STRENGTHENING RELATIVE RIGHTS OF PEOPLE WORKING THE LAND POLICY FRAMEWORK [SRR or 50:50]

Advertisement
Similar documents
South African Baseline Study on Financial Literacy

Processes for Financing Public Basic Education in South Africa

IMPACT OF GOVERNMENT PROGRAMMES USING ADMINISTRATIVE DATA SETS SOCIAL ASSISTANCE GRANTS

THE NEF APPLICATION FORM R R75 million

Southern African-German Chamber of Commerce and Industry Enterprise and Supplier Development Fund

Strategic Plan 2012/17, Annual Performance Plan and Budget 2012/13

CONSTRUCTION MONITOR Employment Q3 2017

ECONOMIC GROWTH PROVINCIAL INTRODUCTION QUARTERLY DATA SERIES

DEPARTMENT OF RURAL DEVELOPMENT AND LAND REFORM ANNUAL PERFORMANCE PLAN 2012/13

Experian Consumer Credit Default Index October 2017

Overview of the state of CSI in South Africa

South Africa. UNICEF South Africa

economic growth QUARTERLY DATA SERIES

CAPACITY DEVELOPMENT WORKSHOP AIDE MEMOIRE AUDITING FOR SOCIAL CHANGE

Expanded Public Works Programme

Department of Rural Development and Land Reform. Annual Report 2014/15

Experian Consumer Credit Default Index. Monthly Update December 2017

Commissioner General Of Samurdhi Ministry of Economic Development Si Sri Lanka

cidb development through partnership August 2008 Update on the National Infrastructure Maintenance Strategy (NIMS)

Statistical release P0141

THE SMALL, MEDIUM AND MICRO ENTERPRISE SECTOR OF SOUTH AFRICA. Research Note 2016 No 1. Commissioned by The Small Enterprise Development Agency

Microinsurance Future in Jamaica-The FSC s Perspective November 4, 2013

Food security and linking relief, rehabilitation and development in the European Commission

South Africa. UNICEF/Hearfield

TECHNICAL GUIDANCE FOR INVOLVING NON-STATE ACTORS IN THE COUNTRY PROGRAMMING FRAMEWORK (CPF)

BUDGET SOUTH AFRICAN BUDGET: THE MACRO PICTURE. Key messages

In general, expenditure inequalities are lower than the income inequalities for all consumption categories as shown by the Lorenz curve for four

Quarterly Labour Force Survey

CONTENTS SL. NO. PARTICULARS PAGE NOS. 1 Preamble 3. 2 CSR Mission 3. 3 Objectives 3. 4 Focus Areas 4. 5 Approach to Implementation 5.

Mining and Sustainable Development: The Case of Ghana. Dr. Toni Aubynn Chief Executive Officer (CEO) The Ghana Chamber of Mines

The Enterprise Investment Scheme

Structured Finance. South African Residential Mortgage Default Model RMBS / South Africa Special Report

FUNDING BASIC EDUCATION CHAPTER 2. Daniel McLaren

Community Services Block Grant Q&A on... Client Eligibility

FOREIGN DIRECT INVESTMENT AND ECONOMIC TRANSFORMATION IN MYANMAR THE ROLE OF THE GARMENT SECTOR

CORPORATE SOCIAL RESPONSIBILITY POLICY

Final Report December 2015

Seminar on Strengthening Social Protection Systems in Namibia

Chapter 16: National Economy Introduction

Poverty, inequality and human development in a postpost apartheid South Africa

DEPARTMENT OF SMALL BUSINESS DEVELOPMENT PRESENTATION ON THE APP FOR QUARTER 3 AND QUARTER 4 OF 2014/15 FINANCIAL YEAR

Bhutan s Journey in Localizing the SDGs

Corporate Social Responsibility 3

Stress testing Are you for ready for future challenges?

