LAND REDISTRIBUTION FOR AGRICULTURAL DEVELOPMENT (LRAD)
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 non-refundable 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.
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 will 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 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.