How can the programme called the Sustainable Restitution Support – South Africa (SRS-SA) improve the success rate of new farmers?
The land reform process lacks the rigour of the typical entrepreneurial process. Generally, stakeholders don’t deal with it as a business-driven process and this contributes to the failure rate of 50%. So an entrepreneurial element needs to be added. Farming is a business like any other and a very high-risk one at that. Commercial farms can have turnovers of up to R50 million and even small farms generate turnovers of hundreds of thousands of rand. One can hardly expect a farmer who does not understand business principles and can’t make informed financial decisions, to manage that kind of money. The technical skills to plant and harvest a crop is not enough. Another reason for the dismal failure of so many land reform projects is that government views them as social development projects. Instead, the priority should be to turn them into profitable businesses as soon as possible.
So the idea is to train beneficiaries in business management and entrepreneurship?
Currently there’s very little focus on this in the land reform drive, despite the fact that beneficiaries have no business sense at all. There’s also room for social development, but land claimants won’t be able to realise their dreams by simply having land given or returned to them. They must be able to farm profitably. Technical knowledge will help, but people who are trained in business management have a better chance of becoming entrepreneurs. At the very least, such training should help them make better decisions. Ideally, it will motivate them and help them to recognise business opportunities.
Is this not easier said than done?
It’s not as difficult as it sounds, especially if the claimants are given the opportunity to take over a going business concern which is then managed well, technically and financially. But the new owners have to be taught how to do that. If not, the business will slide into bankruptcy very quickly with the accompanying failure of supply lines and degradation of land and buildings. The country can’t afford more derelict farms for the sake of politics. An additional requisite is that the going concern earmarked for restitution should be kept operational until the new owners take over. It can’t be allowed to deteriorate and lose productivity.
But even young farmers who grew up on commercial farms and received the best agricultural training have failed. How does one educate a land beneficiary who not only lacks that background, but comes from a completely different culture?
Commercial farmers have all the agricultural skills and experience, but sometimes also lack the entrepreneurial inclination required to grow the business. The SRS-SA programme shows that a well-qualified and experienced strategic partner is an absolute prerequisite for success. This intervention can assist the newly elected Community Property Association or Trust (CPA/Trust) to keep the farm productive. It’s sad that payments to the beneficiaries are often caught up in the bureaucracy of the Land Claims Commission, which is supposed to pay the community their pre-settlement and post-settlement grants as the land is transferred. If this can be done quickly enough, the beneficiaries, who are compelled to invest the capital in the business, can be operational as soon as possible. The result will be a smoother transition and the creation of a new entrepreneurial process.
What’s been the reaction of government departments to the SRS-SA programme?
They appreciate this intervention tremendously and understand that an institutional framework, which can be duplicated with success for other claims, can only benefit the whole process.
What is your success rate with trainees, given the view that there’s only one entrepreneur for every 100 you try to train?
That’s 1980s thinking. The success rate of this intervention can’t be measured yet, as only six months have passed since the first intervention. Entrepreneurship training is usually measured after 36 months. The biggest stumbling block I anticipated was that the CPA/Trust would not accept the trainers. But the appreciation from their side has been tremendous because they know they lack the management skills. I view the elected CPA/Trust as the directors of this company – they have to design a new management structure, new strategies and indicate the future direction of the entrepreneurial concern.
Can affected commercial farmers get involved in the programme?
Although it seems like a paradox and highly unlikely, they would be the ideal strategic partners. Even if they become strategic partners in other land claims, they would be doing South Africa a huge service.
Contact Prof Jurie van Vuuren on (012) 420-3401 or 083 271 0020. |fw