UNICEF Unconditional Cash Transfer Program

Quarterly Labour Force Survey Q3:2017

NDA Annual Report Presentation to The Parliamentary Portfolio Committee on Social Development. Presented By : Ms Rashida Issel Acting CEO

INTERIM NATIONAL DEVELOPMENT FRAMEWORK

Corporate Social Responsibility (CSR) Policy

Presentation of the Strategic Plan and APP April 2015

The New UK Accounting Standard FRS 102

South Africa. UNICEF/Bart de Ruigh

FIDSON HEALTHCARE PLC Lagos, Nigeria UNAUDITED FINANCIAL STATEMENTS

LAND DEGRADATION NEUTRALITY FUND An innovative fund project dedicated to sustainable land use

UNRISD UNITED NATIONS RESEARCH INSTITUTE FOR SOCIAL DEVELOPMENT

AMERICAN CHAMBER OF COMMERCE IN SOUTH AFRICA

PROJECT PROPOSAL PAPER FOR GPSA GRANT US$ 800,000 OXFAM NOVIB NIGER FOR A

Quantum PLUS 19 Deposit

EVALUATION AND FITNESS CHECK (FC) ROADMAP

LAW ON INVESTMENT. National Assembly of the Socialist Republic of Vietnam Legislature XI, 8 th Session

Federally Administered Tribal Areas (FATA) Sustainable Development Plan (SDP)

Provincial Review 2016: KwaZulu-Natal

URBACT II PROGRAMME MANUAL. (Technical Working Document)

INTERNAL REVENUE ACT, 2000 (ACT 592)

PRIVATE EQUITY AND PROPERTY INVESTMENT

EAST AFRICAN COMMUNITY EAST AFRICAN LEGISLATIVE ASSEMBLY COMMITTEE ON AGRICULTURE, TOURISM AND NATURAL RESOURCES

FINANCIAL ACCOUNTING II. Alex and Ben have been in partnership for many years, sharing profits and losses equally.

Southern Punjab Poverty Alleviation Project (SPPAP)

Table 1 sets out national accounts information from 1994 to 2001 and includes the consumer price index and the population for these years.

Transnet National Ports Authority Tariff Methodology: Position Paper Ports Regulator: Road Shows March delivering freight reliably

Fortieth Session. Rome, 3-8 July Audited Accounts - FAO 2015

EAF-Nansen Project (GCP/INT/003/NOR)

WATERFALL BUSINESS ESTATE (WBE) ECONOMIC IMPACT ASSESSMENT

Perceptions of Small, Medium and Micro Enterprise on the Implementation of the New Companies Act in South Africa

SECTION SIX: Labour Demand Forecasting Model

Budgets and Budgetary Control. By: CA Kapileshwar Bhalla

Summary of Project/Program. Summary - Project/Program Approval Request. Private: Public: X Mixed: Grant: USD31 Million 1. Loan: USD5 Million Project:

be worth more Postgraduate Diploma in Tax Strategy and Management

Capital Gains Tax in relation to property. March 2017

Welcome to the presentation on

Budget Paper D REDUCING POVERTY AND PROMOTING SOCIAL INCLUSION

Understanding incorporation and the various costs, benefits and tax relief available

OPERATIONAL PROGRAMME FOR FOOD AND MATERIAL ASSISTANCE

ALJAZIRA CAPITAL COMPANY. CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2015 INDEPENDENT AUDITORS REPORT

Empowerment and Microfinance: A socioeconomic study of female garment workers in Dhaka City

3. The Macro Framework

Rainbow Chicken Limited (RCL) Group audited results for the year ended 30 June 2012

MONTRÉAL FOREIGN TRADE ZONE AT MIRABEL (ZCIMM)

CHARTER FOR SUSTAINABLE AND BROAD-BASED ECONOMIC AND SOCIAL TRANSFORMATION IN THE NAMIBIAN MINING SECTOR ( THE NAMIBIAN MINING CHARTER ) 19

URBACT II PROGRAMME MANUAL

ENERGY LIMITED (CIN: U29224GJ1987PLC010044)

REVISED ACCREDITATION AND ASSIGNMENT FRAMEWORKS FOR MUNICIPALITIES TO ADMINISTER NATIONAL HUMAN SETTLEMENTS PROGRAMMES

The Philippine Rural Development Project (PRDP) Terms of Reference for the Conduct of Mid-term Evaluation Study. 1. Background.

Why Cape Peninsula house prices are losing out

SMME Finance Sector Background Paper: A Review of key documents on SMME Finance Client: FinMark Trust. April 2004.

