Grants and Services of the Land Reform Programme


Department of Land Affairs
15 November 1995


INDEX

1 INTRODUCTION 2 SETTLEMENT/LAND ACQUISITION GRANT 3 SETTLEMENT PLANNING GRANT 4 DISTRICT PLANS 5 FACILITATION SERVICE 6 TRAINING AND CAPACITY BUILDING SERVICES

7 DISPUTE RESOLUTION SERVICES

8 CONCLUDING COMMENT


1 INTRODUCTION

1.1 FRAMEWORK

1.1.1
The Land Reform Programme is a key means of meeting basic needs and eliminating poverty by providing a resource to enable the poor, landless and aspirant farmers to improve their quality of life. The Programme contributes to building the economy through providing a resource and asset base that can generate employment and income, particularly in rural areas. Land Reform is an integral part of the Reconstruction and Development Programme.

1.1.2
There are three focus areas in the Land Reform Programme, namely:

1.1.3
In designing the grants and services needed to support these three focus areas, recognition is given to the fact that the provision of land and tenure security alone is not sufficient to guarantee an improvement of life for land reform beneficiaries. To ensure the productive use of land, the programme also includes settlement support for land development and capacity building to enable the beneficiaries to maximise the benefits gained out of securing access to land.

1.1.4
Experience has shown that the grants and services in support of land reform should be capable of responding to a highly segmented land market, where land is needed for a variety of purposes, including residential purposes, the provision of community facilities, agriculture, mining and other productive purposes. The Programme should address the land needs of villagers, town dwellers, farm workers, labour tenants and aspirant commercial farmers.

1.1.5
The grants and services outlined in this report replace those that have to date been implemented in terms of the Provision of Certain Land for Settlement Act, (Act 126 of 1993). The grants and services are built on, and are complementary to the Land Reform Pilot Programme design. The Pilot will continue to operate in accordance with the RDP approved Business Plan.

1.2 GRANTS AND SERVICES

The Department of Land Affairs (DLA) offers a number of grants and services in support of the Land Reform Programme. To varying degrees and in different ways, each of these is applicable to each of the main Land Reform focus areas, i.e. restitution, redistribution and tenure reform. These measures include:

Settlement/Land Acquisition Grant This grant is set as a maximum of R15,000 per beneficiary household, to be used for land acquisition, enhancement of tenure rights, and investments in infrastructure, home improvements and fencing, according to beneficiary plans. A land acquisition grant may also be accessed by local authorities to establish agricultural lease schemes for residents of towns and villages.

Settlement Planning Grant The Settlement Planning Grant is to be used to enlist the services of planners and other professionals, who will assist the beneficiaries in preparing project proposals and settlement plans.

District Planning District Planning offers an integrated framework for decision-making for the allocation of resources for land reform and settlement on a district level. DLA will financially assist provincially-supported District Planning exercises.

Facilitation Services DLA will offer Facilitation Services, directly or indirectly, to ensure that eligible land reform beneficiaries have access to necessary information and are empowered to seek access to appropriate services and assistance.

Training and Capacity Building Services DLA is presently devising a system whereby training is offered at the community level so as to better support people for the land reform process; and a capacity building programme to equip both beneficiaries and service deliverers with the means to manage development.

Dispute Resolution Services DLA is currently in the process of investigating and planning the establishment of a dispute resolution system that will have the capacity to prevent and resolve land and land-related conflict.

1.3 BENEFICIARIES

The abovementioned grants and services are aimed at assisting the following categories of people:

1.4 KEY PRINCIPLES OF THE LAND REFORM PROGRAMME

The following principles underlie the government's Land Reform Programme:

1.5 LEGAL MECHANISMS

The grants and services offered in terms of the Land Reform Programme will be implemented through the following legal mechanisms:

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2 SETTLEMENT/LAND ACQUISITION GRANT

2.1 OBJECTIVE

2.1.1
The objective of the Settlement/Land Acquisition Grant [hereafter referred to as "the Grant"] is to provide settlement opportunities, and to extend property ownership and/or access to productive resources to the historically disadvantaged and the poor.

2.1.2
To this end the Grant can be used to:

2.1.3
It is understood that the focus of this Grant is to assist those who in the first instance have land needs and security of tenure needs. Where mainly water provision or housing is sought, the applicant should be directed to another, more appropriate institution, such as the Department of Water Affairs and Forestry or the Department of Housing.

