Agriculture, Land Reform and Jobs Roundtable

The focus of this new CDE report is on the agricultural sector’s ability to generate growth and jobs within the current political and economic context. In particular, the report focuses on the effect the current land reform debate has had on critical investments and job-generating initiatives in the agricultural sector as well as how it may impact on these in future.

Click here to download the roundtable report.




Agriculture, Land Reform and Jobs Summary Report

The focus of this new CDE report is on the agricultural sector’s ability to generate growth and jobs within the current political and economic context. It draws on the discussions and materials presented at a CDE expert roundtable on agricultural growth, land reform and jobs, held in June 2018.

Click here to download the summary report.




INFOGRAPHIC: AGRICULTURE, LAND REFORM AND JOBS




OP-ED: Smallholders at the forefront of land reform. The right road or a dead end? | City Press

It is vital that the assumptions on which arguments for rapid and large scale transfer of land to small holders rest on solid evidence, by William Beinart and Peter Delius.

The current heated debate on land reform is fuelled by bold pronouncements about how white-owned land should be secured for African people.

But it is marked by an absence of detailed policy discussion about what should be done with the land that is redistributed.

Prof Ben Cousin has set out to fill this void with the suggestion that 48-million hectares of commercial farmland, 60% of the existing freehold, commercial farmland, should be acquired by the state over the next 15 years and given to about 200 000 “market-oriented smallholders”.

President Cyril Ramaphosa, apparently echoing this approach, has stated that the initial focus of the government’s plans for land redistribution will be the group of around 200 000 emerging black farmers who are “yearning for land”.

Smallholders occupy a considerable area of agricultural land in South Africa, perhaps 23-25 percent (over 20 million ha), and we agree that where possible, they should be assisted to intensify production and market their output.

But at present they produce relatively little and evidence suggests that they are, as a whole, withdrawing from farming.

It is vital that the assumptions on which arguments for rapid and large scale transfer of land to small holders rest on solid evidence.

Our analysis of deep seated patterns of change, the current levels of production and impediments to expansion suggests that the idea of transferring large amounts of new land to small holders is more likely to do economic harm than alleviate poverty.

There is the added danger that a crude version of these proposals will serve as an intellectual fig leaf for deeply destructive populist policies.

In the late nineteenth century and early decades of the twentieth century, South African smallholders intensified their production with new crops such as maize; some produced for markets.

This historical success together with the more recent experiences of land reform in societies such as the ‘Asian Tigers’ has provided a model for some South African policy makers.

But South Africa differs from the latter examples in that conquest, land dispossession, taxation and other pressures set in motion the tragic destruction of black small holder production in the 20th century.

Instead it was a pervasive and increasingly coercive system of migrant labour that left the most indelible mark on most African rural communities and fundamentally restructured their economic and social systems.

These pressures ensured that the development of black farming was stunted.

The former homelands, in which land is very largely held by African people, represented about 14-15 percent of the land (17-18 million ha) in 1994.

This is not the worst land in South Africa; much is in the higher rainfall areas in the eastern half of the country.

There is considerable debate around how much land has been transferred to black people in the democratic era but we estimate that if private land transfers are included there is now around 26-27 percent (25 million ha) in black hands with additional redistributed land owned by the state.

However, if you travel through the former homelands, it is striking how little land is being used for arable agriculture.

Approximately 80 percent of former fields are no longer used, amounting to hundreds of thousands of hectares – perhaps close to a million.

This is a huge amount of land, a third of the amount that commercial farmers use for maize.

If farmed with relatively effective inputs, it could potentially produce a great deal more maize, and other crops, leaving sufficient land for grazing as well.

This development could transform the economy of the areas currently occupied by African landholders.

Smallholders are presently producing less than 5 percent of the maize in South Africa; they are probably producing a higher percentage of the vegetables, but even less of many other crops and fruits.

Livestock are still seen as valuable investments and prices for slaughter animals are good.

But even here, meat production does not meet rural demand.

