The economic recession is not affecting the price of agricultural land, which is escalating, MPs heard on Tuesday.

Coupled with budgetary constraints, this posed a serious challenge to both land reform and restitution programmes, rural development and land reform director general Thozi Gwanya told a joint meeting of Parliament's agriculture and rural development and land reform portfolio committees.

"We have settled about 95 percent of the 79,696 land claims that were lodged, enabling restoration of at least 2.3 million hectares to the people who were victims of land dispossessions.

"This has not been without challenges, one of which has been budgetary constraints. We need about R15-billion to settle the outstanding 4200 land claims, and we have got escalating land prices," he said.

The figure of R15-billion is less than half the amount the Land Claims Commission says is still needed.

At a media briefing in February this year, following a meeting of regional land commissioners, then acting chief land claims commissioner Andrew Mphela said the state had approved restitution awards of R17,6-billion to date.

He told journalists at the time that restitution and land claims would cost "at least R52-billion by the time the process is finished".

Gwanya told members on Tuesday that escalating prices were a problem.

"Some people have been saying the recession might lead to a drop in land prices, especially for housing, but it doesn't look like it is having any affect on the prices of farms.

"This is particularly when it is known the land is bought for government. Once the farmers know the land is bought by government, they tend to demand more."

Commenting on the willing buyer, willing seller principle, Gwanya said this was under discussion.

"We have got a discussion document around that, where we would like to review this willing buyer, willing seller."

Turning to land reform, he said the "aggressive implementation" of this was one of his department's strategic priorities.

"We have redistributed five million hectares of the target that we must redistribute, which is 24.6 million hectares, which makes 30 percent of agricultural land by 2014.

"Clearly, this has been very slow progress and there have been challenges, which the department is dealing with."

A briefing document tabled at the meeting alludes to rising land prices as the most serious of these challenges.

"If the department is to meet the 30 percent target by 2014, it would have to deliver more than three million hectares of land per annum.

"In this regard, the most serious challenge being faced by the department is the ever-increasing land prices and inadequate budget for land requisition," it states.

Last week, Rural Development and Land Reform Minister Gugile Nkwinti said the current recession was forcing government to find a cheaper alternative to the willing buyer, willing seller system of land reform.

"We will investigate less costly models," he told MPs at Parliament during debate on President Jacob Zuma's state of the nation address.

It did not seem possible the state could come up with the estimated R71-billion needed over the next five years to buy land for redistribution, he said at the time.

Sapa

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