2.2 ELIGIBILITY AND PRIORITISATION

2.2.1
Households may apply individually or as groups or communities. A "household" is here understood to comprise at minimum either a single adult (18 years or older) with one or more dependents, or two or more adults, with or without dependents. This is consistent with the definition used for allocation of the National Housing Subsidy. Applicant households must consist of lawful citizens or permanent residents of the RSA.

2.2.2
Households which have an average household income of less than R1 500 per month are eligible for the Grant. For groups, average household income must be less than R1 500 per month. Although a means test for groups will not be applied as a matter of routine, groups that appear to be unusually well off may be further investigated by the relevant authority and thereafter may be considered ineligible.

2.2.3
Local governments may apply for a Settlement/Land Acquisition Grant for the sole purpose of enabling residents of the towns/villages to gain access to land for agricultural production under short-term lease agreements with the local authority.

2.2.4
Being eligible in no way ensures that a Grant will be awarded. Rather, eligibility determines whether one's application will be considered. The Grant will be awarded contingent upon the approval of a Settlement Grant Application, or in terms of a co-funding arrangement through a private financial institution, as described in section 2.5 below.

2.2.5
Applications for Grants will be prioritised in terms of the following criteria:

2.3 DISBURSEMENT

2.3.1
The Grant to an eligible household has an upper limit of R15,000 per household. Whether any grant money will be awarded at all, and if so, how much, depends upon the decision of the DLA Review Panel which will scrutinise Settlement Grant Applications, [or upon that of private financial institutions that participate in Partnership Agreements. (See section 2.5.1)]

2.3.2
Grants awarded to households which have applied as a group, must be disposed of according to collective decision making, as determined in the group's charter or constitution. The pooling of Grants does not preclude catering to differences among households in terms of how the money may be used, e.g. the group may agree that some member households will benefit more in terms of agricultural land than housing, while other member households will benefit more in terms of housing than land.

2.3.3
The Grant is an 'umbrella subsidy' in the sense that any government assistance for either land purchase or basic needs (excluding for provision of bulk infrastructure), will be debited against the R15,000 per household maximum subsidy. To effect this, the Grant will be registered on the same national data base as the National Housing Subsidy. A household may apply for both, and in any order, but cannot qualify for a total of more than R15,000. Also, any settlement benefits received from the government since 1 April 1994 will be taken into consideration in deciding the value of subsidy which a household may obtain.

2.3.4
The Grant may be applied to the acquisition of State land, where this is available and has been identified for redistributive purposes. The value of the land will be considered in order to determine how much of beneficiaries' R15,000 maximum allocation must be debited for its acquisition. The value of state land should be based on the "use value", which is the value that a specific property has for a specific use as may be established through a participative land use planning process. When State land is considered for agricultural purposes then productive value will apply. Productive value refers to the income that the land can earn from agriculture production.

2.3.5
The burden is on the applicant to consider carefully in advance how to use this once-off resource. By choosing to use the Grant in a certain way, the applicant may have to forego other possible uses, particularly if the applicant has already drawn near the maximum.

2.3.6
There should be flexibility in terms of how an applicant may seek to secure Settlement Grant finance over time. Several possibilities exist for how Settlement Grants may be applied for and disbursed, eg:

2.3.7
The Settlement Grant will not necessarily cover the total costs involved in land acquisition and development. Own equity, loan financing and other sources may have to be tapped, either in terms of a Partnership Agreement (see section 2.5), or according to some other arrangement, e.g. as may be developed in the course of the planning processes assisted through the Settlement Planning Grant.

2.3.8
A Grant can also be disbursed to local authorities as described in section 2.2.3 and 2.4.4. In this case it will be provided as a matching contribution to the investment of the local authority. The level of the grant will be determined on merit and further details in this regard will be made available by DLA at a later stage.

2.4 TENURE AND SETTLEMENT OPTIONS

2.4.1
The Grant will be applied in a flexible way - to allow local initiatives to be accommodated in a range of different land acquisition and tenure situations, including those applicable to farm workers. These options include the following:

2.4.2
Individual and communal freehold: the Grant can be used to purchase property to be held under individual or communal freehold. This may be for the landless, as well as labour tenants and farm workers who may wish to leave their employment. Using the Grant to assist in the conversion of tenure may also result in freehold title. Communal title does not preclude the possibility of later conversion to individual freehold title.