Global Environment Facility Trust Fund Grant Agreement

ASEAN Charter ASEAN Community Vision 2025 ASCC Blueprint

Planning, Budgeting and Financing

An EMPOWERDEX Guide. The Codes of Good Practice. Codes Definitions

Advertisement
Transcription:

STRENGTHENING RELATIVE RIGHTS OF PEOPLE WORKING THE LAND POLICY FRAMEWORK [SRR or 50:50] PRESENTATION TO PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM. G26 GROUND FLOOR NEW WING NATIONAL ASSEMBLY DATE: 07 JUNE 2017

PRESENTATION OUTLINE 1) Background 2) Core Purpose and Mode of SRR Policy; 3) Guiding Framework Policies 4) Guiding SRR Policy Framework 5) Pilot Implementation of SRR Policy 6) Social Facilitation 7) Delivery 8) Hectares and Budgets 9) Lessons Learned 10) Impact 11) Conclusion 2

BACKGROUND STRENGTHENING RELATIVE RIGHTS OF PEOPLE WORKING THE LAND FRAMEWORK POLICY: This presentation will summarise the SRR policy imperatives, the lessons learned and the expected outcomes. It will further highlight the status update, delivery of hectares, budgets spent, status update and anticipated impact. 3

BACKGROUND Cont`d 1. The Strengthening Relative Rights of People Working the Land (50/50) Framework Policy was first announced in 2014; 2. SRR is a programme initiative aimed at ensuring that farm workers benefit from owning shares in the agricultural enterprises on farms on which they work as well as providing them with security of tenure. 3. It is also in pursuance of the objectives of the Land Tenure Security for Commercial Farming Areas (signed in 2013); the Extension of Security of Tenure Act (62), 1997 and its 2015 Amendment Bill currently in Parliament, as well as various international agreements government has assented to. 4

THE CORE PURPOSE AND MODEL OF THE SRR POLICY Core Purpose of the SRR Policy Framework : Introduce measures to address land hunger, extreme land concentration, associated poverty and inequity by fostering asset and enterprise equity that introduce fundamental changes to land relations and factors of production. To this end the SRR/50:50 Programme aims to empower farm workers while at the same time recognising their contributions to the development of farms on which they work and the agricultural sector; Provides for government to acquire a stake in the farming enterprise on behalf of the workers and to purchase the land in order to provide tenure security for the farmworkers; Improve socio-economic conditions of people living and working on farms. 5

GUIDING FRAMEWORK POLICIES The SRR Policy Framework is premised on the following foundational documents of our democracy: i. The Freedom Charter ii. The Constitution Sections 25, 26, 27 and 36 iii. The Reconstruction and Development Programme iv. National Development Plan (Chapter 6)

Adopted in June 2016: 1. Offers an analytical framework and guidance on strategic thrust which has guided the pilot implementation; 2. It seeks to move from a single owner system to a collective ownership one; 3. Introduces a fundamental change to relations to factors of production in its transformation process. MEANS OF PRODUCTION: land, labour, capital and business (i) LAND THE SRR POLICY FRAMEWORK [50:50] Land will be owned by Government, either fully or partially, that is either fully or partially nationalised; Where land is owned by Government the title deed is registered to the State; Where the title deed is shared between Government and the previous sole owner, a new dynamic emerges a new form of title deed should be created?

Where Government owns land (even a portion) farm workers will be given a Land Use Rights Certificate which they will use to enter into the new business arrangements with the previous farm owner, This business arrangement gives birth to a new company (NewCo.) jointly owned by all parties plus NEF (5%), ii) LABOUR SRR POLICY FRAMEWORK [50:50] Material facts of each investment case should first be established before taking any critical step; It is a known fact that in an unfettered capitalistic market system (like RSA) workers are generally exploited; What remains unknown are the severities (i.e. the form and extent of exploitation); Therefore before a decision of whether farm workers will continue to provide labour to the NewCo. will determined by the prevailing conditions of each case;

THE GUIDING SRR POLICY FRAMEWORK [50:50] iii) CAPITAL The 50/50 model is a joint venture capital sponsored by Government on behalf of the farm workers with the previous farm owner; The previous farm owner brings in the business entrepreneurial know how and the market, and the farm workers bring their labour, raw skill and the Land Use Right Certificate, Therefore most of the resources accrued from the business should go into training and development of farm workers in terms of directorship, management and operations; It is also evident that the first five years of the NewCo. will be extremely testing;

iv) BUSINESS THE GUIDING SRR POLICY FRAMEWORK [50:50] The state of the current company has to be critically analysed, so that facts on threats, risks and opportunities are well understood before ushering the business into the new era; Each business is unique and should be treated as such, therefore a one size fits all approached will not suffice; The NewCo. should not be overburdened in its formative stage it has to succeed; The state of these productive factors should be established per enterprise; Therefore in the business planning of the NewCo. the investment required to repair and/or replace some of the equipment should be budgeted for from the outset, V) FACTORS OF PRODUCTION Tools, equipment, factories, machines, etc. The question before us is: WHAT IS THE STATE OF THESE PRODUCTIVE FACTORS? We must establish the facts here as well, so that we know what needs to be replaced or repaired; at what cost, from the outset.

