Getting started

Beneficiaries, once informed about the options available within LRAD, select the desired amount of the grant according to their preferred own contribution. They will also decide whether to apply individually or as members of a self-selected group. They will then locate an available area of land, either through their own knowledge, or through the assistance of an estate agent or a DLA or agricultural officer. The land should have the necessary water rights if irrigation is contemplated, and the rights should be specified in the sale contract and reflected in the land price. Once a suitable area of land is located, the participant(s) will enter into a contingent contract with the seller, with the contingency consisting of approval of the project under LRAD.

With or without assistance of a design agent, the participant prepares a farm plan or land use proposal (project proposal), indicating the intended agricultural use of the land and estimating a rough projected cash flow. The participant obtains evidence of additional financial resources (loan, own resources, or both). In terms of contributions in own labour, an individual applicant can claim up to R5000.

The participant next submits all documentation to the local agricultural officer to receive his or her opinion regarding the feasibility of the farm plan (project), including its agricultural potential, value of the land relative to market prices for that of comparable quality and access to water, cash-flow projections, and environmental assessment. Once the local agricul­tural officer has provided an opinion, the participant submits the proposal package to the provincial grant committee (which comprises officers of Land Affairs and Agriculture), which meets as required.

A complete package ready for submission would include:

• The land-use proposal/farm plan (project pro­posal)
• A draft purchase or rental offer for the land
• A list of beneficiaries and their contributions, if the proposal is not individual
• Confirmation from the local agricultural officer that the seller is in legal possession of title and confirmation from a professional valuer (registered with the Council of Valuers) that the land price is reasonable in comparison with recent land transactions in the area
• Evidence of own contribution and any necessary financing in addition to the grant (draft loan agreement, own funds)
• Opinion of the local agricultural officer on feasibility (agricultural and environmental issues).

Upon review of the package, the provincial grants committee makes one of three determinations:

• Complete and in conformity with the requirements of LRAD: approve
• Complete but not in conformity with requirements of LRAD: do not approve and state reasons
• Incomplete: return to applicant and state reasons.

The provincial DLA director, who is part of the provincial grant committee, will together with the Provincial Grant committee approve or reject the application. The provincial Grant Committee will decide either way.

The Provincial DLA director will be the official to who delegated powers in terms of the PFMA will reside from the Director-General: Department of Land Affairs, but should not and must not exercise that authority outside of and separate from the criteria used by the Provincial Grant Committee.

Frequently, farm workers or former farm workers may be residing on the land being contemplated for purchase.  The interests these existing residents must be borne in mind.  A number of different solutions are possible, including accommodating them within the group of applicants, and assisting them to apply for separate tenure security grants.