Johann Kirsten
CROSSFIRE
Concerns about the viability and justification of the new approach to land reform by the Minister of Agriculture and Land Affairs, Thoko Didiza, have been raised since she announced her new approach in February.
But Didiza’s new approach is an appropriate intervention when one considers that the land reform programme went off track some time ago.
The government adopted the land reform programme in 1994 with the ambitious target of redistributing 30% of the total agricultural land area within five years. Lessons from international experience were taken on board and the South African programme was designed to avoid the costly mistakes of programmes in other countries. Despite these sound intentions, research at a number of institutions has shown that the land reform programme as implemented since 1995 has made many of the same mistakes it initially tried to avoid.
In terms of the market-assisted approach to land reform adopted by the government, historically disadvantaged, landless, poor South Africans may qualify for a grant (commonly known as the settlement and land acquisition grant) to purchase and develop farmland. In practice, beneficiary households have to pool their meagre grants in order to buy land from a willing seller – a process made possible by the Communal Property Associations Act, which has had a major impact on the process of market- assisted land reform in South Africa. For many rural households, it is the only way to acquire farmland, because the Sub- Division of Agricultural Land Act (Act 70 of 1970), barring the sub-division of farms into affordable pieces of land, is effectively still in place.
In most cases, farms financed with land grants and settled by groups of households are too small to support all of the beneficiaries as full-time farmers. The Department of Land Affairs anticipated that emerging farmers would use the grant to leverage loan finance for additional land. However, research by Andrew Graham and Mike Lyne of Natal University has shown that most creditworthy farmers do not qualify for a land grant, as the means test applied to potential beneficiaries precludes individuals with a monthly household income greater than R1E500.
While some black farmers were collectively or individually making use of the government grants to purchase land, a considerable number of private land transactions have already taken place without the grants. Recent studies at the universities of Natal and Pretoria of deed transfers to previously disadvantaged persons through private transactions in the Northern Province and KwaZulu-Natal show many more private land acquisitions by black farmers than similar transactions where the government was involved – our estimate is at least five times as many. In the Northern Province a total of 62 transactions were recorded where black people acquired farmland outside the land reform programme during 1997 while only three common property associations acquired their land during 1997.
After almost five years, the government’s efforts have resulted in the redistribution of only 1% of the country’s farmland – a long way from the 30% target that was initially set.
What went wrong?
In the first place, there was a range of features of the administration of the land reform programme that violated the initial design criteria. The large bureaucracy that emerged and the length of time required for approval of a grant were astonishing. The ideology behind the market-assisted process was to minimise the role of government. This has clearly not been achieved. The excessive centralisation of the land reform programme can be considered as the main reason for the poor performance and the slow delivery of land to beneficiaries.
The land reform programme has faltered on other points as well:
l The economic viability of the farm models has not been adequately addressed; the insufficient land size and quality involved in options available to resettled households generally cannot provide the target income. And other assistance and infrastructure necessary to generate income has not been readily available to beneficiaries.
l There has been no clear definition of the role that the public sector can and must play, and what should be best left to the NGO sector.
l The need for additional services – infrastructure, markets, incentives, health – to be considered and access provided has not received adequate attention. These considerations are necessary both to sustain higher productivity consequent on reform and to include others who may not benefit from the direct provision of land.
l Changes to the legal environment have been aimed at establishing the rights of particular marginalised groups. However, some major impediments have not been addressed – for example, the Sub-Division of Agricultural Land Act, which is still in place.
l The focus on the poorest of the poor has created a limited potential for successful and sustainable use of farmland. It has also shown a lack of understanding of the benefits that can be created for the poor if strong rural economic growth can be generated through the successful empowerment of a new class of rural entrepreneurs.
Against this background, it is not surprising that the land reform programme has not lived up to expectations and that it was doomed to fail in obtaining its redistribution targets. More importantly, the objectives of increased efficiency and equity, increased growth, and poverty reduction look unlikely to be achieved. It is also doubtful whether the programme, as implemented until recently, has the ability to create the class of independent and viable small-scale family farms that was initially envisaged.
The challenge was thus to find ways and means to put the programme of redistributing farmland back on track. The new approach contained in Didiza’s policy discussion document is a serious effort in this regard.
The new approach to land reform acknowledges the importance of commercial farming as stimulus for rural economic growth. Although the new approach “could widen the divide” between rich and poor, it will however be creating many more income- earning opportunities for the rural poor. It will be a far better situation than the equality of misery created by an approach only focusing on the poorest of the poor. The establishment of a class of black commercial farmers would do much more for the rural poor than a poorly executed and centralised effort by the government.
The approach announced by Didiza is therefore a much more serious effort to empower black farmers and promote real economic empowerment, and it is a sustainable effort to help the poor indirectly. It will, however, be important that her effort to implement the programme be well planned and well co-ordinated. It is furthermore critical that all support services for agriculture – that is, research, extension, finance, information, infrastructure – be in place to provide the conducive environment for a vibrant and successful agricultural sector.
Johann Kirsten is professor in agricultural economics and head of the department of agricultural economics, extension and rural development at Pretoria University