Land reform policy itself a stumbling block to successful redistribution
One man’s long struggle with red tape and bureaucracy shows how the system sets beneficiaries up for failure
One key observation from the political discourse over land reform is that beyond the broad objective of what it seeks to achieve, the more specific problems around how to execute its implementation are misrepresented, poorly framed and therefore misunderstood.
In May we argued that land reform has not been as slow as portrayed in many political messages and that the problems that have since emerged out of land reform implementation are largely to do with a lack of focus on agrarian support. This is a conclusion we reached after having carefully analysed the implementation of land reform policy in post-democratic SA.
To further this argument we want to illustrate that some of the limitations in ensuring success establishing commercial black farmers are due to unintended consequences in the implementation of the land reform policy itself.
A case in point is the proactive land acquisition strategy, which was introduced in 2006, for the state to acquire farm land for land reform purposes. To date it is estimated that a total of between 2.1-million ha and 4.3-million ha, depending on the data source within the Department of Rural Development and Land Reform, has been acquired by the state. It seems, however, that these farms are not being transferred to beneficiaries.
According to the state land lease and disposal policy, the acquired land would be leased to a beneficiary for a period of between five and 30 years, followed by the option to transfer ownership. In reality however, the beneficiaries only received short-term leases ranging from one to five years. This was clearly reflected in a research paper released early in 2017 by Ruth Hall and Thembela Kepe, albeit that the paper focused on a couple of municipalities in the Eastern Cape.
This makes sustainable farming almost impossible, as articulated by Bongani (not his real name), a potential beneficiary we met at the end of May in the Eastern Cape. Bongani aimed to start commercial farming in mid-2005, but that dream was deferred when he discovered after a three-year waiting period that his application forms to access land had been misplaced and were never processed. He was told, after numerous follow-ups, that this had happened during the demarcation of municipalities, which is strange considering that land reform is not a competence of local government at all.
Bongani reapplied in 2009 but still to no avail. He is currently farming on communal land near the town of Maclear. Nonetheless, we asked him to spell out the application process he followed in late 2009, which he described as follows:
• Identify a farm in your area of interest;
• Submit an application through the department’s district office;
• The application then goes to the beneficiary screening committee;
• It is then transferred to the provincial land committee; and
• If successful, it goes to the national land committee, which is chaired by the deputy minister of rural development and land reform.
We have skipped some of the details, but just to give you an idea, the process entails a roughly three-to four-year waiting period. The obvious risk with this process is that more than one applicant can express interest in a specific piece of land or farm. This complicates the process.
It is clear that … failure to access land is not so much a matter of the scarcity of land but a failure of government departments.
After application, beneficiaries need to have a fundable business plan to be eligible for the government’s post-transfer support. The business plan also has to follow a tedious screening process akin to the aforementioned one, and to further compound the process, the opinion of farmers such as Bongani is that the some of the officials at the department’s offices tend to lack agricultural proficiency to expedite applications. This, of course, is a risk because it could lead to errors and delays in dispensing agricultural support services.
After this convoluted process, if an applicant finally gets access to farmland, he or she is placed on probation for about five years to assess whether they can farm successfully. This is largely where the problem arises, because at this juncture beneficiaries have no title deeds to use as collateral. Therefore the running of the business, including all input costs, depends largely on one source — the post-settlement support system. Its effectiveness therefore has a huge bearing on the programme’s success.
At the same time, this creates a permanent dependency on state resources, without real economic empowerment taking place. The previously highlighted challenges of bureaucracy and human capital have not helped the situation.
Post-settlement support was initially vested in different departments. The Department of Rural Development and Land Reform was initially responsible for delivering the land in question, after which beneficiaries could approach the Department of Water and Sanitation to obtain water rights, the Department of Agriculture, Forestry and Fisheries to obtain agricultural inputs, and the Department of Trade and Industry to obtain implements. This fragmented approach resulted in a misalignment between the land and associated services, which often set the beneficiaries up for almost certain failure.
The bureaucratic approaches that deferred Bongani’s dream of being a successful black commercial farmer could have been avoided had the market-assisted land reform programme prior to 2006 been expedited, giving the issue the attention it deserves.
Instead of improving alignment between the different departments responsible for the various support services, the Department of Rural Development and Land Reform ventured into the sphere of post-settlement support (typically the mandate of the Department of Agriculture and the provincial departments of agriculture) through the creation of the recapitalisation and development programme in 2009, which recapitalises poorly performing land reform projects.
However, this is more like papering over the cracks than identifying the root causes of failing projects and spreads the budget responsible for land acquisition very thinly. Bongani’s story is not unique. It illuminates the grassroots frustrations of many aspiring black commercial farmers. Similar case studies, albeit about having use rights to the land, were highlighted in the aforementioned research paper by Hall and Kepe.
The bureaucratic approaches that deferred Bongani’s dream of being a successful black commercial farmer could have been avoided had the market-assisted land reform programme prior to 2006 been expedited, giving the issue the attention it deserves. The market-assisted approach entailed the transfer of title deeds to beneficiaries, which would have solved the problem of access to finance. We have previously explained how this process would be carried out, but it is worth restating, briefly, to add context:
• A beneficiary expresses interest in land purchase for farming;
• He or she identifies a farm for sale and agrees with the owner on a price;
• An application for a land reform grant and a mortgage (at preferential interest rates) is lodged and an own cash contribution is provided;
• A grant and bond are registered (all funded from one source, such as the state-owned agricultural bank), the transaction is completed, the title deed is registered and post-settlement support is also made available immediately; and
• Mentorship and support by neighbouring farmers and agribusiness firms kicks in.
With such a programme implemented at a faster pace, it is hard to imagine that aspiring black commercial farmers such as Bongani would be experiencing the challenges they do.
Having listened to Bongani’s story, reflected on the statistics of available and arable land for agricultural purposes in some parts of the country, as well as the land he had identified in mid-2005, it is clear that his failure to access land is not so much a matter of the scarcity of land but a failure of government departments, especially the duplication of duties, as well as bureaucratic inefficiencies and human capital challenges of the state system itself.
This story can be interpreted in various ways. Some may read it as a reluctance on the part of the government to transfer land and efficiently provide post-settlement support, while others might describe it as a failure of the government to reinvent its state mechanism to deliver on a promise whose effort and resource requirements it clearly seems to have underestimated.
We’ve narrated Bongani’s story in the hope of redirecting the land reform debate to some of the more immediate issues that remain unaddressed at grassroots level, which have led to the failure of the policy.
New land reform policy proposals should seek to tackle the challenges faced by aspiring black commercial farmers first, before more radical measures are considered. If the systemic issues are not resolved, it is difficult to imagine how the suggestion of land expropriation without compensation will yield a different outcome from the failures we have observed from past policy propositions. In fact, we anticipate that expropriation without compensation will worsen the challenges and exacerbate the problem faced by new black farmers.
• Sihlobo is head of agribusiness research at the Agricultural Business Chamber and Prof Kirsten is director of the Bureau for Economic Research at Stellenbosch University.