Business

Land audit urgently required

Lynley Donnelly

The facts are few but there have bee logistical and political reasons why the state is dragging its feet.

A meaningful debate about land reform is hampered by a lack of accurate information. (David Harrison, M&G)

The charred vineyards of De Doorns are evidence of how imperative it has become to make land reform work.

This week, the labour minister raised the minimum wage for farmworkers to R105 a day, but it is increasingly clear that even the doubling of wages may not be enough to secure the livelihoods of rural people who rely on the land for their income.

The land reform debate is fraught with political posturing, with hard numbers about the progress of land reform, or the lack of it, very difficult to come by.

The government target is to return 30% of white-owned agricultural land to black South Africans by 2014 – or 25.9-million hectares of a total of 86.2-million hectares of commercial agricultural land.

This is land redistribution, which is distinct from land restitution. Restitution refers to cases where claimants were kicked off their land and are appealing to have the property returned to them.

According to the South African Institute of Race Relations in its 2012 South African Survey, about 95.6% of restitution claims have been resolved.

When it comes to redistribution, by March 2012 South Africa had reached 15.5% of that 30% target, or slightly more than four million hectares of the 25.9-million.

Redistribution
Provinces that have seen the most progress are KwaZulu-Natal, in which 61.6% of land available for redistribution has been given to black South Africans, and North West, which reached 51.8% of its 30% target by March 2012. But provinces with additional productive land, such as the Free State, Eastern Cape and Western Cape, have redistribution rates of 15.2%, 12.6% and a dismal 4.5% respectively.

According to Kerwin Lebone, a researcher at the institute, a contributing factor to the performance of KwaZulu-Natal is the large sugar mills that have partnered with their workers in the redistribution process. But it is unclear  why the North West had seen the results it had.

In a presentation by the department of rural development and land reform made in October last year the redistribution rates were higher than those reported by the institute.

The department put redistribution closer to 6.97-million hectares of a total 24.5-million, or 28% of the target.

The picture is further complicated by anecdotal reports that emerged  in 2012 about the number of private sales between black and white individuals that took place outside the formal redistribution processes.

Professor Johann Kirsten at the department of agricultural economics, extension and rural development at the University of Pretoria  said last year that work done by the KwaZulu-Natal agricultural union, Kwanalu, shows that more white agricultural land may have been transferred into black hands through private sales than official numbers indicate.

Because the deeds register makes  no reference to race, estimating the actual ownership of land by black people is difficult, said Kirsten. On the basis of studies done by entities such as Kwanalu, Kirsten said the land owned by black people ranged from 15% to 28% of all privately owned agricultural land in a municipality to as high as 40% in some cases.

The restitution process
In KwaZulu-Natal it is estimated that privately owned land makes up 48.8% of the province and of the 2.4-million hectares of privately owned land for which ownership has been verified, 39.8% is in the hands of black individuals or communities. Add in land owned by traditional authorities, such as the Ingonyama Trust, as well as land owned by the state, and only 24% of land in the province is in white hands.

Kirsten said that the state's record of land reform does not take into account cases where, through the restitution process, claimants have opted to take monetary compensation for the land in question because the government had not converted these values into hectares.

Institutions such as the Institute for Poverty, Land and Agrarian Studies (Plaas) have questioned these figures and have said that many people getting land were in fact inheriting land in the former KwaZulu-Natal homelands, which amounted to intergenerational  rather than inter-racial transfers. Also, the black farmers able to buy land on the open market represent those who are better off and, although this contributes to a slow racial change in land ownership, it does not address rural poverty.

But Kirsten said the anecdotal evidence by Kwanalu and other unions suggest that change is happening faster than official figures suggest and belies the political rhetoric that the willing buyer, willing seller principle has failed.

It is imperative that the state completes a long-awaited land audit, including that of state-owned land, he said. "We need the facts on the table."

A comprehensive land audit appears to be the best way to assess the success or failure of land reform. It could have aided and informed the widely criticised green paper on land reform released in 2011. The meagre 11-page document sketches out the path land reform is to take, including the introduction of a land valuer general to bring some equilibrium into land valuation, which has stymied the willing buyer, willing seller approach.

