/ 12 May 2008

Why land reform is stuck

For most South Africans, the history of land is one of pain and injustice. People must be fully compensated for land and assets that were stolen.

Land reform needs to make its beneficiaries and the country better off. Little is gained in the long run if justice turns out to be purely symbolic, leaves people poorer or even aggravates grievances. So it’s worrying that, as the director general of land affairs is reported to have said, at least 50% of government land-reform projects have failed to make their beneficiaries permanently better off.

The restitution process — one of the key policy instruments for righting the wrongs of the past — is now seriously bogged down. The vast scale, complexity and slow processing of about 5 000 remaining rural restitution claims mean that large swathes of productive commercial agricultural land have effectively been frozen for years to come.

Land under claim cannot be bought, sold or used as collateral and new investment, even maintenance, stops. In some places, a very high proportion of land is under claim. For instance, according to the South African Cane Growers’ Association, 50% of all cane land is under claim. Nearly half of the timber land owned by Mondi is under claim.

There is no prospect of meeting government’s 2008 deadline for completion. If current trends continue, significant parts of the rural economy will decline while the patience of claimants is strained.

Some have begun to look for quick, radical solutions. The Department of Land Affairs is encouraging municipalities to levy very high rates on farm land, to make it unaffordable for established farmers to stay on it and thus to push down prices. Parliament is now considering an expropriation Bill to expand state powers to buy land at below market prices and without the owners’ consent.

This would undermine owners’ access to the courts if they object to expropriation. Following Zimbabwean and Namibian examples, the department has suggested that government should have the right of first refusal on all land outside developed urban areas and that without a certificate indicating government’s lack of “present interest”, such land cannot be sold on the open market.

These proposals assume the main obstacle to successful restitution is white farmers’ unreasonable demands for high prices.

But extensive research throughout the country provides no proof for these accusations. There is no consistent upward movement in the prices government has been paying to settle restitution claims.

Instead, prices fluctuate depending on the type of property being bought. Some recent claims on large and valuable sugar and fruit farms have been expensive to settle, but overall restitution transaction prices only increased by 1,1% annually during the period examined. The evidence simply does not support the notion that restitution prices have been unreasonable.

Instead, the slow pace of processing and settling the remaining claims appears to be largely attributable to two factors: lack of skills and a serious mismatch between the value of the land under claim and the land-restitution budget. Many officials know far too little about the realities of agriculture to be effective. In 2008/09, the Land Affairs Department has R6,6-billion to spend on all its programmes. To put this in perspective, just a handful of claims on valuable coastal land could cost R1-billion to settle.

Incorrect, racially tinged assumptions, low budgets and low capacity all look alarmingly like the beginning of a Zimbabwe-style approach to land issues. We need to change course. The Centre for Development and Enterprise is calling for urgent action to get restitution — and the whole land-reform process — back on track. We have proposals for a bold new approach to land issues and rural development.

This will need to be based on a more accurate analysis of what is holding up land reform; on what we can realistically achieve; what rural black South Africans really want in the 21st century; and on much greater use of public-private partnerships to bring private-sector capacity and expertise to bear on this urgent national challenge.

Ann Bernstein is executive director of the Centre for Development and Enterprise. This article is based on her new report, Land Reform in South Africa: Getting Back on Track, which she co-authored with Dr Jeff McCarthy