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Gauteng Small Farmer Settlement Programme: Policy document

1996

Introduction
Summary
Disposal of land for agricultural purposes
Letting of land for agricultural purposes
Beneficialry criteria
Institutional arrangements
Responsibilities of the Gauteng Provincial Government

1. INTRODUCTION

   The proposed policy has been drawn up following public hearings throughout the province. The public hearings took place under the auspices of the relevant Standing Committees. The policy was the referred by the Executive Council on the Provincial Legislature for debate and amend the policy.

2. SUMMARY

   Gauteng lies at the heart of a process of rapid urbanisation within Southern Africa in general and South Africa in particular. It is accordingly necessary to balance the needs of the future against the potential for viable and sustainable agriculture within Gauteng.

   The Gauteng Provincial Government owns a substantial amount of land in Gauteng and it is imperative that these provincial resources be utilised in a sustainable manner in order to promote growth and development in Gauteng. Existing land allocation and tenure policies in relation to government-owned agricultural land are inappropriate for the development of agriculture and have had the unintended consequence of impeding the development of this sector. It has accordingly become necessary to re-assess existing policy in order to develop mechanisms which are better able to facilitate and guide the future use of government-owned land for agricultural production.

   The Gauteng Farmer Settlement Programme seeks to achieve the following overall objectives within this context:

   1. To promote viable and productive agriculture on government-owned land which is suitable for agriculture in Gauteng.
   2. To give priority to land owned by and administered by the Gauteng Provincial Government.
   3. To address skewed land holding patterns and provide for the redistribution of agricultural land to targeted groups including farm workers, labour tenants, share-croppers, members of disadvantaged communities, irrespective of gender.
   4. To ensure that property rights of named beneficiaries are held independently of the matrimonial regime.

   The Gauteng Farmer Settlement Programme does not exist in isolation but is linked to a number of supplementary and complementary programmes. In particular, the Gauteng Department of Economic Affairs, Finance & Agriculture has established a number of programmes relating to training, capacity building and agricultural extension and these programmes are essential to the success of the Gauteng Farmer Settlement Programme.

3. DISPOSAL OF LAND FOR AGRICULTURAL PURPOSES

   Ownership of land is often seen as the only mechanisms for ensuring security of tenure in relation to land. Many groups who previously leased land now wish to upgrade their tenure to full ownership. This reflects the history of dispossession in South Africa in which individuals and groups without ownership rights were particularly vulnerable to forced removal. These dynamics give rise to the demand that the state should dispose of state-owned land. The policy recognises that mechanisms should be put into place to facilitate the purchase of land for agricultural purposes.

   The Gauteng Provincial Government is however aware that wholesale disposal may lead to speculation and ultimately to the denial of access to land to the poor and disadvantaged. It is for this reason that restrictions are placed upon the disposal of government- owned land in favour of a policy of letting land in the first instance, with options to purchase at a later date.

   3.1. General restriction on disposal

   The sale of government-owned land for agricultural production will only be considered where the land in question is not expected, by the provincial department responsible for urban and rural development and planning, to be required for any competing use or purpose (e.g. conservation, housing, industrial development, roads or other infrastructure) within a period of five years determined at the time of the proposed release of the property in question. At no time will the mineral rights vesting in land be transferred under this programme.

   3.2. Qualification period

   Government-owned land will generally only be sold to individuals or groups who have undertaken farming activities on government-owned land for a period of at least three years from the date of implementation of this policy. Land will be sold subject to the proviso:

   • that there is verification with the Land Claims Commissioner that no restitution claim has been lodged against the particular property.

   3.3. Conditions of use

   1. Beneficiaries of this programme will be required to commit themselves to the sustainable use of the resource and environmentally acceptable agricultural practices as determined by the Department of Economic Affairs, Finance & Agriculture at the time of conclusion of the sale.
   2. Any disposal of government-owned agricultural land under this programme will be subject to provisos that the land be used for agricultural purposes. This proviso should be stipulated through a restrictive condition registered against the title deed. A request for utilisation of the land for any purposes other than agriculture must be submitted, amongst others, to the Gauteng Provincial Government for approval.

   The Gauteng Provincial Government will be entitled to re-acquire land where the owner of the land alters the use of the land without prior approval. The price of re-acquisition will be determined with reference to the price of the original acquisition indexed to inflation and with further reference to improvement made to the land including the productive value of the land. The owner of the eland will be responsible for all costs associated with the re-acquisition of the land by the Gauteng Provincial Government in these circumstances.