2.4.3
Equity share arrangements: the Grant can be used to finance an individual household's or group's buying into a farm enterprise on a shareholder basis. Typically these schemes contract a farmer with his/her (former) farm workers, but the principle applies equally to other emergent farmers who may derive an equity share holding in a farm enterprise. Formally, this entails a three-way agreement between the State, the farm owner and participating beneficiaries. The inclusion in an equity scheme entitles the share-holder to a share of the farm profits, and should make the farm worker part-owner of the farm enterprise.

2.4.4
Short term leasehold arrangements: local government authorities can access a Grant in order to purchase land for urban agriculture, food gardens and livestock grazing within or near towns and rural settlements as described in 2.2.3 and 2.3.8. Under this scheme, the land will be rented out to residents on short term lease arrangements. Ownership would be retained by the local authority.

2.4.5
Lease-purchase arrangements: financial support can be given for purchasing State land under lease-purchase schemes. Beneficiaries can use the Grant to subsidise the purchase of the property. The lease would be determined at market rates, with the option to buy at the end of a pre-defined period. The lease can be for a period of 3 to 5 years.

2.4.6
Off-farm farm worker settlement options: this would mainly entail the purchase of land and establishment of housing and other service infrastructure in proximity to existing farm employment and to other employment opportunities. This is generally more viable where a number of farm workers apply as a group, resulting in an 'agri-village' or 'farm worker village'. It is possible that an agri-village has associated with it some land that residents can use for their own account. Another off-farm option is the settlement of farm workers in nearby towns.

2.4.7
On-farm farm worker settlement options: several on-farm options have been identified, including:

2.5 HOW TO ACCESS THE SETTLEMENT/LAND ACQUISITION GRANT

2.5.1
The Grant can be accessed in two ways:

  • Through the submission of a Grant Application to the Department of Land Affairs (DLA).
  • Through accredited financial institutions as a "co-funding grant" to a loan. (Refer to section 2.5.8 and 2.5.9)

2.5.2
The Grant Application will be reviewed by the Screening and Priorities Committee which has been set up in the DLA for this purpose. The recommendation of the relevant provincial authority and other key role players will be solicited in considering applications. The regional directors of DLA will collate and coordinate these applications.

2.5.3
The Grant Application requires two sorts of information. First, it requires information about the individual or group. If the applicant is a group, then there should also be a full enumeration of the member households, and an indication of the nature of the legal entity the group has formed or intends to form. The second body of information required with the Application pertains to what the applicant proposes to do with the money. This entails a description of the sort of property being sought, the uses to which that property would be put, the infrastructure to be developed, and a clear statement as to how the benefits will be distributed among member households. The application must demonstrate the proposed combination of grant finance, own contribution and loan finance.

2.5.4
The Grant Application is not meant to include a fully detailed land use and/or business plan, since full planning cannot be usefully undertaken until the DLA has decided upon the amount of Grant funds to be awarded. The Application must, however, be detailed enough to provide a basis for deciding whether the applicant is likely to make effective use of the Grant. The DLA will provide detailed Grant Application Forms to be filled in by applicants.

2.5.5
Depending upon the complexity of the applicant's circumstances, it may need the assistance of a planning agency, which may be financed through the Settlement Planning Grant (refer to section 3.1.2 and 3.1.3).

2.5.6
Until an award of a Settlement/Land Acquisition Grant is announced, an applying group or household will generally not be in a position to make an offer on a particular piece of land. However, if a group is applying for the Grant with the intent to purchase land, then it should proceed to identify properties for sale, and judge their affordability on the basis of what share of the pooled Grant it would envision going towards land purchase.

2.5.7
The Department of Land Affairs will make decisions on Grant Applications in terms of the criteria set out in section 2.2.4. The response to an Application could be outright rejection (e.g. does not fall within DLA's brief), rejection with suggestions for re-submission (e.g. application may have merit, but needs refinement), partial approval (e.g. only some of the group's intentions are considered worthy of funding at current time), or full approval. The review of the Grant Applications will be flexible and informative. The Screening and Priorities Committee will draw on its accumulating experience as much as possible to provide feedback to the Department of Land Affairs Regional Directors and the Provincial authorities who will communicate with applying groups as to how they may improve their applications or plans.

