10 July 2014

South Africa: A Poorly Conceptualised Plan - Government's Proposal to Transfer 50 Percent of Commercial Farm Land to Farm Workers

analysis

Just before the 2014 national elections, the Department of Rural Development and Land Reform (DRDLR) announced a plan to redistribute 50% of commercial farm land to farm workers as part of ongoing efforts to redress historical imbalances in the country.

The objectives of the plan are laudable: to deracialise the rural economy; to democratise the allocation and use of land by race, gender and class; and (less clearly) to support "production discipline" for food security and food sovereignty.

Unfortunately, it is highly unlikely that the plan as outlined will realise these goals. The gist of the plan is to transfer 50% of commercial farm land to workers in proportion to the amount of time they have worked on the land. Government will pay for the land but the money will go into an "investment and development fund" co-owned by the old and new land owners.

There are many glaring internal weaknesses with the proposal. To mention just a few: First, the way the land is to be distributed between the farm workers is poorly conceptualised.

According to the proposal, all workers with between ten and 25 years of "disciplined service" on the land will be entitled to 10% share equity based on market value of the land; those with 25-49 years service to get 25% share equity; and those with 50 years or more get 50% share equity.

There are so many holes in this it is hard to know where to start. First, how exactly will land get split between the workers? For example, if a farm has five workers with over 50 years' service will they each receive 50%? That doesn't make sense. The only alternative is that they share the 50% allocated to this category. Thus the more workers there are on a farm, the smaller their share. This is an arbitrary and unjust method of distributing resources.

Related to this, if the purpose of redistributing the land is to encourage "production discipline", then why allocate the largest share to that portion of the farm worker population who are at the point of retiring, and allocate the smallest portion to younger generations who will still be economically active for some time? For older farm workers, tenure security is likely to be a greater priority, as well as provision of water, health care, housing and electricity.

This brings us to the question of how the investment fund will be used. The policy proposal suggests the fund will be used to "develop managerial and production capacity", to invest in the farm and to pay out people who don't want to participate in the plan.

One stark lesson from land reform in South Africa to date is that imposing commercial business models onto poorly-resourced inhabitants is a recipe for failure. In principle, subdividing large commercial farms inherited from apartheid can lead to greater equity, but the essential next step will be to make sure people have water (for household use as well as production) and decent shelter.

Then there is a question about whether the farm still constitutes a single business entity once ownership is divided. It is not clear whether "share equity" refers to equity in the land as a physical asset or in the farming business.

The former suggests rent and the latter suggests dividends. But the evidence so far clearly indicates that farm workers remain in their same abject conditions in such schemes, especially where the business owner controls the finances (which is likely in many circumstances where innumeracy is rife).

What power will workers have to shape "investments in the farm", especially investments oriented towards meeting basic services that are not commensurate with profit making?

Finally, use of the investment fund to pay out those who do not want to participate is unworkable for the same reasons that the division of land is unworkable: in circumstances where there are many workers with rights to shares in the farm (whether the land or the business), there will not be enough money in the pot to buy back all those rights. It will also deplete the resources allocated for "development" of any kind.

How will the physical land to be transferred be identified? Will the current land owner decide, or the workers or the government? Obviously the land owner will identify the least valuable land for transfer, and workers presumably will seek the most valuable land.

What structures and processes will be put in place to manage the inevitable conflicts that arise, and how will the historical power of land owners over workers be tempered? The ANC government's track record on these issues in land reform so far is dismal.

Although Communal Property Associations (CPAs) - which own land collectively on restitution and some redistribution land - are useful institutions in principle, there are major weaknesses in democratic decision-making processes on issues of land allocation and tenure security. This leads to stasis and decay as rights are not clearly defined and people cannot use the land.

The list can go on. But one final issue is why the DRDLR chose to focus only on farm workers rather than on farm dwellers. The model potentially could lead to another wave of evictions of farm dwellers who no longer work on the farm, and families of farm workers will remain with insecure tenure.

It is also arbitrary to draw the line in 2013 or 2014 and say current farm workers should benefit from redistribution of commercial farm land because farm workers contributed to building those assets. It is true that farm workers made a fundamental contribution to the wealth of commercial agriculture today, yet receive few of the benefits.

But what about the literally millions of people who historically worked on those farms and made a contribution, but who either were evicted or were moved off the farms and can no longer find farm work? It is well known that the farm workforce has declined by 50% or more in the past two decades.

Apart from these and many other internal weaknesses, we must keep in mind the context of a government that is incapable of realising its own plans. We need look no further than the record of land reform to date. It is one thing coming up with a radical sounding policy; it is another thing to have the capacity, vision and political power to implement it.

All in all, the proposal is very poorly conceptualised. A fundamental political question for Minister Nkwinti - and by extension the African National Congress (ANC) since he is a leader in that organisation - is why there has been no consultation with farm workers and farm dwellers on this issue. It is hard not to see this proposal as a kneejerk response to pressure from the Economic Freedom Fighters (EFF) and others for more radical policies on economic redistribution.

It is also interesting that the DRDLR has been in ongoing dialogue with the commercial farming lobby. Most recently, Nkwinti has indicated that commercial farmers will be given a year to come up with a feasible alternative to the proposal that redistributes economic assets. It will not be a surprise within the next year when commercial farmers and agribusinesses come up with another version of share equity schemes and methods of integrating a few black farmers into formal value chains on a commercial basis.

These plans do not challenge the base of their economic ownership. Nkwinti will also have to get the plan approved by his ANC comrade-businessmen, some of whom are commercial farmers themselves and who (theoretically speaking) would also stand to lose ownership of economic assets. Maybe they will be exempted.

The proposals may also be a response to the militant farm worker strikes in 2012 that won a 52% increase in minimum wages for farm workers.

But although land was a component of the demands, issues of tenure security (rather than ownership of half a commercial farm) and a living wage (incorporating a decent wage but also services and secure access to land for some production and settlement) were more prominent. The proposals are a blanket solution that is an inadequate response to the differing priorities of farm workers and dwellers in different locations and contexts.

While the proposal correctly recognises the importance of a rapid redistribution of economic assets, the approach it outlines will not succeed. A better approach would retain the basic principle that we are at a point where economic assets must be more equitably redistributed.

Then practically, the first step is to call a moratorium on all farm evictions and to secure the tenure rights of all farm dwellers. These rights could include no forced removals, and the right to build structures and to engage in productive activity on land farm dwellers currently occupy and use for their own purposes.

This establishes a stable baseline. From there, instead of developing unworkable proposals in secret corners or in small discussion groups with land owners, government should support local, farm dweller-driven processes of negotiation to determine how economic assets will be distributed in the next 10 years.

Land reform, rural development, water, housing and other budgets can then be allocated to completed processes of local negotiation. Evidence of a successful negotiation is a minimum 50% transfer of economic assets. The best-organised farm dwellers will be first to benefit.

Civil society organisations will have their work cut out to provide support to organising farm dwellers and to supporting negotiation processes. Such a process will immediately provide greater security to farm dwellers and open the way for their active involvement in policies and plans that directly affect their lives.

Stephen Greenberg is a freelance researcher with an interest in food systems, land, agriculture and rural development.

Read more articles by Stephen Greenberg.

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