Lessons in how to create unwilling sellers

Cash crops and dairy cows thrive in the fertile, misty valleys where Good Hope farm is located.
Issue date 5 October 2007

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Photos: Stephan Hofstätter

The Griffins did everything they could to sell their thriving dairy farm for land reform, but were tripped up by officialdom every step of the way. Now their workers blame them for delays and want to take the law into their own hands. Stephan Hofstätter reports on willing sellers living on the edge.

The Griffins own a quietly prosperous dairy in the misty foothills of the Drakensberg outside the hamlet of Boston in KwaZulu-Natal. The farm is not under claim. No officials from the Department of pushed them to release it for government’s redistribution programme aiming to reverse the impact of racist land laws that resulted in the white minority owning the lion’s share of farmland. land activists, political party agents or labour unionists agitated at their gate. Their workers never mentioned the desire to own the land and farm it themselves. No one has ever put any pressure on them to sell. N or were they about to go out of business, with a dairy herd worth over R1 million with a turnover of R1,2 to R1,5 million a year. The dairy industry slump did play a role in their decision to sell, but the main reason was that the Griffins had simply reached retirement age: it was time to buy a cottage on a plot by the sea and call it a day. Their son Neville had kept the farm going in recent years, but planned to take up a job running another dairy. There was nothing to keep them there. In capable hands The Griffins put the farm on the market in 2005 and were approached by a cooperative from Pietermaritzburg consisting of a handful of black women who wanted to buy it with government grants. The Griffins had heard the stories of late payment and extra red tape farmers faced when selling to government, but wanted to do their bit to help establish black farmers.

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“We thought we’d help the government as willing sellers,” says Geoffrey Griffin. “In the end we just got kicked in the teeth.” W hile the Griffins helped the women to apply for top-up funding from provincial finance parastatal Itala and waited for Land Affairs to process their grant application, the women spent two-week stints on the farm to learn the ropes. Two were unemployed, but the rest were middle-class professionals who possessed financial skills and had access to savings. Many had studied agricultural subjects and all were highly motivated. The Griffins had secured a written undertaking from Clover that its delivery contract would remain in place, as would an arrangement with black contractors who cut and sell alien plants on the farm, employing locals to debark the timber. The farm, Good Hope, would be sold with the herd, together with upgraded dairy and irrigation infrastructure, and 30ha of water rights. Besides this, the fertile valley receives over 1 000mm of rain a year. Cash crops such as cabbages and seed potatoes thrive in the district, which was once one of SA’s top milk producing areas.
Black females not impoverished enough? For the women it was a chance to put their agricultural knowledge to good use and own a thriving, diversified agricultural business in a top farming district. They also offered a stake to the workers on the farm, expecting to employ more as their enterprise diversified. The model fits perfectly with national empowerment and land reform policy that prioritises support for black female farmers – traditionally the most marginalised group in society. It also tallies with Treasury injunctions that taxpayers’ money must fund viable projects. Itala thought their proposal highly bankable so it guaranteed the shortfall before the grants were approved.

“We were really impressed with them,” says Geoffrey’s wife, Wendy. “They’d be up at four in the morning to see how we handled calving or milking. They were the best candidates to make a go of it.” But Land Affairs didn’t see it like that. Officials apparently told the women they were not financing “four-by-four land reform” – a reference to the fact that they weren’t utterly impoverished to begin with. “We did all the work of putting the paperwork together and training those ladies. They were perfect, but they got chucked out,” Wendy says. When government changes the rules Next, the Griffins were approached by a consultant who came up with a different plan. They were told to canvass their workers to see how many wanted to live on the farm, and get them to include family members to bump up the numbers. Eventually 50 people applied for grants to buy the business. Under government’s Land for Redistribution and Agricultural Development (LRAD) programme beneficiaries must make a contribution in cash, assets or sweat equity to qualify for grants. The workers and their families offered their labour and livestock, and formed a trust to buy the land. The Griffins conducted field visits to nearby communal lands to verify their contribution of cattle and goats, and submitted the results to Land Affairs. In August 2006 they signed a sale agreement with the trust, believing they’d fulfilled the department’s requirements.

In December they were informed by fax that the department wished to speed up the application by processing it through the newly launched Proactive Land Acquisition Strategy (Plas) (See box: Getting proactive). This changed the picture considerably. Rather than giving workers grants to acquire the land, the state would buy the farm and lease it to them for three years. In that time they’d be screened by agriculture department officials to ensure they were fit to farm. If they proved themselves they could apply for grants to buy the land. Past mistakes a thing of the past Government’s intentions were laudable. It had become alarmed at the number of land reform farms going belly up because they’d been handed to people without the skills, motivation or inclination to be commercial farmers. Henceforth non-performers would be booted off the land to make way for more worthy candidates before title transfer. According to a memo circulated to land reform offices, agricultural unions and commodity groups would be involved to help develop the farms government bought for redistribution. They would identify suitable land, provide extension and marketing services, and help agriculture department officials evaluate the new farmers. But far from speeding up anything for the Griffins and their workers, the state’s new vehicle to fast-track land reform simply created new delays.

