of strategic partnerships under Recapitalisation and Development Programme was not clearly understood by the potential strategic partners. The Department also reported that it encountered some challenges with development of sustainable business plans and investment in production by strategic partners.



5.2          Financial performance of the Department


The original budget allocated to the Department in 2011/12 was R8.124 billion. The allocation was adjusted by R 43 361; the final appropriated fund of R8.136 billion was allocated to the department. As illustrated in Table2 below, the Department has spent 98.3 per cent of its final appropriation in 2011/12 and under-spent by 1.7 per cent. Although the Department failed to achieve its target to spend 100 per cent of its allocation, the Department has improved from the 2.4 per cent under expenditure reported in the 2010/11 financial year. The under-expenditure during the year under review has been mainly attributed to under-spending on compensation of employees due to failure to attract and retain employees with adequate specialised skills. It was also due to under-spending in goods and services due to the delays in projects, particularly in the CRDP.


The Committee expressed concerns with regard to the general performance of the department. It compared the expenditure trends and performance against the predetermined objectives and found that although the Department spent 98.3 per cent of its final appropriation, about 50% of the targets were not achieved. It further raised concerns about lack of evidence of value for money in relation to the funds spent by the department. This is particularly related to programmes like the Recapitalisation and Development Programme and the land redistribution project because of poor quality of farms.


Table 4: Budget allocation and spending per programme 2011/12





Actual Expenditure


Expenditure as % of final appropriation











Geospatial and Cadastral Services






Rural Development












Land Reform











Source: 2011/12 Annual Report of the Department of Rural Development and Land Reform


5.2.1          Administration: As illustrated in Table 2 above, the programme of administration received a final allocation of R940.483 million in 2011/12. It spent 99.3 per cent of the allocation, thus improving from a 97.1 per cent reported for the 2010/11 financial year. The 0.7 per cent under-expenditure reported for 2011/12 was due to the under expenditure of 24 per cent of the budget allocation for payment of capital assets. The Committee noted that the final allocation of R15 .74 million for capital assets under-spent by 24 per cent is actually less than the original R16.13 million allocated in the APP. The Committee raised concerns that this reflected poor planning by the department.


5.2.2          Geospatial and cadastral services: This programme received a final allocation of R587.010 million and spent 99.3 percent of the allocation as illustrated in Table 2 above. This represented another 0.7 per cent under-expenditure of the allocation. Analysis of expenditure trends have shown a great improvement in this programme because in 2010/11, the programme had under-spent its allocation by 17.1 per cent The under-expenditure of 0.7 per cent during the period under review was mainly due to the poor spending of 26.2 per cent for payment of capital assets and delays in payment of machinery and equipment. It is also linked to the delays in filling of vacancies. The Department reported that the programme could not attract the required relevant, qualified and skilled candidates. The Committee established that this influenced decisions to shift R7.140 million and virements of R35.020 million from current payments in this programme.


5.2.3          Rural Development: This programme received a final allocation of R866.868 million, a significant increase from the original appropriation of R441.276 million shown in the APP for 2011/12. This increase was mainly due to virements and shifts of R460 592 to the programme during the adjustment allocation. This was done in order to augment insufficient allocation for rural development projects and the rural youth programme in the 2011 Estimates of Expenditure (ENE). The annual report also stated that the adjustments were also meant to cover for the budget for compensation of employees in the new organisational structure.  As illustrated in Table 2 above, R786.396 million or 90.7 per cent of the amount appropriated to the programme was spent. The under expenditure of 9.3 per cent was influenced by the 15.7 per cent under expenditure rate for capital assets due to delays in projects, and under-expenditure of 10.3 per cent in current payments due to the failure to fill vacancies.


