The Budgetary Review and Recommendation Report of the Portfolio Committee on Rural Development and Land Reform, dated 20 October 2011


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, conduct annual assessment of the performance of each national department with regard to the medium term estimates of expenditure. This report accounts for the processes that the Portfolio Committee on Rural Development and Land Reform (the committee) undertook during assessment of the performance of the Department of Rural Development and Land Reform (the department). It further proposes the Budgetary Review Recommendations.


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


The committee oversees the Department of Rural Development and Land Reform that has a transversal function that aims to create and maintain an equitable and sustainable land dispensation. In addition, the committee oversees the work of 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 (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.


In accordance with the Rules of the National Assembly, the committee is mandated to, amongst others, consider departmental budget votes; oversee the work of any organ of state falling within its portfolio, enquire and make recommendations about any aspect of the department, including its structure, functioning and policy. In view of this mandate and section 5 of Act 9 of 2009, the committee has embarked on a process to develop budgetary review recommendations as follows:

·         It analysed the strategic plan of the department (including the commission) and the Ingonyama Trust Board;

·         It considered the financial statements of the department, the commission and the Ingonyama Trust Board and their reports on the pre-determined objectives espoused by their strategic plans;

·         It analysed the report of the Auditor-General of South Africa; and

·         It considered other sources such as the State of the Nation Address and oversight reports of the committee.


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), Outcome 7 of the 12 Outcomes being implemented by over the MTSF period. Outcome 7 seeks to ensure creation of vibrant, equitable and sustainable rural communities and food security for all.


According to the 2010 – 2013 Strategic Plan, the vision of the department was “Vibrant, Equitable, and Sustainable Rural Communities”. Its mission was to “facilitate integrated development and social cohesion through participatory approaches in partnership with all sectors of society”. The committee noted that the mission of the department, articulated by the 2011 – 2014 Strategic Plan, puts emphasis on its key functions - “to initiate, facilitate, coordinate, catalyze and implement an integrated rural development programme”. It was against this understanding that assessment of the performance of the department by the committee was made.

2. The 2010/11 Strategic Priorities and Measurable Objectives of the Department


The 2010 – 2013 Strategic Plan has set out four major outputs on which the success of the department was assessed; that is, sustainable land reform, food security for all, rural development and sustainable livelihoods and job creation linked to land reform. Agrarian transformation has been identified as a strategy for rural development and the department defines agrarian transformation as “the rapid fundamental change in the relations of land, livestock, cropping and community”. That strategy entails the following: social mobilization of rural communities to take initiatives; strategic investments in economic and social infrastructure; increased economic activity and rural livelihoods; and sustainable land reform. These are fundamental elements of the comprehensive rural development programme which was set out in order to deliver on Outcome 7.


The proposals in the strategic plan could be categorized into four themes; namely, rural development and sustainable livelihoods sustainable land reform, food security and job creation; and some key targets were summarised as follows:


·         Rural development and sustainable livelihoods: the Comprehensive Rural Development Plan (CRDP) was the main vehicle through which integrated development of rural areas could be achieved. Social mobilization of communities in the 160 wards in manners that would lead to creation of community organizations and cooperatives by 2014 was accorded high priority.


·         Sustainable land reform: Review of the land tenure systems was introduced but the plan deferred the concrete policy proposals to green paper which was to be gazetted in 2010. It further stated that land reform would adopt the CRDP principles which are considered pivotal to achievement of vibrant rural communities and food security.


·         Food Security: A crucial element was to establish community gardens and agri-parks.


·         Job creation linked to skills development: Through household profiling by National Integrated Social Information System (NISIS), the department had planned to determine skills and employability of beneficiaries of land reform. This household profiling is reported to be of assistance with regard to targeting training and development in accordance with job creation opportunities. The department would facilitate infrastructure development, in both land reform projects and CRDP sites, in a manner that created job opportunities for the rural communities.


Table 1 (below) outlines the overall strategic focus of the department in five programmatic areas. It differed with the 2009/10 organization of programmes where the department had seven programmes. During the year under review, four programmes, namely Surveys and Mapping, Cadastral Survey Management, Spatial Planning and Information and the Deeds Registries were collapsed into a single programme known as the Geo-spatial and Cadastral Services. In addition, a fully-fledged and funded programme of rural development was introduced for the first time. It should, therefore, be noted that the 2010/11 Annual Report is the first to provide reporting on a full component of a fully funded programme of rural development because during the 2009/10 when rural development was introduced it did not have a dedicated voted funds except that the department had to do some internal shifting of funds to perform on this key priority of government.






