Executive summary

The Integrated Programme of Land Redistribution and Agricultural 
Development in South Africa is designed to provide grants to 
previously- disadvantaged South African citizens to access land 
specifically for agricultural purposes. The achieve-ment of the 
strategic objectives of the programme-which include 
facilitating the transfer of a targetted 30 % of the country's 
agricultural land over 15 years, improving nutrition and incomes of the 
rural poor who want to farm on any scale and expanding opportunities 
for women and young people who stay in rural areas-will be made possible 
by its key underlying principles which are as follows:

	1 - The programme is unified and basic, it is flexible and 
beneficiaries can use it in ways according to their objectives and resources
	2 - All beneficiaries make a contribution (in kind or cash), but varying in 
size
	3 - The programme is demand directed, meaning that beneficiaries define 
the project type and size, and do not necessarily choose among offered products
	4 - Implementation is decentralised
	5 - District-level staff assist applicants, but do not approve the application
	6 - Ex-post audits and monitoring will substitute a lengthy ex ante approval 
process.


The mode of implementation is adopted in the interest of maximum participation 
of beneficiaries, speed of approval and quality of outcomes.
These principles address some of the concerns over the past programme which are:

	implementation is too centralised
	approval is a slow and costly process
	there is no or insufficient contribution by participants
	there is questionable improvement in the well-being of beneficiaries
	no instrument exists to assist the subsistance small and medium-scale 
producers 
	equity and efficiency is not served well.


This programme is more flexible and does not limit beneficiaries to a small range of 
products. It fully encompassed the land-uses under the previous programme. 
Beneficiaries might want to access the programme to achieve varying objectives 
(some may be similar to those imposed by the products), such as: food safety net 
projects, commonage projects, equity schemes, production for markets, and others.
The programme encourages participants to design what works best for 
them-addressing land needs of beneficiaries to a greater extent than the previous 
programme. To do this, beneficiaries can access a range of grants 
(R20 000 to R100 000) depending on the amount of their own contribution in kind, 
labour and/or cash. Beneficiaries must provide an own contribution of at least R5 000. 
This is similar to the previous scheme in that the total project cost will determine the 
kind of programme that beneficiaries can develop, but offers greater flexibility.

Food safety net
Many participants may wish to access the programme to acquire land for food crop 
production to improve household food security. This can be done on an individual 
or group basis. Many of these projects will be at the smallest end of the scale, 
because poor families may be able to mobilise only the minimum own contribution 
in cash, labour and materials.

Commonage
Participants might seek to acquire tracts of land for common grazing. Under the former 
programme this was sometimes undertaken through municipal commonage projects. 
According to the description of qualifying criteria, municipalities or other government 
bodies will not be eligible purchasers of land under this programme, although they 
can sell it.
Local residents who seek access to common land for grazing or other purposes can 
purchase it direct under the programme, either individually or as an association or other 
properly constituted group.
Municipalities can purchase land with their own resources outside of the programme. 
The objectives of traditional commonage projects can still be accommodated, therefore, 
either under the programme direct by beneficiaries, or outside the programme by 
municipalities. Correspondingly, municipalities can sell land that they own under the
programme direct to beneficiaries.

Equity schemes
Participants can make the requisite matching own contribution, and receive equity in 
an agricultural enterprise tantamount to the value of the grant plus the own 
contribution. Because under the terms of the programme, the grant is intended for
 people actively and directly engaged in agriculture, the grant recipient in the case
of the equity scheme will be both a co-owner and employee of the farm. The 
purchased equity should be marketable in order to retain its value.

Production for Markets
Some participants will enter the programme to engage in commercial agricultural 
activities. They will access the grant and combine it with normal bank loans, 
approved under standard banking procedures, and their own assets and cash to 
purchase a farm. These farmers will typically have more farming experience and 
expertise than those accessing land for subsistence or food-safety-net-type 
activities.
The programme is flexible enough to accommodate most types of projects sought 
in the past, and offers additional opportunities not available under its predecessor. 
Purely residential projects would not be supported under the programme unless 
participants seek to establish household gardens at their new residences. 
Housing projects are supported under other programmes.

Restitution reforms
The programme also has implications for the components supporting restitution 
and enhanced security of tenure. For example, applicants for restitution could 
receive land according to their claims, and apply for grants to allow them to 
establish farms. The land received under restitution would become part of the own 
contribution and would give participants greater flexibility in the choice of the 
amount of the grant and sources of financing for the total package.
The combination of the grant and the restitution would allow those receiving 
land to enter farming, if that is how they opt to use their restored land. Recipients 
of land under the restitution programme would have to show an intention to farm 
in order to be eligible for a grant under the integrated programme.

