The Department of Rural Development and Land Reform says it will take ownership of the Solms-Delta Wine Estate in Franschhoek to help secure the jobs of workers who recently acquired 45% of the business and land.
The department purchased an equity stake in the business in 2016 on behalf of farmworkers following an agreement with the owners.
This was through the National Empowerment Fund and framework on Strengthening the Relative Rights of People Working the Land, commonly known as the 50/50 policy.
It meant farmworkers and farm dwellers shared ownership with wine farmers Mark Solms (Zandvliet-Delta Farming (Pty) Ltd) and Richard Astor (Lubeck-Delta Ltd).
The 50/50 policy assists mainly farmworkers and farm dwellers to secure permanent tenure on the properties where they work or live as well as acquire economic interests in agricultural land and businesses in which they work.
However, despite intervention by the department, including financial support for the business, the project continued to operate at a loss.
This was due to a number of things, they said, including poor wine sales both locally and internationally; under- resourced teams; and inefficiencies in the running of the hospitality business.
“The challenges that have arisen have forced the department to cease the continued funding of Solms-Delta in its present form, a move which is likely to lead to the liquidation of the business by the business rescue practitioner,” the department said yesterday.
“A solid turnaround strategy which will encompass diversification and restructuring of operations will ensure sustainability and profitability of the business.
“The department is committed to work with the farmworkers to ensure that they are supported in order to continue operations in a manner which will secure their employment and improve their livelihoods.
"In addition to this the department will also secure the property as the land owner.” Economic Opportunities MEC Alan Winde said Solms-Delta was unique among other land reform projects in the Western Cape, where funding was received from the national government through the Comprehensive Agricultural Support Grant, and disbursed by the province.
The Western Cape had previously been criticised for the lack of transformation and land reform in the province when the African Farmers Association of South Africa (Afasa) said three years ago that less than 1% of family farms in the province were owned by black farmers.
Afasa regional chairperson Ismail Motala said yesterday, not much had changed in three years, and the figure still stood at about 1%.
Winde said he did not have a record of the latest statistics of farm ownership in the province.