Table 1: Predetermined objectives of the Department of Rural Development and Land Reform


Strategic objective

Measurable output


·         To ensure efficient and effective functionality of the department to support core vision

·         Skilled and capacitated department to deliver on the departmental mandate

·         Periodic performance reports on departmental performance

·         Provisioning of an enabling environment for improved financial compliance and service delivery

Geo-spatial and cadastral surveys

·         Provision of efficient and effective cadastral surveys

·         Provision of efficient deeds registration that underpins security of land tenure

·         Surveyed state land, registrable diagrams, general plans, sectional plans and communal general plans

·         Approved diagrams, general plans and sectional plans and sectional titles

·         Complete and current cadastral information for all land parcels in both paper and digital format, including the creation of national spatial data set

·         Registration of deeds

·         Natural resources conservation

·         Disaster Mitigation Management

Rural Development

·         To contribute to the availability of, and increased access, to food security

·         Contribute to sustainable rural development and livelihoods

·         Increased income and access to job opportunities

·         Community and institutional school gardens developed;

·         Establishment of agri-parks through CRDP

·         Community structures established to support social cohesion and development

·         Job creation linked to skills training

·         Roll out of CRDP to contribute to sustainable development

·         Economic, social ICT and public amenities infrastructure developed

·         Research conducted to enhance rural development initiatives


·         Settlement of outstanding restitution claims

·         Number of claims settled

Land Reform

·         To ensure sustainable land reform aligned to CRDP

·         To contribute to the availability of and increased access to food security for all

·         Strategically located land acquired and redistributed

·         Improved access by beneficiaries

·         Recapitalization and development of farms in distress acquired since 1994.

Source: Adapted from the 2010 – 2013 Strategic Plan of the DRDLR


The Public Service Commission’s (PSC) Monitoring and Evaluation Report for the Department of Rural Development and Land Reform for the 2010/11 period found that there has been compliance with the norms and standards for development of the strategic plan. However, the PSC raised some matters that the department should critically look at; for example, the measurability of some of the indicators. In similar veins, the committee has raised concerns, when considering the Annual Performance Plan (APP) of the department, how certain targets were arrived at. During consideration of the PSC’s report, the committee noted that it focussed on compliance (ticking the boxes) but it did not expound on the impact of interventions. That was considered to be the weakness of the assessment done.

The committee commended the department for a strategic plan that appropriately captured the mandate of the department, especially linking rural development and food security. However, it noted the following: firstly, whilst there has always been commitment to resolve the restitution claims, it did not appear convincingly that the commission would be able to resolve all the claims by 2014; secondly, the land reform programme include the constitutional imperatives of tenure reform and redistribution. However, the strategic plan had down played the significance of tenure reform, hence no strategic objectives, measurable outcomes and targets were set for tenure security in communal areas or tribal areas and on commercial farms.


3. Analysis of the Prevailing Strategic Plan (2011 – 2014)


During the current MTEF period, the performance of the department is measured on the progress made towards delivery on Outcome 7 of the 12 Outcomes of government. In response to President Jacob Zuma’s call, during the State of the Nation Address, to improve the lives of rural people and to focus on job creation during 2011, the department identified the following key priorities:


·         To roll out the CRDP to all rural communities.

·         To improves the lives of rural youth through the National Rural Youth Service Corps (NARYSEC).

·         To improve productivity in land reform projects through effective implementation of the Recapitalisation and Development Programme.

·         To expedite the finalisation of land claims.

·         To improve corporate governance and ensure enhanced service delivery: to ensure internal control, an issue of concern raised by the Internal Audit Committee and Auditor General.

·         To implement proper change management and innovation strategies.

·         To enhance the efficiency of information management.


3.1. Performance and Service Delivery Information


This section presents the plans of the department in terms of the key focus areas; namely CRDP, land reform (encompassing tenure reform, redistribution and restitution), integration of agricultural support, and job creation and these focus areas integrated in the strategic objectives as illustrated in Table 2 of this report.


·         The CRDP: The department prioritised the roll out of the CRDP strategy, aiming to eliminate poverty and food insecurity in rural areas. Whilst the CRDP was rolled out in 29 wards during 2009/10, 39 sites in 2010/11, the department has planned to roll it out to all rural municipalities in the MTEF with a target of 180 rural wards by January 2012.

·         Redistribution: The target for redistribution is to redistribute 30 per cent of agricultural land by 2014 (24. 6 million ha). For the period under review, the department had planned to focus on finding alternatively less costly methods for acquisition of land, and proposed to review the willing buyer - willing seller approach to land redistribution. A policy decision was taken to implement redistribution through the Proactive Land Acquisition Strategy (PLAS).

·         Restitution: By the end of March 2010, the commission had settled 96 per cent of the total 79 696 land claims. The majority of outstanding claims are of a complex nature, involving national strategic assets such as national parks, large commercial farms linked to export markets. The department has been confronted by the challenge of increasing land prices and budgetary constraints resulting from the ever decreasing allocation for restitution.

