Home News 'Private sector can salvage ailing land reform programme'

‘Private sector can salvage ailing land reform programme’

With land reform back on the agenda, the Vumelana Advisory Fund urges government to ensure that land is better utilised once restituted

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Indifference by the private sector in contributing to the land reform programme could unwittingly result in the once flourishing agricultural sector turning into a barren wasteland.

This would have devastating political, social and economic repercussions that would haunt South Africa for generations, cautions the Vumelana Advisory Fund, a non-profit organisation that works with beneficiaries of the land reform programme to make their land profitable.

“To avoid the same mistakes that we keep seeing in land reform, support for beneficiaries of the land reform programme is crucial, because otherwise giving people land without support will not yield any results. Instead, it will lead us back to underutilisation of land and more challenges,” says Peter Setou, chief executive of the fund.

Private sector can prevent land reform blunders

Setou concedes that while there are concerns on the highly politically charged calls for land expropriation without compensation, the private sector still has an important role to play in the land reform programme to ensure that the country does not continue on the same trajectory of an unsuccessful land reform programme.

He says, “The issue is, there is a huge expectation that everything must be done and paid for by government, yet we have other stakeholders who can play a significant role across the land reform value chain. This includes private sector investors, philanthropists with vested interest in agriculture, non-profit organisations as well as stakeholders with an interested in agriculture.”

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According to Setou, as government proceeds in the distribution of the recently announced 700 000 hectors of land, it is crucial to ensure that the land is redistributed in a transparent manner with a clear criteria for selection.

Peter Setou, chief executive of the Vumelana Advisory Fund. Photo: Supplied
Peter Setou, chief executive of the Vumelana Advisory Fund. Photo: Supplied

The process should also present opportunities for partnerships to attract private sector investors who have the skills and funding required to assist land reform beneficiaries to turn their land into commercially viable assets that can revitalise the rural economy, foster entrepreneurship and generate much-needed employment opportunities.

Since 1994, government has spent some R69 billion on buying about seven million hectares of land for redistribution or restitution, against a target of some 26 million hectares. The amount already spent is very close to the estimated net value of all agricultural land in the country (R71 billion), but vast tracts of hectares still remain to be transferred.

In addition, it is often estimated that between 70% and 90% of all land reform projects have failed, with beneficiaries being unable to produce any marketable surplus. While there seems to be some pockets of success, productive land has thus been taken out of use without any resulting benefit to anyone in jobs, income or agricultural production.

‘Empower communities through expertise’

Agriculture economist and independent transaction advisor Duncan Pringle concurs.

He says, “The private sector needs to see itself as an important role player that can ensure the success of the land reform programme through engagement with all the relevant stakeholders and availing its expertise. Working with beneficiary communities, the private sector has an opportunity to forge joint ventures and initiate commercially viable initiatives by empowering these communities with much-needed expertise such as access to infrastructure, to agronomic inputs, to technology and technical expertise, to capital and to markets.”

COMMUNITY PRIVATE PARTNERSHIPS MUST be tailored for THE unique circumstances of each case.

Pringle, notes that, “The failure of the land reform programme in South Africa can be attributed to inadequate post-settlement support to beneficiary communities once they become landowners, lack of skills, poor planning and infighting within communities.

“Allocating land to communities and walking away does not serve the interests of these new landowners, many of whom lack the skills, capital and technical capabilities to make a livelihood out of this land. Equally, the state does not have the requisite capacity to provide support to these new landowners. The private sector can plug this gap and come up with innovative and customised partnership models that will ensure that they receive a return on their investment, while empowering communities by imparting much needed skills to beneficiary communities.”

In 2016 the Vumelana Advisory Fund has awarded the Bela-Bela Communal Property Association in Limpopo with its Vumelana Governance Awards. Photo: Supplied

In the aftermath of the covid-19 outbreak, the land reform programme has taken a blow. A recent report by Oxfam, the global organisation working to end the injustice of poverty, has issued a warning: “Covid-19 is deepening the hunger crisis in the world’s hunger hotspots and creating new epicentres of hunger across the globe. By the end of the year, 12,000 people per day could die from hunger linked to covid-19, potentially more than will die from the disease itself.”

“South Africa is, arguably, the only country in the region that does not suffer from food insecurity, but from access to food. Maize is the most produced cereal in the region, yet all SADC countries except for South Africa and Zimbabwe and, in good years, Malawi, Tanzania and Zambia have to import to meet domestic requirements. Therefore, the failure of the country’s land reform will not only impact South Africa, but the entire region,” says Setou.

The covid-19 pandemic has put a spotlight on the hunger crisis in South Africa, says social activists. Photo: Supplied

“With the exception of South African and Zimbabwe, all the countries in the region also import wheat because it is a temperate climate crop. The risk posed to food production if the land reform programme is not managed will have ripple effects across the region, culminating in economic collapse, displacement of entire communities and fuel internecine strife.”

Setou argues that increasing calls for land expropriation without compensation have eclipsed the critical importance for post settlement support to land beneficiaries. He points out that community private partnerships (CPPs) are a viable option where beneficiary communities and the private sector enter into a win-win partnership for the management of the land.

“Vumelana has implemented the CPP model in a number of instances, and it is one of the approaches that present a plausible solution to addressing some of the challenges that have been experienced in land reform.

“Between 70% and 90% of all land reform projects have failed with beneficiaries being unable to produce any marketable surplus.” – PETER SETOU

“We have seen a number of case studies where participation in the land reform programme by the private sector has addressed the competency gaps for beneficiary communities by facilitating access to markets and finance, spurred investment in production and employment, and led to skills transfer,” says Setou.

He adds that there is no one size fits all, and therefore the composition of the CPPs should be tailored for the unique circumstances of each case.

“There have been isolated cases where in some partnerships the more powerful commercial partners took advantage of the less empowered community entity and conversely there have been cases where the beneficiary community institutions were delinquent. It is therefore important that all the stakeholders take a long-term view, be prepared to invest in capacity building of community leadership and have the capacity to address community facilitation,” Setou concludes.

Staff Reporter
Staff Reporter
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