PRESENTATION ON THE TURN AROUND STRATEGY FOR THE
RECAPITALIZATION AND DEVELOPMENT PROGRAMME
PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM
DATE: 18 FEBRUARY 2015
PRESENTATION OUTLINE
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INTRODUCTION
The Portfolio Committee on Rural Development and Land Reform held Public hearings on 3
February 2015. Various Stakeholders and Role players including farmers and strategic
partners shared their views and experiences in the implementation of the Recapitalization
and Development Programme (RADP).
The Department of Rural Development and Land Reform (DRDLR) was given an opportunity
to present the findings on the evaluation process conducted by DPME and the
recommendations. The findings by DPME indicated that even though the Recapitalisation
and Development Programme (RADP) has made some progress towards achieving its
intended objectives, there is room for significant improvement.
One key finding was that strengthening the RADP is the second-best solution; however, the
RADP should continue in the interim while a lasting solution is sought.
The best and lasting solution would entail a redesign and overhaul of all public agricultural
support programmes and doing away with existing silos of funding for agricultural support
services. This would entail the establishment of an all-inclusive fund to support land
acquisition, extension services and mentorship, agricultural finance and market access.
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INTRODUCTION CONTINUE…
The farmers or beneficiaries and strategic partners also made their presentation regarding
their experiences in the implementation of the programme there were success stories
presented which indicates that if the programme is implemented properly, the main
objectives of the programme will be achieved: that is to rekindle the class of black
commercial farmers which were destroyed by the 1913 Natives Land Act.
At the same time there were very bad experiences that were presented by members of the
public, farmers and strategic partners including civil organizations that were invited. These
bad experiences alerted the Department and the Committee to look at the Programme and
consider implementation of urgent interventions.
The Department is currently attending to key specific project issues that were raised during
the hearings eg. Mount Nebo matter in the North west, where the matter is currently with the
State Attorney, Ilanga Farmers Co-operative, Ebenezer restitution claim (not yet settled on
the farm), Stellenbosch Small Farm Holdings Trust (Commonage farmers) and the farmers
in the Eastern Cape where the study by Professor Hall was conducted. The date to visit
these farmers with Professor Hall has been set for March 2015. Other urgent administration
matters raised by Grain SA are being attended.
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COMMENTS FROM THE PUBLIC HEARINGS

Lack of transparency and communication to SP’s and farmers

Requirements from Technical committee unrealistic and no standardization of requirements.

Deviations from business plans

Cumbersome process for approval of grants/funds

Constant change of RADP Policy

Repeated requirement of Project and Financial Reporting

Non user friendly system for reconciliation of expenditure

Non compliance on the usage of RADP funds by farmers and strategic partners

When should a farmer exit the recap programme – entry and exit mechanism for farmers.

Compensation of Mentors too small.

Need sectorial approach for SLA with DRDLR not “one size fits all”
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COMMENTS FROM THE PUBLIC HEARINGS

Fraud and corruption by some strategic partners

Selection criteria of farms for RADP support.

Delays in the disbursement of funds.

Department neglected the commonage programme.

Post settlement support to restitution farms: RADP is not an appropriate programme to
provide support to farms acquired in terms of Restitution e.g. Ebenezer Land restitution.

Strategic partnership becomes a pre-condition to receiving RADP support.

