Land reform is ‘captured’

South Africa’s increasingly business-orientated land reform programme has opened the door for “elite capture” with businesses – often white owned and multinational – becoming the real winners, while black “beneficiaries” languish without any formal rights to the land.

New research indicates President Jacob Zuma’s renewed promises to do away with the “willing seller, willing buyer” principle this year – something first promised at the 2005 National Land Summit – obscure the enormous problems that crop up once the state owns the land.

“South Africans are debating the land question in a totally myopic way,” says Ruth Hall, associate professor at the Institute for Poverty, Land and Agrarian Studies, a unit of the University of the Western Cape.

“[The debate] is all about how you get the land. That is not a tiny thing, but it only solves one problem.”

In a new article in the academic journal Review of African Political Economy this month, Hall and colleague Thembela Kepe from the University of Toronto present their findings from a sample of 11 randomly selected land reform projects in the Sarah Baartman district of the Eastern Cape, which they studied over the course of three years.

This was in response to a request from the Eastern Cape provincial legislature.

In the article, the two academics argue that years of shifting policies have created a “contorted reform ... governed by state officials, consultants and agribusiness strategic partners concerned with surveillance and control of ‘beneficiaries’ in ‘projects’”.

Most of the black people involved have to settle for “precarious tenure on unsubdivided commercial farms now owned by the state”, claim Hall and Kepe.

“This is not an argument against land reform,” Hall told City Press.

“It can and should be made to work.”

Past and present

South Africa’s land reform policy started out with the aim to fund black peoples’ acquisition of small pieces of land for small-scale farming and settlement.

Under president Thabo Mbeki the emphasis shifted to promoting purchases by bigger black capitalist farmers, say Hall and Kepe.

From 2006 onwards, the model transformed into the current Proactive Land Acquisition Strategy (Plas) and ultimately the State Land Lease and Disposal Policy of 2013.

The system is now premised on state ownership and long-term leases for beneficiaries.

It now takes 50 years of renting state land before beneficiaries get the right to apply to purchase the land.

One of Hall and Kepe’s findings is that none of the beneficiaries of the 11 projects knew about this new policy and had expected to actually own the land at some point.

What’s worse, none of the beneficiaries had leases either, despite some being on the land for a decade.

The main argument Hall and Kepe make is that the current Plas iteration of land reform under Rural Development and Land Reform Minister Gugile Nkwinti is leading to incredibly perverse outcomes, at least at the projects they studied in the Eastern Cape.

Speaking to City Press, Hall said that the way in which newly acquired state land was allocated was untransparent and seems completely random.

“In some cases, a sizeable community may get a small farm, while in other cases, government buys a large farm with substantial infrastructure and even livestock, and gives it to a single family,” says the article.

“The department is buying these farms and leasing them to a friend or whoever happens to be there. If no one makes a go of it, they just tell the unemployed farm workers that they can stay on,” Hall told City Press.

One “typical” project is a farm near Grahamstown that was allocated to an engineer living hours away in East London.

“He didn’t really farm it and got kicked off,” said Hall.

“I don’t think we can really call it redistribution. What is redistribution if you are not securing leases? You are actually creating a population of squatters on state land.”

Enter big business

For Hall and Kepe, there is potentially an even bigger problem with the leasehold system.

Two of their projects did have leases with the state, but these weren’t held by the beneficiaries.

Instead, the land was leased directly to “strategic partners”.

Under the Plas system, beneficiaries only get recapitalisation funding if they have one of these partners, which is usually an existing agribusiness or white farmer, often the previous owner of the land in question.

Hall and Kepe call this “elite capture” of land reform.

“Some of these strategic partnerships are actually a mechanism for public funds to be channelled into private enterprises,” said Hall.

“Some of them are white South African-owned, some are multinational companies that are essentially farming state subsidies.

“They are getting land for free, or extremely cheaply, and then they also get subsidies under the recapitalisation programme.”

Hall and Kepe’s sample of land reform projects happens to include one controlled by Mauritius-based SA Fruit Exporters (Safe), through its BEE partnership with local businessman Evans Nevondo, called Bono Holdings.

Safe and Bono are prolific strategic partners and run about 10 state farms.

They were widely condemned in 2015 for hosting canned hunts for tourists on one of these state-owned farms in Limpopo, while the SABC’s Special Assignment accused the company of what is known as farm flipping at another Western Cape project.

This is when you first acquire farms, then sell them to the government for a profit – only to have the government lease it back to you at a low rate.

While much of the debate in South Africa is still about paying market prices for land, Hall and Kepe say the policy actually “takes the market to the next level”.

“The state ... is not challenging the supremacy of private property, but rather becoming a significant player in the land market.

“Who is land distribution meant to be for? Is it meant to be for the poor? Is it meant to be for the middle class? Is it actually meant to be for large BEE companies, or white-owned ones, or multinationals with BEE partners?” asked Hall.

“We see quite a mix of situations, all of which are problematic in some way.”

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