Percentage of a percentage
It could help to clarify the debate about the progress of redistribution, in particular.

Ruth Hall, an associate professor at Plaas, said the redistribution levels being reported are in essence a "percentage of a percentage". When the land redistributed to black beneficiaries is measured against the total 86-million hectares of commercial farmland the figure is  closer to 4.6%.

According to Hall, the audit is  sorely needed and overdue, but there are logistical and political obstacles to completing it.

Many spheres of the state – national and provincial departments, municipalities and state-owned enterprises – have differing and incomplete information about their own holdings, she said. The process of compiling and auditing the information began a decade ago but is incomplete.

The political challenge is that, over time, the government has become much more concerned that knowledge of what land is owned by the state is likely to lead to land occupations.

Overall, land reform progress is a "mixed picture", Hall said.

"There have been successes in redistributing land, with some households and communities getting land and being able to settle there, farm it and improve their livelihoods," said Hall. The most recent data from the department, released in 2009, suggest that 52% of beneficiaries are cultivating and another 40% grazing livestock.

"Of course, there have been failures in the sense that land has been acquired, but people haven't moved to it for a variety of reasons, or farming started and then stopped, funds dried up, and so this public investment was wasted, and the so-called beneficiaries didn't in fact benefit," said Hall.

'Not the answer'
"Many of these failures stem from inappropriate project planning, which expects poor people to take over whole commercial farms while facing the same market conditions as their predecessors, many of whom had the benefit of years of state subsidy, trade protection and experience, but with little outside support and limited operating capital."

That is why simply speeding up land reform and repeating the same mistakes is "not the answer", Hall said.

In a bid to improve on previous land redistribution the state introduced the proactive land acquisition strategy, through which the government has bought up land and leases it out to emerging farmers. But, in practice the land was being leased out at below market rates, in effect for free in many cases, because rents were not being paid, Hall said.

There was little transparency about eligibility or selection criteria, she said.

"This raises serious questions about equity – about how public money is being spent for private accumulation, especially since it seems that most of the lessees are individuals or a small number of business partners," said Hall.

"The criteria are not clear in policy, and the project data are not being released."

Public spending
Parliament was only presented with total expenditure figures. According to the department's 2012 mid-term review, an average of R8-million was spent per project, and R652000 per person.

"These figures seem high and there is likely a great deal of variation around them," said Hall.

"We just don't know who is getting what and why, so it's very difficult to monitor land reform and its effectiveness as public spending."

According to the department, for these projects, R153-million in leases is outstanding and another R27-million has been written off.  

 


 

 

State envisages a four-tier system

 

Mtobeli Mxotwa, spokesperson for the ministry of rural development and land reform, defended the green paper and said it would provide critical support to land reform programmes and rural development.

He said the proposal was to integrate the current forms of land ownership – communal, state, public and private – into a single, four-tiered system. It proposed to convert state and public land to leasehold; privately owned land to freehold but with limited “extent” (possibly caps on the amount of land); land owned by foreigners to freehold, but with certain obligations and conditions; and communally owned land to communal tenure, with institutionalised use rights.

The proposals would be fleshed out by legislative and other policy proposals put to the Cabinet and would be based on consultations, research com­missioned and regulatory impact assessments done on each proposal.

The establishment of a land management commission was one such example and, once it was up and running later this year, its primary function would be to register land ownership, he said. The state had never undertaken a project of this nature and the commission would perform this function.

Mxotwa said anecdotal evidence of changing patterns of land ownership should be welcomed and “seen as complementing the achievements of the redistribution, tenure security and restitution programmes”. But reports of private sales were not comparable to purchases by the state where there was extensive evidence that prices were artificially raised by owners, at times in collusion with the valuers, estate agents and officials.

The proactive land acquisition strategy was fully transparent, he said, and it was “incorrect to suggest that individuals/ small groups are unfairly benefiting from this process”. The leases were not market related because “this is a land redistribution and empowerment process and not a profit-making initiative”. They were subsidised to assist farmers to be fully operational before they could pay market-related rentals, he said.

The selection process included the vetting of applications by the national land allocation control committee, which considered the applicant’s farming knowledge, the applicant’s current farming status, farming equipment and livestock. 

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