Department of Rural Development and Land Reform Medium Term Budget Policy Statement Presentation to the Standing Committee on Appropriations 2 November 2009

FINANCIAL PERFORMANCE The Department has achieved a record spending of 99.9% (2008/07: 99.5%) against the adjusted appropriation of R6.6 billion for the past Financial year. 2008/09 R’000 2007/08 Budget allocation 6,659,396 5,928,269 Actual Expenditure 6,654,636 5,897,497 Spending as a percentage 99.9% 99.5% Unspent funds 4,760 30,772 Unspent funds as a percentage 0.1% 0.5% The Restitution and Land and Tenure Reform Programmes received allocations of R3.1 billion (2007/08: R3.6 billion) and R2.7 billion (2007/08: R1.6 billion) respectively representing 89% of the Departmental adjusted appropriation.

SPENDING PER PROGRAMME (For the past two financial years)   2007/08 Financial year 2008/09 Financial year Final appropriation Spending 31/03/2008 Spent Spending 31/03/2009 Variance R’000 % Programme 1: Administration 426,554 424,994 99,6% 453,442 453,316 126 99,9% Programme 2: Surveys & Mapping 98,085 97,257 99,1% 72,044 71,875 169 99,8% Programme 3: Cadastral Survey Management 137,937 137,616 99,7% 116,384 116,306 78 Programme 4: Restitution 3,638,611 3,638,465 100% 3,124,781 3,122,148 2,633 Programme 5: Land & Tenure Reform 1,593,471 1,571,073 98,6% 2,800,713 2,799,539 1,174 Programme 6: Spatial Planning & Information 22,018 21,836 34,834 34,256 578 98,3% Programme 7: Deeds Registration 11,593 6,256 53,9% 57,198 57,196 2 Total 5,928,269 5,897,497 99,5% 6,659,396 6,654,636 4,760

2009/10 ADJUSTED ESTIMATES OF NATIONAL EXPENDITURE (AENE) BUDGET The Department originally requested an additional R4.4 billion but due to the prevailing economic conditions, the Department revised its request to R1.7 billion for unforeseeable and unavoidable expenditure with regard to, amongst others, the new offices of the Minister and Deputy Minister, Rural Development, Restitution and Deeds Trading Account. The Department received an additional allocation of R292 million for Rural Development (R252 million), Minister and Deputy Minister (R9 million) and General Salary Adjustment (R31 million). R2,340 million transfer of function Integrated Sustainable Rural Development Programme (ISRDP) from the Department of Co-orperative Governance and Traditional affairs. R’000 Main Budget Original Additional Funding Additional Funding Requested Additional Allocations Reprioritisation/shifts/virements Adjusted Budget Administration Surveys and Mapping Cadastral Survey Management Restitution Land & Tenure Reform Spatial Planning & Information Auxiliary & Associated Services R487,457 R96,147 R111,824 R1,904,284 R3,454,928 R33,562 R12,856 R170,910 R32,000 R3,495,427 R709,992 R24,375 R54,672 - R1,050,000 R430,246 R22,101 R2,000 R6,000 R252,340 R7,592 R181,722 R27,000 R197,151 R-483,847 R31,225 R46,749 R689,280 R140,824 R2,107,435 R3,223,421 R66,787 R67,197 TOTAL R6,099,058 R4,487,376 R1,762,203 R292,033 R0 R6,391,091

ORIGINAL MEDIUM TERM EXPENDITURE FRAMEWORK (MTEF) REQUEST The Department changed its programmatic budget structure from 7 to 5 programmes, to reflect the new rural development mandate which was approved by National Treasury. The changes will be effected on the 1 April 2009. The Department submitted its original MTEF submission to National Treasury on 25 July 2009 and requested R18.3 billion over the MTEF. Rural Development and Restitution together requested R16.5 billion or 90% of the Department’s total request Restitution requested R10.3 billion or 56% of the Department’s total request. R’000 2010/11 2011/12 2012/13 TOTAL Administration Geo Spatial Cadastral Services Rural Development Restitution Land & Tenure Reform R163,393 R266,816 R1,925,757 R3,834,739 R40,166 R182,036 R386,583 R2,088,305 R3,657,642 R32,316 R195,563 R418,020 R2,277,999 R2,838,953 R32,985 R540,992 R1,071,419 R6,292,061 R10,331,334 R105,467 R6,230,871 R6,346,882 R5,763,520 R18,341,273

REVISED MTEF REQUEST R’000 2010/11 2011/12 2012/13 TOTAL Administration Geospatial and Cadastral Services Rural Development Restitution Land Reform R163,393 R266,816 R500,000 R1,000,000 R182,036 R386,583 R525,000 R1,050,000 R195,563 R418,020 R551,250 R1,102,500 R540,992 R1,071,419 R1,576,250 R3,152,500 R1,930,209 R2,143,619 R2,267,333 R6,341,161 National Treasury requested a revised MTEF submission due to the prevailing economic conditions which the Department submitted on 12 August 2009 The Department revised the requested amount to R6.3 billion over the MTEF or a 65% reduction from the original request. Rural Development and Restitution together requested R4.6 billion or 73% of the Department’s total request. Restitution requested R3.1 billion or 49% of the Department’s total request.

