While failure rates of land claimants are high, Malelane beneficiaries in Mpumalanga are an exception and have made good of the land bought for them by the government.
In June 2007, the then-minister of Agriculture and Land Affairs, Lulu Xingwana, handed over the largest parcel of land in the history of South Africa’s land restitution process, to four communities in Malelane.
It was 32 000ha of highly commercial sugar cane farming land valued at R1 billion, to the Tenbosch communities.
This was followed by a hand-over of two pieces of equally rich land to other communities, the last of which was in July.
Failures in land reform have largely been due to the beneficiaries’ lack of finances to run the operation and a lack of know-how.
Thanks to TSB, a major sugar processor in South Africa, the Malelane beneficiaries did not meet the same fate as the others. Chief executive John du Plessis says the company was actively involved in post-settlement solutions and helped the beneficiaries develop sustainable business models for cultivating sugar cane.
As a result, the beneficiaries are now enjoying the flow of benefits from the TSB joint ventures, valued at about R100 million in five years.
The sugar cane farms owned by the beneficiaries in the Nkomazi region covers about 67 percent of the total cane area of 49 598ha.
“It was important for the two to marry so that there is continued production,” says Theo Chiyoka, chief executive of Joint Ventures.
Du Plessis says TSB scaled down its ownership of agricultural land, which now stands at 1 538ha, in order to concentrate on milling sugar cane.
It now leases the sugar cane farms from the beneficiaries, who benefit from the rent paid.
Dividends are also paid to the community trusts or community property associations that have been set up by the communities.
He says TSB provides technical support to the joint ventures, this entails technical audits, technical and operational support, project management, new technology reviews, new developments and a focus on service delivery.
The joint ventures also offer jobs to members of the beneficiary communities, and they offer enterprise development. TSB also provides training and skills development.
Chiyoka says the joint ventures also have a policy of involving the communities in the value chain of TSB through preferential procurement.
He says: “This is designed to benefit them financially. If a person has no capacity, we link them with someone who is experienced. We also help with start ups.”
Harvesting, which is labour intensive, is also outsourced. The harvest is 108 tons a hectare on average.
The joint ventures also has a corporate social investment programme and offers bursaries for agricultural training.
Chiyoka says each joint venture has eight board members, four from TSB and four from the community, and the chairmanship rotates every two years.
Although the joint ventures would be ideal to advise on how the communities spend the dividend flows, they are reluctant to do so, for fear of being accused of dictating how the profits are spent, says Chiyoka.
Akwandze Agricultural Finance was established in 2006, of which TSB is a 50 percent shareholder, to ensure easy access to credit for sugar cane growers, especially those in communal land tenure.
Its share capital is R25m, of which R10.3m was a donation from the SA Sugar Association.
The other 50 percent in Akwandze is held by the Ligugulethu Co-operative.
Roger Armitage, the chief executive of Akwandze, says there are 1 200 small-scale growers and land claimants in the area and at least 10 percent of this small growing area requires replanting annually, or a portion is out of production or produces sub-economically.
He says all growers can be members of Ligugulethu and obligatory shares are based on R1 000 a hectare up to a maximum of R8 000. Ligugulethu has 897 members, who are all small-scale growers.
Akwandze administers multimillion funds for loans from the government or government agencies to sugar cane growers.
Armitage says there is a rigorous loan application assessment, including three credit committees. There is a controlled loan disbursement, a random monthly loan monitoring and a pre- and post-harvest inspections triggered by information systems.
Armitage says the rewards have been that the loans have contributed a 30 to 40 percent increase in the yields of small-scale growers, increased income to growers and brought significant economic upliftment of the region.