I spent my day in Free State where I participated in the South African Stud Book and Animal Improvement Association AGM. My presentation reflected broader themes of South Africa’s agricultural economy – production trends, trade, and policy.
But the discussion that followed was centred on three themes: water regulations and infrastructure, land reform policy; and compliments to the National Treasury’s economic policy paper, with the key focus on the agricultural section of it.
Water regulations and infrastructure
A few people expressed frustration at the slow and ambiguous process of water licensing and shared concerns about the water infrastructure. Fortunately, I had positive news that this matter has been elevated at national policy structures and work on easing the process is underway through bilateral discussions between business and government. The National Treasury economic policy paper released on October 30 also touched on this matter. Moreover, the Water and Sanitation Master Plan that is currently being drafted might address some of the dominant concerns in society.
Land reform policy
Most people needed to know about the current process on the land reform policy, and some asked if it is still a priority or has been shelved?
I think it is still a priority, but there are other pressing issues that have dominated the headlines over the past few months, most notably Eskom matters.
In my response to the question about the current process of land reform policy, I indicated that after consultations across South Africa in 2018 following the resolution by Parliament that there must be an assessment of whether section 25 of the Constitution should be amended, the outcome was that it should be amended.
But this process provided no specific wording on what the amendments should be. Hence, parliament set up another committee to advise the specific wording of section 25 of the Constitution. This committee will report back on 31 March 2020, upon which a draft Constitutional Amendment Bill will be tabled in parliament outlining the proposed amendments to Section 25.
At this point, it is unclear what the outcome of the process will be. Worth noting, however, is that there is no political party, I think, that has enough votes to singularly amend the Constitution of the Republic of South Africa, as all have less than 66% votes in the National Assembly. Any amendment would require that either the Economic Freedom Fighters or the Democratic Alliance votes with the African National Congress. More on this will be clear in 2020, but it is certainly an aspect to watch.
Another equally important process within land reform policy is the report of the Presidential Advisory Panel on Land Reform and Agriculture, which I was privileged to be part of. The Panel finalised its report earlier this year and the Presidency made it available to the public in July 2019. The report was presented to the Cabinet and to the Inter-Ministerial Committee which might draw from it as it works to formulate the land reform policy direction. Again, the work is still underway and it is an equally important aspect to keep an eye on in the coming months.
National Treasury paper
The compliments were music to my ears. The attendees were particularly happy about the proposed approach of joint-ventures for agricultural development. But there was an equal concern that if broader policy questions such as land reform are not addressed, the potential positive impact of the National Treasury suggestions on agricultural development might be minimal.
I indicated that there are plans underway here also: an Agricultural Master Plan and Blended Finance model. It is not clear so far how these will look as the work is still in elementary stages. But for the plans to succeed, there must be a buy-in of both private and public sector to a clear set of rules and timelines for the process.
Overall, it was good engagement, although the sentiment is somewhat down because of both policy matters and also drought in the region of the Free State. On the latter, there are hopes for rainfall soon which could improve conditions. On the former, more work is needed. These are interesting times.
Follow me on Twitter (@WandileSihlobo). E-mail: email@example.com
THE WEEKEND ESSAY: By Wandile Sihlobo and Professor Johann Kirsten
Some of the successful land reform programmes in the world took place in countries where the beneficiaries were those who occupied the land at the time of the reform. This may be true for the provision of secure tenure to occupiers living under legally insecure tenure arrangements in communal areas, however, the context is quite different for the redistribution and restitution programmes in South Africa.
Because of the long history of dispossession, the land redistribution and restitution programmes will naturally involve the displacement of current land owners in favour of the resettlement and relocation of beneficiaries. Such processes require that clear criteria and principles be established at the outset, in order to guide participation as well as to achieve the objectives of the programme. In the case of the restitution programme, the criteria have always been clear since it was linked to those families, communities or their successors that have previously occupied the specific piece of land as verified by oral or documentary history and via the land claims process.
This is in contrast to the redistribution of agricultural land, currently owned under free hold arrangements, where clear criteria for selecting beneficiaries are needed. Section 25 of the Constitution places an obligation on the state to take reasonable legislative and other measures, within its available resources, to foster conditions which enable citizens to gain access to land on an equitable basis. The Constitution does not prescribe which citizens need to be prioritised as this detail was left to the policymakers, however, it is generally accepted that equitable access should enable previously disadvantaged citizens to access land on an equal footing.
During the design phase of the land reform programme back in the mid-1990s, Johan van Rooyen and Bongiwe Njobe documented the criteria formulated for beneficiary selection but was never fully applied nor captured in legislation. Hence, we have decided to revisit their original work in our attempt to start a conversation about the selection of beneficiaries for land redistribution.
The main aim of the land redistribution programme is to redress the impact of past wrongs. For this reason, the programme would generally support aspirant black farmers. However, a programme of this nature will not make an agricultural producer out of every participant although it should go a long way in creating an inclusive and viable rural economy within which agriculture and the related linkages can develop.
There exists a rather obvious trade-off between having bureaucratically administered criteria that could be exclusionary or a broader-based programme that could allow for self-selection among the potential beneficiaries themselves. International experience highlights the limitations of officially administrated programmes where bureaucrats select the beneficiaries, while the pure reliance on the market mechanisms alone also has its disadvantages. Therefore, there is a need to have a balance between criteria setting and self-selecting processes.