·         Recapitalisation and development of land reform projects: This initiative was initiated as a response of the department to support increased production on land reform farms. It further was also an attempt to integrate land reform and agricultural support by providing agricultural technical and financial support to farmers.


Table 2: Predetermined objectives of the Department (2011/12)


Strategic objective


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

·         Legal services rendered to the entire department

·         Improved service delivery within the department and rural communities through provision of ICT, knowledge and information management

·         A comprehensive result based planning, monitoring and evaluation that drives the organization and ensure delivery on expected outcomes by 2014

·         Effective and efficient corporate communication services improved by 2014

·         Effective and efficient financial services provided by 2014

·         Develop rural development and land reform policies and legislation by 2014

·         Institutional reforms (Valuer-General, Rural Development Agency and Land Management Commission) giving effect to the department’s new mandate in place by 2014

Geo-spatial and cadastral surveys

·         Promote an equitable, sustainable land use and allocation by facilitating an integrated land planning and administrative system by 2014

·         Surveyed and registered state and Trust land

·         Develop a Comprehensive Land Register

·         Scarce skills training programme by 2014

·         Improved disaster management services in rural areas and land reform projects by 2014

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

·         40% increase in technological innovations and indigenous knowledge systems harnessed in rural communities to improve food production in 2014

Rural Development

·         Profile rural wards and mobilize rural households in all municipalities

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

·         Skilled and capacitated rural development and land reform beneficiaries

·         To develop and utilize innovative service delivery models

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

·         To provide economic infrastructure in rural areas effectively reducing spatial inequalities by 5 per cent

·         To provide social infrastructure in rural areas effectively reducing spatial inequalities by 5 per cent

·         To provide ICT infrastructure in rural areas effectively reducing spatial inequalities by 5 per cent

·         To establish village industries and enterprises by 2014

·         Establish Council of Stakeholders for each CRDP site by 2012

·         Establish partnerships for economic productivity on CRDP sites


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

Land Reform

·         1 140 860 hectares of strategically located land acquired and allocated within MTEF baseline allocation by 2014

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

Source: Adapted from the 2011 - 2014 Strategic Plan of the DRDLR

Comparative analysis of the strategic objectives of the previous and the prevailing strategic plans shows that the department has, in 2011/12 developed more objectives in order to achieve Outcome 7. The increase in the number of objectives has implications for staffing and capacity building. The committee welcomed that most of the objectives were measurable and had been clearly developed in the 2011/12 Annual Performance Plan (APP). Whilst there was an increase in the number of objectives in different programmes, the committee was concerned about land reform as core programme of the department; it effectively omitted communal tenure reform and tenure reform on commercial farms.


4. Analysis of Expenditure Reports


This section presents analysis of the outcomes for the first quarter expenditure for the year under review. It further analyses the first and second quarter expenditure for the department. .

Table 3: 2011/12 Budget Allocation and spending trends for the 1st quarter


Final Appropriation



Year-to-date Actual Expenditure


Expenditure as % of final appropriation






606 104

144 104



Geospatial & Cadastral Services

388 104

98 120




Rural Development

441 276

77 968




2 497 293

297 306



Land reform

4 191 469

917 665







8 124 246

1 535 811


Source: Adapted from National Treasury (2011) Section 32 Report for Vote 33


At the end of June 2011 (the 1st Quarter) the department had spent R1.5 billion or 18.9 per cent of the total budget of R8.1 billion allocated for 2011/12. The overall actual spending indicated above was below its projected target of 25 per cent or R2 billion.


Spending trends of the previous year showed that the commission usually spent the entire allocation of their budget, and had done so mostly by the end of the first quarter. However, during the current financial year, as illustrated by Table 3, restitution had spent 12 per cent of its total allocation, which is less than the projected 25 per cent. At the time of compilation of this report, second quarter report had not yet been published, but it was estimated, the commission would have spent most of its budget due to the backlogs in restitution and it is likely to spend 100 per cent of its total budget allocation as per previous trends.


The 2011 first quarter spending on core functions of the department was less than the projected 25 per cent due to a number of reasons. One of the reasons was vacancies that were not yet filled and in addition, the department, as a coordinator, also mobilized resources from other sector departments.

5. Analysis of 2010/11 Annual Report and Financial Statements


5.1 Analysis of the performance


The Strategic Plan provided a framework for implementation of the strategic priorities. The committee assessed the performance of the department based on the five programmes in accordance with the annual report and the priorities and the performance plan. Therefore, discussion on performance in this section is closely linked to the strategic objectives and measurable outputs outlined in Table 1.

