By Ben Cousins - DST/NRF Chair in Poverty, Land and Agrarian Studies, Senior Professor PLAAS, Institute for Poverty, Land and Agrarian Studies, University of the Western Cape, South Africa

Introduction

Ben CousinsLand reform in post-apartheid South Africa is in trouble. Research reveals that at least half of all projects have seen little or no improvement in the lives of their beneficiaries, mostly because of poor planning and lack of effective support1 . The pace of land transfer from white to black South Africans is slow, and political pressure is building to address the legacies of the large-scale land dispossession that took place under colonial and apartheid rule.

Policy-making on land has become a somewhat ad hoc process in recent years. In 1997 a comprehensive and ambitious White Paper was published and charted a reasonably clear way forward. Since then policies have changed tack several times, often failing to take into account the lessons from implementation of previous policies. In 2009 the newly-elected Jacob Zuma administration announced that rural development and land reform were national priorities, and in 2011 a short, 11-page Green Paper outlined some new policy thrusts, but with scant justification or discussion of past experience.

Two years later, and with a national election around the corner, a series of short policy documents were released in 2013.

Many of these new policy shifts are highly problematic, and, populist rhetoric to the contrary, are likely to result in elite capture of land reform as well as continued insecurity of tenure for the majority of rural people in communal areas, on privately owned and restored or redistributed land.

That these policies have been adopted in the centenary year of the 1913 Natives Land Act, which denied or rendered insecure black people’s ownership of land across most of the country, is deeply ironic. None of the new policies address gendered inequities in land ownership and use.

A brief review of the history of South Africa’s land redistribution, and summary of the most recent policy developments, illustrates a persistent blindspot in addressing the needs of the rural poor.

Land redistribution policies from 1994 to 2013

Land redistribution in South Africa seeks to address the gross racial inequalities in land ownership inherited from the past, but also an underlying cause of rural poverty – lack of access to productive land.

In 1994 the initial target was to redistribute thirty percent of agricultural land, or 24.5 million hectares, by 1999, later adjusted to 2014. By 2012 around 7.5 percent (or 7.95 million hectares) has been transferred through a combination of redistribution and restitution.

A combination of ideological and pragmatic considerations informed the ANC’s acceptance of the protection of property rights in the new constitution of 1996, and also the adoption of a ‘willing seller, willing buyer’ (i.e. market-friendly) approach to the acquisition of land for redistribution.

Until 2006/07 the primary mechanisms for redistribution involved grants to land reform beneficiaries for land purchase and land development, the establishment of legal entities such as communal property associations and trusts to own land, and business planning to ensure projects were ‘viable’.

These plans have often been poorly aligned to the resources, needs and desires of beneficiaries, and almost all have envisaged large-scale commercial farming ventures being established. In practice, if not in policy rhetoric, the option of using redistributed land for smallholder farming has not been supported. Although subdivision of large farms acquired for land reform is allowed in law, very little has taken place in practice, the default option being a curious form of ‘collective farming’ of large enterprises by groups of beneficiaries, an unintended consequence with predictable problems, including a of access to capital and markets.

South Africa’s land reform has thus combined the least effective aspects of both state and market-driven approaches, and it is unsurprising that many projects have struggled to achieve high levels of productivity.

Limits of land redistribution

These problems, together with the slow pace of redistribution, have led to widespread dissatisfaction with the ‘willing seller, willing buyer’ approach. Some political formations have called for the property clause in the constitution to be scrapped, so that land can be expropriated more easily by the state for redistribution.

However, it is not clear that this is in fact a fundamental constraint on land acquisition and transfer on a large scale. The failure of the state to target appropriate land for purchase and to negotiate good prices, together with the ruling party’s lack of political commitment to land reform (evident in the tiny annual budget for land reform, never more than one percent of the total budget), are more likely candidates.

Government now plans to pass a new expropriation law consistent with constitutional provisions that compensation must be ‘just and equitable’. It will enable farm valuations to take account of a range of factors other than market value, such as the current use of the property, the history of its acquisition and use, the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property, and the purpose of the expropriation.

A pro-active land acquisition strategy (PLAS) was adopted as policy in 2006 and is currently the only available mechanism for redistribution. Here the state has purchased farms and allocated them to applicants on the basis of three to five-year leasehold agreements. Funds for investment in farm infrastructure have been made available to PLAS beneficiaries for ‘recapitalisation and development’.

