Spoonfeeding land reform into the ground

SA can’t seem to get land reform right, despite having far more resources than other countries that have done it successfully. The Besters case in KwaZulu-Natal holds the secret to solving this riddle. But, as Stephan Hofstätter found out, officials have latched onto other ideas that risk compounding past failures.
Issue date 23 November 2007

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Last year Farmer’s Weekly hailed, as a new dawn for land reform, the way the community of farmers, workers, and tenants in Besters, KZN, managed to set aside differences and forge a common vision of land redistribution, without productivity declining. A follow-up visit reveals that Besters holds the key to solving many of the riddles of land reform, including the slow pace of land delivery and plummeting production on land reform farms. Whereas nationally SA’s land reform programme has managed to transfer less than 5% of white-owned land to black people since 1994, the Besters community willingly redistributed almost 25% of the district in five years. Two recent studies reveal most black people in SA who received farms were no better, if not worse off than before, partly because of plummeting agricultural production. At Besters, eight of the 14 land reform farms earned a total of R1 million in their first year of operation, most of which was reinvested. women’s co-op landed a R2 million fencing contract from Grinaker-LTA, and small commercial vegetable and poultry enterprises are in the pipeline. Investments in social capital included employing two full-time mentors from the district to ensure skills transfer in herd and farm management. Black farmers attend commercial beef production courses at Dundee Research Station and financial management courses sponsored by Standard Bank. Stock theft has declined, and land values have increased from R1 000/ha to R3 000/ha – key indicators that land reform has improved the district. T his contrasts starkly with most other land reform farms in SA.

Land transfer commonly either halts agricultural activity, with farm houses, equipment, crops and livestock looted or, in the case of equity schemes and strategic partnerships, brings few benefits to the new landowners other than keeping their farm jobs. Government sticks to its job What distinguishes Besters from almost all other land reform projects is that government confined itself to do what it was supposed to, in this case highly effectively, under the leadership of national director general of land affairs Mdu Shabane, who was KZN’s director of land affairs at the time. His office set the ball rolling by ensuring farmers complied with land policy and law, they set up negotiating structures and made sure everyone played by the rules. his month the World Bank will release a report on Besters, suggesting that SA’s land reforms aren’t working because government has over-complicated matters by subjecting projects to excessive state control and micro-management. “�“ Government must play an oversight, not executive, role,” says the report’s lead author Hans Binswanger-Mkhize, a Swiss economist.

Now a doctor at Tshwane University of Technology, he’s one of the world’s leading land reform theorists and has spent decades doing field research in developing countries for the World Bank, notably Mexico, Brazil and India. He advised the Mexican government on constitutional land reforms credited with supporting the country’s economic revival. In my experience reforms only work when they’re driven by the beneficiaries and landowners – in this case the white farmers and black communities themselves,” he says. But in SA, officials negotiate land prices with farmers on behalf of beneficiaries, appoint consultants to draw up business and production plans and control grant application processes that splinter off in different directions to various desks and departments, and then draw the strands together at local level. B inswanger-Mkhize says land reform projects have become little more than collective farms, where even trivial decisions such as buying diesel are vetted by officials. This is not only the worst incentive for productivity, as a century of failed experiments worldwide with collective farms has shown, it also complicates land reforms needlessly, creating endless red tape with unworkable solutions imposed from above. suppresses capacity at local level,” he says. They swiftly and efficiently concluded farm valuations, sales and payments. The details were left to the farmers, their workers and labour tenants to thrash out.