·         Programme 1 (Administration): The department had committed itself to achieving reduction of the vacancy rate by 12 percent and improvement of internal auditing systems in order to achieve unqualified audit opinion. It reported that it achieved 80 per cent target for implementing training programme and was at 11 per cent vacancy rate, 1 per cent below the targeted 12 per cent. A greatly significant observation was that the department again failed to achieve the unqualified audit opinion because the Auditor-General found the immovable asset register incomplete.


·         Programme 2 (Geo-spatial and Cadastral Services): The program includes what was referred to as supportive outputs 1 and 2 as reflected in Table 1 under Geo-spatial and cadastral services. The programme prioritised supporting the roll out of CRDP, monitoring programme implementation at CRDP sites; provision of access to geo-spatial information to visually impaired persons through a Braille atlas for each province over the next three years; and assisting in creation of an orderly and sustainable rural settlements by ensuring alignment and harmonization of rural development plans to existing planning frameworks such as the Provincial Growth and Development Strategies. The committee assessed performance of this programme under the three sub-programmes discussed below:

·         Cadastral services: It achieved by far its targets of 15 days per request of production of research reports, cadastral survey information and plans; 9 working days for examination and approval of diagrams, generating plans and sectional title plans. However, it failed to achieve the target to complete and current cadastral information for all land parcels because of shortage of staff that resulted from moratorium on filling of vacancies. Another highlight was that the National Spatial Data Set is 88 per cent complete against 65 per cent target.

·         Deeds Registration: It prioritized to reduce turnaround times for registration through an e-cadastre system. However, it failed to achieve its targets because of the rationalization process of the organizational structure and the moratorium on filling of vacancies. The process was reported to have affected the ability of the department to fill vacancies.

·         Rural disaster mitigation services: All the targets under this sub-programme were not met. The committee noted concerns that the department failed even to develop a strategy to address rural disaster management. Non-performance was said to be related to rationalization process as discussed above.


·         Programme 3 (Rural Development and Rural Livelihoods): The programme consists of Social, Technical, Rural Livelihoods and Institutional Facilitation (STRIF) and Rural Infrastructure Development (RID) branches with a sub-programme known as Technology research and development.

·         STRIF focussed on food security, building of sustainable livelihoods and skills training which were to be achieved through social organization and mobilisation; technical support; skills development; rural livelihoods and food security; as well as institution building and mentoring. During the period under review, the branch had mobilized 28 communities, profiled 13 694 households, and established 25 council of stakeholders, and established the NARYSEC. However, the following shortcomings were reported: firstly, no rural schools gardens were established; of the four proposed agreements with sector departments (health, agriculture, water and education), only one was achieved; and of the 15 000 planned household gardens, only 1 500 were achieved; secondly only 2 of the planned 10 agri-parks were established; 1 of the planned 10 trade agreements entered into with markets; thirdly, in addition to 25 Councils of Stakeholders, 45 of the planned 125 enterprises were established whilst 221 of the planned 375 cooperatives were also established. The figures illustrated shows failure to achieve the targets. The department attributed this failure to the difficulty of coordination.


·         RID focussed on provision of strategic investment in social and economic infrastructure to enable rural communities to address their basic human needs and engage in different economic activities. It prioritised establishment of e-centres in all CRDP wards; infrastructure delivery for water, sanitation, health care, roads and housing; establishment of the Rural Development Agency (RDA) during the MTEF period; and provide infrastructure for the recapitalization and development programme. Of all the 8 targets, the department achieved or exceeded the targets in only 3; namely, number of wards with CRDP intervention, reduction in rural infrastructure backlog, and 2010 soccer world cup viewing parks. Some of the failures to achieve the targets relate to lack of coordination with other government departments illustrated by delays in formalizing agreements with other government departments and entities; for example, the department failed to establish one clinic per CRDP site due to change of strategies by the Department of Health and insufficient funding.


·         Programme 4 (Restitution): Ninety-six per cent of the total 79696 land claims had already been settled at the beginning of 2010 and the commission was still faced with outstanding rural and very complex land claims estimated to require higher budget allocations. Although the commission had committed to settle the entire 3909 outstanding claims in line with the CRDP principles, it specifically prioritised to complete research on all outstanding claims by December 2011. Whilst the Commission had planned to settle 60 claims, it exceeded the target by settling 457 land claims excluding the 257 claims that were dismissed. The report lacks details with regard to recapitalization of restitution projects, especially in view of the R275 million allocated for that purpose.