The great bulk of food consumed in the rural areas is purchased.

There are therefore potentially huge opportunities for African growers to market locally in the rural areas and small towns.

It is clear that land shortage is not a key impediment to expanding production.

Other impediments are far more important.

Agricultural technology is a bottleneck. Few have teams of oxen for ploughing, and tractors are expensive to buy, maintain or even hire.

People see smallholder farming as hard work for risky and limited returns; the costs of seed, fertiliser, ploughing and equipment are prohibitive.

Many associate it with poverty and a way of living that no longer accords with their ideas of modern living.

Family labour is less available but the transition to wage labour has not generally been made.

The existing tenure systems make it difficult to accumulate land.

Land acquired through land reform is usually held within Communal Property Associations (CPAs). These have some of the same benefits as communal areas, providing access to land and grazing for a large number of families. But they also lead to the same disadvantages for individual families in that they are managed collectively and often to the benefit of the few.

Although the overall picture of smallholder farming suggests a decline, there are exceptions.

These “pockets of dynamism” suggest where investment and assistance may be most productive.

Some irrigation schemes that were built in the homeland era are thriving but many are not effectively managed and offer scope for intensification.

Joint ventures or partnerships with the private sector have been an important innovation.

These are now very diverse. In sugar, forestry and wool for example, there may now be around 50 000 smaller black farmers who connect with major companies both for production and marketing and this is probably the fastest growing area of smallholder production.

Land restitution is resulting in a variety of leasebacks where successful claimants gain ownership of the land but lease it back to established or new commercial operators.

Our research suggests that there is great scope for innovative thinking and projects on the land already occupied by black smallholders in the former homeland areas or on recently transferred land.

This may now constitute around 25 percent of agricultural land much of it in areas with over 500mm rainfall.

It is essential that the current landholders receive upgraded, secure tenure in these areas.

Unlocking the productive potential of these areas should be a policy priority and would generate considerable, widely distributed income, as well as provide the basis for other businesses.

Successful redistribution that facilitates production will require far more support than has been provided so far.

The state does not at present have the resources to provide adequate extension services and agricultural education for those who hold land.

It is vital that private sector resources are mobilised as well.

The issue is not so much the area of land involved but the capital, inputs and skills to bring it into production and to enhance rural livelihoods rather than spread rural poverty.

A fast track process to land redistribution in which land allocation runs ahead of support structures and infrastructure (including basic services such as schools and clinics) is likely to be a dismal failure.

The damage will be even greater if the manner of implementation undermines confidence and productivity in the commercial farming sector which will for the foreseeable future remain fundamental to food security and economic growth.

Large numbers of people have and will continue to move to the cities. The government should prioritise provision of residential sites and housing in secure forms of private tenure.

In peri-urban areas and in smaller towns, some of which still have a good deal of municipally owned land, there is scope for larger plots that allow for urban gardens.

In the context of a rapidly urbanising society the overall assessment of the progress of land reform should include urban land and the expansion of property ownership in its criteria and should not be restricted to rural land.

Based on our recent contribution to CDE’s VIEWPOINTS series, Smallholders and land reform: A realistic perspective.

• Beinart and Delius are Emeritus Professors at Oxford and Wits Universities respectively.




CDE PRESENTS TO PARLIAMENT’S JOINT CONSTITUTIONAL REVIEW COMMITTEE on Section 25

On Friday 26 October 2018, CDE’s Ann Bernstein, gave evidence to the Joint Constitutional Review Committee arguing for accelerating land reform but against changing section 25 of the constitution.




VIEWPOINTS | Smallholders and land reform: A realistic perspective | CDE

The latest report in CDE’s VIEWPOINTS series, Smallholders and land reform: A realistic perspective shows that land reform policy will fail if it ignores where the major demand for land lies. Continuing urbanisation suggests that the demand is for securely held sites in urban and peri-urban areas.