What we know in each case, is the price and state of the land because we have valuated it. Therefore, it is possible to set the rental price. We have set this price at 2% of the price of the land. What we do not know in each case, is the net annual profit of the land, given the fact that workers, who had been surviving on exploitative wages and living conditions, are now going to be co-owners of the business; and, might opt for corrective measures in this regard. The government cannot charge the Newco a rent based on net profits that are unknown. Therefore, only 2% rental shall be charged based on the price and state of the land, as reflected in the valuation outcome. 11

INTENDED POLICY OUTCOMES The intended SRR Policy outcomes are to: i. Secure the land rights and residential tenure of the farm-dweller/worker; ii. iii. iv. Empower people working the land to acquire majority equity-holdings in farming enterprises and bring about economic transformation of the agricultural sector; Enable beneficiaries to sell labour-power across the fence, without fear of eviction; Strengthen farmworkers bargaining power in advancing worker rights and improving his/her conditions of living; and, v. Address socio-economic livelihood challenges faced by farm dwellers and labour tenants. 12

DELIVERY OF SRR PROGRAMME (summary) In 2015 the Policy was announced at the State of the Nation Address by the State President who called for a pilot of 50 projects by 2019, from which to learn. Progress to date: - The Department signed a Memorandum of Understanding with the National Empowerment Fund to become the implementing agent for the programme; - To date: 91 project proposals have been received, 5 were declined / withdrawn; 86 proposals are at different stages of implementation; and 20 projects have been approved of which 15 have been implemented and transferred; - Of the 15 farms transferred, 4 farms were transferred in the year ending March 2016 to the state and these are in: i) Eastern Cape (Birbury farm), ii) Free State (Oatlands, Diamond and Kalkput farms) amounting to just over 2 600 hectares at the cost of R36 million. 08:36 14

DELIVERY OF SRR PROGRAMME (summary of projects delivered to date) Progress to date: - In the financial year 2016/2017, 10 of the 15 commercial farms have been transferred to: i) Eastern Cape (Klein Monden Rivier); ii) KwaZulu Natal {Westcliff (Paard Fontein and Hoghton), Limpopo (Dabchick); iii) North West {Stars Away (Tweefontein 58, Willowpark 41, Olivenbult 61 and Stinkhoutboom 43)} ; and iv) Western Cape (Solms Delta and 803 Worcester) amounting to over 8 252 Hectares at the value of R 56 million. v) Gauteng: In the financial year 2017/2018, one farm transferred in (Marolien) amounting to R 31 million benefiting 105 beneficiaries at 65 hectares. There are 606 farm workers that have benefited from these acquisitions on 11 303 hectares at a cost of R 325 million. 08:36 15

DELIVERY OF SRR PROGRAMME (ha delivered & budget spent to date) Province Project name Hectares Participating Farm workers Amount Approved/Disbursed Approved/Tran sferred Transferred/Approved date EC Sun Orange 800 35 R 38 067 000 Approved 18 February 2016 FS Gannahoek 4 500 253 R 52 444 000 Approved LP Mabaleng 435 35 R 40 292 431 Approved 12 May 2016 LP Jurgens Boerdery Beperk 1 085 42 R 34 388 000 Approved 02 March 2016 WC Saamstaan 4 000 200 R 154 951 980 Approved 02 March 2016 Approved = 5 Farms 10 820 565 R 165 191 431 EC Klein Monden Rivier 560 4 R 29 500 000 Transferred 16 September 2016 EC Birbury 632 29 R 12 826 000 Transferred 02 February 2016 FS Oatland 1 544 21 R 15 800 000 Transferred 04 June 2015 FS Diamand 197 23 R 2 900 000 Transferred 02 June 2015 FS Kalkput / Klippan 259 35 R 8 900 000 Transferred 04 June 2015 GP Marolien 65 105 R 30 948 000 Transferred 04 May 2017 KZN Westcliff Paard Fontein 405 Transferred 02 September 2016 61 R 33 000 000 KZN Westcliff - Hoghton 61 Transferred 02 September 2016 LP Dabchick Conservancy 1 660 13 R 21 000 000 Transferred 29 July 2016 NW Stars Away Farms Tweefontein 58 3 188 Transferred 17 March 2017 NW Willowpark 41 437 5 R 30 000 000 Transferred 17 March 2017 NW Olivenbult 61 1 331 Transferred 17 March 2017 NW Stinkhoutboom 43 513 Transferred 17 March 2017 WC Solms Delta 51 292 R 65 000 000 Transferred 01 July 2016 WC Hoogland - 803 Worcester 400 18 R 75 100 000 Transferred 10 March 2017 Transferred = 15 Farms 11 303 606 R 324 974 000 Approved and Transferred = 20 Farms 22 123 1 171 R 490 165 431 08:36 16