·         Programme 5 (Land Reform): The department had planned to implement stringent criteria to meet different land needs of beneficiaries; namely, the landless poor, small-scale farmers and commercial farmers. It is evident that the focus of the department had been to resuscitate farms under the Recapitalization and Development Programme (RADP) in order to bring all distressed land reform projects into full production through co-management, share equity schemes, mentorships and strategic partnerships. It further planned to run a campaign that will mobilize social partners, and forge partnerships to ensure that all available capacity in the sector is galvanized to contribute to the success of RADP; and to strengthen security of tenure for farm dwellers and labour tenants through provision of legal support to defend their rights, and introduce legislation that will strengthen the rights of farm dwellers. The department exceeded its target for acquisition of strategically located land. It is also reported that the improved land acquisition instruments were in place by the end of the financial year under review; and that 411 of the planned 504 farms were also under the RADP. However, the report lacks information with regard to strengthening of tenure security for farm dwellers, labour tenants and farm workers although these issues appeared in the strategic plan.



5.2 Analysis of financial statements


The original budget allocated to the department during 2010/11 was R6.769 billion which was adjusted by R524 million in November 2010; the total appropriated fund was R7.293 billion. See Table 4 for illustration on overall financial performance of the department.

Table 4: Budget allocation and spending per Programme for 2010/11


Final Appropriation



Actual Expenditure




Expenditure as % of final appropriation







709 768

689 270

20 498



Geospatial & Cadastral Services

448 738

372 080

76 658




Rural Development

361 431

357 467

3 964




3 774 221

3 765 603

8 618



Land reform

1 999 224

1 937 205

62 019








7 293 382

7 121 625

171 757


Source: Adapted from the 2010/11 Annual Report of the DRDLR


As illustrated in table 4 above, the Department has spent 97.6 per cent of its final appropriation, implying that it under spent 2.4 per cent of its budget for the year. The committee regarded this as an improvement when compared to the 2009/10 financial year’s under-expenditure of 8.4 per cent. The 2010/11 under-expenditure of 2.4 per cent is mainly attributed to under spending on compensation of employees due to the moratorium on filling new vacancies in order to allow for a rationalisation of the department’s structure in line with the new mandate of rural development. The moratorium that was only lifted in January 2011 delayed spending on compensation of employees and expenditure on related goods and services, and machinery and equipment.


The department spent R2.1 billion (88 per cent) of the current payment allocation, which is an under-expenditure of 12 percent. The budget for machinery and equipment was under-spent by 28 per cent. It is reported that the department spent R5 billion or 102 per cent of its transfers allocation in 2010/11 due the need to speed up the land reform process. It is of concern, though, that R10.8 million of foreign aid assistance given to the department in 2010/11 was not utilised and no explanation has been provided in this report. It should be noted that there were no roll-overs during the period under review.


The following points provide analysis of financial performance according to the various programmes and it discusses Table 4 to build on analysis of programme performance.


·         Administration: As illustrated in Table 2, administration programme received an allocation of R709.768 million in 2010/11 and R689.270 million was spent, representing 97.1 percent of the its total allocation. An under-expenditure of 2.9 per cent in this programme was influenced by under-spending for payment of capital assets where 68 percent of the allocated budget was spent. Under spending was attributed to delays in ICT infrastructure expenditure that occurred in February 2011 rather than September 2010 as projected. The delays were attributed to delays in finalising the lease agreements with Department of Public Works for newly leased office buildings.


·         Geospatial and Cadastral Services: The Geospatial and Cadastral Services Programme received a final allocation of R448.738 million during the year under review and R372.080, representing 82.9 per cent, of the entire allocation for the programme was spent. This is the programme with the highest rate of under-expenditure of 17 per cent. Under-expenditure of this programme was influenced by poor spending of 23 per cent for payment of capital assets and delays in payment of machinery and equipment linked to the delays in filling vacancies. It is reported the programme could not find candidates with required and relevant skills. .


·         Rural Development: The programme was allocated a budget of R448.738 million in 2010/11 and 98.9% of that allocation was spent. This means that only 1% of the allocated budget was not spent. This under spending was attributed to the failure to fill posts for senior managers. Although the spending rate of the programme during the period under review was good it should be noted that 20.7 per cent of the funds for this programme were shifted within the programme or to other programmes. Money was shifted due the department’s restructuring or reprioritisation.

·         Restitution (the Commission on Restitution of Land Rights): Restitution received final appropriation of R3.774 billion in 2010/11 and managed to spend 99.8% (R3.765 billion) of the entire allocation. It should be noted that the budget allocated to restitution programme was exhausted by July 2010/11 as it had to pay its commitments as was compelled by court. Through the adjusted appropriation, restitution received an additional allocation of R487.5 million from the National Treasury and R1.5 billion shifted from the land reform grants. This meant that the commission received a total additional allocation of R2 billion in 2010/11.


During the year under review, approved total commitments for the department amounted to R6.573 billion. Included in the commitments were projects that were older than 3 years amounting to R642 million, which meant that interest might be charged during payment of these claims in terms of section 80 of the PFMA. This figure excluded land gazetted, authorised offers not yet accepted by landowners, which might result in increase in commitments. It is reported that the department would continue to engage with National Treasury in order to get financial solution with respect to the financial exposure of the commission.