2.5.8
Alternatively, the Grant can be made available as a "co-funding grant" to a loan by accredited financial institutions upon securing the loan, subject to the eligibility criteria set out in section 2.2. The DLA will be satisfied that if the financial institution judges the applicant's plan credit-worthy - assuming a partial capital infusion from the State - and provided that the financial institution is prepared to contribute towards the total investment cost, then a detailed review by the DLA Review Panel may be unnecessary. Procedures and mutual obligations between the DLA and financial institutions will be defined and formalised through Partnership Agreements.

2.5.9
The allocation of a Grant as a co-funding grant to a loan will be encouraged where the Grants are used to acquire land for agricultural production or other small business development.

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3 SETTLEMENT PLANNING GRANT

3.1 OBJECTIVE

3.1.1
The objective of the Settlement Planning Grant is to assist poor communities to plan for their settlement needs in terms of the acquisition, use and development of the land and the mobilisation of resources required to do this.

3.1.2
The Settlement Planning Grant is designed to support each of the three Land Reform focus areas, namely restitution, redistribution and tenure reform. In doing so the Grant could, on the one hand, be aimed at assisting beneficiaries of the Settlement Grant. On the other hand, it may also be used to support land reform initiatives undertaken by other institutions e.g. local authorities, district councils and NGOs who use their own resources to implement land reform projects.

3.1.3
The Settlement Planning Grant enables prospective and actual beneficiaries to select and appoint DLA-accredited planners and other professionals from private firms and NGOs, with whom they will collaborate on a strategy for development. The services potentially covered by the Settlement Planning Grant will be sufficiently varied to include legal and financial-planning assistance, land use planning, infrastructure planning, land valuation, and assistance with land purchase negotiations.

3.1.4
There are two principal planning phases that may be financed through the Settlement Planning Grant:

  • preliminary settlement, land use, and/or business planning, contributing to the preparation of a Settlement Grant Application;
  • detailed settlement, land use, and/or business planning, after the beneficiary's resources are known (whether from a Settlement Grant or some other source).

A given applicant may seek to take advantage of one or the other, or both.

3.1.5
The appointment by potential beneficiaries of land valuers from a panel of DLA-accredited valuators is possible through the award of a Planning Grant.

3.2 ELIGIBILITY

3.2.1
Applying households must consist of lawful citizens or permanent residents of the Republic of South Africa.

3.2.2
Institutions such as NGOs, local authorities and district councils may apply for the planning grant to promote land reform initiatives.

3.3 DISBURSEMENT

3.3.1
The amount of the Settlement Planning Grant for the preliminary phase is equal to 2% of the estimated overall project cost. The estimated overall project cost will be taken as R15,000 multiplied by the number of eligible households applying. Consideration will be given to special circumstances requiring a different calculation.

3.3.2
For the detailed planning phase, the Settlement Planning Grant is 4% of the overall project budget that has been pledged. The estimated overall project cost will be taken as R15,000 multiplied by the number of eligible households applying. Consideration will be given to special circumstances requiring a different calculation.

3.3.3
Individual households with similar settlement circumstances and needs will be encouraged to collectively apply for the Planning grant, but the benefit of planning will accrue to the individuals. The intention is to maximise the benefits of this grant in terms of economies of scale.

3.4 HOW TO ACCESS THE SETTLEMENT PLANNING GRANT

3.4.1
Interested parties must submit a completed Planning Grant Application, providing basic information about the applicant(s) and their goals, as well as an indication as to why planning assistance is needed.

3.4.2
Applications will be reviewed in accordance with the procedure in section 2.5.2. In evaluating the application, the Screening and Priorities Committee will also have to assess whether the applicant should be directed elsewhere (e.g. another department), or whether the applicant could manage with the facilitation service rather than full fledged planning assistance.

3.4.3
If awarded, the Settlement Planning Grant will be used in order to acquire the skills of a planning agency. The beneficiaries will be involved in drawing up the planning brief, and in the selection of the planning agency. The formal contract will be between the DLA and the selected planning agency, on terms agreed with the applicant.

3.4.4
Many situations may require a range of skills for planning. In these instances a lead planning agent will be selected who, by agreement with the applicant, sub-contracts under a consortium arrangement for planning.