PROPOSED MTEF BUDGET The proposed budget over the MTEF is in terms of the new programmatic budget structure to reflect the new Rural Development mandate which was approved by National Treasury. Currently, the Rural Development Programme does not have a baseline over the MTEF. The indicative baseline for Restitution over the MTEF is less than the 2007/08 level. R’000 2010/11 2011/12 2012/13 Indicative Allocation Proposed Budget Administration Geospatial and Cadastral Services Rural Development Restitution Land Reform R554,617 R251,248 R1,584,701 R4,099,636 R718,010 R518,064 R500,000 R2,584,701 R576,462 R267,026 R2,086,448 R4,720,970 R758,498 R653,609 R525,000 R3,136,448 R606,664 R280,377 R2,190,770 R4957,019 R802,227 R698,397 R551,250 R3,293,270 R4,957,019 TOTAL R6,490,202 R8,420,411 R7,650,906 R9,794,525 R8,034,830 R10,302,163

2ND QUARTER SPENDING PER PROGRAMME Budget R’000 Available budget after April to Sept spending Budget Spent from April to Sept % Spending June to Sept Administration 507,457 273,812 46% 132,767 Surveys and Mapping 96,147 58,242 39% 20,591 Cadastral Survey Management 131,824 72,337 45% 29,812 Restitution 1,877,284 166,855 91% 289,052 Land & Tenure Reform 3,434,928 2,009,304 42% 606,663 Spatial Planning and Information 38,562 19,117 50% 7,993 Auxiliary and Associated Services 12,856 10,812 16% 279 TOTAL 6,099,058 2,610,480 57% 1,087,158 Linear target end Sept 2009 was 50% and was exceeded by 7%, as opposed to the first quarter’s 14% over spending of the linear. 2nd quarter spending represented a 42% under spending of the quarter’s revised drawings, as opposed to the 7% over spending and deficit cash flow of R152 million end 1st quarter.

2ND QUARTER SPENDING PER ECONOMIC CLASSIFICATION Budget R’000 Available budget after April to Sept spending Budget Spent from April to Sept % Spending June to Sept Compensation 932,580 584,237 37% 177,785 Operational costs 619,075 303,927 51% 187,042 Current transfers to households 16,308 11,408 30% 1,666 Capital transfers to households 3,510,371 1,119,373 68% 602,151 Departmental agencies and accounts 1,020,724 591,534 42% 118,514 TOTAL 6,099,058 2,610,480 57% 1,087,158 Departmental agencies and accounts include Land Acquisition (PLAS) funds of R1,018 billion and the spending indicated was paid from the suspense account in respect of Land Acquisition. Linear target end Sept 2009 was 50% and was exceeded by 7%, as apposed to the first quarter’s 14% over spending of the linear. 2nd quarter spending represented a 42% under spending of the quarter’s revised drawings, as opposed to the 7% over spending and deficit cash flow of R152 million end 1st quarter.

MAIN COST DRIVERS The goal of the Land Redistribution for Agricultural Development (LRAD) Sub-programme is to contribute more significantly to agricultural development and to extend the target group beyond the poor so as to also include emerging black farmers. LRAD is designed to provide grants to black South African citizens to access land specifically for agricultural purposes. The Pro-active Land Acquisition Strategy (PLAS) allows the Department of Rural Development and Land Reform (DRDLR) to acquire land in terms of the Provision of Land and Assistance Act, 1993 (Act No 126 of 1993) [Section 10(a)]. The Commission on Restitution of Land Rights (CRLR) provides restitution of rights in land in terms of the Restitution of Land Rights Act, 1994 (Act No 22 of 1994) [section 42D, read with section 2], to persons or communities dispossessed of such rights after 19 June 1913 as a result of past racially discriminatory laws or practices. Restitution can take the form of land restoration, financial compensation, or a combination. In claims for restoration of land rights, restoration of the specific land that the community was dispossessed of is recommended where at all feasible, so as to ensure access to land and opportunity by rural communities. Comprehensive Rural development seeks to achieve vibrant and sustainable rural communities as well as the long terms outcome of social cohesion and development. 10

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