LRAD


DEPARTMENT: AGRICULTURE
REPUBLIC OF SOUTH AFRICA 

LAND REDISTRIBUTION FOR AGRICULTURAL DEVELOPMENT



PREVIEW

The LRAD information booklet provides basic answers to frequently asked questions. This booklet is meant to assist potential beneficiaries and sellers to understand the basic concepts and requirements which must be satisfied in order to benefit from the programme from any point, whether as a seller, agent or beneficiary.

The booklet is not meant to substitute the policy document (LRAD) or the programme manual, but is merely there to supplement and provide quick answers to basic questions.

1. What is the LRAD programme?

The Land Redistribution for Agricultural Development programme was designed to help previously disadvantaged citizens from African, Coloured and Indian communities to buy land or agricultural implements specifically for agricultural purposes.

2. How does it help people?

Most of our people do not have sufficient money to buy land for farming purposes. This programme will make some money available to successful applicants to help supplement what they already have for purchasing agricultural land. This will be done in the form of government grants.

3. What is the LRAD grant?

It is a nonrefundable form of funding or financial contribution to help prospective farmers to purchase land by government.

4. How much will I get?

A formula will to be used to determine how much an individual will get. This formula is based on how much money or inputs to be used in the farming operations on that piece of land (own contribution in kind), or a combination of the two a person contributes towards the purchasing of that particular piece of land or on-farm implements (own financial contribution).

The grant amount will be determined according to the total own contribution. Refer to Table 1.

5. What is own contribution?

The grant will only serve as financial supplementation to what an applicant already has. Own contribution is therefore the money that an applicant should bring into the process to form part of the whole capital package, viz. own contribution + grant.

6. Is only cash accepted as own contribution?

There is a number of ways in which own contributions can be made, viz.

(a) Cash contribution

An applicant can contribute from a minimum of R5 000, which will qualify for a matching grant of R20 000 up to a maximum of R400 000 which will in turn qualify for a matching grant amount of R100 000.

(b) Contribution in kind

There are a number of ways you can contribute in kind, viz. property, machinery, equipment and livestock. These will be equated to their current cash value and the total amount then used as own contribution.

(c) Own labour

Any number of labour units will be equated to a maximum of R5 000 own contribution.

7. What assets can be used as own contribution?

Existing agricultural assets that are integral to the operation of the land to be acquired through the programme.

8. What assets cannot be used as own contribution?

Land that was accessed through an earlier grant, restitution, tenure security grant, donation, etc.

9. What if I have not yet finished paying for some of my assets?

Outstanding debt on agricultural assets will not affect the extent to which these will be counted as own contribution.

10. What is the minimum and the maximum amount that one can get and what is the corresponding own contribution?

A minimum amount of R20 000 will require a minimum own contribution amount (cash or in-kind) of R5 000 and a maximum of
R100 000 will require a maximum own contribution amount of R400 000. Between the minimum and maximum amounts, there is a continuum of grant amounts, depending on the participant's own contribution (see scale of grant and own contribution).

11. Why is it that the less money one contributes the larger the grant ratio is?

This programme is aimed at helping poor people. The grant scale is therefore designed in a way that the less money one has, the bigger the grant to own contribution ratio one wil receive compared to what someone with a bigger contribution will receive.

12. What can use the grant for?

(a) Acquisition of land
(b) Land improvements, infrastructure investments, capital assets and short-term agricultural inputs

13. Which departments are responsible for the programme?

Grants will be provided by the Department of Land Affairs, but both the departments of Land Affairs and Agriculture will work in collaboration to oversee the whole process from start to finish.

14. Who should apply?

You should

• Be a member of a previously disadvantaged group (i.e. African, Coloured or Indian)

• Be 18 years or older

• Intend to use the land for agricultural purposes only

• Intend to farm on a full- time basis (except for safety-net projects)

• Not hold any position within government structures

• Be prepared to participate in a training programme after land acquisition

• Be in a position to make an own contribution

• Be an organised entity if applying as a group

• Have a bank account

15. What are safety-net projects?

The LRAD programme is designed in such a way that beneficiaries will enter the system at various levels of production, viz.

(a) Safety-net projects

This is the level at which beneficiaries will acquire land to produce mainly for own consumption.