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4 DISTRICT PLANS

4.1 OBJECTIVE

4.1.1
The purpose of District Planning is to provide an integrated framework for decision-making for the allocation of resources for land reform and settlement on a district level.

4.1.2
District Plans will thus assist in ensuring that:

  • development at the district level is balanced and sustainable;

  • development at the district level takes into account the multiplicity of needs and possible conflicts around limited resources;

  • an overall settlement framework is created.

4.1.3
District Plans may also be used to further inform the Department of Land Affairs Screening and Priorities Committee and the Provincial authorities as to the feasibility and compatibility of the various group development plans submitted to them.

4.2 DISBURSEMENT AND HOW TO ACCESS

4.2.1
DLA will assist in making funds available to the relevant provincial authorities or district councils on application in order to undertake District Planning. Application forms will be made available at regional DLA offices and further guidelines for the disbursement of the Grant will be provided.

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5 FACILITATION SERVICE

5.1 OBJECTIVE

5.1.1
The objective of the Facilitation Service is to ensure that prospective land reform beneficiaries have access to necessary information and are empowered to apply for necessary assistance. This is deemed particularly important in ensuring that rural groups and communities that are weakly organised get access to the Land Reform Programme.

5.1.2
The functions to be supplied through this service include:

  • providing information to prospective beneficiaries, explaining the Land Reform Programme processes to them, and offering advice on the variety of options available for settlement;
  • pro-actively identifying and mobilising individuals or groups who may benefit from land reform;
  • assisting with applications, such as the Planning Grant Application and the Settlement Grant Application;
  • facilitating the establishment of legal entities and providing advice with respect to legal issues;
  • assisting prospective beneficiaries in approaching formal financial institutions and in investigating the local land market;
  • assisting prospective beneficiaries with the selection and appointment of valuers if required;
  • linking with provincial and local government authorities and other line function Departments with specific reference to bulk and internal infrastructure supply.
  • facilitating the appointment of a planner, and the planning process;
  • ensuring community participation in planning process;
  • ensuring the participation of women in decision making and the planning process;
  • assisting the community in identifying settlement needs;
  • ensuring that eligible beneficiaries are empowered to access necessary longer term services and assistance.

5.2 ELIGIBILITY AND HOW TO ACCESS

5.2.1
Facilitation Services are available on request, or may be initiated by DLA. DLA will seek at all times to provide a person to fulfil this service who is acceptable to the individual or group.

5.2.2
Either DLA officials or accredited agencies contracted by DLA will provide this service.

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6. TRAINING AND CAPACITY BUILDING SERVICES

6.1 A training and capacity building programme is being developed to complement the grants and services of the Land Reform Programme.

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7. DISPUTE RESOLUTION SERVICES

7.1 OBJECTIVE

7.1.1
The objective of a dispute resolution system for land reform is to provide both preventative and resolution mechanisms to effectively address the range of land-related disputes that will arise in the course of the Land Reform Programme.

7.1.2
An immediate measure has been taken to establish a National Land Reform Mediation Panel whose members are available to implement dispute resolution procedures in specific situations upon application.

7.1.3
A comprehensive dispute resolution system for land reform will be devised following the outcome of an investigation into the most effective methods and institutional arrangements for such services in the longer term.

7.2 HOW TO ACCESS THE MEDIATION PANEL

7.2.1
The administering agent appointed by the DLA to manage the Mediation Panel will receive applications for land-related dispute resolution services from any one of the following: the DLA Regional Director; the head of department of the Provincial government department responsible for land matters; the chairperson of the Land Reform Steering Committee in the Province; the District Office manager of the Land Reform Pilot Programme; or the Land Claims Commissioner. Upon such application, a mediator will be assigned as appropriate.

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8. CONCLUDING COMMENT

The grants and services of the Land Reform Programme outlined in this document will be implemented by the Department of Land Affairs upon Ministerial approval. An essential component of the approach however, is to learn by doing, and to adapt policy and procedures in order to timeously improve delivery to the client. Amendments may therefore be made to this document in the course of implementation.


For further information, please contact:

Department of Land Affairs
Private Bag X833
Pretoria 0001

Please e-mail comments, responses, suggestions and queries to
mpsmithers@sghq.pwv.gov.za

15 November 1995

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