5.2.4          Restitution: The final appropriation for this programme decreased from R3.774 billion in 2010/11 to R2.393 billion in 2011/12. In 2011/12, the commission spent 99.3 per cent of the final allocated budget. The highest under expenditure rate in this programme is 4.1 per cent in current payment. The Committee noted the shifting of funds and virements from transfers and subsidies to the amount of R186.817 million. In addition, R79.134 million was transferred to land reform for recapitalisation of restitution projects. It was further noted that the total financial value of claims approved in 2011/12 was R1.544 billion. However, the total expenditure as shown in Table 2 included expenditure on backlog claims. Of the total expenditure, R1.172 billion was used for purchasing land, R760.726 million was for financial compensation and R87.400 million was used for grants.


5.2.5          Land Reform: The final allocation for this programme was R3.349 billion of which 99.1% was spent. When compared to the expenditure rate of 96.9% in 2010/11, land reform has improved on its spending. The under-expenditure of 0.9 per cent in the period under review is influenced by poor spending in payment of capital assets in which only 29.5% of the budget was spent. Although there is an improvement in spending, the questions raised by the Committee related to attainability of value for money through the land reform, that is, the state of farms acquired as well as productivity of those farms.


6.         Public entity: the Ingonyama Trust Board


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 Ingonyama Trust Board (the Trust Board). 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 vision of the Ingonyama is to be “a leader in sustainable communal land management”. Its mission is to contribute to the improvement of the quality of life of the members of the traditional communities living on the Ingonyama Trust land by ensuring that land management is to their benefit and in accordance with the laws of the land; and to develop progressive business models for the social and economic upliftment and the empowerment of the members of the traditional communities on land administered by the Trust. The Board has innovatively set out to develop best practices “to ensure that by 2025 all persons occupying its land shall have formal tenure in the form of a lease on surveyed land”.


Although the Ingonyama Trust Board is a largest land owner in KwaZulu-Natal, the land parcels are located in the jurisdiction of various municipalities.  One of the challenges encountered by the Ingonyama Trust Board is the conflict between the local municipalities and the institutions of traditional leadership (including the Ingonyama Trust Board as the land owner). The conflict arises mainly when the Ingonyama Trust Board asserts its own powers as the land owner in title whereas municipal councillors, responsible for service delivery to the people, makes assumptions that they can make decisions about land owned by the Ingonyama Trust. Some municipalities are also in conflict with the Ingonyama Trust Board based on the question of liability for municipal rates for land owned by the Ingonyama Trust. The Ingonyama Trust Board has a legal position which states that the Ingonyama Trust Board is liable for municipal rates on its land which is unallocated. The beneficial occupiers, including government departments, businesses are liable for rates on land they occupy. This matter has caused conflicts with some municipalities.


6.1     Performance of the Ingonyama Trust Board against the 2011/12 strategic interventions


6.1.1          Land management: The focus of the Ingonyama Trust Board under this key area of intervention was to conduct land audits, developing land management plan for exclusive land, and reconciling the asset register. During the period under review, none of the targeted 300 title deeds were consolidated, and this was no reported that this is no longer necessary due to the falling away of the Communal Land Rights Act. The Committee noted concerns over lack of report on implementation of the plans to manage exclusive land to address challenges of relentless squatting and illegal businesses.

6.1.2          Projects: The Ingonyama Trust Board reported that it assisted four traditional communities of Ximba, Zungu, Matheni and Mandlakazi to acquire shares in Zululand Anthracite. The Committee noted concerns that report lacked details about the deal and the number of members of traditional communities (households) benefiting from the deal.  With regard to bursary fund, the Ingonyama Trust Board reported that R400, 000.00 was paid to deserving students. However, the Committee noted that there was no criteria set to differentiate the deserving students. The Ingonyama Trust Board informed the Committee that the fund was evenly distributed to students. The report lacked the detail about the number of beneficiaries for the bursary scheme.


6.1.3          The Committee expressed concern that the report did not go further than noting 88 per cent of the applications received from communities was approved and paid. The Committee could not establish how many communities received funds from the Ingonyama Trust Board. 


6.1.4          Enhancement of capacity of the Board to effectively communicate to stakeholders: The Ingonyama Trust Board planned to develop a communication strategy and increase its awareness programmes to all its stakeholders. The Committee commended the Ingonyama Trust Board increasing the staff complement by filling 24 of the 27 approved posts, it conducted 18 road shows. The Committee noted that the planned decentralisation of office of the Ingonyama Trust Board was not yet completed.