Tenure reform
Some communities holding land under traditional-tenure arrangements may wish 
to address the desires of their members to upgrade the tenure of their present 
holdings. Similarly, members of the community may seek to access land currently 
held under traditional tenure but lying under-utilised or vacant. From the 
perspective of the community, it may be desirable to offer members greater 
security of tenure in order to increase investment and land-use efficiency. 
Communities and traditional leaders who wish to respond to tenure requests 
within their community could offer the land for sale to members under the proposed 
programme. Receipts from the sale of land would go into revenues of the community
to be used for investments in schools, clinics, productive enterprises and other 
infrastructural projects benefiting the community.
Members purchasing land under the integrated programme for purposes of security 
of tenure would apply for a grant in the normal way. The traditional authority would
be the seller in the transaction, and with the exchange of money, the title would be 
converted into the name of the buyer. The remainder of grant funds not used to 
purchase the title would be available to the buyer as start-up capital, on-farm 
investments, and other uses designated in the project proposal. The beneficiary 
would have to make his or her own contribution in the same way as other applicants 
under the programme. This use of the programme would be voluntary according to 
the decision of the members and leaders of traditional communities. As in all transactions 
supported under the programme, both the seller (community) and buyer (member) 
would have to be approving parties in the transaction.
The proposal developed above does not directly address the disposal of state land, 
but has several implications for advancing the process. For example, restitution 
claims lodged against state land can be evaluated and settled.
People who receive land against their claims can enter the redistribution programme 
if they opt to use the land for farming. The programme would provide additional 
resources for start-up and operation of the new farms, as noted previously in the 
discussion of implications for restitution. State land free of claims can be offered 
to the general public by means of the redistribution programme.

Purpose
This document elaborates on the framework for an integrated programme of land 
reform and agricultural development in South Africa. The initial framework document 
was developed by the Departments of Agriculture and Land Affairs, approved by 
the Minister, and presented to the MinMec in April 2000. Upon acceptance of the 
general framework document, MinMec requested the Departments of Agriculture 
and Land Affairs to elaborate the programme.
This document responds to the MinMec request. It also reflects consultative 
processes between the Departments of Agriculture and Land Affairs; between 
the Departments of Agriculture and Land Affairs and Provincial Departments of 
Agriculture; and between Government and key stakeholders. The document 
presents the objectives, principles, key features, and implementation procedures 
of the programme. An outline of a draft implementation manual is appended to the 
policy document.

Objectives of the revised programme
The agreed objectives of the programme as reflected in the framework document 
are to:
	1 - increase access to agricultural land by previously-disadvantaged people 
and to facilitate transfer of ownership of 15 million ha in five years and approximately 
30 % of the country's agricultural land over the duration of the programme
	2 - improve nutrition and incomes of the rural poor who want to farm on any 
scale
	3 - overcome the legacy of past racial discrimination in ownership of farmland
	4 - facilitate structural change over the long term by assisting 
previously-disadvantaged people who want to establish small and medium-size 
farms
	5 - stimulate growth from agriculture
	6 - create stronger linkages between farm and off-farm income-generating 
activities
	7 - expand opportunities for promising young people who stay in rural areas
	8 - empower beneficiaries to improve their economic and social wellbeing.

Basic Principles of the programme
The following key principles underlie the programme:
	1 - It is unified, basic and beneficiaries can use it in flexible ways according 
to their objectives and resources
	2 - All beneficiaries make a contribution in kind or cash, but varying in amount
	3 - It is demand directed-beneficiaries define the project type and extent, and 
do not necessarily choose among offered products
	4 - Implementation is decentralised: local-level officials provide opinions and 
assistance in preparation of project proposal
	5 - A committee at provincial level approves proposals
	6 - Local-level staff assist applicants, but do not approve the application
	7 - Ex post audits and monitoring will substitute a lengthy ex ante approval 
process
	8 - The mode of implementation is adopted in the interest of maximum 
participation of beneficiaries, speed of approval and quality of outcomes.

