The numbers for effective land restitution and redistribution are astronomical, the time short and sometimes it seems that only a miracle can ensure the success of the programme.
The government’s land reform programme requires big spending, close to R2-billion a year. But the total budget for the Department of Agriculture and Land Affairs was less than R2-billion this year. A massive R13-billion is needed next year to meet President Thabo Mbeki’s restitution deadline at the end of next year, where land or cash compensation is given to communities dispossessed during the apartheid years.
Minister of Agriculture and Land Affairs Thoko Didiza conceded last month that the government did not have the R13-billion needed to meet the deadline.
Land reform targets require 30% of South African farmland to be in black hands by 2015. But recent statistics show that only 3% has been transferred to black ownership.
At the moment 71% of all restitution claims have been settled, at a cost of R4,2-billion, of which R2,7-billion was cash compensation. The remainder poses a serious challenge to the restitution commission’s funding, because it includes problem areas in Limpopo where one claim can blow a year’s budget.
Although most land stakeholders agree that land reform is too slow and that finances present a major obstacle to reform, different people have different ideas of how to overcome the department’s money blues.
Willing buyer, willing seller — paying market-related prices
This is the current model being used, but land activists such as the Landless People’s Movement (LPM) and the National Land Committee (NLC) say it is doomed to failure. Farmer unions such as AgriSA insist that this is the best way to manage land reform.
Ruth Hall and Edward Lahiff, researchers at the Programme for Land and Agrarian Studies (Plaas) at the University of the Western Cape, say the land reform programme has relied heavily on the market to provide land for redistribution, under the so-called willing buyer, willing seller approach.
In its submission to the portfolio committee on agriculture and land affairs, Plaas blamed the market-based approach for the slow pace of land reform.
But the government insists that it will abide by the property clause in the Constitution, and will honour the willing seller, willing buyer principle.
“But we are encouraging land owners … to offer reasonable prices for their land,” says Hilgard Matthews, spokesperson for the chief land claims commissioner.
In 2002 the total value of land in South Africa was estimated at R57-billion. To purchase 30% of this by 2015 would cost R17-billion, or R1,5-billion a year.
At 2002 prices, this is a conservative estimate and the end cost might break South Africa’s bank.
Expropriation — non-market related prices, but with some form of compensation as required by the Constitution
This option, supported by many land stakeholders, will definitely be cheaper than paying market-related prices for farms. Sellers will receive compensation.
The government can also pay a flat rate to farmers for their land. Andile Mngxitama, programme director of the NLC’s land rights and campaigns, says this would be feasible because “there is nothing in the Constitution that suggests that market compensation must be paid when land is redistributed for land reforms”.
Hall says the government may be able to bring down the cost of acquiring land for land reform purposes to some extent by expropriating land and paying “just and equitable” compensation, as required by the Constitution, rather than market prices. The potential savings to the fiscus need to be weighed against the potential backlash from farmers and investors.
Zimbabwean-style expropriation
This is definitely the cheapest option, but may turn out to be very expensive in the long run, as Zimbabwe has shown. But the capital cost for the government is zero.
Hall says a state-driven process of land confiscation is not on the cards politically, though community occupations of unutilised land may become more common in the future.
Maureen Mnisi, chairperson of the LPM in Gauteng, says the government will have to move away from the “failed” market-led land reform programme, “or any other policy that requires poor people to buy back stolen land”.
Outside donors or private partnerships
One of AgriSA’s proposals to fund land reform is to get outside donors to fund the land reform programme. This will mean that market-related prices are still paid for farms, but will take some of the financial strain away from the government.
Hall says donors have been willing to contribute funds to South Africa’s land reform programme, “but there has been no indication that funds would be available on the scale that is needed”.
She says the issue of who pays for land reform is also politically contentious, as this provides substantial influence over the way in which the programme is implemented.
Land tax
Glen Thomas, Deputy Director General of Land Affairs, proposed a “land reform” land tax at the Black Management Forum conference last month. He said the land tax will finance land reform and said that such a tax will also bring down land prices.
Land tax will not be something new. South Africa already has legislative provision for agricultural land to be taxed. As it stands the power to determine whether to tax agricultural land, and at what level, is in the hands of municipalities.
Increasing the land budget
Land activists have long called for an increase in the land budget. While there has been a significant increase in total funding allocated to land affairs department in recent years, this has never amounted to more than 0,5% of the total national budget.
Since last year restitution has constituted more than 50% of the total land affairs budget, but Hall and Lahiff project that the land reform component will fall as low as 23% in 2005/06.
Hall says it is clear a substantial increase in the budget for land reform is needed, both to increase the pace of reform and to ensure that, where land is redistributed, it can be used sustainably to improve the lives of beneficiaries.