The project on verification of outstanding claims had already been started and would be completed by the 31st March 2012. Based on the progress made in this project, the department could provide estimates. The committee advised that a short term solution should be to focus on reducing the commitments by paying court orders and prioritising settlement of state land claims. The committee was greatly concerned that, 12 years after the closing date for lodgement of land claims, there were still un-traceable claimants and settled claims that were not yet finalized. For example, about R681.834 million worth of properties acquired for restitution claimants were not yet transferred to claimants by 31 March 2011.


·         Land Reform: The final allocation for the land reform during the year under review was R1.999 billion of which 96.9 per cent (R1.937 billion) was spent. The under expenditure of 3.1 per cent was caused by poor spending in payment of capital assets in which only 56.5 per cent of the budget was spent. The committee was concerned that more than half of total budget of the land reform programme, that is 52.2 per cent or R2.2 billion, was shifted from land reform grants. About R1.5 billion was shifted to restitution to cover court cases. According to the PFMA only 8 per cent of the total budget is allowed for virement except if it is approved by the legislature. Shifting funds from land reform grants implied that there was less money available to acquire land for beneficiaries. Only R562.2 million was available land reform grants during the year under review due to a shift from redistribution through grants to a Pro-active Land Acquisition Strategy (PLAS).


6. Consideration of other sources of information


1.       Committee oversight reports


The committee jointly conducted oversight visits with the Portfolio Committee on Agriculture, Forestry and Fisheries. The committee, therefore, draws some of the observations in this section from the oversight visits at the seven provinces; namely, Eastern Cape, KwaZulu-Natal, Northern Cape, Limpopo, Free State and Mpumalanga. Findings from these visits show the challenges experienced by rural communities, farm dwellers and workers with regard to sustaining productivity on farms acquired as a result of poor support mechanisms. With regard to farm workers, there were still cases where the Land Rights Management Facility could not assist to prevent evictions of people with long-term occupier status.


In a broad sense, 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.

·         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 411 projects 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.

·         Livestock farmers complained about stock theft as well as predators. They argued that failure to ensure rural security poses a threat to the sustainability of farming, 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 to required urgent attention.

·         The role of municipalities in land reform projects as well as support given to farm workers during evictions requires strengthening. It was unclear during the oversight visit whether local and district municipalities were involved in any developmental initiatives in land reform.

·         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.

·         Strategic partnerships in restitution have not yet resulted in material benefits to households who form part of various CPAs and Trusts, especially in Limpopo


6.2 Report of the Auditor – General


The department has received a qualified opinion from the Auditor-General (AG) based on tangible capital assets. The committee was concerned that the AG has been raising concerns in relation to the performance of the department with regard to the asset register for a number of years and it remains the same issue resulting in qualification for the department.


The following sections discuss findings of the Auditor General with regard to tangible assets, emphasis of matters and other matters.


Tangible capital assets


The department failed to develop a complete asset register for all national government’s immovable properties under its custodianship because state land in former TBVC states and Self-Governing Territories was unsurveyed or was surveyed but not registered in the Deeds Registry. As a result, it was not vested and thus not recognised in the financial statements. It was impossible for some audit procedures to be performed to confirm completeness and evaluation of, and rights and obligations regarding tangible assets.


Emphasis of Matters


By end of March 2011 there were about R681.834 million worth of properties acquired for restitution claimants but not yet transferred to claimants. It created significant uncertainties on whether provision has been made for any liability (Interest and legal costs) that may result from claims of R1.172 billion instituted against the department; and on the value of potential liability of the Department towards the claimants beyond the R883.470 million that has been verified and due for approval by 31 March 2011. The uncertainty is due to the complicated process that needs to be followed in validating claims. The Auditor-General further emphasized the following:

·         Total commitments amounting to R6.573 billion which includes commitments of R642 million relating to projects that are older than three years that amount to R642 million, which an interest might be charged in terms of PFMA.

·         Fruitless and wasteful expenditure of R73. 406 million as a result of interest paid as compelled by the court on late payments of land purchase, and R3.324 million was incurred, as interest had to be paid to suppliers due non-compliance with normal procurement processes.

·         Irregular expenditure of R4.177 million was incurred due to non-compliance with supply chain management procedures and overpayments of restitution commitments.


Other Matters


Validity, accuracy and completeness of information on land reform could not be established due to insufficient appropriate audit evidence and lack of support documents; and noted the following:

·         Accounting officer did not take effective appropriate steps to prevent and detect irregular, fruitless and wasteful expenditure as required by PFMA.

·         Planned and reported performance targets for restitution and land reform programmes were not specific and measurable.

