Having reflected on the possible unintended consequences of expropriation without compensation, it is worth re-looking at some of the existing proposals that were never fully tested, as a means to facilitate land redistribution.

These include the resolutions from the NAREG process, the High-Level panel report, Operation Phakisa, as well a variety of private sector and academic proposals, among others.

The current land policy proposal ascended from the frustration of perceived slow progress, albeit having shown in this piece that there has been progress if one views this process in terms of hectares moved from white farmers to black farmers (not the productivity of the land).

With that said, the ongoing land reform discussions provide a window of opportunity to share ideas on how we imagine the land reform process going forward. In other words, after having highlighted the unintended consequences of expropriation, one can also use this opportunity to share views on the best practice to acquire agricultural land for redistribution.

In June 2017, we argued that land reform processes should be more aligned with the ideas raised in chapter six of the National Development Plan as we believe it has more practical steps of effective land reform productively.

The National Development Plan suggested that the identification of transferable farms and beneficiaries should take place at a district level, facilitated by district land-reform committees that were established in 2015. Under the auspices of district committees, a tripartite joint venture approach on land reform will be established.

Farms for sale could be identified by the committee and a leading successful farmer can be appointed as mentor or co-investor to acquire new land with a qualified beneficiary. The beneficiary should be selected only by the land-reform committee to ensure a good working relationship.

In acquiring the farm, the state can contribute 30% of land value in grant money to the beneficiary. Another 30% can be a loan from the state-owned agricultural bank in the name of the beneficiary and farmer and the remaining 40% would be a cash contribution by other farmers in that particular district.

The contributing farmers would then be exempted from future land-reform claims and the farm could be operated via the farmers’ existing operation to ensure success.

A subsidised interest rate would need to be provided by the state-owned agricultural bank for the loan and backed by a state guarantee in the spirit of risk sharing.

If farmers in districts work together and get at least 30% of land in each district transferred to black farmers and thereafter utilised productively, then land expropriation without compensation would not be needed. Agribusinesses and commodity organisations would also have to provide post-transfer support and mentorship to new beneficiaries.

This can be done only if there is a fair and transparent beneficiary selection; grants and loans are disbursed fast; title deeds are transferred and registered speedily; the government shares in the risk of redistributing land and developing new farming operations, and there is policy stability.

One of the most enduring and fundamental factors in the land-reform debate is the trust deficit between the government and private sector. Trust needs to be built in order to ensure the success and sustainability of the land programme and the agricultural sector. DM

Wandile Sihlobo (@WandileSihlobo) and Tinashe Kapuya (@TinasheKapuya) are agricultural economists. Theo Boshoff is a land policy analyst.

Source: Daily Maverick

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20 April 2018, South Africa: Following the announcement by the Joint Constitutional Review Committee calling for written public submissions on the review of section 25 of the Constitution (Property Clause) and other sections where necessary, to make it possible for the state to expropriate land without compensation in the public interest, the Vumelana Advisory Fund is appealing to Communal Property Institutions (CPIs), community leaders, commercial partners and investors and other intended beneficiaries of the land reform programme to participate  in this process through written and oral submissions to the Committee. The Vumelana Advisory Fund is a non-profit organisation that helps beneficiaries of the land reform programme to develop their land in an effective and sustainable way.

“Given the importance of land reform for these key players, it is crucial for communities and CPIs in particular to understand the value of their involvement and the impact that their voice will have within these discussions and that their experiences can help put a sharp focus on current challenges and concerns within the land reform programme, including possible solutions,” says Peter Setou, Chief Executive of the Vumelana Advisory Fund. “CPIs, commercial partners and investors as well as communities will provide vital insights that could help shape and guide the future of land reform in South Africa, as they have first-hand experience on what has worked and has not worked.  They can help identify the gaps and help shape the land reform programme,’’ says Setou.

Setou notes: “It is also critical to acknowledge that land reform has different dimensions. It has urban and rural dimensions and involves more than just the agriculture sectors as there are other sectors such as tourism as an example. Land reform in South Africa is further implemented via different programmes namely land redistribution, restitution and tenure reform, and each programme has its own dynamics. All of this has to be taken into account in developing and implementing interventions”.

Discussions and deliberations on the proposed review of Section 25 of the Constitution should not be left to politicians alone but must echo the diverse voices of those currently involved in land reform, as well as future beneficiaries.

“The critical feedback by communities and intended beneficiaries of the land reform programme is a key ingredient in making this process a success,” highlights Setou. “In our work, we have found that decisions taken on the land reform programme without the input of intended beneficiaries and other key stakeholders often miss the mark,” he says. “The public needs to be adequately informed in order for them to be involved and play an activist role in the ongoing discussions about this issue.

“Vumelana appeals to community leaders to play their civic duty role and rally communities to exercise their constitutional prerogative of making their voices heard and making a meaningful contribution to these discussions that will not only impact on their future, but that of generations to come,” says Setou.

According to Setou, the Constitution makes provision for public participation in the policy making process and further gives members of the public, regardless of their social standing, the opportunity to have meaningful public consultations with the relevant governmental representatives.  However, many communities often don’t exercise these rights, either due to lack of awareness or apathy.