Key features of the programme 
The programme is designed to provide grants to previously-disadvantaged South 
African citizens to access land specifically for agricultural purposes. Acquisition 
of land by absentee owners for speculative purposes will not be supported under 
the programme.
Beneficiaries can access grants under the programme on a sliding scale, depending 
on the amount of their own contribution in kind, labour, and/or cash. Every 
beneficiary (which can be an individual, family or household) makes at least the 
minimum contribution in cash or kind. Those who make the minimum contribution 
receive the minimum grant. Those who make a higher contribution of own assets, 
cash, and/or labour receive a higher grant, determined as a basic proportion of their 
own contribution (Box 1).
To receive a grant higher than the minimum of R20 000 applicants must commit 
R5 000 of their own contribution for each additional R1 000 in grant. As the grant 
and the own contribution increase, the grant declines as a proportion of the total 
extent of the project (Box 2). The grant and own contribution are calculated on a 
per household basis. If people choose to apply as a group, the required own 
contribution and the total grant are both scaled up by the number of households 
represented in the group.
Own contribution by beneficiaries in labour can be calculated in terms of the labour 
input that an individual or members of the family or household would contribute to 
the project. This can be calculated by taking the average or minimum wage rate 
within agriculture or the industry within agriculture. The contribution in kind could 
be calculated by costing assets such as machinery and equipment, farmland and 
other assets that a beneficiary may possess. The cash contribution is fairly 
straightforward. These three forms can be mixed in various combinations to meet 
the required own contribution from the beneficiary. 
Beneficiaries will select the position on the scale at which they wish to enter the 
programme-determined by their objectives and ability to leverage the grant with 
their own resources. Because the programme is intended to function over 15 to 
20 years, benefits (grants) under the programme will be indexed to real value of 
the rand.
Most beneficiaries seeking the minimum grant will use it to establish small farms 
and food gardens for home consumption to supplement nutrition. Such a small 
project might cost R25 000, with the participant contributing R5 000 and the grant 
covering the remaining R20 000. In such a project, the own contribution would 
be 20 % and the grant would cover 80 %. An own contribution of this magnitude 
(in labour, materials, and/or cash) is enough to assure commitment of the 
beneficiaries to the project, but not too high to exclude the poor.
The grant would be used to cover expenses such as acquisition of land, design 
and transfer agent's fee, working capital, settling in costs, investment in 
small-scale infrastructure, and other necessary expenditures. If small farmers 
choose to access land as a group with sectional title (similar to residential housing) 
by pooling their individual grants, the land need not be subdivided prior to project 
approval. It may be desirable to subdivide soon after the project is established.
On the other hand, some beneficiaries will have the skills and resources to manage 
larger farms. In that case, total project costs can range up to R500 000 or higher, 
of which the grant can cover up to about R100 000. The remainder (about R400 000)
would be financed through a combination of a normal bank loan approved under 
standard banking procedures and owned assets and cash. Farmers choosing this 
option would have to possess managerial skills adequate to handle the debt, as 
well as prior experience in agriculture.
Beneficiaries under the programme (e.g. rural households, labour tenants, 
farm-workers, and people at present farming on smallholdings and others) can 
purchase land on offer from any owner, whether public or private. The land must 
be intended for an agricultural use of their choosing, such as improved food 
production to improve household consumption, grazing, production for markets, 
and other agricultural activities. A database of land on offer and land desired will 
be developed to satisfy buyers and sellers. The Department of Land Affairs will 
contract a data management firm to create the database, and public access to it will 
be provided through the local-level offices rendering assistance in the implementation 
of land redistribution.
Land owners, communities, individuals and agents can initiate actions on their own. 
For example, a present owner of a large commercial farm could decide to sell a section 
of his/her land under the programme, and could hire a design agent to draw up an 
attractive package. Individuals or small groups of people wishing to access land can 
choose a farm which is at present on the market, and offer to buy it under the 
programme, with subdivision and apportionment to meet their needs. A professional 
developer could purchase farmland (outside the programme, with own financing), 
subdivide it, establish basic infrastructure, and then sell it to beneficiaries under 
the programme. Beneficiaries are responsible to design their own projects, and 
can use grant money to hire the advice of specialists or design agents.
Although some farms may change hands as entire units, most may have to be 
subdivided in order to meet the objectives of beneficiaries. An owner of 
agricultural land seeking to subdivide in order to sell part to a beneficiary under 
the programme will not be required to seek a permit. Until the restrictions on 
subdivision are fully rescinded, any subdivision undertaken for transactions 
under the land reform programme will be automatically preapproved without further 
action on the part of the seller. The permission to subdivide for sale of land under 
the programme will be effective immediately upon the launch of the programme.
A permit will be required only if land is to be rezoned for agricultural use (e.g. from 
commercial to agricultural or from forest to agricultural use.) The Land Development 
Objectives presently used to regulate land use and farm size will, over time, have 
to be incorporated into a new and improved system of zoning for land use.
Beneficiaries may choose to access land under one of several forms of contract. 
The choice of contract is up to the participant. For example, land can be purchased 
outright. Alternatively, the participant could enter into a lease contract with an 
option to buy at a future date. The participant could lease the land with gradual 
purchase through instalment payments over the duration of the lease. 
Beneficiaries may purchase land individually. Alternatively, they could purchase 
within a group such as a common property association with sectional title. The 
value of benefits per participant will depend on the amount of the beneficiary's 
contribution, and not on the form of the contract. 
Participants may do all the planning themselves, or may choose to select a design 
agent to help them. The design agent will be paid on commission basis, with an 
initial retainer and final payment of the residual amount at the settlement when 
ownership is transferred to the participant. If the project is not approved and no 
transfer takes place, the design agent is not paid the residual.
The approval process will be simplified and shifted to the local and provincial levels. 
Because beneficiaries will be contributing their own resources, they will have 
incentives to design sound projects. Design agents working on a partial retainer will 
also have incentives to create plans that can be approved and implemented quickly
With improved incentives for sound and efficient design of projects, cumbersome 
and centralised steps in approval can be eliminated. Because project designs may 
have unintended or unforeseen environmental implications (as, e.g. with introduction 
of irrigation from surface sources), projects should undergo 
Environmental Assessment Plan (EAP) screening according to national guidelines.