Professors William Beinart and Peter Delius analyse historical trajectories and current levels of production to show that the rapid transfer of more land to smallholder farmers will not be the solution the country needs. Land reform and agricultural policy should unlock the productive potential of current smallholders where possible but policy should also encourage investments in non-agricultural routes to rural development and improved livelihoods.

Click here to download the publication. Previous publications in this series can be accessed here.




Viewpoints | Why land expropriation without compensation is a bad idea | CDE

VIEWPOINTS is a new series published by CDE in which we will be drawing on the expertise of South Africans from a range of organisations to encourage and enrich debate on important issues.

In the second of the series, Wandile Sihlobo and Tinashe Kapuya argue that land reform (through both the state and the market) has made more progress than experts and policy makers care to admit, that expropriation without compensation is a catastrophically bad idea, and that trust between government and private sector is essential for the success and sustainability of effective land reform.

Click here to download the report.




Op-ed: Huge number of land claims and chaos of overlaps must be resolved| business Day

The festering sore must be healed speedily, as SA cannot wait another few decades for proper redress.

The land reform challenge in SA involves many issues: land restitution, intended to redress the loss of land by black communities and individuals since 1913; land redistribution by the state to black South Africans to change the skewed pattern of land ownership; and tenure reform.

In recent months the issue of expropriation without compensation has hogged the headlines.

Ten years ago the Centre for Development and Enterprise recommended that resolution of the restitution backlog should be the first priority for successful land reform because it lay at the root of so many other challenges in virtually all regions of the country.

Sadly, this advice and the offer of a partnership on land reform from business leadership were not accepted by the government. Since then the situation has become considerably worse.

The original deadline for lodging land restitution claims was 1998. Claims could only be made for land lost after 1913 as a result of racially discriminatory laws or practices. It was envisaged that the process would primarily provide redress for the so-called “black spot” removals that took place under apartheid, and that it would be completed within five years. Once this goal was achieved land redistribution was to be the central focus of land reform.

Unfortunately, numerous deadlines have passed without this goal being achieved. The 2017 high-level panel report to Parliament chaired by former president Kgalema Motlanthe claims there are still more than 7,000 unsettled, and more than 19,000 unfinalised, “old-order” claims (pre-1999). It estimates that at the current rate of progress it will take 43 years before the backlog is cleared.

In 2014 the Zuma administration, seeking to shore up its rural support base and consolidate its alliance with traditional leaders, reopened land claims. It took this step despite many thousands of claims for restitution lodged in or before 1998 remaining unresolved.

In the 12 months after the 2014 act came into effect, 166,000 new claims were lodged — double the number in the first round. The act was challenged by communities deeply concerned that their decades-long wait for a resolution of their claims would be further drawn out.

In 2015 the Constitutional Court declared the Restitution of Land Rights Amendment Act 15 of 2014 to be invalid and stipulated that land claims lodged by 1998 be finalised before a re-enactment of the 2014 act. The court recognised the validity of the new claims, but it prohibited any further processing of them until all old-order claims were completed. Parliament was given 24 months to introduce new legislation. Failing that, the chief land claims commissioner had to apply to court for an order on the processing of claims lodged after July 1 2014.

Earlier in 2018 the Treasury’s modelling estimated that new claims already lodged would take 200 years to conclude at a cost of about R600bn. If the process of lodging new claims is reopened, the high-level panel estimates a total of 397,000 new claims will be made and could take 709 years to finalise. Even if these alarming figures are somewhat exaggerated, it will certainly take many decades and vast amounts of money for land restitution to be complete.

The claims process was reopened in 2014 without a strategy to overcome the obstacles that had impeded the rate of progress until then.

In 1999, in an attempt to speed up restitution, an administrative route was established that bypassed the Land Claims Court. This decision had unforeseen consequences: quality of work deteriorated due to a lack of effective oversight; thousands of claims were gazetted and settled on the basis of inadequate research; in defiance of the law, claims were “bunched” together and artificial communal property associations created that often became dysfunctional.