7.         Consideration of other sources of information


7.1        Committee oversight reports


During 2011/12, the Committee jointly conducted oversight visits with the Portfolio Committee on Agriculture, Forestry and Fisheries (DAFF) to four provinces; namely, Northern Cape, Limpopo, Free State and Mpumalanga. The focus of these visits was to look at implementation of CRDP and farmer support programmes by the Department and DAFF. As reported during the 2010/11 period, the observations are still relevant because very little has changed. The Committee, therefore, draws some observations in this section from the oversight report for 2011/12, tabled in the National Assembly. Findings from these visits show the challenges experienced by rural communities, farm dwellers and workers. Farmers continue to face challenges with regard to sustaining productivity on farms acquired as a result of poorly coordinated support mechanisms. With regard to farm workers, there were still cases where the Legal Services Project/Land Rights Management Facility could not assist in preventing evictions of people with long-term occupier status, especially in the Eastern Free State. The following section summarises some of the crucial observations.


·         Weakness in coordination of land reform and rural development projects across the different spheres of government. Visit to the Free State Province illustrated a vivid example of the fact that Provincial (for example, Public Works) and National Departments (for example, Rural Development and Land Reform) at times, operate in competition rather than complementing each other. The Committee noted that the province has since shifted rural development mandate the Provincial Department of Public Works to the Provincial Department of Agriculture and Rural Development. It is anticipated that greater synergies and complementation would occur.

·         There was gap in monitoring of NARYSEC and Council of Stakeholders. Clear systems were required to ensure effectiveness of training and deployment of trainees so that they do not just wait for the stipends without doing any work.

·         Although Recapitalization and Development Programme has been established and has been reported to have reached 257 farms in the year under review, on many occasions there was a clear lack of integration of land reform and agricultural support mechanisms. For example, some projects did not have any extension officer allocated to them, where there were extension officers allocated; beneficiaries report lack of visits by the extension officers. Recapitalisation of group-based projects such as in restitution faces a threat from weaker institutional organisation of CPAs and Trusts. Dysfunctional common property institutes pose threat to the success of group-based agricultural projects

·         Livestock farmers complained about stock theft as well as the predators. They argued that failure to ensure rural security poses a threat to the sustainability of their farms, their ability to contribute to food security as well as their own sources of livelihoods.

·         Development of rural infrastructure (roads, electricity, communication, water) in areas where land reform beneficiaries have been relocated required urgent attention.

·         The role of municipalities in land reform projects as well as support given to farm workers during evictions need to be strengthened.

·         Private sector organizations such as the Stud Book South Africa have potential to contribute to the development of livestock farmers in South Africa. Through their stud breeding programme they could enter into joint ventures and mentoring programmes with the emerging farmers on both land reform farms and communal areas.

·         Apart from creation of job opportunities for few, strategic partnerships in group-based restitution projects have not yet resulted in material benefits to households who form part of various CPAs and Trusts, especially in Limpopo. This matter also threatens sustainability of these partnerships.


7.2        Report of the Auditor – General


During the period under review, both the Department and the Deeds Registry Account received a qualified opinion from the Auditor-General. The department, as it has been for the last three years, received a qualified report based on the incompleteness of the asset register. The Committee observed that the matters of emphasis related to same issues that were raised in the past although the value of liability varies. When compared to 2010/11, the number of issues under matters of emphasis has decreased during the period under review.


7.2.1     Department of Rural Development and Land Reform


The following paragraphs discuss findings with regard to immovable tangible capital assets, significant uncertainties and matters:


(a)                 Immovable tangible capital assets: The Department has failed to have a complete asset register for all government’s immovable properties under its custodianship because state land in former TBVC states and Self-Governing Territories was not registered in the Deeds Registry. It was therefore not been vested and thus not recognised in the financial statements. It was therefore impossible for some audit procedures to be performed in order to confirm completeness and evaluation of rights and obligations regarding tangible assets. The Accounting Officer has reported that the Department has started to address this matter through the verification of all state-owned land parcels. By 31 March 2012, the project was not yet complete and was extended until end of December 2012.