Since its inception in 2012, Vumelana has been working together with communities and investors to facilitate successful community private partnerships in the land reform programme to ensure that land is productive, creates jobs and improves the overall livelihood of beneficiaries of the land reform programme and communities. “There needs to be some level of information sharing with the communities leading up to the deadline for submissions in May 2018 in order to create an understanding of what this process is about. Communities further need to understand the impact that this will have on the country, the economy, employment creation, food security and social cohesion among other things, not only today but in the future,” says Setou

The public hearing process on the expropriation of land without compensation is scheduled to begin on 8 May in Limpopo.

All written submission must be made by Thursday 31 May 2018. Parties that wish to make oral submissions are urged to send their requests to Pat Jayiya at pjayiya@parliament.gov.za or call 021 403 3661 by no later than Thursday 31 May 2018. –Press release

Source: AgriOrbit

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The 24-member Joint Committee on Constitutional Review, which was tasked by President Cyril Ramaphosa with assessing both the legality of and public opinion towards the controversial proposed change to the Constitution, announced that the deadline for written submissions had been extended to 15 June 2018.

Due to the widespread and intense public interest in the proposed change, the committee had also decided to hold its public hearings on the subject across all South African provinces over the period 26 June to 6 August 2018. The committee has reportedly already received over 100 000 written submissions regarding the proposed amendment, and it anticipates many more to continue to flow in ahead of the new deadline.

Annelize Crosby, head of Land Affairs with agricultural association, Agri SA, welcomed the deadline extension “as many of our affiliates will also be submitting comments. Agri SA will be ready to submit its very substantial submission by the end of May,” she said.

Chris van Zyl, assistant general manager of farmers’ union, TAU SA, also welcomed the deadline extension. He said that TAU SA had encouraged its members both individually and collectively to oppose the proposed legislation. The deadline extension for written submissions would allow them more time to do this.

“In essence, expropriation without compensation is just a legalised form of theft. This forms the brunt of our approach,” Van Zyl said. He added that TAU SA was also interested to know why government had not given title deeds to beneficiaries of previous land transfers.

Farmer’s Weekly approached the Youth section of the African Farmers’ Association of SA for comment on the deadline extension, but no response had been received at the time of going to print.

Source: Farmer’s Weekly

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Access to tailored seasonal finance, fair and equitable access to markets and supply chains, effective government regulation and management of standards, input supplies, and on-farm and off-farm infrastructure (such as roads and silos) all form part of a holistic set of post-settlement support measures that have to be delivered at the right time and place, in order to give land reform beneficiaries a fair chance to succeed.

One of the most important yet contentious parts of post-settlement support is government subsidies. These can include low-interest loans, low-cost to free inputs, and concessionary lending for equipment and machinery. The reason subsidies are an intensely contentious issue has to do with how inefficiently they could be managed at government level, and how they create a dangerous form of state dependency for farmers and market distortions that breed inefficiency.

The SA government routinely gives away free inputs as well as tools and machinery, with these subsidies being implemented through national programmes such as Ilima- Letsema and the Comprehensive Agricultural Support Programme.

In the recent issue of Agrekon, an academic journal, agricultural economics professor at the University of Fort Hare Mike Aliber demonstrated that in any given year, roughly 20,000 small-scale farmers receive free inputs from the government in the Eastern Cape alone.

Without getting into the detail of how government programmes are prone to malfeasance and rent-seeking and are plagued by bureaucratic inefficiencies, which generally lead to fiscal leakages, there is a strong sentiment among frugal economists that subsidies are neither a good use of resources nor an effective way of increasing productivity among farmers.

The reason is that free input support programmes create a negative psychological effect of dependency, which disempowers farmers from becoming innovative, resourceful entrepreneurs.

Averting this trap has led to new thinking around how the government could create systems of accountability that ensure farmers, especially new smallholder farmers, receive much-needed support while getting a personal commitment from the same farmers to produce efficiently and productively. There are various ways this can be done, based on tried and tested models that were used to establish the commercial agriculture that we have in SA today.

For example, the government could consider a co-funding model in which subsidised loans are provided to farmers for farm improvements such as fences, farm buildings and feedlots, with the state reimbursing the approved beneficiaries according to government-approved tariffs. The farmer will first pay for the improvements (using own resources or a loan from the Land Bank or another facility) and then claim the refund from the relevant government office based on proof of expenditure and on-site inspection to verify actual expense. The refund can be offset against the outstanding credit amount.

The weakness of current support programmes such as the Comprehensive Agricultural Support Programme is that it sometimes takes up to three years to get funding following initial approval. Yet anecdotal evidence reveals that in most cases it is usually the same farmers who benefit from the programme, and therefore the approval process should not be that lengthy. To avert this problem, agribusiness firms and financiers could affirm their commitment to providing some of the elements of this support package on behalf of the government.

What is clear is that post-settlement farmer support requires urgent comprehensive reforms, which not only consider the elements already discussed in this article but also include ready access to well-qualified agricultural extension officers.

Sihlobo is chief economist of the Agricultural Business Chamber of SA (Agbiz).

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