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AGRICULTURE AND LAND. Chapter 6 Provincial Budgets and Expenditure Review. Agriculture and Land. Introduction Overview of budget and expenditure trends Provincial and National expenditure trends Service delivery trends on selected programmes Conclusion. Background.
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AGRICULTURE AND LAND Chapter 6 Provincial Budgets and Expenditure Review
Agriculture and Land • Introduction • Overview of budget and expenditure trends • Provincial and National expenditure trends • Service delivery trends on selected programmes • Conclusion
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
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
Budget trends in National Dept of agriculture and sub-programmes
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.
Provincial settled restitutions claims • 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
Provincial budget and expenditure by programme …. • 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 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
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.