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The threat of Section 17 notices, informing landowners that their tenants had lodged claims against them, forced the farmers of Besters into action. After numerous meetings they committed as a group to find ways of distributing their land without harming the district’s economy. It took over 100 community meetings – during which former adversaries gained mutual trust and an understanding of each other’s needs and aspirations – before the farmers and their tenants agreed on a joint strategy that worked for everyone. Their key innovation was to set up a Section 21 company, Abrina, to implement the reforms, rather than relying on a land affairs support unit or government-appointed consultancy to help black farmers apply for grants. Abrina is jointly run by farmers and tenants, with executive directors elected from both communities. Officials from different departments attend board meetings as non-voting directors. he right incentives Abrina has proved highly efficient at disbursing funds received from different government agencies, primarily for buying Solutions to major flaws The World Bank report identifies a major flaw in the Besters model.

Large farm units were kept intact and transferred to communal property associations (CPAs), rather than subdivided into smaller family holdings, where owners would have the greatest incentives to save and reinvest profits. The report argues that economies of scale usually exist not at farm production level, but in upstream and downstream services such as a tractor pool, feedlot and abattoir, that could be outsourced to separate enterprises with farmers as shareholders. The report recommends a combination of enterprise models, including contract farming, private for-profit companies, a financial services corporation, and market garden cooperatives, according to the members’ needs, aspirations and incentives. The same approach should be followed with land use rights. Families could be allocated usage rights over residential stands and portions of arable land that become formalised, tradable and inheritable with time. Forests and pastures could be owned and operated communally.

The same system could apply to companies or co-ops. “This is how property rights evolved in Switzerland and many parts of the world. The point is, it was left up to the communities to decide on the rules,” says Binswanger-Mkhize. Roland Henderson, the Besters farmer who became a key figure in driving the process and is now deputy chairperson of Abrina, agrees CPA farms weren’t the right choice. “They are too big to manage and are bound to fail. We’re herding people with dissimilar aspirations and incentives into the same box,” he says. “The real determiner of farm size should be the skills to manage it.” Besters is currently looking at subdividing the land on the principle that farms should be owned by the smallest number of people possible. Although all CPA members would get title to their residential stands, to avoid absentee owners who are often sources of conflict, only families who actually want to farm would own the agricultural properties. The others would get the chance to be paid out their share, with the option of using the proceeds to start other enterprises.

“There’s always trouble with a CPA,” says Abrina chairperson Zweli Mbhele, who played a leading role in achieving community consensus. “When you’re dealing with groups, some want to work and others don’t. This causes problems.” Exit packages would give enterprising members the chance to pursue their real ambitions. “One guy wants to use his share to start a car repair business and another wants to do taxis,” he says. “We must give people options.” Government back in the driving seat? Senior officials concede land reform projects aren’t working. “Our review of [land reform] projects found 75% of land restored is agricultural land, but there are many challenges around its productive use,” says acting director general of land affairs, Tozi Gwanya. “After 50 years of deskilling, our people aren’t commercial farmers.” He is proposing new targets to measure the success of land reform, such as productivity, jobs created, and income derived. But plans under discussion risk repeating past failures by putting government in the driving seat again. Earlier this month Gwanya distributed a government-commissioned land reform strategy document in parliament that proposes creating municipal implementation agencies that would function much like Abrina at Besters by housing and disbursing grants as part of a coordinated post-settlement support strategy.

But instead of being run by people directly affected, they would be chaired by land affairs and municipal officials with far less incentive to prevent misspending. By treating land reform failures as a planning problem that can be fixed with more state intervention, the strategy risks multiplying government inefficiency and strangling the land programme with red tape. Despite being bound in book form, with a foreword written by land and agriculture minister Lulama Xingwana, Gwanya says the Settlement and Implementation Support (SIS) strategy hasn’t been adopted as official policy. “We’ll use this handbook for guidance, but it will be a consultative approach, involving land NGOs, farmers’ unions and so on, to ensure any amendments made to the White Paper on Land Policy are well considered and practical.” But Besters proves black and white farmers, the landed and the landless, can bury the hatchet and thrash out solutions that work on the ground, if government sticks to its oversight and supporting role and doesn’t try to run people’s lives. It has demonstrated if government learned to let go, and really let the people govern, the land issue in SA would be solved. |fw