Hon House Chairperson, hon Minster, MECs present, hon members, firstly, it would be remiss of me not to thank the department for their presentations, to our committee as well.
Rural development has moved up on the government's agenda, hence the establishment of a dedicated Ministry. In the state of the nation address, the President announced rural development and land reform as one of the government's top five priorities. This department states that its purpose is to "initiate, facilitate, co-ordinate and catalyse the implementation of a Comprehensive Rural Development Programme that leads to sustainable and vibrant rural communities". Only some R1,568 billion has been allocated to the land restitution programme, of which R800 million has been used to purchase farms.
Many farmers and land claimants are going to court to force the department to honour the commitments of signed contracts to purchase land. In the interim, much productive land is not farmed, which South Africa can ill afford. By the Minister's own admission, some 90% of land reform projects have failed due to the lack of postsettlement support to the land reform beneficiaries. What is required is for government to commit the necessary resources to finance land reform and to ensure that there is sufficient capacity within the state to manage the process.
Some of the concerns raised by the committee are the unacceptably high vacancy rate in the department; the continued use of external consultants; the inability of the Auditor-General to audit receivable revenue; and a lack of effective deed registration, which prevented the department from finalising the asset register of all state-owned land.
It was highlighted that there was a need to integrate land reform and agricultural support programmes - by which the success of these programmes will be measured - by an increased amount of small-scale farmers that become economically viable. The fact that the department will only focus on 150 wards through the Comprehensive Rural Development Programme is of concern as the budget allocated is only a fraction of what was requested from Treasury. The department must then obtain co-operation with other stakeholders such as the Departments of Social Development, Health, Home Affairs, Transport, Water Affairs, etc. Funds will have to be pulled to address competencies within the selected area.
More than a third of South Africa's population is found in rural areas, but agriculture accounts for only 10% of employment. Migration to urban and metro areas is likely to continue for the foreseeable future. Weak infrastructure, combined with deteriorating rail and roads in many farm areas, raises production costs and limits market access. This, in turn, reduces productivity. This means that users cannot afford to contribute much towards infrastructure investments. Poor social infrastructure means lower skills and health levels.
The Minister has already submitted a Green Paper to Cabinet with regard, as he has alluded to, to the government's new approach to land reform, including alternatives to the willing-buyer, willing-seller principle. The Minister of Agriculture, Forestry and Fisheries has alluded to the fact that government is looking into a share scheme with the aim of reaching land reform targets. The uncertainty and confusion created by these various statements is not good for agricultural production and will scare off future investments.
The DA is in full support of reversing the effects of past land dispossession, but the process must not undermine property rights, which will ultimately destroy the free-market system. Ignoring the basic principle will result in the total collapse of food production and the banking system. According to a written reply to a question from the Minister of Agriculture, Forestry and Fisheries, some 98 farms in the Free State province alone purchased through the Land Bank are unproductive, and if we expand that to the other eight provinces, we then realise what we are talking about. Small agricultural units operate on minimal net profit margins with the result that small and medium commercial farmers are in no position to divide income between more shareholders.
The DA proposes that the government first implements a successful model based on the partnership and mentorship to which the Minister has alluded for the failed farms under the land restitution process before risking the successful productive farms and food security. I thank you. [Applause.]