Data on the PLAS programme are hard to come by. Between 2009 and 2012 a total of 882 238 hectares was redistributed to 10 447 beneficiaries, but it is not clear exactly how many of these were for PLAS projects. A small number of case studies suggest that PLAS beneficiaries tend to be relatively well-off and have other business interests, but often fail to pay the rent required of them. The department’s mid-term review of 2012 reports that a number of established (white) commercial farmers are acting as ‘strategic partners’ or ‘mentors’ (264 and 117 respectively) to land reform beneficiaries, and that some have been appointed in order to ‘graduate smallholder farmers into commercial farmers’2 .

New policies

Three new policy documents announced in August 2013 [year] effectively redefine land redistribution policy: the State Leasehold and Disposal Policy (SLDP), the Recapitalisation and Development Programme Policy (RDPP), and the Agricultural Landholding Policy Framework (ALPF) – see Figure 1 below.

New land redistribution policies, 2013State Land Leasehold and Disposal Policy (SLDP)

The  SLDP applies to farms acquired through PLAS. It is targeted at black South Africans, and defines four categories of ‘farmer’ beneficiaries:

  1. Households with no or very limited access to land, even for subsistence production
  2. Small-scale farmers farming for subsistence and selling part of their produce on local markets
  3. Medium-scale commercial farmers already farming commercially at a small scale and with aptitude to expand, but constrained by land and other resources
  4. Large-scale or well established commercial farmers farming at a reasonable commercial scale but disadvantaged by location, size of land and other resources or circumstances and with potential to grow

Categories 1 and 2 will be leased state land at a nominal rental of R1.00 per annum, without an option to purchase. Labour tenants and farm workers who acquire land in terms of the provisions of existing legislation on security of tenure will also lease from the state, but pay only a nominal rental.

Categories 3 and 4 will be leased state land for 30 years, with leases renewable for another 20 years, and have an option to purchase. The first five years of the initial lease will be treated as a probation period in which the performance of the lessee will be assessed, and new lessees will pay no rental in this period. For categories 3 and 4, the rental thereafter will be calculated as 5 percent of ‘projected net income’, as set out in an approved business plan. Leases will require beneficiaries to establish a legal entity with its own bank account in order to engage in business activities, have notarial bonds entered on their leases, provide tax clearance certificates, maintain an asset register, and seek permission to make improvements.

The SLDPs’ four-category typology of beneficiaries is based on the sensible idea that they are not homogeneous. But small-scale farmers in categories 1 and 2, who greatly outnumber larger and commercially-oriented black farmers, will pay only nominal rentals and never have the option to purchase the land they occupy. Farmers will be assisted to ‘graduate’ from one category to the next, the implicit assumption being that ‘bigger is better’. People who want secure rights to well-located land for settlement and as a base for their multiple livelihood strategies, a possible route out of rural poverty, are not catered for at all.

Recapitalization and Development Policy Prog​ramme (RDPP)

The RDPP replaces all previous forms of funding for land reform, including settlement support grants for those having land restored through restitution. Its rationale is that many land reform projects have been unsuccessful because of inadequate and inappropriate post-settlement support and are in ‘distress’, and thus in need of further injections of funds.

It will also provide financial support to black farm owners who are not land reform beneficiaries, and to producers in communal areas. Beneficiaries will be ‘prioritized’ in accordance with the four categories listed in the SLDP, but just what that means is unclear. Again, business or development plans written by either private sector partners or departmental officials will be used to guide decision-making. Funding will be for a maximum of five years. Beneficiaries of the policy will have business partners recruited from the private sector to work closely with them, as mentors or ‘co-managers’, or within share-equity arrangements, or as part of contract-farming schemes.

Key aspects of both the leasehold and the recapitalization policies seem to assume that ‘emerging’ commercial farmers will be the main beneficiaries, as in requirements that lessees set up companies with bank accounts and enter into strategic partnerships with commercial farmers or private sector companies. Some provisions of the leasehold policy assume that there will be only one lessee per farm, and no mention is made of subdividing large farms to provide for smallholders. It is clear that progress towards becoming a large-scale commercial farmer is what is assumed to constitute ‘success’, and that applicants for land who are deemed to fall within categories 3 and 4 are likely to be the main beneficiaries.