(b) Equity schemes

Members of a group will each contribute a certain amount towards accessing the grant. In turn, each member will own a certain percentage (share) of the project according to the degree of their contribution. This share is called equity, and it will be equal to the value of each individual's contribution plus the grant. These shareholders will be both co-owners and employees of the farm.

(c) Production for markets

Some people will enter the programme at a much higher level than the ones mentioned above. These people will most probably have more farming experience as well as access to additional finance through normal bank loans as well as their own assets and cash to purchase bigger farms and therefore farm on a much larger scale.

(d) Agriculture in communal areas

Quite a number of people in communal areas already have secure access to agricultural land, but may not have the money to start using that land productively. Such people will be allowed to apply for assistance to start putting up productive investments on the land. These kinds of projects may either be at the lower scale of production (safety-net projects) or higher up (production for markets).

16. What type of land am I allowed to buy under this programme?

Any agricultural land in South Africa, regardless of its present tenure status, is potentially eligible for redistribution under this programme, except communally-held land in former homeland areas.

17. Can one obtain land and still be working somewhere else?

One of the requirements is that the applicant should be committed to farm on a full-time basis, except in the case of food safety-net projects, where the beneficiaries will only be producing enough for consumption.
 
18. What what kind of assistance will I get from the government after I have obtained land?

The Department of Agriculture has a post-settlement support services framework in place to assist farmers. Training will be provided periodically and field officers will be available in all districts to offer technical assistance to all farmers, emerging as well as commercial.

19. What kind of documentation will be expected from me?

• Land use proposal/farm plan (project proposal).

• An option to sell with an agreed price, if leasing with an option to buy.

• A list of household members or group members, if the proposal is for a group.

• Confirmation that the title to the land is clear, free from land claims, registered in the name of the seller and that the negotiated price is not higher that the appraised market price.

• Evidence of availability of remainder of financing (own funds or contingent loan contract).

• Valuation report.

20. Where can I go for assistance regarding the professional preparation of the above documentation?

Applicants may do all the planning themselves, or may choose to accept the assistance of a design agent. It is not compulsory to employ one if you feel that you can undertake and fulfil all the requirements. District officers will also assist applicants if needed.

If you decide to appoint a design agent, you can do so by accessing the list of agents at provincial land reform offices or provincial agricultural offices. These agents will then undertake all the necessary work and a planning grant will then be made available for their payment.

TABLE 1 Scale of grant and own contribution

OWN CONTRIBUTION

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

100 000

 

 

25 798

33 278

38 622

42 926

46 592

49 819

52 721

55 371

57 819

60 100

1000

 

26717

33880

39090

43317

46932

50122

52996

55624

58054

60320

2000

 

27585

34463

39548

43702

47268

50422

53269

55875

58287

60539

3000

 

28408

35031

39998

44081

47600

50720

53540

56125

58519

60756

4000

 

29192

35583

40439

44455

47928

51014

53808

56372

58750

60972

5000

20000

29941

36120

40871

44823

48252

51305

54074

56618

58978

61187

6000

21385

30659

36644

41296

45187

48572

51594

54337

56861

59206

61400

7000

22631

31350

37156

41714

45545

48889

51879

54599

57103

59431

61612

8000

23768

32015

37655

42125

45899

49202

52162

54858

57343

59656

61823

9000

24819

32657

38144

42528

46248

49512

52443

55116

57582

59879

62033

 

OWN CONTRIBUTION

110000

120000

130000

140000

150000

160000

170000

180000

190000

200000

-

62241

64262

66180

68006

69751

71424

73032

74582

76077

77524

1000

62448

64458

66366

68184

69921

71588

73190

74733

76224

77666

2000

62654

64654

66552

68361

70091

71751

73347

74885

76371

77808

3000

62859

64848

66736

68537

70260

71913

73503

75036

76516

77949

4000

63063

65041

66920

68713

70428

72075

73659

75186

76662

78090

5000

63266

65233

67103

68888

70596

72236

73814

75336

76807

78230

6000

63467

65424

67285

69062

70763

72396

73968

75485

76951

78370

7000

63668

65614

67467

69235

70929

72556

74123

75634

77095

78510

8000

63867

65804

67647

69408

71095

72715

74276

75782

77239

78649

9000

64065

65992

67827

69580

71260

72874

74429

75930

77382

78788

 