Qualifying criteria
The programme will be open to citizens of South Africa who are members of 
previously-disadvantaged groups, are willing to live on (or near) the purchased farm 
and operate or work on it, and are committed to use the grant to purchase land for 
agricultural activities. Men and women will have equal access to all benefits under 
the programme, and women will be actively encouraged to apply.
For the purposes of the programme, agricultural activities can range from 
household gardening or grazing to commercial agricultural activity, and any combination 
of the two. Successful applicants will be required to participate in training courses 
and activities designed to assist them in successful operation of their farms and 
gardens.
Beneficiaries will be allowed to graduate from smaller to larger farms, and will be 
able to access the programme to facilitate investment to increase scale. Smaller 
farmers can therefore trade up through the programme if they have sufficient 
own contributions. Some beneficiaries can expect to benefit several times 
through trading up, although lifetime benefits for a single applicant are limited 
to an accumulated amount of R100 000.

Paid-up membership to a locally-based community organisation or association
This could be a church, farmworkers' union, labour tenants association, 
financial services cooperatives, stokvels, commodity or chamber of commerce.

Examples of how beneficiaries could use the programme 
Beneficiaries can use the programme for a continuum of projects, ranging in 
size from food safety net and subsistence production to small and medium 
production farms. People can access the programme as individuals or as groups 
at any level. These projects all fall within a single stream and will have one set 
of implementing procedures. The programme does not have individual products. 
Beneficiaries might want to access the programme to achieve varying objectives, 
such as food safety net projects, commonage projects, equity schemes, 
production for markets, and others. These are now discussed briefly for illustrative 
purposes only-because the programme encourages beneficiaries to design 
whatever works best for them.

Food safety net
Many beneficiaries may wish to access the programme to acquire land for food-crop 
production to improve household food security. This can be done on an individual 
or group basis. Many of these projects will be at the smallest end of the scale, because 
poor families may be able to mobilise only the minimum own contribution in cash, 
labour, and materials.