   3.4. Selling Price

   Government-owned agricultural land will be disposed of at a price to be calculated by reference to the productive value of the land or the market value of the land, whichever is lower, as determined at the time of the exercise of the option by the Department of Economic Affairs, Finance and Agriculture. In the event of a dispute on the valuation, the prospective owner may request an independent appraisal and will be liable for the cost of the valuation if it differs from that of the Department by less than 15%.

   In the event of future disposal of the land, the Gauteng Provincial Government shall have the option to purchase with reference to the price of original acquisition indexed to inflation and with further reference to improvements to the land, including improvements in the productive value of the land.

   The Gauteng Provincial Government shall also retain a statutory right of first refusal where the owner wished to sell the property.

   3.5. Disposal under Deed of Sale

   • Government-owned agricultural land will generally be sold outright to individuals or groups, who will be responsible for financing the purchase of the land from own savings or by accessing end-user finance from various financial institutions.
   • Land may however be disposed of to individuals or groups over an extended period of time, in accordance with the provisions of the Alienation of Land Act and on the following terms and conditions:
     1. The individual or groups will be required to furnish a deposit equal to 10% of the value of the property as determined by the Department of Economic Affairs, Finance & Agriculture. In the event of a dispute on the valuation the prospective ownermay request an independent appraisal and will be liable for the cost of the valuation if it differs from that of the Department by less than 15%.
     2. The remaining conditions of credit, including the interest rate to be charged, will be determined by reference to prevailing commercial terms applied by the financial institution for the Gauteng Provincial Government, for the purchase of agricultural land, from time to time.
     3. Qualifying persons may be entitled to access a Settlement Support Grant from the Department of Land Affairs to finance the whole or part of the purchase price for the land and may use the grant as a deposit.

4. THE LETTING OF LAND FOR AGRICULTURAL PURPOSES

   4.1. Duration of lease when there is an option to purchase

   • Agricultural leases will be concluded for a period of three years. These leases will include an option to purchase if the Gauteng Provincial Government intends to dispose of the land at the end of the three year period. In exceptional circumstances, a lease with an option to purchase may be renewed for a further period of three years.

   4.2. Options to renew leases when there is no option to purchase

   • Agricultural leases will be concluded for a period of three years. Options to renew the lease for a further three year period will be included in the lease agreements. This option may be exercised by the tenant-farmer at the end of each full lease period, subject to the government's decision not to change the use of the land.

   4.3. Cession and sub-letting

   • No sub-letting of the property is permitted without the written consent of the Department of Economic Affairs, Finance & Agriculture.
   • The lessee will be obliged to identify a nominee in the event of his/her death, disability, illness or unexpected absence. In these circumstances:
     1. The named nominee will be entitled to continue the exercise of the rights and obligations of the original lessee for the remaining period of the lease.

   4.4. Use of agricultural land

   All land which is made available under the Gauteng Farmer Settlement Programme must be utilised for agricultural production in order to optimise and protect this valuable and scarce resource for development.

   Beneficiaries of this programme will be required to commit themselves to the sustainable use of the resource and environmentally acceptable agricultural practices as determined by the Department of Economic Affairs, Finance & Agriculture at the time of conclusion of the lease.

   4.5. Rentals

   1. Rentals are to be calculated, based on the productive value of the land plus the value of improvements as determined by the Department of Economic Affairs, Finance & Agriculture and Housing and Land Affairs respectively. Improvements incurred by the tenant-farmer and approved by the Department of Economic Affairs, Finance & Agriculture will be excluded from the rentals.
   2. The rentals paid will not accrue o any purchase price determined under clauses 4.4.

   4.6. Rental payments

   • Rentals should be payable on a three monthly basis in arrears at such time and place as may be determined by the lease.

   4.7. Deposit

   • All tenant-farmers will required to furnish a deposit equivalent to three months' rental under the lease, prior to the occupation of the land.
   • Interest on the deposit is to accrue to the Gauteng Provincial Government and should be utilised (if possible) for the promotion of a agricultural projects and programmes.
   • The deposit is to be repaid to the tenant-farmer upon the termination of the lease agreement, less any amount outstanding in respect of rentals, service charges, etc., or any amount required to repair damage, etc..

