Time to re-examine existing land reform proposals

JOHANNESBURG — There are two missing accompaniments to our incipient land redistribution without compensation draft laws; trust between government and mainly white landowners, and “radical” innovation by land-owners themselves. Innovation may help build trust and certainly lessen the chances of the law being used punitively when (for instance) farmers in a given district pull together to help support new colleagues on the land. This piece discusses an important missing element in the current heated discourse; how can we collectively go about it in a way that addresses historic imbalances and mitigates disruption of the economy via failed new enterprises? It’s a valiant attempt, but I can’t help wondering when the authors posit an admittedly pragmatic proposal in Chapter Six of the National Development Plan. Part of this is that surrounding farmers contribute 40% of seed capital to the new occupant of the expropriated land – in return for not getting expropriated themselves. The politics around that, be it the traditional have/have-not divide or intra-farmer, could form the subject of a thriller novel. Perhaps the central dilemma is how to break the ongoing victor/victim drama and get down to the nuts and bolts of brokered equity in choosing who gets and who gives the land. Story courtesy of the Daily Maverick. – Chris Bateman

By Wandile Sihlobo, Tinashe Kapuya & Theo Boshoff*

Having reflected on the possible unintended consequences of expropriation without compensation, it is worth re-looking at some of the existing proposals that were never fully tested, as a means to facilitate land redistribution.

These include the resolutions from the NAREG process, the High-Level panel report, Operation Phakisa, as well a variety of private sector and academic proposals, among others.

The current land policy proposal ascended from the frustration of perceived slow progress, albeit having shown in this piece that there has been progress if one views this process in terms of hectares moved from white farmers to black farmers (not the productivity of the land).

The EFF are still threatening to colonise farms. More brilliant cartoon work available at jerm.co.za.

With that said, the ongoing land reform discussions provide a window of opportunity to share ideas on how we imagine the land reform process going forward. In other words, after having highlighted the unintended consequences of expropriation, one can also use this opportunity to share views on the best practice to acquire agricultural land for redistribution.

In June 2017, we argued that land reform processes should be more aligned with the ideas raised in chapter six of the National Development Plan as we believe it has more practical steps of effective land reform productively.

The National Development Plan suggested that the identification of transferable farms and beneficiaries should take place at a district level, facilitated by district land-reform committees that were established in 2015. Under the auspices of district committees, a tripartite joint venture approach on land reform will be established.

Read also: Large-scale land expropriation will spark SA banking crisis – expert

Farms for sale could be identified by the committee and a leading successful farmer can be appointed as mentor or co-investor to acquire new land with a qualified beneficiary. The beneficiary should be selected only by the land-reform committee to ensure a good working relationship.

In acquiring the farm, the state can contribute 30% of land value in grant money to the beneficiary. Another 30% can be a loan from the state-owned agricultural bank in the name of the beneficiary and farmer and the remaining 40% would be a cash contribution by other farmers in that particular district.

The contributing farmers would then be exempted from future land-reform claims and the farm could be operated via the farmers’ existing operation to ensure success.

A subsidised interest rate would need to be provided by the state-owned agricultural bank for the loan and backed by a state guarantee in the spirit of risk sharing.

Read also: Private banks risk losing R125bn if land EWC goes totally pear-shaped

If farmers in districts work together and get at least 30% of land in each district transferred to black farmers and thereafter utilised productively, then land expropriation without compensation would not be needed. Agribusinesses and commodity organisations would also have to provide post-transfer support and mentorship to new beneficiaries.

This can be done only if there is a fair and transparent beneficiary selection; grants and loans are disbursed fast; title deeds are transferred and registered speedily; the government shares in the risk of redistributing land and developing new farming operations, and there is policy stability.

One of the most enduring and fundamental factors in the land-reform debate is the trust deficit between the government and private sector. Trust needs to be built in order to ensure the success and sustainability of the land programme and the agricultural sector.