Commonage
Beneficiaries might seek to acquire tracts of land for communal grazing. Under the 
former programme this was sometimes undertaken through municipal commonage 
projects. According to the description of qualifying criteria, municipalities or other 
government bodies will not be eligible purchasers of land under this programme, 
although they can sell it.
Local residents who seek access to communal land for grazing or other purposes 
can purchase it direct under the programme, either individually or as an association 
or other properly constituted group.
Municipalities can purchase land with their own resources outside of the programme. 
The objectives of traditional commonage projects can still be accommodated, therefore, 
either under the programme direct by beneficiaries, or outside the programme by 
municipalities. Correspondingly, municipalities can sell land that they own under 
the programme direct to beneficiaries.
Equity scheme
Beneficiaries can make the requisite matching own contribution, and receive 
equity in an agricultural enterprise equal to the value of the grant plus the own 
contribution. Because under the terms of the programme, the grant is intended 
for people actively and directly engaged in agriculture, the grant recipient in the 
case of the equity scheme will be both a co-owner and employee of the farm. The 
purchased equity should be marketable in order to retain its value.
Production for markets
Some beneficiaries will enter the programme to engage in commercial agricultural 
activities. They will access the grant and together with normal bank loans, approved 
under standard banking procedures, and their own assets and cash, they will 
purchase a farm. These farmers will typically have greater farming experience and 
expertise than those accessing land for subsistence or food-safety-net-type 
activities.
The programme is flexible enough to accommodate most types of projects sought in 
the past, and offers additional opportunities not available under its predecessor. 
Purely residential projects would not be supported under the programme unless 
beneficiaries seek to establish household gardens at their new residences. 
Housing projects are supported under other programmes.
Procedures for implementation
Beneficiaries, once informed about the options available within the programme, 
select the desired amount of the grant according to their preferred own contribution. 
They will also decide whether to apply individually or as a member of a 
self-selected group. They will then locate an available area of land, either through 
their own knowledge, or drawing upon the database to be developed at the 
direction of the Department of Land Affairs. The land should have the necessary 
water rights if irrigation is contemplated, and the rights should be specified in the 
contract and reflected in the land price. Once a suitable area of land is located, the 
participant(s) will enter into a contingent contract with the seller, with the 
contingency consisting of approval of the project under the programme.
With or without assistance of a design agent, the participant prepares a farm plan 
or land use proposal (project proposal), indicating the intended agricultural use 
of the land and estimating a rough projected cash flow. The participant obtains 
evidence of additional financial resources (loan, own resources, or both). In the 
case of contributions in labour or kind, the beneficiaries estimate their monetary 
value.
The participant next submits all documentation to the local agricultural officer to 
receive his or her opinion regarding the feasibility of the farm plan (project), 
including its agricultural potential, value of the land relative to market prices for 
that of comparable quality and access to water, cash-flow projection, and 
environmental assessment. Once the local agricultural officer has provided an 
opinion, the participant submits the proposal package to the provincial grant 
approval committee (comprises jointly officers of Land Affairs and Agriculture) 
which meets weekly or as required in public session.
A complete package ready for submission would include:
	1 - The land-use proposal/farm plan (project proposal)
	2 - A draft purchase or rental offer for the land
	3 - A list of beneficiaries and their contributions, if the proposal is not 
individual
	4 - Confirmation from the local agricultural officer that the seller is in legal 
possession of title and that the land price is reasonable compared to local 
transactions in land
	5 - Evidence of own contribution and any necessary financing in addition 
to the grant (draft loan agreement, own funds)
	6 - Opinion of the local agricultural officer on feasibility (agriculture and 
environmental issues).
Upon review of the package and in public session, the provincial grants 
committee makes one of three determinations:
	7 - complete and in conformity with the requirements of the programme: approve
	8 - complete but not in conformity with requirements of the programme: reject 
and state reasons
	9 - incomplete: return to applicant and state reasons.
Immediately upon approval the grants committee issues an order to the financial 
institution holding the land-grant account for the province to release funds for the 
grant component to the designated settlement account in the financial institution 
identified in the proposal package as the clearing bank.
At this point, a transfer agent who deals in normal real-estate transactions completes 
the transfer according to normal commercial procedures. The transfer agent assembles 
all the necessary documents and financing, and effects the transfer (pays the seller, 
delivers title to the buyer, pays commission to design agent, gives the residual resources 
from the grant or loan to participant to cover other project costs). Transfer must be 
completed within three months after the issuance of the release-of-funds order. If any 
aspect of the transaction collapses and title is not transferred, then the financial 
institution transfers grant funds back to the provincial land-grant account.
Implementation responsibilities
Primary responsibility for design and implementation rests with the beneficiaries. 
They select the chosen amount of the grant, engage a design agent if required, identify 
available land, enter into a contingent contract with the seller, apply for a normal 
bank loan through standard banking procedures, if necessary, engage a transfer agent, 
prepare a farm plan, submit all documentation to the local agricultural officer for an 
opinion, assemble the completed proposal package, submit it to the provincial grant 
approval committee, and ensure that title is taken within three months' time. Because 
the demands on the beneficiaries are substantial, only those sufficiently motivated to 