Large numbers of unresolved, overlapping and directly competing claims have contributed to mounting ethnic and “tribal” tensions, as well as xenophobic sentiments. As a result, vast areas of the countryside resemble tinder boxes at risk of igniting with the next spark.

Unresolved claims that have dragged on for decades discourage farmers from investing in land and pursuing new economic opportunities.

Instead, many adopt a survivalist strategy, extracting what they can from the land with minimum inputs while laying off all but the most essential workers. The result has been escalating levels of unemployment in rural areas and low levels of productivity on many farms. Many of the most bitterly contested and seemingly insoluble claims are in potentially highly productive regions.

Case studies suggest that little if any economic benefit has accrued to the majority of recipients of restituted land. Workers and tenants who reside on restituted land have suffered losses of jobs and security. In some instances, black beneficiaries of land reform have discovered that land they have been given is also under claim. Some have abandoned farming as a result. The existence of vast areas of land embroiled in legal disputes is an obstacle to securing farms for redistribution.

The country faces some critical choices. The looming Constitutional Court process, which must take place in July, will help chart a route forward in relation to new-order claims.

However, this will not change the fact that 19,000 old-order claims remain, which will take decades to clear. Nor will it wish away the 166,000 new-order claims that could jeopardise the security and viability of rural producers for decades. Many new claims overlap with each other as some are on land that is already under claim. The morass of unresolved, overlapping and conflicting claims will worsen.

Some hold the view that expropriation without compensation will provide a panacea for these problems. They are profoundly wrong. Aside from its deleterious effect on the wider economy, it will not solve the lack of administrative capacity, nor will it clear the multitude of conflicting and overlapping claims that remain unresolved.

An urgent discussion is needed on how to treat the new claims and how to provide adequate levels of funding, capacity building and legal support to finalise old claims.

The state cannot achieve this alone and needs a determined partnership with private and civil society actors. This festering sore needs to be healed. SA must deal with the realities of land redress, but it cannot take the rest of this century.

A process to drive a fair, speedy approach needs to be developed and progress on restitution claims reported to Parliament every six months. This could involve the establishment of a dedicated unit to make it happen, so that by 2030 SA can look back on a job well done.

• Bernstein is head of the Centre for Development and Enterprise. This article draws on a research paper written for the centre by Prof Peter Delius.




CDE, Business and Land Reform

This short report has been written by CDE to inform business leaders in 2018 of what was done by CDE and business ten years ago on the land issue. It provides further information to the op-ed which appeared in Business Day on Tuesday 17 April 2018 [see here].

It is being distributed as a resource as a contribution to current engagement and discussion on this important issue.

Click here to download the report.




Op-Ed: Land-reform plan has been drawn up- it just needs willing leaders| Business Day

A report offering solutions to the unresolved issue was published 10 years ago and is even more relevant today.

Twenty-four years into democracy SA has failed to deal successfully with the series of historic injustices, the impoverishment of millions of South Africans and the political furies that surround “the land question”. Ten years ago the Centre for Development and Enterprise (CDE), supported by business, published its third major report on land reform in SA. We issued a strong warning that applies with greater force today — land reform is in trouble.

This is not just another policy issue in which government capacity is unequal to a difficult task. This issue affects our constitutional compromise on property rights. 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. The future of the land issue will affect the country’s ability to reach its economic growth targets, produce its own food and compete in global markets.

Our analysis of what was going wrong and what had been achieved in restitution, redistribution and tenure contained a set of far-reaching proposals. With support from Business Leadership SA, the CDE put forward a detailed offer for co-leadership and active involvement by the private sector in helping to ensure dramatic progress on SA’s complex land reform issues.

In 2005-08 the CDE ran an intense engagement, research and policy formulation process. We examined three sectors of the agricultural economy: fruit, timber, sugar; spoke to farmers across the country, including new black farmers; engaged with officials in the Department of Land Affairs nationally and in the provinces; heard the views of academics, including the pioneering studies that showed black South Africans were starting to benefit from new deracialised policies and buying land on the market; and researched the activities of organised agriculture and large agribusinesses, some deeply involved in starting to transform their sectors.

