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The announcement that the Land Claims Commission (LCC) intends to place a moratorium on the purchase of land and ‘postponed' payments on existing sale agreements is extremely problematic. The LCC cannot renege on already signed contracts.

First, the LCC has a legal obligation to honour contractual agreements, and a cancellation of this kind of contract can only happen due to unforeseen circumstances. Simple escalation of cost does not mean that the department is entitled to retract its obligation.

Second, it is highly concerning that, despite the fact that the LCC knew that it would not have enough money to settle claims in the 2009/10 financial year and subsequently ran out of money within the first two months, it did not communicate this to their local branches, who continued to make offers and sign sale agreements with farmers. It has taken them seven months to communicate to the public that they are now placing a moratorium on buying land!

The situation is now desperate. The LCC needs a total of R65.3bn to settle all outstanding land claims and had asked Treasury for R5.3bn for the 2009/10 financial year. However, they were only allocated R1.9bn.

Should government not settle the thousands of outstanding rural land claims, this could have potentially devastating effects on agricultural production in the country. For example, in Limpopo where 88% farms are under claim, hundreds of farmers, beneficiaries and agricultural businesses are suffering as food and fibre production plummets at alarming rates.

How the more than 120 officials in the LCC are supposed to keep themselves busy to earn their salaries until the next financial year is another matter that the government will have to explain.

The DA will ask questions to the Minister on Rural Development and Land Reform to establish how many transactions have been signed and what is the precise amount needed to honour their side of the contract made with farmers.

The ANC government needs to stop relaying the myth to the public that land reform and rural development is one of their highest priorities even while they refuse provide the requisite funding to ensure such development.