Land reform has been as controversial an issue in post-colonial Africa, as it has been emotive. Not surprising given the sheer scale of poverty and inequality that countries had to deal with once they attained freedom.
The last country to be liberated, South Africa, is finding itself in this unavoidable position- having to take land from mostly white farmers and giving it to large numbers of disadvantaged. In its attempt, South Africa is haunted by the chaos and misfortunes of neighbouring Zimbabwe.
This is not a policy unique to Africa, however. Colombia is working towards an accord on land reform. Some socialist movements in China, Mexico and Cuba, as well as democratic regimes in Chile, Puerto Rico and Venezuela have gone through it.
<div id="attachment_1745" style="width: 210px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1745" class="size-medium wp-image-1745" src="/wp-content/uploads/2017/04/John-du-Plessis-CEO-of-TSB-Sugar-200x300.jpg" alt="" width="200" height="300" />ohn du Plessis, CEO of TSB Sugar</div>
The reason South Africa’s land reform process has become urgent is the 100 year anniversary of the Natives Land Act, on June 19. The act limited black land ownership to 7%, later increased to 13%. It restricted black people from buying or occupying land, except as employees.
Between 1994 and 2011, 6.8 million hectares (ha) were transferred to claimants. This land is allocated on a 99-year leasehold. The minister of rural development and land reform, Gugile Nkwinti, said that 4,813 farms had been transferred, between 1994 and January 2013 and that his department had spent R12.9 billion ($1.43 billion) on land reform.
Political pressure is growing to speed up South Africa’s tortoise-like land reform in the face of unrest among the poor.
The reasons the land restitution progress has dragged range from corruption to government inefficiency. The bigger question is whether allocation of this land means it will be put to work. The reality is that some claimants have opted to take cash instead of title deeds. South Africa’s department of agriculture, forestry and fisheries (DAFF) and the department of rural development and land reform (DRDLR) failed to respond to questions about these issues.
The DRDLR has spent R1.8 billion ($200 million) on the redistribution and recapitalization programs and has set aside R3.2 billion ($355 million) for land reform.
This has been carried out under South Africa’s Restitution Land Rights Act of 1994, which was amended to redefine the ‘restoration of a right in land’ as ‘the return of a right in land or a portion of land dispossessed after June 19, 1913 as a result of past racially discriminatory laws or practices’.
The government is hoping to finalize the thousands of outstanding claims in the next year. The process has taken 18 years. To complicate matters further, the laws are being rewritten, which is likely to cause even more uncertainty.
The willing-buyer, willing-seller model was scrapped and in November President Jacob Zuma created a stir when he proposed that land be bought from white farmers at “just and equitable” prices. He has also suggested a land policy barring foreigners from owning land in South Africa, in favor of long-term leasing. The policy has yet to be finalized and passed, along with the auditing of privately-owned land.
A good case study of the land reform initiative is the sugar industry in Mpumalanga, in northern South Africa. The country is the world’s eleventh largest sugar producer. According to the DAFF’s February 2013 newsletter, Mpumalanga contributed almost a quarter of the national sugar production, during the 2010/2011 season. The South African sugar sector made around R8.2 billion ($910 million), the bulk of which goes to the local market. The growers get around 64% and the millers get more than 35% of the industry’s divisible proceeds.
In 1998, TSB Sugar began work with the government on land reform. TSB gave up around 90% of its land, which the company is currently in joint ventures (JVs)—with communities—over. The land used to be owned by the company, to secure its cane supply.
The company’s CEO, John du Plessis, has been in the sugar industry since he left university. He says the industry has been through tough times due to drought, land reform initiatives and pressures on margins. Du Plessis feels that land reform initiatives caused feelings of uncertainty, leading to lost efficiency in the milling sector and lost production in the agricultural sector. Pressure on margins has been caused by competition from imports, inflation and rising input costs, mainly due to electricity and fuel increases.
Du Plessis says that the biggest problem with the transference of land was high expectations by those who receive it.
“There is a huge expectation that ownership and management can be taken over, sooner rather than later, and we know that’s not a reality,” he says.
Land reform has definitely caught on in the sugar industry. Sixty seven percent of the 49,598ha in the Nkomazi cane area, in Mpumalanga, is owned by beneficiaries and 88% of this percentage is functional.
TSB and its JVs contributed 34% of the cane for the Nkomazi area during the 2012 season. The area has exceeded the national ownership target, while productivity on some of the land has increased slightly, largely due to the fact that some farms were run down. Small growers are a concern. These growers operate as sub-economic units, some producing only 35 tons per hectare against an industry norm of 100 tons per hectare. They are trying to solve the issue by forming co-operatives but this is often hindered by squabbles among owners.
“Sometimes it’s social issues that are undermining the sustainability of land reform and not production,” says Dave Thomson, the manager of land reform at TSB.
The global reality is that there are fewer farmers farming larger areas. The National Development Agency and the South African Sugar Association (SASA) raised R2.8 billion ($310.5 million) last year to improve the competiveness of small-scale sugar cane farmers.
One of the new cane farmers on the block in Mpumalanga is Petros Silinda, who used to teach agricultural science and biology in the province. He held numerous positions including commercial manager, company director and chairman of a trust. His three children are also learning the business.
Silinda believes that new farmers need to work with the old.
“There’s no chop and change in farming,” he says.
Each community in the area formed a trust in 2004, TSB has no say over how the trust manages its finances. The trust in charge of Silinda’s community’s interests has a 22-year deal with TSB, which was signed in 2008. The first 11 years are a 50-50 partnership and the next 11 will be in a 60-40 split between the trust and the company respectively. The trust represents around 1,464 households.
New political party leader, Mamphela Rampele, who was speaking at the opening of the Land Divided Conference 2013, said that there needs to be a balance between the need to redistribute land and retain existing commercial farmers.
At the sugar fields of Mpumalanga, Thompson says that trying to tinker with land prices isn’t going to speed up land reform. He thinks that government needs to look at the process and red tape. Land waiting to be transferred is in the hands of the government but who is there to manage the farms and ensure that there isn’t a dip in production before the beneficiaries receive it.
In Mpumalanga, they tell the story of how the owner of the 576ha Outeniqua farm sent government an offer to purchase the farm but the officials were slow. The farm fell into ruin as the farmer walked away. It was looted and vandalized and by the time the government made its R13 million ($1.4 million) purchase and transferred it to Silinda’s community, it was nothing but fallow land.
When Zimbabwe pushed through the Land Acquisition Act in 1992, the government was entitled to designate mainly-white commercial farms for resettlement.
Little happened until 2000, when the ruling party lost a referendum over a new constitution, that would have absolved the government of paying compensation. Bands of war veterans took the land by force, effectively paralyzing the industry. Professor Sam Moyo, from the African Institute for Agrarian Studies, feels that the downfall of the sector was due to the three droughts that occurred between 2002 and 2008, along with the economic meltdown.
The other issue is that when experienced commercial farmers leave, they take their skills with them. This was the case in Zimbabwe.
SASA is trying to make sure that doesn’t happen to its industry. What some fail to see is that having worked the land for generations is very different from being in charge of a business. If the sugar industry can embrace an adapt-or-die mentality, then there may be hope for the rest of the country. The road is long and the squabbles plenty.
Silinda’s parting words speak volumes.
“The moment you start fighting, over nothing, this business is going to perish and when it perishes, it perishes with us.”