In a market-driven land reform process (which was anticipated in 1996) the market will do the selecting, generally favouring those already empowered, albeit on a limited basis and leaving out the poorest and landless of the poor. It is, therefore, logical to assume that the market alone is not enough to do justice. At the same time, there are imminent dangers in relying solely on bureaucratic institutions to effectively distribute land.
Experiences in Mexico, Zimbabwe and now also in South Africa, as highlighted in our previous article on June 11, demonstrate that in addition to the opportunity for corruption, it also takes a long time to carry out effective administrative functions related to land reform. As a consequence of the history of South Africa, four sets of principles for the selection of beneficiaries are relevant. These are:
(i) Victimisation and disentitlement: It is obvious that one needs to consider those South Africans who were historically disadvantaged and victimised through disentitlement and denial of access to land and support services, to be beneficiaries.
(ii) Poverty and need: a land reform programme should provide the rural poor with access to opportunities for income generation, employment and self-employment. It becomes critical therefore to incorporate criteria which give preference to the poor and the landless amongst the previously disadvantaged as beneficiaries.
(iii) Productivity and sustainability: It is recognised that productivity in agriculture is a determining principle for participation in the land reform programme, particularly in relation to designing the level of support services needed to enhance the productive capacity of the beneficiaries.
(iv) Participative processes: International experience shows that problems almost inevitably arise when groups are moved on a top-down basis into land-based schemes with unrealistic expectations as to what is involved in resettlement, with unclarity in what they are expected to do for themselves and what will be done for them. The expectations therefore of the beneficiaries, once identified, need to be anticipated and fully integrated into the planning process and subsequently dealt with in the implementation stage.
One of the key objectives of the programme to redistribute agricultural land has become the need to ensure the productive use of the land to promote agricultural growth, food security and exports – as was recently echoed in the ANC’s December 2017 resolution on land reform. In this context and in light of the principle of “productivity and sustainability” we need specific criteria to select the best beneficiaries to transform the commercial agricultural sector and at the same time ensure productive use of the land.
There are the obvious elements such as good health; age between 30 and 45; education (not always formal but also years of experience); and gender (ensuring that women are included as beneficiaries). Moreover, Njobe and Van Rooyen highlighted specific criteria that have been shown through international experience to improve ‘agricultural success’:
- Net financial worth. This is a useful criterion to target the poor but also helps to identify those beneficiaries that exhibit strong repayment ability as well as willingness to increase the size of the holding and other assets. Obviously imbedded in net financial worth are the principles of financial leverage and secure rights to land.
- Previous farming experience. Many studies have found that successful farming experience and acquired skills are strongly predictive of good performance. The main argument here is that previous farming experience and the understanding of the farming environment could ensure a productive and sustainable use of land. These aspects include: formal or informal training in farming practices; the previous existence of a viable black agricultural community; the existence of (indigenous) knowledge of viable farming; those who have lived and or worked on white-owned farms have through practice acquired knowledge of farming; and women involved in food production activities.
- Entrepreneurial skills. Modern farming is a business like any other business but with far greater (external) risks. Entrepreneurial and business skills are therefore critical for the financial success of the commercial farming enterprise (i.e. to make money and a living from agriculture). These skills include: the cultivation of cash crops and marketing of the crops/livestock; the inclination to grow more cash crops; a desire to increase landholding; a more positive orientation towards training; employment of other people; exposure to agriculture and other information through the media; openness to the advice of fellow farmers, co-operatives and extension officers; the desire to contribute to the decision making process; awareness of the need for insurance; forward planning; a good knowledge of and a willingness to apply modern crop and cattle farming practices; some form of previous management training.
- Managerial aptitude. This has always been a major factor influencing the success of commercial farming ventures. Many white commercial farmers faced bankruptcy in the past due to their inability to manage risk, finances and marketing. It is for that reason that our Professors spend a lot of time talking to farmers (during the 1970s and 1980s) about the importance of management (financial, human resources, water, risks, markets). Farm management became a core of the agricultural curriculum at most universities and agricultural colleges as it became clear that the managerial skills of the farmer are critical for the success of any commercial farmer.
Overall, the criteria for selection of beneficiaries is critical when one thinks about the ideal scenario to fast-track sustainable land reform. A parallel process can be followed that combines the streamlined benefits of a market-led approach for aspiring farmers to purchase commercial land through blended finance products and a decentralised process led by local institutions, such as District Land Committees to ensure that the landless and resource-poor are not marginalised.
These committees would have to make use of the aforementioned criteria for beneficiary selection to ensure the allocation redistributed land is equitable and just, but at the same time ensure that there is a productive use of land and food security. This is a juggling act, but which can be mastered through the application of a well-designed set of criteria.
Wandile Sihlobo is head of agribusiness research at the Agricultural Business Chamber of South Africa (Agbiz) and Professor Johann Kirsten is the Director of the Bureau for Economic Research (BER) at Stellenbosch University.
Written for and first published on Business Day on 25 June 2018.
 For the full text see Johan van Rooyen and Bongiwe Njobe-Mbuli (1996). Access to land: selecting the beneficiaries. Chapter 18 in Agricultural land reform in South Africa: Policies, markets and mechanisms edited by Johan van Zyl, Johann Kirsten and Hans Binswanger, Oxford University Press, Cape Town.
Follow me on Twitter (@WandileSihlobo). E-mail: firstname.lastname@example.org