Agricultural Landholding​ Policy (ALPF)

The ALPF draws its inspiration from the notion in the 2011 Green Paper that one ‘tier’ of land tenure in South Africa will be ‘freehold with limited extent’.

It proposes that government designate maximum and minimum land holding sizes in every district, and take steps to bring all farms either up to the specified minimum size (a ‘floor level’) or below the maximum size (a ‘ceiling’).

The rationale is to attain higher levels of efficiency of land use and optimize ‘total factor productivity’.

District land reform committees will determine landholding floors and ceilings by assessing a wide range of variables (including climate, soil, water availability, water quality, current production output, commodity-specific constraints, economies of scale, capital requirements, numbers of farm workers, distance to markets, infrastructure, technology, price margins, and relationships between different on-farm resources). Holdings in excess of the ceiling will be trimmed down through ‘necessary legislative and other measures’. What this means is unclear, but the document indicates it may include purchase (possibly through giving the state the right of first refusal on land offered for sale), expropriation, or equity sharing.

The ALPF document reviews international experience of setting land ceilings as a land reform measure, and in particular the cases of India, Egypt, Mexico, the Philippines and Taiwan. The document points out that in almost all cases the impact of land ceilings has ‘not lived up to expectations’, and in some cases have had almost no effect on disparities in land-holdings. The document also states that ‘optimum levels of productivity (i.e. both floor and ceiling) are ‘dynamic and continuously changing upwards and downwards’.

The agricultural land holdings policy therefore lacks a sound basis in both theory and in relevant experience in other contexts.South African agriculture is highly diverse in its products, systems and scales of production, partly in response to high levels of environmental variability (both between and within large district municipalities) but also to market realities. Environmental and market conditions are dynamic and fluctuating, and as the ALPF policy document itself admits, ‘optimum productivity’ is a constantly moving target. Successful farmers, both large and small, are those who are able to improvise flexible and effective responses to dynamic variability. To imagine that anyone (let alone officials who have never farmed themselves) could designate landholding sizes that make economic sense in South Africa today is highly unrealistic.

Strategic partnerships

The Recapitalisation and Development Policy requires that land reform beneficiaries enter into strategic partnerships or mentoring relationships with commercial farmers or agribusiness companies. This is problematic, given the mixed experience to date.

The experience to date of strategic partnerships and joint ventures in land reform in South Africa does not appear to have been taken into account.

Land reform beneficiaries who have entered into strategic partnerships with businesses have had a mixed experience to date. There are some success stories, but a great many failures too. Some of the partnerships established on fruit and nut farms in Limpopo have gone bankrupt, and others continue to struggle to pay any kind of dividend to community members3 . Small-scale farmers on irrigation schemes have had their fingers burned in poorly-managed joint ventures with tobacco and fresh produce companies. Many of the business plans drawn up by these partners have been far from appropriate, and have not provided useful instruments with which to measure the performance of beneficiaries of land reform. Partnerships and business plans are not panacea for failure in land reform. The lessons of recent experience do not appear to inform these new policies.

Conclusion

Since 2009 most policy documents on land reform have stressed the need for ‘agrarian transformation’, defined as ‘a rapid and fundamental change in the relations (systems and patterns of ownership and control) of land, livestock, cropping and community’, and the creation of ‘vibrant, equitable and sustainable rural communities’. Smallholder farmers and the rural poor are often named as key beneficiaries. 

But the new policies are inconsistent and often unclear and close analysis reveals a bias in favour of a relatively well-off class of ‘emerging black commercial farmers’ rather than the rural poor4.


1 See Fact Check Land Reform No. 4, ‘Many land reform projects improve beneficiary livelihoods’, Institute for Poverty, Land and Agrarian Studies, 2013 (www. plaas.org.za/plaas-publication/FC04)

2 Department of Rural Development and Land Reform, Mid-term Review, 2012: 20.

3 Edward Lahiff, Nerhene Davis and Tshililo Manenzhe, 2011. Joint ventures in agriculture: lessons from land reform projects in South Africa. London: International Institute for Environment and Development.

4 See http://www.plaas.org.za/blog/new-land-policies-further-entrenching-poverty-and-inequality

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