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LREAD PERSPECTIVE- 2019 REFLECTION

LREAD PERSPECTIVE- 2019 REFLECTION

And here we have arrived at the end of another year in South Africa! As usual, it was full of ups and downs, but that is all part of what makes our country so special. It was also an interesting year in terms of land reform activities. Here is a quick recap.
Expropriation without Compensation (EWC), dominated the land discourse throughout the year. It was used as a main rallying call leading up to the elections in May by both the African National Congress and Economic Freedom Fighter. But from then on the rhetoric cooled down significantly, and as we enter the final month of the year, a much quieter process is unfolding as the Draft Bill on Expropriation without Compensation is being drafted and debated by a special ad hoc committee in Parliament. The Committee recently decided to refer the Bill to the National House of Traditional Leaders, and will re-publish the Bill in early 2020 for public comment. At this point in time, it seems as if the only real achievement of the EWC’s drive has been to hurt the country’s image on the international stage with investors being reluctant to invest in a market where property rights are not clearly defined and protected.

In August 2018, the Land Bank launched an innovative funding instrument called Blended Finance. It compromised a mix of grant funding and commercial debt, which for the first time in recent memory afforded new and smaller scale black entrepreneurs the opportunity to break into the land market. Many of these entrepreneurs lacked the balance sheet strength to qualify for a normal commercial loan, but due to the grant portion of the Blended Finance product, it was possible to structure deals for these first time buyers.
Unfortunately, Blended Finance was suspended in February 2019. Reasons for this differ depending on who you talk to. It seems as if there were some teething problems in the co-ordination between Land Bank and the two government departments, namely Agriculture and Rural Development & Land Reform, providing the grant portions. However, rumour has it that Blended Finance will be re-launched in a more streamlined version sometime in the second quarter of 2020.

Due to the increased focus on land ownership and land reform, plenty of research and analysis was done on the topic throughout the year. In an article: The truth about land ownership in South Africa, Wandile Sihlobo and Tinashe Kapuya do some interesting calculations to conclude that government has, since 1994, transferred the equivalent of 17.4 million hectares of agricultural land from white owners to black ownership. This includes land restitution; money paid out in restitution cases where claimants preferred cash over land; redistribution through various programmes, including the 4000 farms bought through the current PLAS Programme; and lastly the private transactions between white sellers and black buyers where there was no government involvement. South Africa has 82.8 million hectares of farm land, which represents a redistribution of 21% of land from white owners to new black owners.

Many people might be surprised by this 21% figure, as the general narrative of land reform in South Africa is a negative one. We mostly read about the failed projects and slow pace of transformation. Transformation is happening too slowly and there is too little, but there is also progress. This was demonstrated during the Land Reform Symposium hosted by Landbouweekblad and the PALS initiative in Ceres in November this year.
The event, also attended by both the National and Provincial Ministers of Agriculture, focussed on the stories of individuals, who, on their own accord, decided to make a difference in the transformation of the agricultural sector. Black and white farmers shared the stage to tell their individual stories of daring and trust in each other’s ability to make things work.

And this is the LREAD’s take away from 2019: We live in a complex country during complicated times. Perhaps it is unrealistic or misplaced to think that land transformation will ever be a neat and orderly process which unfolds along the lines of a central government strategy and plan. South African people are special. We proved it once again by winning the Rugby World Cup!

It is normal South African farmers, some with land, and some still locked out of land ownership, who are coming together and making individual and unique plans. Government should rather focus on supporting these initiatives, instead of trying to dictate the direction and features of transformation.
And with this, the LREAD wishes each and everyone out there who is making a positive difference in transforming our country a blessed and well deserved holiday season. May 2020 be a year of positive change in this arena!

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