Land And Honor

Mauritius has enjoyed robust growth of between 5 and 6% for decades. The country has developed from an agrarian base into a diversified middle income economy through prudent management of the economy.
Mauritius’ economy relies on four sectors: sugar; textiles; tourism and financial services. The authorities are keen to diversify the economy further towards services. One ambition is to transform the economy into an information and communications technology hub.
The Mauritian economy generated $19.28 billion and expanded by 4.1% in 2011. The International Monetary Fund (IMF) attributed this to its tight macroeconomic policies. The Washington-based lender also put the country’s good performance down to its response to the global crisis but expects the economy to drop below 4% owing to the European sovereign debt crisis.
In light of the Eurozone crisis, in January, the Minister of Finance, Xavier-Luc Duval, announced that the government is developing a contingency in case of a partial or full dissolution of the European Union. Mauritius’ economy is tied to Europe. Two-thirds of Mauritian exports go to Europe and thousands of tourists fly the other way. The Eurozone is also a major source of investment for the island.
To buffer against the Eurozone crisis, this year the government announced an expansionary budget. The focus of expenditure is infrastructure development to improve the efficiency of the economy. This is likely to boost investment.
The expansionary fiscal stance will be complemented by an expansionary monetary policy. Following the dip in growth, the Bank of Mauritius (BOM) in December 2011 cut interest rates from 5.5% to 5.4%. The BOM is likely to move towards a loosening bias in 2012 given the downward inflation profile. Consumer inflation in February fell to 4.1% year-on-year; from 4.8% a month earlier. The IMF expects inflation to be 5% year-on-year in 2012.
The European crisis has also led to a dip in tourist arrivals. Tourist arrivals remain below the one million mark. The authorities have turned their attention to Asia, where growth remains robust.
In January, Mauritius won, for the third year running, the title of World’s Leading Island Destination and the World’s Leading Beach Destination.
Despite slowing growth prospects, investors are likely to remain interested in Mauritius in their search for yield. Investors are likely to recognize that slowing growth prospects are due to exogenous factors and not as a result of economic mismanagement
The Wall Street Journal and the Heritage Foundation, a US think tank, ranked Mauritius in the world’s top 10 most economically free countries, making it the only sub-Saharan country to achieve this. The survey ranked Mauritius eighth, with a score of 77. This ranking put Mauritius ahead of G4 (US, UK, Japan and France) countries. The survey ranks 183 countries in 10 freedom categories which are then converted into an index, with 100 being the highest possible score.
In addition, Mauritius was ranked 46th out 183 countries in Transparency International’s Corruption Perceptions Index 2011. Only Botswana (32) is ranked higher in Africa.

Tag: Agriculture

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