There is no trade-off between land reform and agricultural production and productivity. This was the message from President Cyril Ramaphosa in the debate on the State of the Nation Address.
Land reform and agricultural success were, he said, ‘complementary and mutually reinforcing’.
‘Providing more land to many South Africans, along with the means to productively work the land, is not only about correcting a past wrong, but it is also about building a prosperous and a more inclusive future,’ he added.
As the objective of a land reform programme, this is of course good. More than this, productive land reform can be a major contributor to economic growth and development across the economy at large. This, in broad terms, was the experience in Japan, South Korea, and Taiwan.
This has not always been the case, as numerous examples over the past century have shown – in China, Tanzania, Zimbabwe and Venezuela, to name a few. Not only were these initiatives economically damaging, but they were also accompanied by political repression; indeed, they often formed part of it.
The question for South Africa is which path the country will follow.
If land reform is to contribute to agricultural production, then agriculture has to be a central focus.
It’s difficult to argue that this has been the case in South Africa. Despite occasional genuflection to the need to safeguard South Africa’s farming economy and investment climate – the latter being already hugely compromised – the focus of the ‘debate’ around reform has been on land. Call it ‘the land question’. It has been tightly bound to politics (probably inevitable) and injected with a toxic dose of racial nationalism (which was a political choice, and something in which the president has been deeply implicated).
‘The land question’ has come overwhelmingly to mean the racial ownership and distribution of land. The developmental benefits that land reform might confer are relegated to distant secondary considerations.
Indeed, there are odd assumptions built into government’s thinking that once race-based transfers are effected, the economic side will follow of its own accord.
Former minister of agriculture and land affairs, Lulu Xingwana, once memorably bemoaned the lack of interest in farming on the part of the young. ‘We have to lure our youth back to the lands, we have to show them that agriculture is not only about working hard in the sun and mud, but that there are more sexy options in the sector – such as making cheese, ice-cream, wine, beer, or whiskey,’ she said.
Hostility to farmers
Ms Xingwana was better known for her hostility to farmers than for her understanding of farming, but in these remarks she captured the gist of official thinking. This official line suggests that even in a country where people are quitting ‘the land’ for the prospects that an urban economy provides, farming can provide a major outlet for youthful energies. It’s ‘easy’, and it can be ‘sexy’. (Incidentally, those ‘sexy options’ are not necessarily even farming activities, as anyone who has visited a plant where our beer is brewed or where our ice-cream emerges in those colourful plastic wrappers can attest.)
Provide the land and somehow prosperity will follow.
The truth is that farming is a tough and often physically demanding job. More than this, it is a business. It is in fact a sophisticated, highly capitalised business. A successful farmer has an understanding of the science around his or her field of endeavour, and a grasp of logistics, marketing and finance. And as for all successful businesses today, it calls for constant innovation.
Farming is no easy option, and it is to display a frankly delusional policy mindset to imagine that it is.
If land reform – in this sense, agrarian reform – is to contribute to a society’s development, it needs to both incentivise and facilitate economic activity. It needs to be properly designed, not only in terms of acquiring and distributing land, but in providing support to its beneficiaries. This in turn requires realistic planning and competent execution.
Yet even the government acknowledges that its land reform efforts have produced mixed success at best. While there is dispute over what proportion of projects have ‘failed’, there appears to be general consensus that enough of them have failed to call into question the entire approach. One reason (far from the only one) is that support for turning land reform beneficiaries into successful farmers has been lacking. In pure budgetary terms, the sums devoted to land reform have been trifling.
In the 2020/21 budget, the Department of Agriculture, Land Reform and Rural Development was allocated some R16.8 billion, against overall budgeted expenditure (including contingency reserve) of a little short of R1.8 trillion. This was less than 1% of the total. In the face of the pandemic, this was reduced to R14.4 billion – which, aside from being a substantial drop in rand terms, also meant a fall in the proportion of expenditure.
Looking at the budget vote in more detail, funding for every programme – land reform, food security, farmer support, infrastructure, to name a few – was reduced in the 2020 mid-year supplementary Budget. (Even before the pandemic hit, there was no indication that funding was set to rise significantly over the coming years.)
For something that is supposedly so central and essential to South Africa’s very future, these are concerning numbers indeed. The case they make is that the government is not serious about making land reform work. When President Ramaphosa speaks of ‘the means to productively work the land’, he is at best enunciating some abstract position. These ‘means’ will not come from the government.
Signature drive
Indeed, the government’s land reform agenda – enhanced powers for the state to seize property by expropriation without compensation (EWC) – works directly against farmers. Farming debt at the end of 2019 stood at just below R187 billion. Yet official policy is to undermine agriculture by threatening the security of assets.
As Cas Coovadia, then director of the Banking Association of South Africa, said: ‘I can’t understand how you’re going to expropriate land without compensation and still get investors in with confidence.’
The short answer is that you won’t.
‘We are going to take land and when we take land we are going to take it without compensation,’ the president said boldly at a party event in 2018. In fact, not only is it the government’s intention to expropriate farming land and assets, but also, there is no intention to pass them on to beneficiaries. This was restated by ruling party members in the context of EWC. Rather, those who are ‘provided with more land’ will not be owners, but tenants of an incapable and often venal state. They will be subject to its dictates, and lack the ability to leverage their holdings for the capital they need.
And this points to more of the failure that has been so criticised in South Africa’s land reform efforts. A properly conceived land reform programme could make a valuable contribution to the country. What is proposed will do the opposite.
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