·         Adequate monitoring controls did not exist to detect fictitious beneficiaries receiving grant funding – second time. There are no adequate controls to ensure that in terms of LRAD beneficiaries contribute their labour on the farm.

·         The Department did not have approved fraud prevention plan in place although the accounting officer conducted a risk assessment.

Other matters


Special Investigating unit was still investigating 11 cases of allegations of irregularities relating to land reform and restitution projects.


7. The observations of the Committee


The Portfolio Committee on Rural Development and Land Reform, having analysed the strategic plan and discussed the 2010/11 annual reports of the Department of Rural Development and Land Reform, the Commission on Restitution of Land Rights, The Ingonyama Trust Board, recorded the following observations:


1.       The department (including the commission) lacks adequate capacity to effectively implement programmes and achieve targets set under the strategic plan. The committee found that capacity inadequacies were in the following specific strategic areas:


·         There were no clear systems to ensure risk management and fraud prevention. The department, due to its land reform programme, has a high risk potential for fraud. This is evidenced by the investigations related to material losses through criminal conduct where an amount R53.301.000 million was incurred through fraudulent activities in 2009/10 financial year. The committee noted that the Special Investigation Unit has been tasked to carry out investigations in the department.

·         Research and conflict resolution capacity to deal with the challenges of land restitution, especially proving validity of land claims and facilitating social cohesion within the Communal Property Institutes (CPIs) such as the Communal Property Associations and Trusts.

·         Monitoring and evaluation systems to ensure that the department remains informed of indicators of success or failures of the land reform projects and the livelihoods impact of land reform; training and deployment of the NARYSEC trainees.

·         Weaknesses of the internal audit within both the Department and the Ingonyama Trust.

·         Lack of adequate skilled human resources for the implementation of strategic programmes. For example, skills in surveys, research, monitoring and evaluation, conflict resolution, data base maintenance and management.


2.       The land reform programme, encompassing redistribution, restitution and tenure reform, forms part of the core functions of the department and this was also illustrated by the budget allocation for these programmes. The committee noted the following:


·         There are critical challenges confronting South Africa with regard to communal land rights tenure. Since 1994, the only available legislation to this effect is the Interim Protection of Informal Land Rights Act, 1996 (Act 31 of 1996). In the absence of the Communal Land Rights Act, and weak enforcement of IPILRA due to the absence of the regulations, majority of the rural poor living under informal and customary tenure continue to live under insecure tenure.

·         With repeal of the Black Authorities Act, pieces of legislation such as the Traditional Leadership Frameworks Act, 2003 (Act 41 of 2003) continue to have an impact on customary tenure and general development of people in tribal or communal areas.

·         During deliberations on the Annual Report of the commission, it was observable that it would not finalize all the outstanding land claims by 2014. It also became evident that the goal to redistribute the 30 per cent of agricultural land by 2014 was not achievable under the current mechanisms of land acquisition based on willing buyer – willing seller, and the under resourced programme for restitution because of the continual reduction of budget allocation for restitution.

·         The committee welcomed the RADP; however, there were concerns around criteria for eligibility for funding, especially where there were deserving farmers who were not included in the identified projects. In addition, its focus has been on PLAS farms with an unintended bias against subsistence and petty commodity producers because of its focus on development of black commercial farmers.


3.       Evidence from oversight reports on the CRDP as well as deliberations with the department shows that the challenge for rural development is mainly coordination and integrated planning for interventions in rural development. As a result, the following challenges are resultant:

·         Inadequate budget for rolling out ITC infrastructure such as the e-rap centres; planned outputs such as clinics and school gardens not achieved due to coordination failures

·         Excessive usage of consultants in CRDP sites. For example, in Diyatalawa, the Department procured services of a consultant to plough backyard vegetable gardens. The committee was extremely concerned that such initiatives tended to not empower local communities or beneficiaries but to deepen dependency tendencies.

·         The committee noted that some of the sites, particularly Muyexe, has witnessed greater cooperation and integration but such extents of coordination had not been witnessed in other CRDP sites.

·         NARYSEC candidates are trained but the Committee found that some of them have not been deployed to particular duty stations and with clear performance areas. As a result some of them are not working but collect stipends. For example in Riemvasmaak.


4.       The Ingonyama Trust Board has not only functioned as a landowner-in-law of the Ingonyama Trust land. In terms of the Act 3 of 1994 as amended, its core business is real estate and land management for the material benefit and social wellbeing of the individual members of the tribes and communities. The Ingonyama Trust Board had not been spending 90 per cent of its revenue on communities but has created its own reserves. It further reports of slow intake of funds by communities.


