Eastern Cape residents protest at a land claims case. There is a common understanding that SA's land reform process has been too slow, bureaucratic and costly, say the writers. Picture: YANDISA MONAKALI
Eastern Cape residents protest at a land claims case. There is a common understanding that SA's land reform process has been too slow, bureaucratic and costly, say the writers. Picture: YANDISA MONAKALI

The importance of successful land reform to correct the injustices of the past and restore dignity to the majority of our population is well accepted and appreciated. There is a common understanding that the land reform process has been too slow, bureaucratic and costly.

This has created frustration and partly contributed to more radical views and proposals on how to deal with the inequality in land ownership in SA. These proposals quite often ignore the history of the land reform programme as well as the lessons learnt from our own and international experience.

This is the first article in a series intended to shed light on the various contested land reform issues, particularly farmland.

It highlights the lessons learnt from agricultural land reform internationally and the expensive lessons learnt in SA over the 24 years of our own land reform programme.

During the design years of the mid-1990s it was well accepted that SA should not repeat the mistakes of land reform programmes learnt elsewhere. The lessons were clear:

Land reform needs to be fast paced, otherwise a combination of excessive bureaucracy, centralisation of the process and legal challenges are likely to render the programme ineffective.

The role of the public sector should be clearly defined. Programmes that have relied entirely on the public sector in the belief that only the state is capable of maintaining integrity, delivering services, determining needs and managing the process have generally failed.

Land reform is only one part of a comprehensive programme of economic reconstruction. The redistribution of land is necessary, but not sufficient to bring about real economic empowerment and poverty alleviation. Additional services, including infrastructure, markets, social services, among others, have to be provided as part of a comprehensive reconstruction and development programme.

The conclusion from these lessons is that market-assisted land-redistribution programmes tend to perform better than those administered by the public sector. In other words, the state might be good at acquiring land, either through purchase or expropriation, but that does not necessarily translate to effective redistribution of land to the beneficiaries.

Programmes led by the state typically vest too much control in public sector bureaucracies, which tend to develop their own set of interests that are often in conflict with the rapid redistribution of land. This is true in SA as beneficiaries are hampered by bureaucratic obstacles to acquiring land. It is therefore mistakenly argued that the market-assisted approach, which was followed between 1996 and 2006, was responsible for the slow progress of land reform. Yet with an average of 13,000 farms available on the market every month, there have always been enough willing sellers.

However, in the wake of years of disempowerment and impoverishment, a well-functioning land market is not a sufficient condition for a successful land-reform programme since the history of dispossession has made it difficult for beneficiaries to access finance to acquire these farms.

Furthermore, the large, mechanised and well-established farms are expensive and can be a challenge to the newcomer. Allowing easy and painless subdivision of these larger farms would have been a great opportunity for land reform but this, unfortunately, was never made possible unless acquired by the state. Also required is the provision of (sizeable) land acquisition grants and post-settlement support to assist beneficiaries to acquire land and start the farming enterprise.

Executing land reform through grants to beneficiaries resolves challenges around beneficiary selection. This was the main philosophy of the market-assisted approach for land reform recommended to the government in the mid-1990s.

The idea was simple. A beneficiary expresses interest in land purchase for farming and identifies a farm for sale and agrees with the owner on price. An application for a land-reform grant and a mortgage (at preferential rates) is lodged and own cash contribution provided. A grant and bond is registered — all funded from one source, such as the state-owned agricultural bank — the transaction completed, title deed registered and post-settlement support also made available. Mentorship and support by neighbouring farmers and agribusiness firms start.

Policy design is largely to blame for the perception that progress on land reform has been slow, but how slow has it actually been since 1994? The department’s statistics on land reform, and especially on how much farm land the state already owns, allow for estimates at best.

It is unfortunate that this intended approach was constrained by land-acquisition grants being too small — leading to group farming — and was delayed by over-bureaucratised approaches to comply with public finance rules. At the same time, post-settlement support arrived too late due to poor co-ordination between provincial land reform and agricultural departments. The end result was many failed projects.

The land-reform beneficiaries were in a way set up to fail, which necessitated the introduction of the recapitalisation and development programme (RADP) to recapitalise poorly performing land reform projects.

The critique against the market-assisted approach as well as concern about the slow progress towards the land-reform targets prompted a shift away from the system of grant-based purchase by individuals or groups altogether and towards state purchase of land through the proactive land acquisition strategy (Plas). In this programme, introduced in 2006, the government takes ownership and government officials decide on the beneficiaries who will become tenants. Farmers wanting to buy the land from the state were never given the opportunity to do so and now farm with short-term rental contracts, making access to finance and other business contracts very difficult, if not impossible. Farmers on these rental farms were not given the option of full title deed, frustrating the real empowerment of black commercial farmers.

Policy design is largely to blame for the perception that progress on land reform has been slow, but how slow has it actually been since 1994? The department’s statistics on land reform, and especially on how much farm land the state already owns, allow for estimates at best.

First, it is important to understand the total land size in SA, and as the table shows there was 82.5-million hectares of farmland under freehold tenure in 1993. Since 1994, a total of 4.1-million hectares of farmland has been lost to urban development, mining and other nonagricultural uses, reducing the area of freehold farmland to 78.4-million hectares.

Of this a total of 8,356,124ha, or 10,7%, was allocated to beneficiaries via the redistribution or restitution programmes since 1994. We estimate through our own research and analysis of deed transfers that black farmers acquired an additional 1.2-million hectares (1,5%) privately, without the support of the government programmes. Due to the suspension of the land redistribution for agricultural development and settlement land acquisition grant programmes in 2006 very little redistribution to individual owners happened, while the state has acquired and still owns a total of 2.2-million hectares, or 2.8%, of farmland instead. Many communities elected to receive financial compensation as part of the restitution process. To date, this accounts for a total of 2,920,385ha (3.7%).

If we compare the redistribution and restitution numbers released by then land reform minister Gugile Nkwinti in February 2017 and the numbers provided by the department in May 2018, the slow progress is clearly evident. Only 10,800ha was redistributed to beneficiaries for the full 2017-18 year, while only 105,000 hectares was returned to communities and beneficiaries under the restitution programme.

The redistribution of farmland has in effect come to a halt, with the only action happening being land purchases by the state through the Plas programme. This supports the argument that when the state acquires land it is unlikely to redistribute the title deed to beneficiaries.

Another aspect that is completely missing from our land-reform programme is that of tenure reform in the former homeland areas. This is an important omission, even though it is something the Constitution demands of the state.

Overall, the state’s failure to effectively redistribute the land acquired has been one of the key factors contributing to the view that land reform has been slow. This is leading to growing frustration and has led to calls for "expropriation without compensation" to speed up the process.

Given the above, it is doubtful whether this on its own would have much effect. It is clear that the process so far has not appropriately taken into account major lessons from the past, which should serve as guiding principles for a more robust land reform process in future.

• Sihlobo is head of agribusiness research at Agbiz, and Kirsten the director of the Bureau for Economic Research at Stellenbosch University.