How the rapid transfer of land is a recipe for rural poverty
A fast-track approach to land redistribution will be destructive for agricultural production and the national economy. There a much better ways to approach land reform
Ben Cousins has recently argued in Business Day for a rapid and radical land reform in SA with the purchase or expropriation of 48-million hectares of commercial farmland, 60% of the existing freehold, commercial farmland, over the next 15 years. Given that both the government and AgriSA estimate about 27% is already in African hands, this addition would amount to well over 80% of agricultural land in forms of smallholding and communal tenure.
He suggests it would be given to about 200,000 “market-oriented smallholders” — a rough estimate of the top 10% of existing smallholders. We agree that smallholders could be far more productive and should be much more fully supported. But we argue that Cousins’ approach radically underestimates the destructive consequences as well as the amount of land already available. The threat of rapid transfer of land by expropriation with or without compensation would lead to a wholesale withdrawal of investment and agricultural production as well as undermining other rural enterprises. This would greatly diminish output, food security, rural incomes and it is very likely to expand rural poverty.
Land reform through restitution and redistribution policies has made some progress, with over 9% of commercial farmland (over 8-million hectares) redistributed through government schemes. With respect to the overall landholding by black people, it is estimated that an additional 3%, possibly more, has been purchased privately, and the former homelands made up about 14% of land (about 27% in all). A significant amount of this land is in the wetter, eastern and northern half of the country and has higher than average potential. The initial priority should be to unlock the productive potential of this land and support existing smallholders.
With respect to the former homelands and transferred land, there is strong evidence that the great majority of smallholders are investing little in agriculture. If you travel through these areas, it is striking how little land is being used for arable agriculture. Most of the cultivated areas are in small gardens adjacent to homesteads. Approximately 80% 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.
According to government statistics, smallholders are presently producing less than 5% of the maize in SA. State and private agencies should focus on this. There is also little evidence that the state could cope with an organised land transfer on the scale that Cousins envisages. Restitution has been slow not least because of lack of government capacity and existing claims should be a priority. Post settlement support, largely absent, is an urgent necessity. Making a success even of these outstanding restitution transfers will be a major task. In the urban areas provision of title deeds by the state has by no means kept up with transfers and an estimated 1-million are yet to be finalised. The extension services provide little support for existing smallholders. The veterinary services and Animal Health Technicians are a partial exception but problems of disease control are ubiquitous. With respect to crops, effective support to existing smallholders, not to mention a greatly expanded area, would require massive expansion of training.
One major reason for the decline of smallholder farming has been the lack of such support, estimated in 2017 to be reaching 11% of all and 23% of more active smallholders. Much of the most effective extension is now done through the private sector in such fields as sugar, forestry and wool where about 50,000 smallholders have been involved. This may well be undermined if the existing commercial farmers are displaced. The recent decline in sugar outgrowers by about 30,000 smallholders is largely the result of the withdrawal of corporate and government subsidy. Again, this is a scheme that worked and should be supported as a priority. New settlements on the scale envisaged would require a great deal of service provision of schools and clinics; it is well documented that the state can barely cope with adequate provision to the rural areas now.
Cousins advocates a major extension of irrigation and we agree that this would potentially boost agricultural output. But many dams and irrigation projects were built in the homeland era. Roughly one half of the 100,000ha is effectively used. Reviving these assets and will initially require intensive and costly support. We certainly advocate that strategies should be developed to find appropriate management systems and technologies, where smallholders can afford the costs of irrigation.
We differ with Cousins on the amount of land that is necessary for an expanded smallholder programme. His approach will provide an average of 240ha for each new farmer; they would no longer be smallholders. It is impossible to manage this amount of land without financial resources to purchase agricultural machinery and fencing as well as a range of inputs. If we are aiming to support smallholders, even those presently in the top 10% of producers, who may partially meet subsistence and sell a little, then there is certainly space for 200,000 new farmers on average holdings of 20ha. This would amount to 4-million hectares over 15 years, which may be a manageable project. Nevertheless, given the state’s dismal record so far, and the difficulties experienced by Communal Property Associations, it is vital that pilot projects are first attempted because it is likely that failure rates may be high.
New farmers will need extensive support in terms of inputs and extension. If the state, working with the private sector, could provide this, this would be a major achievement that would require financial and technical inputs from the state that are not remotely being achieved at present. The pace and scale of support for smallholders should put production at the forefront. Big schemes tend to fail; successful projects start small and expand where context and conditions allow for this, and outcomes are evaluated. If approached in this way it may be possible to achieve a substantial expansion of small holder farming.
The state has barely tested different models. Experiments with private land are urgent. Overblown targets at the outset are likely to produce large areas of land with unproductive forms of tenure. We propose a different approach that would protect and enhance existing agricultural investment and production and also create certainty for commercial landholders. We strongly support purchase of land by new black owners who wish to invest in productive agriculture. Top of the government’s agenda should be to follow the people and meet the demand for land in key urban and peri-urban areas.
In the metros this would largely be housing but especially in medium-sized and smaller towns, it should include larger plots of about 0.2ha with space for gardens. These settlements would be near to public and private services and markets. Security of tenure should be enhanced and plans implemented for more intensive livestock production as well as diversified crop production. The crux is investment: 5ha is a good deal of land to manage if used for high-value crops. The focus should be on production and not percentages of land transferred. After negotiations with landholders it should be clearly specified where land will be bought out to avoid generalised insecurity.
We think that a fast-track approach would be destructive for agricultural production, the national economy and would intensify rural poverty. But we believe that there are constructive approaches to supporting smallholders that should be a focus of attention.
• The authors are emeritus professors at Oxford and Wits Universities respectively and authors of numerous books and articles on rural transformation in SA, the most recent (with Michelle Hay) being Rights to Land (Jacana, 2017).