   4.8. Termination of the lease

   • The lease agreement may be cancelled by the Gauteng Provincial Government in writing as a result of any breach of any material clause in the lease agreement.
   • The tenant-farmer will be entitled to cancel the lease agreement on three months' written notice to the Gauteng Provincial Government.
   • Upon termination of the agreement the tenant-farmer will be compensated at replacement values for self-incurred improvements to the leased property prior approved by the Department of Economic Affairs, Finance and Agriculture.
5. BENEFICIARY CRITERIA

   5.1. Allocation of new leases and disposals

   All new leases are to be allocated on the following basis:

   5.1.1 Leases are only to be made available to individuals who qualify for subsidy assistance in terms of the Settlement Support Grant. Thus, individual beneficiaries must:

   1. Be a South African citizen or be a permanent resident in South Africa;
   2. Preferably earn less than R1 500.00 but not more than R3 500.00 per month.
   3. Potential lessees who earn more than R3 500.00 per month should not be excluded from participation in the programme but should they exercise an option to purchase they may be required to access finance from sources other than the settlement subsidy;
   4. Not own any other immovable property.

   5.1.2 Leases may be allocated to groups which are comprised of individuals which meet the above mentioned criteria, which have been established in terms of an approved written constitution.

   5.1.3 The individual/group need not show that agricultural production will be the only source of income to the individual or group. Part-time tenant-farmers will accordingly be permitted, provided that he/she is able to undertake farming activities consistently, productively and effectively.

   5.1.4 The beneficiaries of this programme shall be identified in accordance with the criteria laid out in section 2(e) above.

   5.2 Lease agreement for existing tenant-farmers as at the date of implementation of this programme.

   New leases may only be issued to existing tenant-farmers where:

   • The tenant-farmer is up-to-date with all payments under existing lease agreement.
   • The tenant-farmer is not under investigation by the Budlender Commission.
6. INSTITUTIONAL ARRANGEMENTS

   6.1 Allocation Committee

   6.1.1 The allocation of all leases is to be undertaken by an Allocation Committee which is to be comprised of:

   • An official nominated by the Department of Economic Affairs, Finance & Agriculture.
   • An official nominated by the Department of Housing and Land Affairs.
   • An official nominated by the Department of Agriculture.
   • An official nominated by the Department of Land Affairs.

   6.1.2 All decisions of the Allocation Committee are to be fully minuted and secretariat support for the Allocation Committee is to be provided by the Department of Housing and Land Affairs.

   6.1.3 The Allocation Committee is to be accountable to the Member of the Executive Council responsible for Housing & Land Affairs, acting in consultation with the Member of the Executive Council responsible for Economic Affairs, Finance & Agriculture.

   The Allocation Committee shall:

   1. Call for the submission of applications by those wishing to enter the programme.
   2. Publish the criteria to be met by potential beneficiaries of the programme.
   3. Publicise names of all tenant-farmers identified as beneficiaries under the Gauteng Farmer Settlement Programme in the Provincial Gazette for information.
   4. Invite the public to lodge objections to the Committee's decisions within thirty days of the publication of the list.

   The Allocation Committee will consider the objections and make a final decision within a further thirty days.

7. RESPONSIBILITIES OF THE GAUTENG PROVINCIAL GOVERNMENT

   7.1 The Gauteng Department of Economic Affairs, Finance & Agriculture shall:

   7.1.1 publicise and provide information on the Gauteng Farmer Settlement Programme;

   7.1.2 provide appropriate training as determined by the Gauteng Department of Economic Affairs, Finance & Agriculture, in order to develop the necessary expertise amongst the beneficiaries of the Gauteng Farmer Settlement Programme;

   7.1.3 provide agricultural extension and research services, as determined by the Gauteng Department of Economic Affairs, Finance & Agriculture;

   7.1.4 provide assistance in accessing credit and financial support; and

   7.1.5 monitor the implementation of the Gauteng Farmer Settlement Programme.

   7.2 The success of the programme will be determined by the establishment of accessible and effective mechanisms to enable the Provincial Government to administer and manage the processes of both leasing and sale.

   7.3 Legislation to give effect to aspects of the programme will be introduced before the Gauteng Legislature.

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Last modified: 23 April 2008 07:15:28.