Many voluntary initiatives in the private sector had been aborted because of the scale of restitution claims gazetted on private land and delays lasting years in resolving them. Most rural South Africans do not want to become farmers. The vast majority want a secure place to stay. There are pockets of real land hunger in the country that should be identified and the purpose for which land is needed established.

SA is urbanising rapidly. Land reform therefore must include the identification and release of urban and peri-urban land for settlement, housing and economic development, as well as reform of ownership and use of land suitable for farming. Urban-oriented land reform will involve many more beneficiaries than providing rural plots for small farmers and will offer better access — to mixed sources of income for poorer households, to services and opportunities available in urban areas, and to the fruits of national economic growth.

There is no place in a land-reform strategy for a “one-size-fits-all” approach. There are large regional and sectoral differences among appropriate land uses. Effective land reform thus requires specialisation, experience and local knowledge. Far more of these strengths can be found in the private sector. Providing land alone will not allow new black farmers to succeed.

Much greater post-settlement support is needed, as is more complete integration of new farmers into the established farming community. Both will require greater involvement of local private sector players in effective partnerships with state institutions. The slow pace of processing and settling land restitution claims is creating uncertainty, stalling investment and having negative effects on agricultural production. The government has had only mixed success in acquiring land at reasonable prices and at an acceptable pace.

The government must make more funds available and they must be spent in a more market-sensitive way. Allowing inexperienced officials into the complexity of the land market with billions of rands, without support from skilled, ethical private sector professionals, will result in continued poor value for money.

In 2008 we argued that SA needed a bold new approach. The CDE and business leaders had one core recommendation: the country should immediately establish an action-oriented partnership comprising senior leaders in government and the private sector, particularly agribusiness. This presidential task team should have its own budget and report every six months to Parliament on progress with respect to land issues. Its work should focus on five areas:

• Completing restitution speedily. The resolution of the restitution impasse is the first priority for successful land reform because it lies at the root of so many other problems in virtually all regions of the country. Large agricompanies are offering assistance with creative plans to make speedy progress in generous settlements — they need willing and competent partners in the state.

• Getting redistribution on the right track and to significant scale in rural and urban areas. To do this we need an audit of state land and informed knowledge of the nature of demand for land whether for settlement or farming; by whom and in which parts of the country. A new public-private agency is needed to buy land effectively to meet the diverse needs of poorer people in the right parts of the country.

• Deracialising commercial agriculture through agribusiness support for redistribution and effective farming in each sector of the agricultural economy, black economic empowerment deals, and the establishment of villages for farm workers and families. (SA needs to redesign land tenure laws affecting commercial and communal land.)

• Tackling rural poverty directly. Establish a blueribbon commission to develop an economic and development strategy for rural “routes out of poverty”; establish an education fund of R1bn a year of state money to provide opportunities for rural learners to go to agricultural college, quality boarding schools and university.

• Spend more on land reform, and spend it better. Treasury has rightly been cautious in its allocations to the department and has had to retrieve unspent funds in the past. A bigger budget is essential but this can only happen if the partnerships we are proposing are established. The department does not have the capacity to spend more money effectively.

In 2008, we concluded: “Above all, we need to change the way we think and talk about land reform. SA needs to change the conversation about land. The country needs a new narrative that moves away from Zimbabwe-style terminology and focuses on how to help poor people escape poverty. Expand educational and economic opportunity to prepare rural South Africans for the 21st century.”

If only the government had responded to this unprecedented, far-reaching proposal. If only business had continued their campaign for change. In 2018 a national consensus is still there for the taking. The only question is whether leaders in the public and private sectors have the will to get land reform back on track. Bold action and leadership are required now.

Bernstein is the CDE head. The centre’s land reform papers are available at www.cde.org.za.