2. SETTLEMENT AND PRODUCTION LAND ACQUISITION GRANT POLICY FRAMEWORK

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1 2. SETTLEMENT AND PRODUCTION LAND ACQUISITION GRANT POLICY FRAMEWORK Policy overview 1. Introduction The Settlement and Production Land Acquisition Grant (SPLAG) is a grant to provide for both settlement and agricultural production land needs of people living and/or working on rural land. In this context, rural land (land outside proclaimed towns) also refers to farm land. The grant will provide rural dwellers, farm workers and farm dwellers in a manner that ensures that their way of life is not tampered with, and that they benefit from the development opportunities presented by government. Section 25(6) of The Constitution of the Republic of South Africa of 1996 (Act 108 of 1996) an authoritative statement with regards to security of tenure in land. It reads thus: - A person or community whose tenure of land is legally insecure as a result of past racially discriminatory laws or practices is entitled to the extent provided by an Act of Parliament, either to tenure which is legally secure or comparable redress. The grant will therefore be used to assist rural dwellers as well as farm workers (defined as persons living and working on other people s farms, not necessarily defined in terms of the Extension of Security of Tenure Act (ESTA), 1997 (Act No. 62 of 1997) and farm dwellers (rights based applicants- defined as persons that have gained rights in land in terms of the various pieces of tenure legislation administered by the DLA who have an interest to secure their livelihoods and a willingness to eventually produce commercially. The SPLAG will also support the establishment of agri-villages so that beneficiaries are afforded an opportunity to make productive use of the land both from a settlement and development perspective. 2. General eligibility criteria The following categories of people are eligible to apply for the SPLAG: a) Rural dwellers, Farm workers, farm dwellers and farm occupiers and their families who wish to acquire land and improve their livelihoods, settlement and tenure conditions. b) Farmers living in communal areas in terms of the Communal Land Rights Act, 2004 (Act No. 11 of 2004) who wish to acquire land and improve their livelihoods, settlement and tenure conditions.

2 c) Labour tenants and their families who wish to acquire and improve the land which they hold or alternative land, in accordance with the Land Reform (Labour Tenants) Act, 1996 (Act No. 3 of 1996). d) Occupiers, former occupiers and other persons who need long term security of tenure in accordance with the Extension of Security of Tenure Act (Act No. 62 of 1997), the Transformation of Certain Rural Areas Act, 1998 (Act No. 94 of 1998), the Interim Protection of Informal Land Rights Act, 1996 (Act No. 31of 1996), the Distribution and Transfer of certain state land Act, 1993, (Act No. 119 of 1993), the Upgrading of Land Tenure Rights Act, 1991 (Act No. 112 of 1991) and the Land Titles Adjustment Act, 1993 (Act No.111 of 1993). 3. Objectives The primary objective of the grant is to improve security tenure and livelihoods and to extend property ownership by providing access to land for settlement as well as productive resources for farm dwellers and farm workers. To this end the grant can be used: a) in part, to do agricultural production: land improvements, infrastructure investments, capital assets and short-term agricultural inputs; b) in part, to effect settlement improvements through the provision of on-site basic infrastructure such as water, sanitation, internal roads, top structures and fencing (bulk infrastructure and connectors to internal services, e.g. electricity, roads, water and sanitation, are not covered by the grant); c) in part, to define or measure, secure, upgrade and register tenure rights; d) in part, or in its entirety, to acquire rural immovable property (including the fees and taxes related to the purchase) for settlement purposes. This grant is to assist rural dwellers, farm workers and farm dwellers who in the first instance have both settlement needs and agricultural production needs. Where land is needed primarily for commercial agricultural purposes, applicants can apply for LRAD funding. Where land is needed primarily for settlement purposes, applicants can apply for the Department of Housing s housing subsidies or be directed to municipalities that have applied for the Department of Land Affairs (DLA s) Commonage Settlement Grant (Urgent/rapid settlement of evicted occupiers or those threatened with a successful (legal) eviction order ito ESTA, can also be supported by the SPLAG for peri-urban and rural settlement). 4. Grant structure The Settlement Production Land Acquisition Grant (SPLAG) will cater for both settlement and agricultural production purposes. The following grant structures are applicable funding mechanisms for the SPLAG:

3 (a) Grant structure 1: R p/hh: settlement and production The grant is currently set at R (lowest end of LRAD grant) per household with no own contribution. (b) Grant structure 2: R p/hh for settlement and LRAD on a sliding scale for production OR Applicants will qualify for an LRAD grant on a sliding scale depending on own contribution. The settlement grant remains at R per household. 5. Grant eligibility The grant eligibility criteria apply to both grant structures. a) Whether any grant money will be awarded at all, and if so, how much, depends upon the availability of funds and the decision of the Provincial Chief Director and/or the Director General of the DLA, after consultation with the relevant structures. b) Grants awarded to individuals who have applied as a group, must be disposed of according to collective decision making, as determined in the group's charter or constitution. c) The grant will not necessarily cover the total costs involved in the housing development/acquisition. Own equity, loan financing and other sources may have to be tapped. d) All disbursements will take place in accordance with the provisions of the relevant legislation, policy and procedural stipulations. 6. How to obtain the SPLAG These criteria apply to both grant structures. a) The grant can be obtained on application to the Department of Land Affairs. b) Depending upon the circumstances, the applicant(s) may need the assistance of a service provider, who may be financed through the Planning Services Fund.

4 c) The applicant(s) will have to prepare a land use proposal (project proposal), indicating a rough cash flow projection; settlement models and patterns and intended agricultural use of land (farm plan). d) The relevant Provincial Grants Committee will review the application. The recommendations of the relevant provincial departments, the municipality and other key role players will be solicited in considering applications. 7. Settlement conditions In addition to the eligibility criteria outlined in Section 2 (General eligibility criteria), the following will serve as Conditions in awarding the SPLAG: a) The grant will be restricted to rural dwellers, farm dwellers, farm occupiers farm workers, communal farmers and rights-based applicants (defined in terms of legislation listed in Section 2) who intend to use the land for both settlement and agricultural production. Applicants who only need land for housing will not qualify. Such applicants can apply for the Department of Housing s housing subsidies or be directed to municipalities that have applied for the Department of Land Affairs (DLA s) Urban Settlement Grant. b) The grant will be linked to the viability of the enterprise c) The grant will be linked to the type of enterprise and related required skills d) They must have the ability to use the land productively. The grant will prioritize those that are economically active in the farming community. e) Every beneficiary must have a succession plan. f) The applicant(s) will have to submit a land use proposal (project proposal), indicating a rough cash flow projection; settlement models and patterns and intended agricultural use of land (farm plan). Service providers can be appointed from the Department s Planning Services Fund to assist applicants in this regard. g) The applicant/s must also provide evidence of additional financial resources (loan, own resources or both) if applicable. h) 8. Settlement models The Settlement and Production Land Acquisition Grant will be available for amongst other the following project types: a) Agri-villages b) Rural farm settlements with individual farming plots

5 8.1. Agri-villages The SPLAG can be used to establish agri-villages if such a model were found to be viable and appropriate in addressing the beneficiaries livelihoods realities. An agri-village is defined by the Ethekweni Land Use Guideline as A private settlement of restricted size, established and managed as a legal entity, that is situated within an agricultural or rural area and where residence is restricted to bona fide rural workers and their dependants, of the farms, forestry, or conservation enterprises situated in the area. The Amajuba IDP Agriculture Plan 2005 Report goes so far as to suggest that this concept of land use embraces the need to increase efficiency, increase growth and reduce poverty amongst the rural poor Rural farm settlements with individual farming plots In some instances, beneficiaries may prefer not to be relocated into an agri-village. They may opt to be settled on individually owned pieces of land. The SPLAG will be flexible to also allow such a settlement model.