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Comments on the Budget and DLA Plan for 2005

Comments on the Budget and DLA Plan for 2005. Nick Vink Thulasizwe Mkhabela Mohammad Karaan Department of Agricultural Economics University of Stellenbosch. Budget 2005. Expansionary, growth oriented Social grants Infrastructure Restitution CASP MAFISA Small Business benefits.

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Comments on the Budget and DLA Plan for 2005

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  1. Comments on the Budget and DLA Plan for 2005 Nick Vink Thulasizwe Mkhabela Mohammad Karaan Department of Agricultural Economics University of Stellenbosch

  2. Budget 2005 • Expansionary, growth oriented • Social grants • Infrastructure • Restitution • CASP • MAFISA • Small Business benefits

  3. Key Questions • Is it enough? • What/where are the gaps? • Is it good for growth? • Does DLA have the capacity to deliver? • Private sector responsibilities? • What will it do for the 2nd economy? • Will it alleviate food security problems? • Are the plans/targets substantiated by research? • Do plans comply with global norms? • Are the target achievable?

  4. Premises • Growth comes from expansion: markets, technology, human capital • Integrated L&A reform Strategy • MERS, URP, ISRDP • Devolution & Decentralisation • Skilling (internal & external) • Facilitation • Inter-govt collaboration • State land ltd.

  5. Growth and equity • The Budget also calls for a balance between growth and equity • This implies that strategies must be backed by institutions • Government a catalyst in institutional development

  6. Three institutional dimensions • With regard to land reform, there are three dimensions of institutional innovation that DLA should address: • Access to land • Access to support services • Access to value adding opportunities

  7. Access to land • Long term (>10 years) land rental AS A MEANS TO LAND OWNERSHIP • Performance criteria for tenants on state land • Exit strategies • Disscounted future earnings part of own contribution

  8. Access to land • Part of LRAD contribution into a sinking fund to purchase the land • Mentoring programmes • Coordination with BEE programmes and BEE funding

  9. LR Impact • Cost-Benefit assessments • Restitution vs Growth • Communication on restitution • Budget vs Pipeline • Land cost: valuations, cost burden • Farmworkers: Agrivillages, seasonality • Private purchases (support?)

  10. Integration • CASP • MAFISA • AgriBEE • Local Govt (infrastructure, facilitation) • Water Affairs • Tax incentives • Industry: levies, mentor, markets, infra…

  11. Capacity • Local govt • Bureaucracy vs developmental • Consultants? • Collective action problems • Institutional development prog’s • Farm/ownership models • Financing models • Guard opportunism

  12. Access to support services • CASP will depend on contributions from Agriculture, Land Affairs, Transport, Public Works, Education, Health, Social Development, Land Bank, Municipalities etc.etc. • Is there clarity on the role of DLA?

  13. Access to value adding • Focus land reform on industries where this is easier • Support cooperatives • Contracts • What is the role of DLA?

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