Mail & Guardian
Mail & Guardian

A private land revolution

4 min read

It is possible that the market is transferring as much or more land between whites and blacks than state land reform, according to research released this week by the Centre for Development and Enterprise. It poses a challenge to the notion that only the state can lead land reform.

It suggests the current approach to land reform is too narrow and does not take into account important new realities. For example, although it is not widely known, the private sector is making a major contribution to land reform, and could do more.

Little information is available about the racial breakdown of private land transactions as the Deeds Office does not classify buyers and sellers by race. Nonetheless, using surnames, pioneering research has been undertaken in Limpopo and KwaZulu-Natal. This research indicates that the value of properties transferred from whites to blacks by the market between 1997 and 2000 was five times higher than the value of land transferred by the state.

Research in Limpopo points to the effectiveness of the market as a vehicle for redistributing ownership of agricultural land and suggests that ”land transfers to blacks have occurred much faster when the government has not been involved”. Thus, despite the fact that white-to-white transfers dominate the land market, it is possible that the market is transferring as much or more land between whites and blacks than state land reform. A national study quantifying market redistribution is urgently needed.

South Africa has a robust rural land market. It is estimated that more than 5% of the country’s land is up for sale every year. This form of redistribution is not being taken into account when progress towards the 30% redistribution goal is calculated.

Private sector organisations have become increasingly involved in land and agricultural reform, and have achieved meaningful results. Our research has uncovered a wide range of initiatives. Two examples:

  • The timber industry has established outgrower arrangements with more than 12 000 emerging producers. The companies involved provide black farmers with free seedlings, interest-free loans, technical advice, advance payments and, most importantly, a market.

  • Over the past 30 years, the sugar industry has facilitated the development of small growers operating on communal land. There are now about 48 000 small growers, occupying 19% of the land under cane. Last year the South African Sugar Association set up the Inkezo Land Company, which aims to transfer 78 000ha of land to emergent growers by 2014, which will bring land redistributed by the industry to one-third of its total land.

    • Private sector initiatives taking place are voluntary and remarkably diverse. Unlike the relatively few government programmes, private-sector land reform falls into at least eight categories:

    • large-scale company or agri-sectoral initiatives directed at land redistribution — as in the sugar industry;

  • outgrower arrangements;

  • sponsorship and innovative financing mechanisms offered by the banking sector to emerging farmers;

  • support from regional co-ops and agricultural/farmers’ associations to black emergent farmers. South Africa’s largest fruit exporter is facilitating the development of emergent farmers by investing in black-owned farms and by developing the ”Thandi” range, a label to be used by all fruit-producing farms with a significant black share-holding;

  • initiatives by sector-specific organisations — for example, the National Wool Growers’ Association — to promote new black entrants;

  • inititiatives by agri-businesses to train black emerging farmers to produce the products they require — for example, Monsanto Inter-national’s training in vegetable production in the Delmas region;

  • share equity initiatives between farm owners/managers and workers; and

  • new factories or processing plants that create new areas of black farming. An example is Stoney’s Peppadew in Tzaneen.

    • It is important to note that these achievements have not been adequately quantified and are generally not included in official accounts of land reform progress.

    Ann Bernstein is executive director of the Centre for Development and Enterprise. This article is based on the centre’s publication, Land Reform in South Africa: A 21st century perspective