acquire land will go through the process.
Many beneficiaries will choose to engage a design agent, who will work direct with 
and under contract to the beneficiary. The design agent can assist in any or all stages 
of the process as requested by the participant. For example, an agent may be asked to 
help identify land for purchase, to assist beneficiaries in preparation of a farm plan and 
land-use proposals, to prepare a submission to the provincial grant approval committee, 
and to assist and facilitate the process of grant approval, in case the approval committee 
has queries. The fee of the design agent will depend on the nature and amount of 
assistance requested, and will be paid upon transfer.
Agricultural and land officers at local level will play an important role in implementation. 
They provide a technical opinion on the proposed farm plan, land-use and 
environmental assessment, and in this way contribute to the quality of proposals. 
They also can assist in identifying land by helping beneficiaries access the 
database on land transactions. They certify the accuracy of the seller's title and 
check that land price and the price that is reflected in the contingent contract is 
reasonable. They can also advise beneficiaries or design agents in negotiations 
with sellers.
Local-level officials will be an important source of information and training for 
participants and agents (clarifying technical and legal aspects of the programme). 
They must be adequately trained to fulfil this role. The local agricultural offices 
should provide "one-stop" assistance for applicants and design agents seeking 
help for and evaluation of their proposals. The offices should have all the 
necessary information about procedures for implementation, how to draw up a 
successful (complete) application, a computer with access to the land data bank 
for those seeking suitable packages. Establishment of a unit within these local 
offices should take place within the next six months. The units should have a 
special budget so that they could pay the staff seconded to them, and to cover 
incremental administrative costs as well as to hire specialised expertise if 
necessary e.g. land appraisers.
The Provincial Executive Council should hold overall accountability for the 
programme in the province. It should further decide whether the Provincial 
Department of Agriculture should chair the provincial land reform coordination 
committee, which should consist of key stakeholders and should meet quarterly 
to review the performance of the provincial grant committee. The provincial 
grant committee should consist of provincial officers of Land Affairs and 
Agriculture.
Its main functions should be to accept or reject proposals within a period of 
two weeks after receipt of beneficiary applications. It should also check that 
the proposal package is complete and coherent, and whether, based on the 
information provided in the proposal, the project is eligible for support under 
the programme. The provincial grant committee should not be expected or 
required independently to verify the accuracy or veracity of the submission, 
because much of the verification will become evident from the documentation 
(e.g. contingent contract, draft loan agreement, etc).
The Departments of Agriculture and Land Affairs at national level will be 
responsible for the overall design of the programme and monitoring of its 
impact. The Department of Land Affairs should budget for the programme. 
Both Departments should provide training for beneficiaries, agents and local 
land and agricultural officers; coordinate policy issues and interdepartmental 
activities; monitor the flow of funds to the provincial level; monitor and 
evaluate the outcomes of the land-reform programme, including random ex 
post financial and physical audits of approved projects. The Department 
of Land Affairs should negotiate with financial institutions to establish 
procedures facilitating a smooth flow of funds.
The estate agents are already operative and they handle the settlement of 
real estate transactions. For a normal fee, the estate agent obtains all required 
documentation, ensures transfer of the title and payment to the seller and 
design agent. At the estate agent's office, the participant(s) and the seller 
sign the land contract. Funds consisting of the grant money, beneficiaries' 
own finance, and possibly a mortgage are assembled and distributed as 
indicated in the proposal in order to complete the transaction.
The Government should provide a guarantee to the financial institution 
for payment of the approved amount after the release order is received. The 
designated financial institution will receive a copy of the approval letter from 
the provincial grant committee. This letter will carry a guarantee for the grant 
portion from the Government, and allow the transfer agent to begin to 
complete the transaction even before the receipt of the grant in the 
settlement account.
Implications for the programmes of restitution and tenure reform
The proposed programme relates most direct to the redistribution component 
of the present land reform initiative. The programme also has implications for the 
components supporting restitution and enhanced security of tenure. For example, 
applicants for restitution could choose to receive land according to their claims, 
or use the programme, which would allow them to establish a farming enterprise. 
Recipients of land restitution must show intention to farm in order to be eligible 
for a grant under the programme.
If they pursue their claims, then the land received under restitution would become 
part of their own contribution and would give them greater flexibility in choice of 
grant amount and sources of financing for the total package. They would qualify 
for the grant under the programme if they intend to expand upon their restitution 
land and are willing to provide an own contribution. The combination of the grant 
and the restitution would allow those receiving land to enter farming, if that is 
how they opt to use their restored land.
Some communities holding land under traditional tenure arrangements may wish 
to address proposals of their members to upgrade the tenure of their holdings. 
Similarly, members of the community may seek to access land now held under 
traditional tenure but, lying underutilised or vacant. Furthermore, the community 
may want to expand their communal land. From the perspective of the community, 
it may be desirable to offer members sectional titles in order to increase investment 
and efficacy of land use.
Communities and traditional leaders who wish to respond to sectional title requests 
within their communities could offer the land for sale to members under the 
programme. Receipts from the sale of land would go into revenues of the 