8.       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) and the Ingonyama Trust Board, the committee recommends the following:


To the Executive


1.       To introduce mechanisms (include review of legislation where necessary) to enhance effective coordination among the various spheres of government and integration of rural development at local and/or district levels in manners that foster intergovernmental relations. The success of CRDP will, to a large extent, be determined by the effectiveness of coordination and integration of service delivery by different spheres of government.





To the Department of Rural Development and Land Reform


2.       To develop specific strategies and plans to address the points (administration program) outlined below. The department should submit to the National Assembly those plans before the end of current financial year.


·         Recruit highly skilled professionals and develop an intensive programme of staff development to address capacity challenges in the field of surveys and cadastre, research for validation of restitution, and systems and programme implementation. Enhancement of capacity would help the department to finalize surveying of state land, completion of the National Asset Register, and finalization of restitution.

·         Put in place effective monitoring and evaluation systems to track progress and identify problems and deficiencies in project implementation across the programmes, especially CRDP, Land Reform with particular emphasis on fraud prevention as well as impacts of interventions made by government.

·         Enhance internal audit function to highlight weaknesses in the systems especially on risk management and fraud prevention.

·         Put in place mechanisms to ensure monthly reconciliations in order to avoid material adjustments at the end of the year and submit the report on a quarterly basis to the committee.

·         Build internal capacity on a range of key functions of the department whilst minimizing utilization of consultants.

·         Develop an effective communication strategy for all the stakeholders to know what services are available and the potential beneficiaries should expect, especially for restitution, PLAS and rural development.

·         Put in place mechanisms that create certain restrictions on open market resale of land acquired under land reform programme.


3.       To take necessary steps to ensure implementation of the following strategic core areas of work of the department and report to the National Assembly within six months after adoption of this report.


·         Maintain 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.

·         Report on implementation of the turn-around strategy of the commission with particular focus on elimination of the backlogs and unpaid commitments under restitution and projections for finalization of all lodged land claims.

·         Establish two teams to deal with restitution challenges; one team comprising of the commission personnel should be capacitated to conduct credible research to validate land claims; and the second team should comprise of National Treasury and the Department in order to find alternative solutions to finance settlement of backlog land claims and commitments.

·         Assess comprehensively all the CRDP pilot sites and draw lessons for an effective and efficient programme of rural development.

·         Minimize usage of consultants but ensure empowerment of rural communities to take charge of their own development, especially in cultivation of household gardens, fencing of fields and other small-scale infrastructure development projects.

·         Develop capacity for speedy delivery of land and integration with agricultural support in the form of input costs, access to markets, and agricultural research and extension support. It is anticipated that an effective implementation on this area of work could impact positively on the development smallholders and address food security challenges.


4.       To review and harmonize all legislation that impacts on development of the rural areas, For example, the Communal Property Associations Act, 1996 (Act 28 of 1996), Interim Protection of Informal Land Rights Act, 1996 (Act No 31 of 1996) and the Traditional Leadership and Governance Frameworks Act, 2003 (Act 41 of 2003).


To the Ingoyama Trust Board


5.       To focus on its core mandate as prescribed by the relevant legislation so that the wealth accruing is for the material benefit of the communities and beneficiaries.


6.       To report to Parliament within five months after the adoption of this report on progress made with regard to compliance with employment equity legislation and the KwaZulu-Natal Ingonyama Trust Act (1993), as amended by the National Act 9 of 1997, especially with regard to disbursement of funds to the beneficiaries and communities.


To National Treasury


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




·         Restitution is a constitutional mandate in terms of Section 25 (7) and it entitles victims of apartheid land dispossession to restitution. Extensive financial resources are required for the Commission to finalize land claims in manners that restores property or any other form of equitable redress;

·         Therefore, National Treasury and Department of Rural Development and Land Reform should devise appropriate mechanisms to finance settlement of outstanding claims, backlogs and commitments by 2014. It is further recommended that the two department jointly report to the National Assembly about these mechanisms and implementation progress within five months after adoption of this report.


Recapitalization and Development of Land Reform Farms (RADP)


·         Rolling out of the RADP require investment in development of capacity in agricultural economics, facilitation skills, business planning and enterprise development and monitoring and evaluation. Therefore, National Treasury should consider increasing allocation that would ensure that the department builds adequate capacity to roll out RADP and facilitate increased productivity on land reform farms of which the majority have been reported to be in distress or have collapsed.






Comprehensive Rural Development Programme


·         Adequately resourced CRDP projects as well as capacity to coordinate should assist the department’s failure to meet the targets because of shortage of capital funds as well as lack of human resource to facilitate and coordinate interventions and support required.


State Land Management


·         Increase funding for capacity to implement the Vesting Master Plan by recruiting scarce skills professionals such as the surveyors, cartographers, and others. This could assist the department to finalize development of a complete asset register for national government’s immovable properties under its custodianship.


Report to be considered.