Land and agriculture got a lovely bonus from Trevor Manuel in his budget speech on Wednesday, suggesting that the government was trying to implement the African National Congress promise at its Polokwane conference to beef up the rural economy. But rural economy analysts were hesitant to immediately pop the champagne corks.
Land reform received an additional R1,8-billion for rural development and agrarian reform, and the total budget for the next three years for reform and restitution rose to R20,3-billion. But year-on-year, the budget for the Department of Land Affairs declined between 2008/09 and 2009/10 by 8%, driven by a precipitous decline in the capital budget allocated for the land-restitution programme.
Michael Aliber and Karin Kleinbooi, researchers from Programme for Land and Agrarian Studies (Plaas) at the University of the Western Cape, explained the reason for the downward turn as obscure.
“On the one hand, in mid-2008 the Restitution Commission indicated that it would need to spend R18-billion in order to meet the deadline of 2011, which would be consistent with an increase in annual expenditure up to that date,” Kleinbooi said.
“On the other hand, the just-released estimates of national expenditure imply that the restitution programme has already begun its winding down phase, which explains the general downward trend in its budget line.”
The two said the other significant feature of the land-reform budget is a sharp reversal of previous trends whereby the capital budget tended to grow far more rapidly than the current budget.
“In comparison to last year’s budget, current expenditure — which can be interpreted broadly as the state’s capacity to effect land-reform transfers — grew in both absolute terms and relative to the corresponding capital budget,” Aliber said. “For restitution, the current budget increased by 104% relative to the capital budget decline of 49%; while for the ‘land reform’ budget line [largely comprising land redistribution, but in principle also tenure reform], the figures are 53% and 16%, respectively.”
Kleinbooi said the boost was not enough. She says the budget estimates that over the medium term an additional 2,2-million hectares will be transferred via the redistribution programme at a total cost of about R12,3-billion.
“While no comparable figures are provided for restitution in terms of hectares, assuming similar land costs, then the MTEF allocation would allow for the restoration of less than one million hectares, making a total of about 3-million hectares,” she said.
Given the approximately 5,2-million hectares transferred to date, this means that more than 17-million hectares would need to be delivered over the three years remaining between the end of this medium term framework period and 2014, the target date for transferring a total of 30% of all commercial farmland.
“This is obviously a nonsensical target under the present circumstances,” she said.
Talking about the R1,8-million injection into rural development and small farmer support, Kleinbooi said the significance of this was underlined when Manuel deviated from the script to ensure that this fact was acknowledged by Gwede Mantashe, “Presumably to signal that the allocation is a financial commitment in support of the rural development thrust of the ANC’s election manifesto,” she said.
In his speech, Manuel emphasised how important it was to empower small-scale farmers.
“Key to transforming rural livelihoods is to better enable small-scale farmers to use land more productively,” Manuel told Parliament.
“Improved support to farmers is important, but access to long-term finance is a critical ingredient too. Following good progress in repairing its integrity and in giving effect to its core mandate to support agricultural investment, government will also consider proposals by the board of the Land Bank to strengthen its balance sheet.”
In a telling deviation from the script, the minister noted that the Land Bank’s offerings did not appear to be suitable to land-reform beneficiaries, and then said that “land is an asset, and it’s an asset that needs to be worked by the poor.”
Kleinbooi and Aliber said the meaning was ambiguous, but seemed to suggest that land reform needed to show more tangible results in terms of poverty reduction and food production than it can demonstrate to date.
“Many would agree, but it can hardly be said that there is any consensus as to a good plan for the way forward. To borrow on a theme developed elsewhere in his speech, where rural development is concerned, we are certainly not ‘already shovelling’, nor probably are we ‘shovel-ready’; in reality there is some uncertainty as to which is the business end of the shovel,” Aliber said.
Manuel also specifically targeted food production in the agricultural boost, giving fruit and vegetable farms in KwaZulu-Natal and Eastern Cape an additional R650-million over the medium term. The funds will be used to build infrastructure on prime pieces of land in the two provinces.