community to be used for investments in schools, clinics, productive enterprises, 
and other infrastructural projects yielding benefits to the community.
Members purchasing land under the integrated programme for purposes of 
tenure security would apply for a grant in the normal way. The traditional 
authority would be the seller in the transaction, and with the exchange of 
money, the title would be transferred to the name of the buyer. The remainder 
of grant funds not used to purchase the title would be available to the buyer 
as start-up capital, onfarm investments, and other uses designated in the 
project proposal. The beneficiary would have to make his or her own contribution 
in the same way as other applicants under the programme. This use of the 
programme would be voluntary at the decision of the members and leaders of 
traditional communities. As in all transactions supported under the programme, 
both the seller (community) and buyer (member) would have to be willing 
parties in the transaction. 
On the other hand, a community may want to purchase additional land. Such 
a community would be eligible for the grant under this programme, provided 
that the acquired land is used for agricultural purposes, sectional titles are 
granted to beneficiaries, and the beneficiaries are willing to choose the amount 
of their own contribution. In all the communal tenure cases described, the 
general character of communal property would not be altered fundamentally.
Implications for the disposal of state land
The proposal developed does not directly address the disposal of state land, 
but has several implications for moving ahead with the process. For example, 
for state land against which restitution claims have been lodged, the claims 
can be evaluated and settled. Those who receive land against their claims 
can enter the redistribution programme if they opt to use the land for farming. 
The programme would provide additional resources for start-up and operation
 of new farms, as noted above in the discussion of implications for restitution. 
State land that is free of claims can be offered to the general public through 
the redistribution programme.
The State would have to publicly announce its intentions to dispose of its 
agricultural land in three months' time, in order to invite beneficiary bids for 
the purchase of such land. The State would in this case be a seller of 
agricultural land and beneficiaries the buyers of land under the programme. 
The time of three months should be sufficient to enable beneficiaries-either 
as groups or individuals-to place their bids and to secure a grant under the 
programme.
To effect this process, all information about state and parastatal agricultural 
land would have to be compiled and made available to beneficiaries upon 
request and selected location, so that they can be able to participate effectively. 
An interim provincial grant committee should also be established together 
with, possibly, an interim land grant account with a financial institution. 
The selection of a financial institution should be done through a competitive 
tendering system.
Key implications for Government
The proposed programme is a revision and modification of the existing programme. 
It already has sufficient legal foundation to permit immediate implementation. 
Several important new features are included in the design, however, and require 
governmental actions in order for the programme to achieve its optimum impact. 
Some of these are listed as follows, and others may be identified during further 
elaboration of the programme and a continued consultative process.
Subdivision
The ability of participants to subdivide existing large land units will be critical to 
the success of the programme. Signature of the repeal of the Subdivision of 
Agricultural Land Act, Act No. 70 of 1970 is still pending, and in the meantime 
subdivision requires approval by the Minister. Retention of the requirement 
for ministerial approval prior to subdivision will create a very serious obstacle 
to implementation.
For this reason it will be critical that the regulation be changed to facilitate 
subdivision for transactions under the programme. The Minister for Agriculture 
and Land Affairs can submit to Parliament a proposal for a technical amendment 
in the act that will give prior and automatic approval for the type of subdivisions 
undertaken in furtherance of transactions supported under land reform. This 
action should be undertaken as soon as possible and should be accepted by 
July 1, 2000.
Zoning
In the future a system of zoning for land use should be developed, incorporating 
the present approaches to regulating land use contained in the Land Development
 Objective (LDO) and in the Integrated Development Plan (IDP). Zoning is a 
mechanism that allows municipalities to regulate growth and influence land-use 
patterns. The system of zoning should include a procedure for changing the 
designated classification of land by use. For example, if in the course of land 
reform a section of an existing farm is to be retained for agricultural use and another 
section converted into commercial use, the latter should require a zoning permit. 
At present the procedures for changing classification are not developed fully.
Agricultural services
Faster-paced land reform will create an increased demand for advisory services 
on the part of beneficiaries. Implementation of the new programme will therefore 
create added urgency for reform of the agricultural extension service. The 
Department of Agriculture should redirect its budget and redeploy staff to create 
a special programme to assist land reform beneficiaries, both during the process of 
preparing proposals and after purchase of the land. Staff of the Department will 
need special training to prepare them to fulfil these functions. Public extension 
agents need not meet all of the increased demand for services, however. The private 
sector can play a greater role in the provision of services, as it does in many other 
countries. The public extension service should concentrate on the provision of advisory 
services that benefit a wide public, such as advice to land-reform beneficiaries, 
veterinary disease control, agents and market information.
Advice that only benefits primarily the recipient can in many cases be well provided 
by the private sector, such as assistance with farm-business plans, or proper 
application of fertiliser. Cost-sharing mechanisms that defray part of the expense 
of purchased agricultural advisory services are used in many countries and can 
be adopted in South Africa. Cost sharing can improve the client orientation of service 
providers, and can give the farmer increased power to get services that are most 
useful. Several pilots of alternative models of service provision are at present 