Restitution subsidize the Redistribution programme in terms of post settlement support.
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PROBLEM STATEMENT
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Good programme badly implemented by officials
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RADP benefiting only few, especially those that are politically connected.
RADP is a waste of money, too expensive per capita, per job and never reaches the farmers on time,
disbursement of funds long after being required by the farmer results to wasteful expenditure
Deviation from approved Business Plans
Slow implementation of the RAD due to late payment
Lack of reports for the released trenches
Coordination of Stakeholders especially on project support
Alignment of Business Plan and Contracts
Models of SP (Mentorship, Contract farming, etc.)
Procurement of goods and services by Strategic partners and farmers not monitored and accounted
Registration of the Assets acquired by RADP funds
None alignment of lease agreement with RADP contracts
Insurance on the projects
Defaulters not held accountable
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PROBLEM STATEMENT CONTINUE…
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Delays in release of tranches
Creation of commitment to DRDLR due to prior approval by farmers and strategic partners
Lack of communication on changes of BP and policies to SP and Beneficiaries
Price variation between Standard costs and BP
Quality of services by contractors and sub-contracting appointed by strategic partners
Termination of SP contracts after the release of the Money by farmers
No re-investment by farmers and strategic partners in the farms
Conflict management btw beneficiaries
Profit deposited in the private account
Fraudulent activities on the Joint bank accounts by farmers colluding with SP.
Reimbursement of beneficiaries from RADP funds
Lack of separation of roles and responsibility between CPA/Land holding entity or leasing
entity and Business Entities or operating company
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OBJECTIVES OF THE TURN AROUND STRATEGY
The aim of the RADP Turnaround Strategy is to establish a unified approach in the
implementation of the programme, and address the findings emanating from all the
evaluation studies and audits conducted in the programme eg. DPME, M&E evaluation and
the AG audit findings. The Strategy seeks to achieve the following objectives:
 Maximizing impact of current and future budget and resources spend on the programme,
 Better coordinated approach for efficient and effective use of RADP funds and other
funding from other role players,
 Re-alignment of existing farmer support programmes both internal and external,
 Make financial services accessible to a large segment of the needy farmers,
 Promote and support linkages and support with all relevant value chain interventions in
the APAP,
 Ensure contractual obligations are enforced and defaulters are held accountable.
 Ensure equitable distribution of RADP funding and promotion of own equity contribution
by farmers and strategic partners,
 Disbursement of funds from the programmes must be aligned to commodities and
season.
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STRATEGY: WHAT NEEDS TO BE DONE?
 RADP approval to be scheduled annually to coincide with commodity cycles e.g.
in November like CASP. (Early in March a meeting will be called to disburse
RECAP money)
 Commodity development to help us develop disbursement calendars for each
commodity (in two weeks the Provinces should have these calendars).
 RADP to be equitably redistributed and to bring in own equity element to it –
Differentiation.
 Focus on small-holders, in Mega Agri-Parks, convene land reform commodity
study group.
 Infrastructure development on Land Reform farms to be driven by RID to reduce
costs.
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STRATEGY: WHAT NEEDS TO BE DONE?
 FIX problem at source by selecting winners in commodities and good
farms that are farmable by establishing District Land Commodities
 Establish panel for business plan valuation/appraisal that include
industry players (at DLC or Provincial level)
 Develop an automated RADP project management system,
 Alignment with the integrated funding model developed with DAFF,
National Treasury and Land Bank to ensure maximum support for Land
reform beneficiaries/ farmers.
 Finalize the RADP implementation manual.
 Review the RADP Policy to address the shortcomings identified.
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WHAT NEEDS TO BE DONE? CONTINUEE…
 Enforce contractual conditions and hold defaulters accountable.
 Invest in continuous knowledge improvement for Staff, Farmers
and Strategic Partners as a compulsory requirement. (Train
people in their area of performance)
 Invest in modernisation of the application system for both land
acquisition and RADP applications. (Electronic System)
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WHAT NEEDS TO BE DONE? CONTINUEE…
 Relationship
between
the
beneficiaries/farmers
and
implementers/project officers is very important (Beneficiaries are bypassing processes by approaching Top Management at National Office
which results in them not acknowledging the presence of a project
officer);
 Land Acquisition needs to be included in point one above;
 Clear criteria on projects selection is very important; and
 Monitoring and Evaluation of implementation.
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AUTOMATED RADP MANAGEMENT SYSTEM:
The Department with its ICT Unit is currently developing an Automated RADP management
system. Based on the above mentioned challenges in the RADP Business processes, the
following modules will be developed:

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Electronic Application System module.
Business plan module.
Financial Module. (Funds disbursement model and expenditure monitoring module)
Reporting module. (Monthly and quarterly reports on business plan implementation,
impact (jobs created, training and production)
 Monitoring and Evaluation module.
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BUSINESS CASE:
Based on the above models, the following business process is proposed: Application Module:
1. Phase one: Development of the electronic application system:
 ITC develops an electronic RADP application system at a District Office, Provincial and National level.
 Determine the various functionalities at the different 3 levels above (capturing of applicant information,
verification, processing, authorization and approval).
 Define different system users (District system controller, Provincial system manager, authorizing
officer and approval officer).
 Processing and capturing of prioritized RADP applications in an electronic system after registration on
the BAS system by District system controller. Following information is required:
Part one: Applicant information: NB: Documents eg. ID copies will be scanned and saved on the system.
- RSA bar-coded identity document and applicant details
- Spouse details
- Contact details and physical address for the applicant
- Registered property descriptions.
- Lease contract details or copy of title deed
- Legal entity registration certificate and registration number.
- Applicant banking details.
- accountant details for the applicant.
- SARS certificate
- Tax certificate number
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BUSINESS CASE CONTINUE…
Part Two: Strategic partner information;
- RSA bar-coded identity document and applicant details;
- Spouse details, if any;
- SP physical address and contact details;
- Form of strategic partnership;
- Legal entity registration certificate and registration number;
- SP banking details;
- Accountant details for the applicant;
- SARS certificate; and
- Tax certificate number.
Part Three: Business Plan information: after approval by NLARCC and MCM
( approved memorandum approved by DDG and signed Business plan are source documents):
- capture total funds approved;
- Capture funds as per approved trenches;
- Itemize the funds as per approved Business plan( eg. Tractor, mentorship fees, production
inputs etc);
- develop item codes per item in the business plan against the budget to control over
expenditure per item;
- make provision for deviation with the approved funds; and
- make provision for approved additional funds.
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BUSINESS CASE CONTINUE…
Business Plan Module:
Part one: Business Plan approval:
- capture date of approval by DLC or DSC, PTC, NLARCC and MCM
- Capture key commodities to be funded ( eg. Crops( maize, beans,
potatoes, citrus
- capture current levels of production
- capture projected income, expenditure and net profit
- job creation targets, and targeted training.
- projected production levels eg. Estimated yields per enterprise.
Part two: Approved business plan information
( approved memorandum approved by DDG and signed Business plan are source
documents)
- capture total funds approved
- Capture funds as per approved trenches
- Itemize the funds as per approved Business plan( eg. Tractor, mentorship fees,
production inputs etc)
- develop item codes per item in the business plan against the budget to control over
expenditure per item. - make provision for deviation with the approved funds.
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- make provision for approved additional funds.
BUSINESS CASE CONTINUE…
Financial Module: Two parts of this model are being proposed: Funds disbursement
model and Expenditure reporting model.
Part one: Funds Disbursement module: ( funds will not be transferred to a joint account)
- Capture supplier information on the system based 3 quotations from the SP,
beneficiary and verified by the project officer.
- Capture confirmation of delivery of goods and services from the project officer(
confirmation certificate signed by project officer is a source document)
- Based on approved funds on the system, capture amounts from invoices received
on the system by district system controller, checked by the ASD in the District.
- Scan and load verified copies of invoices on the system
- Authorize payment based on verified, captured invoices by the provincial System
manager at PLAS Finance unit.
- Approve payment and transfer funds to the supplier or pay mentorship fees to the
bank account captured on the system – PLAS Trading account National Office.
- capture projected income, expenditure and net profit
NB: Procurement of goods and services will be based on 3 quotations from potential suppliers via
a project adjudication committee. The appointed supplier will submit all relevant details for
capturing into the system including account details.
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BUSINESS CASE CONTINUE…
Part two: Expenditure Module: ( funds will not be transferred to a joint account)
- Provide monthly expenditure reports per project.
- Print expenditure per item code to monitor over expenditure per item
- provide reports on any deviation per item per project.
- alert district system controller to capture new invoices once expenditure is
80% or above on transferred funds.
- Authorize and Process trenches once expenditure is above 80% of the
total fundstransferred.
- Link the process to part one processes.
NB: The proposed module above will assist to avoid over expenditure on approved
items, delays in the release of trenches, non-compliance in submitting invoices,
mismanagement of joint accounts and manage the ageing report.
