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LREAD Perspective December 2018

LREAD Perspective December 2018

Land reform has been on the centre stage throughout 2018, and with national elections coming in the first half of 2019, one can expect much more in the months to come. Populist phrases and concepts such as “Expropriation without Compensation” and “give back the land” rang loud and clear throughout the year.

But there were also critical and analytical evaluations on land reform by thought leaders throughout the year. A good example of this is work done by Professor Johan Kirsten, of the Bureau for Economic Research at Stellenbosch University, and Wandile Sihlobo, Head of Research at the Agricultural Business Chamber of South Africa.

They recently compiled and made public a Compendium of Essays on Land Reform in South Africa. This is a collection of articles the authors published in Business Day throughout the year, and focus on a range of land reform topics. It encapsulates many of the challenges in a sober and easy to understand manner.

Most people seem to agree that land reform is needed and that it is important. But people do argue about how land reform should be done, and who should benefit from it. In the Kirsten and Sihlobo articles these questions are addressed through the application of simple economic realities to explain that:

  • Zimbabwe showed us that land grabs end up being very expensive. Maybe the new occupiers do not pay for the land, but the rest of the country and all its people does. A shrinking economy and massive unemployment was the price for land grabs.
  • Land without tradeable value cannot be used as security to access funding for inputs or expansion. The authors argue that in an EFF scenario, where all land resides with the state, all that happens is that government ends up with an administrative nightmare with land on which no investment is possible.
  • Our entire economy is based on the principle of ownership, and if you were to take land out of the equation, the entire economy could come tumbling down.
  • Current land reform policy is not helpful for successful land transformation. The authors provide an overview of South African land reform policies and its success rates up to date.
  • Beneficiary selection is crucial if agricultural land reform is to be successful.
  • Government support is crucial, and South Africa has a rich history of previous agricultural support programmes to learn from. The authors propose a simplified and streamlined government support programme, with institutions such as the Land Bank playing a more central role.
  • The role of the private sector is even more crucial, and the authors refer to the district committees from the National Development Plan, but argues that it should be driven by the private sector with much less government involvement.

This collection of articles is a good example of the creative and intelligent solutions we as South Africans can come up with when confronted by challenges. President Ramaphosa has stated at national and international events throughout the year that our land reform challenge is a South African issue, and we will find South African solutions to fix it.

The LREAD ends this year on a positive note and looks forward to the land reform story unfolding in 2019. You can access the articles by Kirsten and Sihlobo online here: https://agbiz.co.za/uploads/AgbizNews18/181207_Land%20Reform%20Essays%20Final.pdf

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