(b)                 Significant uncertainties: The Auditor-General drew attention to the fact that no provision has been made for any liability that may result from claims of R2.402 million instituted against the Department because the final decision was still pending, which  might be in favour or against the department; the department’s potential liability of approximately R790 million towards the claimants has been verified and due for approval in terms of Section 42D of the Restitution of Land Rights Act, 1994 (Act No 22 of 1994); and since the amount owed for municipal levies cannot be determined, no provision had been made in the financial statements for any liability that may result in respect of municipal rates.


(c)                 Other reports: The Auditor-General noted that the Internal Audit has been investigating 32 cases of alleged irregularities related to payments to beneficiaries in land claims; land reform projects; procurement fund; and asset management issues. It also noted that the Special Investigating Unit was investigating 36 cases of alleged irregularities in certain land reform projects totalling approximately R495 million. Of all the investigations, four have been completed by the Internal Audit. Those four dealt with irregularities related to payments to beneficiaries in land claim projects and to procurement fraud.


The Committee noted that, through Internal Audit and the Special Investigation Unit, the Department has been able to recover over R60m. Therefore, the Committee commended the Department for these efforts.


7.2.2     The Deeds Registration Trading Account


This entity received a qualified opinion based on its failure to account for all the expenditures for goods and services received during the year under review. As a result, the operating expenses disclosed in the financial statements are not complete and understated by R13 318 524. The Auditor-General drew attention to the significant uncertainties because the entity was investigating incorrect registration of deeds which might lead to possibly litigation against it. However, since the outcome of the matter could not be predetermined, no provision for any liability that may result has been made in the financial statements.





7.2.3     The Agricultural Land Holdings Account


Although the entity did not receive any qualified opinion, the Auditor-General raised matters of emphasis. Such matters related to the following:

·         The entity incurred losses to the value of R163. 941 million due to unverified assets (R5. 875 million), inventory written down (R130 826 million) and lease debtor’s balance outstanding for more than 90 days (R27. 240 million); and

·         In its exchange transactions the entity has incurred impairment for an allowance of R74.995 million in which the extent of the recovery is uncertain.


7.2.4     Ingonyama Trust Board


The entity received a qualified opinion from the Auditor-General during the period under review based on the following matters:

·         Non-valuation of land: As a consequence, the Auditor-General was not able confirm the value of the land disclosed and held by the trust.

·         Incompleteness of royalty revenue: the trust has not implemented effective controls to ensure that royalty revenue is completely recorded.

·         Unable to provide adequate supporting documents with regard to purchase of shares for four traditional councils.


8.         The observations of the Committee


The Portfolio Committee on Rural Development and Land Reform, having analysed the strategic plan and discussed the 2011/12 annual reports of the Department of Rural Development and Land Reform, the Commission on Restitution of Land Rights, the Ingonyama Trust Board, made particular observations which are discussed in this section.


It noted an improvement in the manner in which the Department reports on its annual performance. However it was concerned about level of detail of the 2011/12 Annual Report. It further noted the failure of the Department to table quarterly reports, hence its request for further details. The Committee also observed inadequate capacity of the Department to effectively implement programmes and projects; implementation of land redistribution, restitution and farmer support programmes; supporting rural development and rural livelihoods; and land tenure and administration. 


8.1        Capacity to implement programmes and achieve targets set out under strategic plan


8.1.1     The Committee noted that the risk management strategy has been developed and implemented. However, it is concerned that the project was put on hold and there were no convincing reasons for putting the project on hold.


8.1.2     The fact that only one piece of legislation, the Spatial Planning and Land Use Management Bill was tabled in Parliament late made it difficult to meet the Constitutional Court order to ensure that there is a planning legislation prior to 17 June 2012.