PROGRESS ON SOCIAL FACILITATION (APPROVED PROJECTS) 17 Transaction Name HH Profiling Awareness Creation Trust Registered Corporate Governance Directors Workshop Solms Delta REID X X X Ekhamanzi REID X X X Dabchick NEF X X X X X Klein Mondriviers X X X X X X X X Sun Orange IDC X X X X Hoogland X X X X X X X X AGM Held Social Plan Market Linkages Saamstaan NEF X X X X X Marolien X X X X X Jurgens Boerdery X X X X X X X X Stars Away X X X X X X X X Birbury X X X X X X Gannahoek NEF X X X X X X X Zuurfontein X X X X X X X X

Name Province Extent of land (ha) No of Beneficiaries Nature of business Proposal Received, screened and prioritized Valuation Commissioned Valuation Completed Due Diligence commissioned Due Diligence Outcome Deal S. Asking Price Made Deal S. Asking Price Deal Structuring Price Settlement Reached Deal Structuring Agreement signed Equity Structure Final Price (incl land, business & capitalisation) Offer to Purchase Signed Board formed Workers Trust Formed Company Formed Shareholder Compact Lease Contract Signed Conveyancing commissioned Farm Management formed Conveyancing completed Socio Economic and HH Profiling Land Rights enquiry & Allocation, LURC Training & Capacity Building IMPACT (KEY PROCESSES, KPAs and KPIs) STRENGTHENING OF RELATIVE RIGHTS FRAMEWORK Project Description DRDLR - MTTT Valuation (OVG) Due Diligence (NEF) Deal Structuring (NEF) Transaction Agreement (NEF, LRD and REID) Socio- Economic Facilitation (NEF, LTA, REID and DEEDS) Decisions, Approval and Actions Status No MTTT Recommen dation MCM Approval LRD Land & Buildings Financial Statement, Movable Assets, Off-Take Agreements, Goodwill, Entrepreneurial Capital 5 Key Performance Areas (KPAs) 19 Key Performance Indicators (KPIs)

THE LESSONS LEARNED FROM THE PILOT - Issues of power relations between the farm workers and the farmer hence social facilitation should be prioritised at the due diligence stage of the project cycle to manage these relations, - The Department solicited institutional support to undertake due diligence, land and property valuations as well as facilitating the mergers and acquisitions of the SRR transactions; - Need to conduct the due diligence and cost benefit analysis of all SRR projects for the State to derive maximum value out of these investments, - Awareness creation detailed explanation to the different stakeholders should be done at initial stages of the project to manage stakeholder expectations from the SRR projects,

THE LESSONS LEARNED FROM THE PILOT - Additional capacity is required in the approval committees for these projects i.e. agric economics, legal experts, farmers etc.; - Capacitation of the workers Trust to participate in the board of the NewCo - The Farm Workers Trust need guidance on when, how much and when to draw dividends from the business enterprise. A dividend policy for the NewCo to be developed as part of the Standard Operational Procedures for all the SRR projects.

CONCLUSION The acquisition of equity by farm-workers, must be seen to be a fundamental gamechanger in the agricultural sector; It introduces co-management of the farm based on relative equity-holdings and the capacity of each participant in production and management of the agricultural enterprise; This programme initiative contributes towards governments efforts at revitalisation and transformation of the rural economy through the social and economic empowerment of farm workers and communities; As a consequence of this programme, farm workers and dwellers will no longer have reason to fear the sceptre of evictions because land tenure will have been secured; 21

THANK YOU!!!! 22