underway, and their results will be evaluated early in summer.
A number of people presently employed by the agricultural extension service can 
be expected over time voluntarily to leave the public service to acquire land 
under the land reform programme. Some of these people with skills and training 
may concurrently enter the private sector as service providers.
Rural infrastructure
Accelerated implementation of land reform will create additional demands for 
infrastructure. Correspondingly, appropriate investment in infrastructure will 
increase the returns to land reform. Therefore, it will be important to create 
mechanisms within the programmes of municipal infrastructure to allow rural 
communities to express their needs and for the programme to respond to these 
demands.
Programme financing
The capital budget to finance the grants will be allocated to the Provincial 
Department of Land Affairs and held in an account from which only the 
provincial grants committee is legally empowered to authorise transfer of funds 
to the settlement account of approved applicants. No approvals other than that 
of the provincial grants committee taken in public session will be required prior 
to authorisation of release of funds. Regular reports on the flow of funds and 
disbursement will be submitted by the Provincial Departments of Agriculture, 
but approval authority will lie solely with the provincial grants approval committee.
Because the programme is demand directed, total programme costs will depend 
on demand for grants of various amounts, and can be estimated only after 
observing demand in the early stages of implementation. It can be assumed, 
though, that most applicants will seek the small grants in the range of R20 000 
and that a lesser number of applicants will seek larger grants of about R50 000 
on average.
A range of possible total programme costs, depending on numbers of applicants 
in the various groups, can be calculated. For example, 200 000 applicants for 
small grants and 30 000 applicants for the larger grants would yield total 
programme costs of about R5,5 billion over the duration of the programme. 
Funds already allocated for land reform, but undisbursed under the prior 
programme of redistribution, would be sufficient for the first year of implementation, 
and annual estimates in succeeding years could be based on observed demand 
in the preceding year.
Funds would flow through the budget of the National Department of Land Affairs 
to provincial land grant accounts maintained specifically to cover grants under 
the programme. The National Department would receive an annual allocation for 
grants and would make an initial deposit into the dedicated land grant accounts 
of each province. The provincial accounts would be replenished at the rate at which 
they are drawn down. The allocation of programme benefits among provinces 
therefore would be determined by demand in the provinces, and would not be 
preallocated.
Key responsibilities and timing
Key responsibilities of the various agencies and levels of government for 
implementation are summarised in the table. The Departments of Agriculture and 
Land Affairs at national level would jointly share responsibility for programme 
design, policy issues, and design of training programmes. The Department of 
Land Affairs would be solely responsibile for monitoring flows of funds to the 
provincial level and auditing the use of funds, as well as monitoring and 
evaluation of the outcomes. The Department of Land Affairs at national level 
would contract for development of a database of land available and sought 
under the programme.
Provincial Departments of Agriculture and Land Affairs would sit on the grant 
approval committee and would access information from the national monitoring 
effort to track performance of the programme in the province. The provincial 
Department of Agriculture would convene the committee and provide the secretariat. 
Staff from the provincial level will assist in development of the programme manual, 
and thereby contribute to more detailed formulation of implementation procedures.
Both the Department of Agriculture and of Land Affairs have operational structures 
at local government level. Where both departments have staff in place, they 
should share responsibilities under the programme. Local governments and 
municipalities should be requested to provide an audit of agricultural smallholdings 
within their boundaries. The agricultural staff would advise on technical and 
agronomic issues relating to the farm proposal, and offer an opinion as to its 
technical and financial feasibility. Staff from the Department of Land Affairs 
could advise on the land price, assist with title search, and help applicants 
access the database on land packages available. Where no staff of the 
Department of Land Affairs are located at local level, more responsibility will 
fall on agricultural staff, and they will need funds to contract out some of 
the tasks.
Department of Agriculture	Department of Land Affairs
National level	
	1 - Design of the programme	Monitor the flow of funds to the provincial 
levelMonitor and evaluate the outcome of the land reform programmeDevelop 
database of land available for the programme 
	2 - Provide training for participants, agents and local land and agricultural 
officers	
	3 - Coordinate policy issues and interdepartmental activities	
Provincial
	4 - Comprise the provincial grant approval committee	Land survey, 
title registration and transfer 
	5 - Accountability for the programme in the province 	
	6 - Convene the grant approval committee and provide the secretariat	
Local
	7 - Provide a technical opinion on the proposed farm plan, land-use and 
environmental assessment	Provide information and training for participant and 
agents (clarifying technical and legal aspects of the programme) 
	8 - Provide agricultural support services
	
Monitoring and evaluation
The proposed programme features a streamlined process of approval at the 
provincial level relying on documentation prepared and submitted by participants. 
This approach is necessary in order to deliver the desired rate of implementation. 
Streamlined approval can function well together with a system of selective audits 
and monitoring and evaluation.
The audits should, for a selected group of approved projects, confirm the accuracy 
and veracity of the information submitted. The audits will be both financial 
(to determine that expenditures have been as permissible under the programme 
guidelines) and physical (to determine that the expenditures actually took place and 
that purchased goods and services are in place on the farm enterprise). The 
evaluation activities will assess the quality of outcomes and the impact on 
beneficiaries and rural communities more generally.