The minister was speaking at a Farm Equity Scheme (FES) workshop held in Cape Town, which gave farmers, farmworkers and other roleplayers the opportunity to discuss mechanisms that needed to be put in place to ensure the future of the schemes.
At a press conference following the workshop, the minister said, “FES was a good policy, but it was badly implemented, we did not manage it well – both ourselves as government and the farmers.” A document distributed at the workshop stated that the June 2009 moratorium was prompted, in part, by “the realisation that the contribution of these schemes to redistribution targets had been greatly exaggerated”.
While equity and shareholding varied greatly, “in many cases equity in the landholding entity was often as little as 9%, yet the total extent of hectarage of the land was claimed as redistributed,” noted the document. According to Nkwinti, the government has already invested R500 million in the schemes, which began in 1996 and were intended to enable farmworkers to obtain shares in agricultural companies and farms.
The FES was initially proposed as a means of redistributive land reform in the deciduous fruit and high-value agricultural sectors. It was also seen as a means of transforming the agricultural sector by increasing worker participation in operational and strategic management. Despite some successful projects, the department wasn’t convinced that the majority were contributing to improved livelihoods, said Nkwinti.
“In many instances, the former owners continue to retain their dominant position as if nothing had changed,” he said, adding that, as implemented, the FES ran the risk of becoming a “rescue package” for unsustainable farming operations. Nkwinti quoted a 2009 study, which found that, of the 100-odd schemes started – about 80 of which were in the Western Cape – only nine had paid dividends to their members, and half of these were reinvested in the venture.
His department, he added, would be working overtime to get the moratorium lifted by January next year, because they still had to spend more than 70% of the R900 million earmarked for the recapitalisation and development programme. This included getting farm equity schemes up and running again during the 2010/11 financial year.
Nkwinti said no decision had been made yet on the ratio of ownership of the equity schemes, but he told journalists he liked Western Cape premier Helen Zille’s call for 50/50 equity share schemes. This call was made at a farmworkers’ summit held in Somerset West in June this year, but the Western Cape agriculture department later released a statement saying that the Zille wasn’t referring to shareholding schemes in which existing farming units were divided on a 40/60 basis.
Instead, it was said the Western Cape provincial government supported a model of land reform where a commercial farmer and his workers identify a farm for sale on the open land market, and the commercial farmer then buys a 50% share in the farm, while the workers buy the rest using grant money from the government.
When asked for his comment about the possible lifting of the moratorium, Western Cape agriculture minister Gerrit van Rensburg said, “We have been very proactive in lobbying for the moratorium to be lifted, as we believe equity share schemes to be a very good vehicle for achieving sustainable land reform in the agricultural sector.”
