1. AGRICULTURE AND LAND Chapter 6 Provincial Budgets and Expenditure Review

2. 2 Agriculture and Land Introduction Overview of budget and expenditure trends Provincial and National expenditure trends Service delivery trends on selected programmes Conclusion

3. 3 Background The land and agrarian reforms programs are by far the most important programs driving transformation –Access to commercial agricultural sector by previously disadvantaged groups The land reform program is important in addressing the skewed land ownership patterns –1,7 m hectares of land redistributed to 252 000 HH Agriculture important rural economic development –Stimulating rural economies –Food security

4. 4 Institutional arrangements Agriculture is a concurrent function shared between national and provincial departments National is responsible for formulating policies while provinces are the implementing spheres National is separated into two departments: –Land Affairs – responsible for land reform programmes –Dept of Agriculture – accountable mainly for farmer settlement and support The sector also enjoy support from numerous state agencies such as Land Bank, Agriculture Research Council, ARC, etc

5. 5 Budget trends in National Dept of agriculture and sub-programmes

6. 6 Budget trends in National Dept of agriculture - cont The Agriculture’s budget grows from R1,2 billion in 2003/04 to R2,4 billion by 2009/10, an average annual rate of 13,1 per cent. The largest growth at a sub-program level is those for Livelihoods, economics and business development program. Expenditure for sub-programs grows sharply at annual growth average rate of 20%, –livelihoods and sector services and Sector services partnership grow at even higher rates of 28.9% and 28.1%. The budget for Land Affairs is much higher than that of the Dept of Agriculture –Due to rising allocations for land restitution, tenure reform and land redistribution. Between 2003/04 and 2006/07, overall expenditure grew significantly from R1,3 billion to R2,8 billion at an average annual rate of 30,3 per cent.

7. 7 Provincial settled restitutions claims

8. 8 Budget for land reform and restitution grows sharply, more than doubling from R1,3 billion in 2003/04 to R2,8 billion in 2006/07. Land restitution programme grew sharply from R839 million in 2003/04 to R2,0 billion in 2006/07, an average annual rate of 34,9 %. Land redistribution and tenure reform remains key to realising objectives of the agriculture reform, hence high spending. –R7,1 billion is set aside to finalise land redistribution over the next three years A large proportion of land claims have been settled. –Out of a total of 79 696 land claims that were lodged in 1998, 74 417 claims had been settled by the end of March 2007

9. 9 Provincial budget and expenditure by programme

10. 10 Spending is budgeted to increase from R4,4 billion in 2006/07 to R6,0 billion in 2009/10 Spending by predominantly rural provinces is relatively higher than those for urban provinces. Collectively Eastern Cape, Kwazulu-Natal and Limpopo spent the largest share at a combined 62,9 % of the total provincial spending. Provincial budget and expenditure by programme ….

11. 11 Provincial budget and expenditure trends Provincial expenditure on agriculture grows at an annual average rate of 12,6 % between 2003/04 and 2006/07 With a share 47,3% Farmer support and development is prioritised to unlocking and improving agricultural potential of provinces. Compensation of employees declines significantly from 62,7 % in 2003/04 to 48,6 % in 2006/07 and is projected to decline further to 44,5% by 2009/10. –The decline is attributable to the absorption of large number of low cost unskilled staff from former homelands. Non-personnel expenditure has more than doubled from R1,1 billion in 2003/04 to R2,2 billion in 2006/07 and is further budgeted to increase to R3,4 billion in 2009/10

12. 12 Personnel vs Non-Personnel Expenditure

13. 13 Concluding Remarks Government is succeeding in bringing the historically disadvantaged population into the mainstream of agriculture sector Complemented by the Comprehensive Agricultural support programme the land reform programme should ensure significant return to the rural economies of South Africa It is therefore critical for government to continued its investment in Agriculture to ensure sustained and productive land use.

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