8.1.3     Although the Committee welcomed an extensive process of consultation on the Green Paper on Land Reform, it remained concerned about the department’s strategy for meaningful public participation and engagement. The Committee reflected on its own engagement with the Department on the Green Paper, that it has not been adequate. It further raised concerns about the failure of the Department to attract people with skills and capacity to develop policies. This is of particular concern to the Committee because of the amount of policy and legislation development that would ensure from the processes of Green Paper on Land Reform.


8.2        Implementation of land redistribution, restitution and farmer support programmes


8.2.1     The Committee was informed that the policy proposals in the Green Paper on Land Reform would assist the State to improve the pace of land redistribution in order to address the land ownership inequalities in South Africa. However, the Committee has noted a need for a thorough engagement with the Department in order to ensure that the green paper addresses the current land reform programme weaknesses. The Committee was concerned that there was no adequate capacity for policy development within the department, as documented in the annual report.


8.2.2     The Communal Property Associations Annual Report (2009/10) provides an overview of the turnaround strategy for the Communal Property Associations. “The aim of the strategy is to provide state institutional backing to ensure compliance”. The Committee was previously informed STRIF in collaboration with the programme for land reform under the Recapitalisation and Development Programme would ensure that this work is carried out. The Committee expressed concerns that both programmes of land reform and rural development did not report on implementation of the turnaround strategy for the CPAs.


8.2.3     The Committee noted that land acquisitions exceeded the set targets. However, it also noted that those were the reduced targets and that more money was being spent to acquire fewer hectares, thus benefiting fewer people or households. The only mechanism for farmer support is the Recapitalisation and Development Programme. However, the Committee is concerned that the perennial recapitalisation funding affects the allocation for land acquisition. In view of this perennial recapitalisation funding, the Committee concluded that there was no comprehensive strategy for support to land reform beneficiaries and the emergence of smallholder farmers. This remained a critical policy gap.


8.3        Supporting rural development and rural livelihoods


8.3.1     Indeed, various interventions have been made throughout the nine provinces of South Africa. The report of the Department states that significant strides have been made in addressing the challenges of rural poverty and unemployment. The Committee noted that the report mentions that evaluation studies were conducted. The Committee has not seen any of results of studies conducted and would like to engage with the findings. Such discussion would look at the impact of interventions in terms of livelihoods created and the change on people’s lives since the inception of CRDP in 2009.


8.3.2     The key challenge identified by the Committee is with regard to funding for rural development and coordination of such funds and interventions. The Committee is of the opinion that there was no adequate capacity to implement such a programme which requires intergovernmental approach to development.


8.4       The Committee made the following observations with regard to the Ingonyama Trust Board:


8.4.1          The Committee noted that the Zulu history book project which has been on the plans of the Ingonyama Trust Board was incomplete, yet the cost of this project was paid in full. The Committee noted that the Ingonyama Trust Board has not recouped the amount paid to the service provider.


8.4.2          During the year under review, the Ingonyama Trust Board continued with the construction of its new Headquarters in Pietermaritzburg. This project was to be concluded in 2012/13. The Committee has noted that the transfers from the Department were not enough for the construction, and found that the Ingonyama Trust Board was using its own funds for the project.


8.4.3          The Committee was concerned about lack of clarity about matters relating to municipal rates being levied on to the Ingonyama Trust Board and the continued disputes between the Ingonyama Trust Board and municipalities on this issue. The Committee argued that the Department and the Ingonyama Trust Board should resolve this matter.


9.         Recommendations of the Committee


In view of the analysis of the various documents, assessment of the performance of the Department of Rural Development and Land Reform (including the Commission on Restitution of Land Rights), the Portfolio Committee on Rural Development and Land Reform recommends the Minister of Rural Development and Land Reform should ensure that -  


9.1       The Department of Rural Development and Land Reform introduces mechanisms to enhance effective coordination among the various spheres of government and integration of rural development at local and/or district levels in a manner that fosters intergovernmental approach to rural development. The Department should submit a report to Parliament within two months of adoption of this report.





