Dr Thulasizwe Mkhabela is an agricultural economist and is currently the Group Executive: Impact & Partnerships at the Agricultural Research Council; mkhabelat@arc.agric.za
Dr Thulasizwe Mkhabela is an agricultural economist and is currently the Group Executive: Impact & Partnerships at the Agricultural Research Council; [email protected]

Land expropriation bill and agriculture: Policy clarity or mudding the waters?

By Opinion Time of article published Oct 15, 2020

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By Thulasizwe Mkhabela

JOHANNESBURG - There is no doubt that land reform is once again high on the development agenda.

Post socialist countries in Asia and Europe have seen a substantive shift in control over land from state and collective units to smallholder.

Governments across Africa, Asia and Latin America recognise customary land rights by issuing formal titles to local people. Policy makers in parts of Latin America and Africa implement programmes that redistribute land from large landowners to landless people and tenants (farm dwellers).

All these programmes have one commonality, they seek to establish and/or enhance land rights of and access to land by disadvantaged groups by way of legal and administrative acts.

In this way, the programmes constitute land reforms, although their fundamental objectives and modalities vary greatly. The South African government is amongst those countries in Africa that are vigorously pursuing fundamental land reform.

South Africa has a notorious history of alienating the majority of its people from access, use and ownership of land. Dispossession and forced removals of African people under colonialism and apartheid resulted in extreme land shortages and insecurity of tenure for much of the black population. Thus, land reform is a development imperative in South Africa.

The intended objective of land reform in South Africa can be summarised as bringing about fundamental transformation of property rights in order to (re)address the history of land dispossession and lay the foundations for the social and economic emancipation of the rural and urban poor. The land reform process in South Africa has both social and economic underpinnings making it a complex and difficult endeavour.

Land reform in South Africa has been implemented through three government programmes, namely: restitution, redistribution and tenure reform.

Agriculture is a vital sector as an economic development catalyst. The need to accelerate land redistribution and promote transformation in the sector cannot be overemphasised. However, the need to sustain a viable and affordable food system is equally important and the South African government has acknowledged this.

Therefore, the key challenge is to find a balance between maintaining a viable agricultural economy and improving the pace of land reallocation and transformation in the sector to achieve the inclusivity of the previously disadvantaged individuals (PDIs).

It must be emphasised that the focus in this article is limited to the land redistribution pillar of the land reform, which seeks to redistribute land for productive agricultural use. The renewed attention that the land reform process in South Africa is currently enjoying warrants a thorough analysis of the cost and benefits of various scenarios that could be pursued. Furthermore, it would be foolhardy for policy makers to implement radical land reform without the empirical evidence to support the option chosen.

The South African agricultural sector remains relatively dualistic in structure encompassing just more than 30 000 large commercial farmers that produce nearly 95 percent of agricultural output and millions of small-scale farmers that are typically characterised by poor on-farm infrastructure and unco-ordinated production systems.

The overall agricultural sector plays an integral role in the South African economy contributing 2.6 percent to gross domestic product; providing 847 thousand jobs, largely to a low-skilled labour force, and generating more than R146 billion from foreign markets. 93.5 million hectares are used for agriculture. Farm debt was R158.3bn, with agricultural capital assets at R470bn in 2017.

The government allocated R30.3bn to agriculture, while the private sector funds allocated to agriculture were R744m. Despite this undisputable role in the economy, the country through the Nation Development Plan committed to an inclusive economy, which benefits all its citizens.

The importance of an inclusive economy gained momentum at the 54th conference of the ruling party in December 2017 where radical policy decisions were adopted to speed the inclusion of previously disadvantaged individuals (PDIs) in the formal economy. One of these decisions was the expropriation of land without compensation in order to accelerate land reform and participation of PDIs in the food system. President Ramaphosa in his State of the Nation Address reaffirmed the need for inclusivity and fast-tracking land reform in February 2018.

The land debate is sensitive and the lack of reliable and unbiased land ownership numbers adds to the distortion of the debate. The existing numbers on agricultural land ownership and redistribution are highly contested primarily because of methods used to collect the data. Despite the lack of consensus, they offer some good insight into the land redistribution patterns, which indicate that about 72 percent of agricultural land is still owned by large commercial farmers. This implies that 24 percent of previously white owned land has been redistributed taking into account both government-sponsored and private land transactions.

Ironically, the quantum of redistributed land has not been translated into production growth implying that other factors are required to unlock the meaningful participation of the PDIs in the formal food system. For example, statutory data from the National Agricultural Marketing Council shows that on average 94 percent of agricultural output is produced by commercial farmers suggesting that emerging farmers have not gained any significant share in food value chains despite redistributed agricultural land.

Scholars have identified lack of post-settlement support; group characteristics and conflicts; and limited access to markets as chief factors causing limited success of PDIs. It is clear that there are sunk costs that government must incur in order to realise meaningful participation of PDIs in the food system. Such costs include investing in human capital; markets; rural infrastructure and on efficient and effective post settlement support mechanisms.

In 2009, the Department of Rural Development and Land Reform evaluated the implementation of land reform programmes. The evaluation identified that most projects were not successful and in distress; there was lack of adequate and proper post-settlement support; and some projects, which were acquired through the Land Redistribution for Agricultural Development Programme were on the verge of being auctioned or had been sold due to collapse of the projects.

Due to the above scenario, the Recapitalisation and Development Programme was introduced in 2010 in order to address the above challenges. The programme intends to provide black farmers with social and economic infrastructure and basic resources and complement agricultural programmes of the Department of Agriculture, Forestry and Fisheries.

While land redistribution is an important means of production, it is not sufficient. South Africa is food-insecure at household level with more than 13 million people living under poverty line. It is important to note that the gazetting of the Land Expropriation Bill and its ultimate promulgation into law will provide policy clarity that the market so desperately needs, even if there are dissenting views.

Dr Thulasizwe Mkhabela is an agricultural economist and is currently the group executive: Impact & Partnerships at the Agricultural Research Council; [email protected]

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