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BUSINESS CASE CONTINUE…
Reporting Module:
- monthly expenditure reports per project.
- SP Ageing reports
- provide reports on any deviation per item per project.
- provide reports on the number of farms recapitalized per month, per
Quarter and per annum
- Provide details of expenditure per Trench released in order to process
subsequent trenches.
- Provide monthly and quarterly performance reports per project ( jobs
created, farmers trained and production levels.
- Load all POE from SP for reporting purposes.
NB: The proposed module above will assist the branch to provide accurate
performance reports to M&E with valid POE.
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BUSINESS CASE CONTINUE…
Contract management Module:
- capture all RADP contracts on the system.(SLA and Tripartite Agreement)
- Processing of contracts at District level by legal officer
- legal compliance checking by DD legal at PSSC
- Verification of contracts and support by Director LRD
- Vetting of contracts by Strategic institutional Partnerships National office
- Provide monthly and quarterly performance reports per project ( jobs
created,
farmers
- Approval of contracts by DDG LRD.
NB: The proposed contract management module will ensure that all the RADP
contracts are generated and approved electronically to avoid any discrepancies in
the various forms of contracts based on each forms of SP. Electronic contracts will
be tailor made to meet special conditions inline with each forms of Strategic
partnership.
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PROJECT PLAN FOR THE REVIEW OF THE RADP POLICY AND THE
MANUAL
Activity
TIME FRAME
Undertake a desk top review of existing RADP policy and RADP manual in line with the legal
compliance audit findings, findings of the DPME review, Internal Audit findings, findings of the
audit conducted by the Office of the Auditor-General, proposals from workshops conducted by
the Department and the process for selection of beneficiaries of RADP and also interview CD
RAD’s staff
2 weeks
1-13th March 2015
Design and submit the framework of amended RAD policy and RADP manual in line with the
1 week
legal compliance audit, findings of the DPME review, Internal Audit findings, findings of the audit
conducted by the Office of the Auditor-General, proposals from workshops conducted by the
13th – 21st March 2015
Department and the process for selection of beneficiaries of RADP
Present and collect feed-back for framework of amended RADP policy and RADP manual in line 2 days
with the legal compliance audit findings, findings of the DPME review, Internal Audit findings,
findings of the audit conducted by the Office of the Auditor-General, proposals from workshops 23rd and 24th March 2015
conducted by the Department and the process for selection of beneficiaries of RADP to CD
RAD’s staff and the members of the project steering committee;
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PROJECT PLAN ON RADP POLICY AND MANUAL CONTI…..
Incorporate inputs and submit first version of RADP policy and RADP manual
2 weeks
24th March – 6th April 2015
Present and collect feed-back for first version of RADP policy first version of RADP manual to
CD: RAD’s staff and the project steering committee;
2 days
8th and 9th April 2015
Incorporate inputs and submit second version of RADP Policy and Manual of amended RADP
policy
2 weeks
9th April – 22 April 2015
Present collect feed-back second version of RADP policy with CD RAD staff and PSSC ‘s
2 days
28th and 29th April 2015
Incorporate inputs and submit 3rd version of RADP policy to CD’s RAD staff and PSSC’s
2 weeks
29th April-11th of May 2015
Present third version of RADP policy to all the relevant branches of the Department namely
Land Redistribution and Development, Rural Infrastructure Development (RID) and Rural
Enterprises and Industry Development (REID)
2 days
12th and 13th May 2015
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PROJECT PLAN ON RADP POLICY AND MANUAL CONT…
2 week
Incorporate and submit inputs into fourth version of RADP policy to CD RAD’s staff and all
branches of the Department namely Land Redistribution and Development, Rural Infrastructure 14th -25th of May 2015
Development (RID) and Rural Enterprises and Industry Development (REID)
Present fourth version of RADP policy to external stakeholders
1 day
28th of May 2015
Incorporate and submit inputs for fifth version of RADP policy to CD RAD’s staff and external
stakeholders
1 week
28th May- 4th of June
2015
Incorporate inputs and submit final version of RADP policy to CD RAD staff and members of
project steering committee t
1 week
4th-11th June 2015
Submit final version of RADP policy to CD RAD staff for editing
1 week
11th – 18th June 2015
Resubmit edited final version of RADP policy to CD RAD’s staff for submission to Minister of Rural 1 week
Development and Land Reform
18th -25th June 2015
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PROJECT PLAN ON RADP POLICY AND MANUAL Cont …
Finalizing amendment of RADP manual
Present and collect feed-back of second version of RADP manual with CD 1 day
RAD staff and PSSC ‘s
1st July
Incorporate inputs and submit final version of RADP manual to CD’s RAD
staff and PSSC’s
2 weeks
1st -14th July 2015
Incorporate inputs and submit final version of RADP manual to CD RAD
staff and members of project steering committee
4 days
14th -18th July 2015
Submit final version of RADP policy to CD RAD staff for editing
4 days
18th -22nd July 2015
Resubmit edited final version of RADP manual to CD RAD’s staff for
submission to Minister of Rural Development and Land Reform
1 week
22nd July – 29th July 2015
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Thank You
Ngiyabonga
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