9.2       The Department of Rural Development and Land Reform develops and implement strategies and plans to ensure the following: 


9.2.1     Recruitment of highly skilled professionals and development of an intensive programme for staff development to address capacity challenges in the area of policy development and monitoring and evaluation, as well as coordination of rural development programmes;


9.2.2     Effective performance monitoring and evaluation systems to track progress and identify problems and deficiencies in project implementation across the programmes, especially CRDP and land reform; and


9.2.3     Building of internal systems and capacity for the implementation of the Risk Management Strategy and fraud prevention.


9.3.      The Department of Rural Development and Land Reform reports to Parliament, within three months of adoption of this Report by the House, on the following issues:


9.3.1     The development and maintenance of an up-to-date database of all previous and current land reform projects and their beneficiaries to ensure compliance with criteria for qualification as a beneficiary to land reform grants and subsidies;

9.3.2     The financial implications for finalisation of the restitution claims within Medium Term Expenditure Framework baseline allocation and submit a report to Parliament;

9.3.3     Capacity of the Department to implement a faster pace of redistribution of land to beneficiaries as proposed in the land reform model of the National Development Plan. The Committee recommends that the Department submits a report on how the programme of land reform integrates with agricultural/farmer support in the form of access to input costs, access to markets, and agricultural research and extension support;

9.4.4     Submission of plans about how the programme of land redistribution can be a strategy to support smallholder farming and farmers in South Africa and smallholder farming as a strategy to address the challenge of food insecurity; and

9.4.5     Submission of the plans regarding performance of the National Rural Youth Service Corps programme and how the Department plans to ensure that the graduates from this programme are deployed or integrated in work place.


9.4       The Department of Rural Development and Land Reform facilitates the review and harmonisation of all legislation that impacts on development of the rural areas, For example, the Communal Property Associations Act, 1996 (Act 28 of 1996), The Traditional Leadership and Governance Frameworks Act, 2003 (Act 41 of 2003) and the Traditional Courts Bill [B15 – 2008].




The Portfolio Committee on Rural Development and Land Reform further recommends the Minister of Rural Development and Land Reform ensures that the Ingonyama Trust Board -


9.5       Submits to Parliament, its fund disbursement policy and strategies for disbursement of funds to relevant traditional communities within two months of adoption of this Report by the House;


9.6       Conducts an assessment of the proposed decentralised district offices of the Ingonyama Trust Board and report to Parliament about the financial implications of the decentralisation process within three months after adoption of this Report by the House;


9.7       Reviews its bursary policy and improve the criteria through which deserving students in its area of jurisdiction qualify for bursary funds. The Ingonyama Trust Board should report to Parliament within three months after adoption of this Report by the House; and


9.8       Reports to Parliament, within three months after adoption of this Report by the House, on how it intends to address all the matters raised by the Auditor-General, especially the reasons for qualified audit opinion. Management meetings with the Auditor-General should be used to clear up any differences between the Auditor-General and the Ingonyama Trust Board.


Budget recommendations


Rural development and land reform is one of the top five priorities of government. The Portfolio Committee on Rural Development and Land Reform recommends that budget allocation for this mandate should reflect the high priority accorded to the portfolio. The Portfolio Committee on Rural Development and Land Reform recommends, in particular, an increase in budget allocation of the Department of Rural Development and Land Reform for the following programme areas:


9.9       Restitution is a constitutional mandate in terms of Section 25 (7) and it entitles victims of apartheid land dispossession to restitution. The Portfolio Committee on Rural Development and Land Reform recommends that the National Treasury and Department of Rural Development and Land Reform should devise appropriate mechanisms to finance finalisation of all outstanding and backlogs claims by 2014;


9.10      Within three months of adoption of this Report by the House, both the  Department of Rural Development and Land Reform and National Treasury should submit to Parliament a programme that illustrates how government would fund restitution in order to settle and finalise all land claims by 2014; and


9.11      The success of land reform and successful smallholder farmers require increase in allocation infrastructure development on farms and start-up capital. The Portfolio Committee on Rural Development and Land Reform recommends that allocation for farmer support be increased in order to ensure the recapitalisation and development programme that can result in increase in farm productivity.



Report to be considered.