Correspondence seen by Farmer’s Weekly shows repeated offers to sell made over several months were met with silence from Land Affairs. The Griffins had to threaten legal action before the department would appoint a valuer. Fed up and fired down In May Land Affairs finally made an offer accepted by the sellers. A sale agreement was signed and sent to the department to countersign. For over a month nothing was forthcoming. Then came the bombshell: there had been a temporary moratorium on Plas acquisitions, and the sale agreement was not approved. The Griffins were advised that they were free to sell their farm to a third party, or their workers could approach any bank for loan funding and reapply for grant funding. After three years of trying to sell their farm for land reform, the Griffins were back to square one.

Mtholephi Mthimkhulu, MEC for Agriculture and Environmental Affairs, was asked if he was aware of widespread complaints that Land Affairs officials in KZN were deliberately obstructive or grossly negligent in processing BEE farming proposals made by white landowners who were willing sellers, and that this was contributing to delays in land reform in the province. Through his spokesperson Mbulelo Baloyi, the MEC replied he had not seen “any deliberate detrimental action on the part of the officials of both the Land Affairs department and provincial agriculture department”. For officials being paid regular salaries and commuting from their suburbs to offices in Pretoria and Pietermaritzburg, these bureaucratic lapses and about-turns meant little more than putting an application form at the bottom of the pile. But life on the farm had changed dramatically for both the Griffins and their workers. Biting the hand that feeds you The Griffins’ workers now turned on them, accusing them of refusing to sell. At one meeting they threatened to kill the dairy herd. At another Geoffrey was the target. “They threatened to do me in,” he says. “When everything falls apart it’s easier to blame the umlungu.” Now this willing seller just wants out. He plans to advertise his farm and sell it to the highest bidder. “My advice is, whether you’re a white seller or black buyer, have as little as possible to do with Land Affairs.” In all likelihood, this prime property that has been available for land reform for years will end up in the hands of a third party because of government’s incapacity or unwillingness to process a simple property transaction. And people like the Griffins will bear the blame. |fw
State wants to step up forced sales

While the Griffins and many like them in KZN are trying to sell their farm for land reform, government has finalised its review of the willing-buyer, willing-seller principle and hopes for approval to step up expropriations by the end of the year. An internal memo seen by Farmer’s Weekly points out expropriation has the advantage of allowing for better planning because land markets are failing to supply enough land to meet national redistribution targets. The memo identifies three areas as land reform priorities, where expropriation is expected to be applied most vigorously: high-potential agricultural land; contiguous blocks of agricultural land suitable for resettlement, allowing for infrastructure cost savings; and commercial farms bordering communal areas. When Geoffrey Griffin hears government wants more powers to expropriate because too few farmers are willing to sell their properties for land reform it causes his hair to stand on end. “It’s enough to make you bitter.”
Getting proactive

Government has set a target of transferring 30% of white-owned land to blacks by 2014, but to date only 4% has been handed over – although this figure is expected to more than double when private sales are included. Land Affairs’ latest intervention to speed up land reform, the Proactive Land Acquisition Strategy (Plas), has already ground to a halt. Approved in 2003 pending development of an implementation plan, Plas was piloted last year and rolled out in KZN this year. But a temporary moratorium has been put on all Plas sales, apparently because of objections from Treasury officials. Plas envisages the state buying up large tracts of land and making it available for redistribution. The state, rather than beneficiaries, therefore becomes the key driver of land reform. It targets three main groups: people living in communal areas, urban blacks with farming skills and people living with insecure tenure rights. The approach has been designated pro-poor, while able to cater for the needs of emerging and commercial farmers. It’s also supposed to form part of sound land use planning and be integrated with municipal and provincial growth strategies, housing programmes and agricultural development corridors. A Plas manual seen by Farmer’s Weekly and circulated among provincial land reform offices in May 2007 says farmers’ unions, estate agents, commodity organisations and financial institutions should be approached to assist in identifying suitable land on the open market, screening beneficiaries and developing the land. Land can be acquired through market sales, expropriation or auctions before or after finding beneficiaries. Once selected they are expected to lease the land for a trial period to screen them for suitability. The agriculture department must monitor the beneficiaries and expel those who perform badly. Once pronounced fit to farm those remaining can apply for LRAD grants to buy the land at a price fixed by Land Affairs at the time of acquisition, subject to Treasury approval. Shortfall must be made up by loan funding from commercial banks or parastatals. Planning costs such as valuations, feasibility studies and subdivision will be conducted by Land Affairs, and farm infrastructure development costs by the agriculture department through its Comprehensive Agricultural Support Programme. The housing department will carry settlement planning costs.