The land crisis in South Africa: fresh thoughts on a perennial topic

A weekly letter by the leader of the Democratic Alliance

With millions of South Africans having been stripped of their land rights over successive centuries, the DA and the ANC agree that redress and restitution are essential. However, we differ on the means.

The DA’s aim is to redress this deep historical injustice in a way that will extend land ownership to millions more, while enhancing (rather than destroying) the productive capacity of the land.

We believe the ANC’s approach will have the opposite result.

Under successive Ministers, government has pursued the target of redistributing 30% of agricultural land by the year 2014, according to the “willing-buyer-willing-seller” principle. Progress has been slow: only 4% of land has in fact been redistributed since 1994.

As a result, ANC pressure has grown to abandon the “willing-buyer-willing-seller” approach, in favour of more direct state intervention. President Mbeki announced last year that the willing-buyer-willing-seller principle was under review. More bluntly, Land Minister LulamaXingwana declared that “we do not have time to be talking and talking, we are now going to negotiate [the selling price of land] for six months, not more, not less.”

The DA fully endorses the need for radical land reform following centuries of deliberate race-based state dispossession. But we believe the ANC’s approach will, once again, have an outcome that is opposite to the stated intention. It will not empower the dispossessed and landless masses the ANC claims will benefit from its policies.

Why? There are numerous accounts of serious inefficiencies in the system, where willing sellers are stymied by bureaucratic procedures which belie the Department’s claim that it is a “willing buyer.” The land redistribution statistics would look slightly better if the government responded promptly and negotiated the purchase of land willingly offered to it.

But the problem goes much deeper than the managerial inefficiency of the current system: the point of departure is wrong. We believe the goal of land reform policy should be to extend land ownership to millions more people, not to use state intervention to switch land ownership from one group to another on a racial basis.

We believe accelerated state expropriation of private land – could have seriously negative consequences. Taken to the extreme, it could presage a “Zimbabwe” outcome where expropriated land is distributed to those with influential political connections, destroying the commercial farming sector, and leaving the majority of landless peasants worse off than before.

This is an outcome we must avoid at all costs.

What is the DA’s alternative? We believe the answer lies in the distribution and productive use of the vast tracts of State-owned land throughout South Africa. Ironically, our unjust history of State land acquisition can now be put to positive use: it enables the state to offer millions more people the best possible chance of far-reaching land restitution, without risking the devastating consequences of the “Zimbabwe option.”

The South African State owns huge tracts of land, both in urban and rural areas, acquired by various administrations over many years. This land is currently unproductive, under-utilised and under-resourced. This unused land is not only “dead capital”; it is hugely costly to maintain in its unproductive state. This is a bizarre state of affairs when there is such a shortage of land for industrial, commercial and housing use in the City.

Worse still, the Land Minister seems unaware of the extent of unproductive state land that could be used for restitution purposes. In response to the DA’s enquiries in Parliament last August, she declared: “The impression that we have endless or vast tracts of state land that can address the needs of the landless is not true.”

In fact, it is true. The same Minister pointed out at media briefing a month later that some 11.5 million hectares of state land – roughly equivalent, taken together, in size to Malawi – is in fact in state hands. An audit is urgently needed countrywide.

In rural areas, the state owns vast tracts of land suitable for restitution, but prefers to focus on the appropriation and redistribution of highly productive privately-owned commercial farms. This is a slow and difficult process, exacerbated by the insistence that transfer takes place from private ownership to inappropriate collective institutional arrangements. This generally results in the collapse of the enterprise, despite significant investment in “post settlement support”.

It is naïve to think that high-value land, efficiently farmed and producing viable export crops for a highly competitive international market, can simply be transferred into group ownership schemes where institutional arrangements and enterprise management are both inappropriate and unproductive.

Again: instead of destroying the capacity of existing land, government policy should be to extend agricultural production by putting the “dead capital” of its substantial land assets to good use, through well considered restitution and redistribution. This means that land transfers must be based on viable institutional arrangements that can survive in the complex and highly competitive value-chain of national and international agriculture.

It is romantic in the extreme to believe that this can be done on the basis of co-operative ownership schemes and minimal agricultural experience. There are too many examples of highly productive farms that have been reduced to subsistence agricultural plots through inappropriate institutional arrangements. If this approach continues indefinitely, it will destroy the capacity of commercial agriculture to produce enough food for the nation and for export, and will limit agricultural production to those families fortunate enough to have access to a subsistence plot.

The best alternative is to promote partnerships between the intended beneficiaries of land reform policies and experienced, successful farmers, as well as new investors. These venture partnerships should be established on a risk sharing basis, so that there is a real incentive, among all participants, to make them succeed. There is no shortage of willing partners to make this approach to land restitution work, holding out real potential to extend land redistribution and ownership significantly, while boosting agricultural productivity and output for the benefit of the country as a whole.

This is the result all South Africans want to see, and the DA’s approach will produce it. Instead of vilifying productive farmers and punishing them on the basis of their race, we urge the ANC to accept that the majority of farmers want democratic South Africa to be a great success. They want to use their vast agricultural experience to put right what was wrong in the past. There are many potential investors in agri-businesses that want the same opportunity; they should be given the chance.

Perhaps the most complex arena of “land distribution” are the rural areas where most black people have traditionally lived, and which are still owned by the state under a complex array of restrictive forms of “apartheid” title. This denies them the right to deal with their land freely: to buy, sell, let, mortgage, or develop.

What is called for is a bold and comprehensive “one-stop” legislation to make free title possible in areas where traditional leaders have too much sway over land usage. By upgrading and revamping land tenure, and selling off unused state-owned land, we can truly empower those in need. This is a much more practical solution than the notion, so attractive to some of the ANC’s race nationalists, of redistributing “white” land to black people.

By contrast: the DA believes that with well-targeted and carefully researched action, the state can use its assets to massively extend land ownership and open all the opportunities for progress and development this entails.

This is the strategy of the open, opportunity society – to use the resources of the state to make life choices available to its citizens. With minimal risk, and while sustaining and improving agricultural output, government could truly free the people and give them opportunities (for housing, for farming) to prosper in the interests of all. The state has the means; all it lacks is the will.

Moneyweb