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Big talk, but there’s less money for land reform (again)

Remember when the President announced that the restitution process would be re-opened and people would be able to lodge claims? Promises were made that government would dedicate the resources required to deal with the expected 379,000 new claims, at an estimated cost of R180billion. It would also ensure that the remaining approximately 30,000 claims lodged by the deadline in 1998 would be expedited.

 

Those funds are not forthcoming

The total funding available for restitution is less than it was last year, with a 3% drop in funding. Similarly, the funds for land redistribution and tenure reform (which are treated together in the budget) are also down by 3% compared to this time last year. This is bad enough, however the capital budget for buying and developing land has declined by 8% for restitution relative to last year, and by 30% relative to 2013/14. For redistribution, the capital budget has declined by 29% since 2013/14. Given that it is the capital budget that goes to land acquisition, this is bad news indeed. In fact, this understates the severity of the decline in resources available for land acquisition through redistribution, because since 2009 an increasing share of this budget has been devoted to re-equipping existing redistribution projects through a ‘recapitalisation’ programme. So more funds are being diverted away from land reform, from a shrinking pool of money.

Funds for land reform (R billions)

 

2013/14

2014/15

2015/16

Restitution

    - total

    - capital

 

3.39

3.03

 

2.68

2.31

 

2.60

2.12

Redistribution & tenure reform

    - total

    - capital

 

3.39

2.96

 

2.82

2.10

 

2.74

2.10

 

Moreover, it continues a trend

Taking inflation into account, and going back a bit further in time, the trend is in fact quite alarming. As shown in the figure below, the Zuma administration initially presided over rising budgets for restitution and redistribution, but since 2010/2011, these budgets have plummeted. In real terms, the land reform budget under Zuma is far lower than during most of Thabo Mbeki’s second term.

 

Budget trends in restitution and redistribution, 2008-2015 (inflation adjusted in 2015 constant Rand)

What does the budget tell us?

The budget tells us that the Treasury is not buying the new policy talk of government. It is not going to fund this ministry’s promises of expanding its programmes, speeding up land reform, settling old land claims, dealing with the flood of new incoming land claims, or funding new pie-in-the-sky plans like paying farmers 50% of the value of their land without them giving it up, in return for shares for a small fraction of workers.

Questions the budget doesn’t answer

The budget may tell us this much, but what it doesn’t tell us is how the limited funds now in the kitty will be distributed, and who’s going to get the lion’s share. How much of the shrinking funds for land redistribution will be siphoned off to commercial farmers, either to buy shares in their farms (the 50-50 policy proposal) or to pay them to manage land reform farms as strategic partners? These questions the Treasury cannot answer. The Ministry should answer them.

*Michael Aliber at the Department of Agricultural Economics and Extension at the University of Fort Hare.