OWN CONTRIBUTION

210000

220000

230000

240000

250000

260000

270000

280000

290000

300000

-

78926

80286

81608

82893

84145

85366

86558

87722

88860

89973

1000

79064

80420

81738

83020

84269

85487

86675

87837

88972

90083

2000

79201

80553

81867

83146

84392

85607

86793

87951

89084

90193

3000

79338

80686

81997

83272

84515

85727

86910

88066

89196

90302

4000

79475

80819

82126

83398

84637

85846

87027

88180

89308

90412

5000

79611

80951

82255

83523

84760

85966

87143

88294

89419

90521

6000

79747

81083

82383

83648

84882

86085

87259

88408

89531

90630

7000

79882

81215

82511

83773

85003

86203

87375

88521

89642

90738

8000

80017

81346

82639

83898

85125

86322

87491

88634

89752

90847

9000

80152

81477

82766

84022

85246

86440

87607

88747

89863

90955

                       

OWN CONTRIBUTION

310000

320000

330,000

340,000

350000

360000

370000

380000

390000

400000

-

91063

92131

93178

94206

95214

96204

97177

98134

99074

100000

1000

91171

92237

93282

94307

95314

96302

97274

98228

99168

 

2000

91278

92342

93385

94409

95413

96400

97370

98323

99261

 

3000

91386

92447

93489

94510

95513

96498

97466

98418

99354

 

4000

91493

92553

93592

94611

95612

96595

97562

98512

99446

 

5000

91600

92657

93694

94712

95711

96693

97657

98606

99539

 

6000

91707

92762

93797

94813

95810

96790

97753

98700

99632

 

7000

91813

92866

93899

94913

95909

96887

97848

98794

99724

 

8000

91919

92971

94002

95014

96008

96984

97944

98888

99816

 

9000

92025

93075

94104

95114

96106

97081

98039

98981

99908

 

GRANT SIZE BY OWN CONTRIBUTION              

GRANT

20000

30,000

40,000

50,000

60000

70000

80,000

90,000

100000

-

5000

15080

33005

60596

99548

151463

217,873

300245

400000

1000

5710

16489

35301

63953

104130

157427

225368

309415

 

2000

6481

17977

37695

67425

108844

163538

233024

318761

 

3000

7315

19549

40189

71014

113690

169796

240843

328283

 

4000

8214

21204

42784

74722

118671

176204

248825

337983

 

5000

9180

22945

45484

78550

123788

182763

256974

347863

 

6000

10214

24774

48289

82499

129042

189474

265289

357923

 

7000

11320

26693

51201

86572

134435

196339

273772

368166

 

8000

12498

28703

54222

90770

139969

203360

282425

378592

 

9000

13751

30807

57353

95095

145644

210537

291249

389203

 

Because the program is intended to function over 15 to 20 years, benefits (grants) under the program will be indexed to the real value of the Rand

21. How do I start the process

Call (012) 319 7020 or consult your nearest Land Affairs or Agricultural Provincial offices below.

Provincial departments of Agriculture and Land Affairs

Province

Department

Contact person

Tel number

Gauteng

Agriculture

V. Titi

011-355 1317

 

Land Affairs

M. Ndlela

012-310 6500

Mpumalanga

Agriculture

R. Matare

013-755 4721

 

Land Affairs

A.van der Merwe

013-755 3499

Free State

Agriculture

M.B. Motsie

051-8611258

 

Land Affairs

W. Barnes

051-400 4200

KwaZulu-Natal

Agriculture

W. Urquhart

033-343 1397

 

Land Affairs

M. Shabane

033-355 4300

North West

Agriculture

Mr Seobi

018-389 5723

 

Land Affairs

P. Mongae

018-384 2437

Northern Cape

Agriculture

F. du Toit

053-838 9111

 

Land Affairs

O. Mvula

053-831 4090

Northern Province

Agriculture

J. Thupane

015-295 7090

 

Land Affairs

E. Letsoalo

015-297 3539

Western Cape

Agriculture

I. Olckers

021-808 5103

 

Land Affairs

S. Middleton

021-426 2947

Eastern Cape

Agriculture

Mr Pityi

040-609 3532

 

Land Affairs

M. Kenyon

043-743 4689

2001

Compiled by Directorate Farmer Settlement and Development
Printed and published by Department of Agriculture, Directorate Communication
and obtainable from Resource Centre, Private Bag X144, Pretoria, 0001South Africa