Land reform: time to take the initiative

How will producers and agribusiness be affected if the agriculture sector cannot come up with a plan for land reform? In no way must food security be put at risk, says Agbiz CEO John Purchase.

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Land reform is currently in the spotlight, and rightly so. The issue is not whether land reform should take place or not, but rather how it should be done to ensure a more equitable and fair pattern of land ownership. This process must not be allowed to put food security at risk.

It is this dilemma that is creating conflict in the ongoing consultation process between government and the private sector, and more specifically with organised agriculture and agribusiness.

Central to this conflict are two of the three principles of the Green Paper on Land Reform, namely:

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  • Democratic and equitable land allocation across race, gender and class
  • Sustained production discipline for food security. 

These principles say nothing about private property rights and the broadening of those rights through a transparent and credible land and property market. Instead, the emphasis is on the allocation of land to beneficiaries with a view to ultimately reflecting the demographics of the country in terms of race, gender and class.

This implies that the government will attempt to take control of the land (ownership/curatorship?) in order to manage the allocation as a function of power.

But at the same time, “sustained production discipline for food security” can hardly be enforced by government.

All of this is very similar to a ‘Centrally Planned Economic System’ – an obsolete ideology that resulted in immense suffering and starvation in many parts of the world, including African countries to our north.

Open market
At most, government can create an empowering policy and legislative environment within which entrepreneurs, both large and small, can consider capital investment in food production for a fair return.

An open, competitive market system must form the foundation of our agricultural food system, as well as our food security. As such, certain interventions are required with regard to the system/principles so as to systematically address the imbalances and wrongdoings of the past.

The South African Constitution gives specific guidelines for managing land reform and property rights in the country, while the associated Bill of Rights also entrenches certain rights in this regard.

During the process of consultation on the Green Paper on Land Reform by the National Reference Group, a number of bills and amendment acts (close to nine) were devised, mostly with the support of Agbiz.

However, no form of consensus on the ‘land ceilings’ could be reached during this process, while ‘50:50’ ownership and management model in relation to farmworkers was incorporated as an afterthought at the very end of the process.

Agbiz lodged principle grievances against this model, since it would have in effect cut any enterprise’s ability to secure financing in half, and would have simultaneously put financiers at great risk.

Disastrous route
These two major points of contention, together with a new one that was unexpectedly announced by Gugile Nkwinti, the Minister of Rural Development and Land Reform, at the recent Communal Land Indaba, to the effect that every farmworker household must be given one hectare of land by the owner, with title deed and all, are a source of great uncertainty and serious concern.

It is clear that the department is moving towards the establishment of smallholder farmers in the commercial agriculture sector. This philosophy of an ‘African Peasant Order’ speaks very strongly to the work of the two main advisors/researchers associated with the department of rural development, namely Prof Sam Kariuke, of the Department of Sociology at Wits University, and Prof Sam Moyo of the University of Zimbabwe.

The latter was also the architect of Zimbabwe’s radical and disastrous land reform plan.

It is worth reading up on their work. In order to counteract this radical and disastrous route towards land reform, it has become critically important for the private sector to take the lead in land reform and to guide it in a commercially viable direction that will also ensure true food security, rather than the government’s erroneous definition thereof.

The way forward
For this reason, Agbiz and the Banking Association South Africa (BASA) have joined forces and, in line with the land reform framework of the National Development Plan (NDP), which is government policy, have developed a financing model and have offered to take the initiative in terms of land reform.

But then all role players, including the major commercial farmers, will have to work together on a large-scale to achieve the goals that have been set.

If we are unable to achieve and demonstrate true success, the land reform debate will be sent ever further down a dead-end street, leaving us as nothing but spectators and victims of the process.

The government’s failure to successfully implement land reform is sure to be used by outside elements as an excuse for broad-based ‘land grabs’ or the illegal occupation of land.

We have little choice in the matter, but the road we must travel is one founded on specific economic principles and values, and we have to remain steadfast and work together to achieve success. This is the best antidote to obsolete ideologies and dead-end policies.

This article was originally published in the AgBiz Newsletter. Contact John Purchase at +27 82 441 2308 or +27 12 807 6686.