ZImbabwe disaster looms as SA land reform kicks into gear

via ZImbabwe disaster looms as SA land reform kicks into gear – BizNews.com 24 February 2015 By Andrew England of the Financial Times

Modern Zimbabwe is a reminder of how critical for South Africa to get its ‘land reforms right. It is well documented how Mugabe’s botching of land reforms turned a bread basket of the continent into a place where famine stalks behind every rainy season. South Africa faces a greater challenge in terms of scale and divergent claims. In this brilliant analysis published in the Financial Times of London this morning, Andrew England looks at the issue from all sides. Examining the conundrum of keeping land productive while reversing obvious injustices without rewarding rampant opportunism. Those charged with solving this complex problem require the wisdom of Solomon – and dollops of maturity and humility. – AH 

On the surface, Alfred Mahlangu and his brothers look like a success story of post-apartheid South Africa. One year after the end of white rule in 1994 he and his siblings sought to forcibly reclaim land taken from their forefathers around 1920.

Their “land invasion” was part of a district-wide protest and resulted in their arrest. Yet they achieved their aim of grabbing the attention of the ruling African National Congress and ended up with a lease for the 800-hectare property, which Mr Mahlangu and nine family members now run as a co-operative.

But as President Jacob Zuma proposes a new wave of land reform in the country, the example of the Mahlangu family and many other black farmers is less success story and more cautionary tale of the challenges the nation faces if it is to resolve one of the most bitter legacies of colonial and apartheid rule.

“Most of the land that the government has given back to the black people through land reform is not productive,” says Mr Mahlangu sitting in a barn, near the dilapidated farmhouse. “Not because blacks are stupid [or] they cannot farm, it’s because of lack of support from the government.”

Land reform has been high on the ANC’s agenda since Nelson Mandela led the party to a historic victory at the country’s first democratic election in 1994 with promises of redressing the nation’s huge social and economic imbalances. But it is an issue laced with race, politics and the legacy of colonialism and apartheid and, by most accounts, the process has so far failed to meet its objectives.

Now, however, the government is planning to push through a series of controversial policies, which, if implemented, would represent the biggest shake-up of agriculture in years. At stake is the future shape of farming, and South Africans only have to look to neighbouring Zimbabwe to see the consequences of getting it wrong.

Mr Zuma used his annual state of the nation address this month to announce plans to prohibit foreigners from owning productive land. The policy will not be implemented retrospectively and foreigners will be able to hold long-term leases.

Land owned by all individuals would be capped at 12,000ha – which the government says is equivalent to two farms – with the excess acquired by the state and transferred to black ownership.

Mr Zuma also outlined a “50/50 policy” that would make workers who have lived on white-owned farms for many years eligible to acquire a share of the farm, up to 50 per cent. The president said the policies, which will be presented to parliament this year, were needed “to secure our limited land for food security and address the land injustice of more than 300 years of colonialism and apartheid”.

Economic woes

The new proposals come amid mounting anger over the slow pace of transformation since 1994, as the ailing economy struggles while rampant unemployment and poverty still blight the country. Mr Zuma and the ANC are also drawing increasing criticism for corruption and cronyism, while facing a fresh challenge from the militant and populist Economic Freedom Fighters.

Zuma’s address was overshadowed by violence when armed police were deployed to forcibly eject EFF MPs from parliament. The spark for the shocking scenes was the EFF members interrupting Mr Zuma’s speech to question him about a scandal involving $22m of taxpayers’ money spent on his private home.

Some see the latest land reform proposals as evidence of populist politicking, while there have already been warnings that the measures threaten production and investment in a sector crucial for jobs and food security.

“It can only have a negative effect on food production,” says Charl Senekal, South Africa’s biggest sugar producer, who would be a target of the land cap. “Things in South Africa are getting tougher and tougher – water is getting more scarce, land is getting more scarce.” He says land reform “is as necessary as the air we breathe”, but believes there is too much emotion around the issue. Mr Senekal urges a more cautious approach, arguing that the government could buy farms already on the market and ask commercial operations to help build them up.

Mr Zuma responded to critics of the proposals in parliament last week – specifically mentioning Mr Senekal – by saying: “We are taking these actions precisely because the fate of too many is in the hands of too few.”

Yet the government can expect strong resistance to the proposals from white commercial farmers. Hans van der Merwe, executive director of AgriSA, which represents commercial enterprises, says white farmers acknowledge the need for reform. But he says the proposals announced by Mr Zuma are impractical and unaffordable.

“It creates a lot of uncertainty,” he says. “We will look at the constitutionality of it, but only after we’ve exhausted discussions with the government.”

But after 20 years of slow progress, the ANC is adamant of the need for change. “South Africa belongs to all the people, black and white, so it’s not sustainable to have a few South Africans maintaining a life of privilege while the vast majority doesn’t,” says Gugile Nkwinti, rural development and land reform minister. He argues farmers sometimes exaggerate the concerns and suggests the government will not be swayed.

After coming to power in 1994, the ANC set the goal of redistributing 30 per cent of farm land to black farmers by the end of 2014, which it estimated would entail transferring 24.5m ha of land out of the 82m ha in white hands. But only 4.2m ha, or more than 4,800 farms, have since been transferred to black workers. About 35,000 mostly white farmers still dominate the sector.

Capital and resources

The government has spent billions of rand buying land to transfer to the black population, but often new farmers find themselves starting from scratch with few resources and no access to capital. This leaves them unable to afford the inputs and machinery required to make the land productive. Against this backdrop, l and reform has become a central priority of the Zuma administration, which believes almost 1m new jobs can be created in agriculture by 2030.

The industry provides about 740,000 jobs and contributes around 2.5 per cent to gross domestic product. But rural areas are among the poorest and most racially unreconstructed, and the ANC is increasingly reliant on rural voters for support. Getting reform right is seen as critical to boosting the rural economy, while accelerating racial integration.

Mr Zuma has already outlined plans to dispense with the ANC’s long-stated “willing buyer, willing seller” policy, under which white-owned land could only be procured if an owner agrees to sell. Instead, the government will look to expropriate land at “fair value” prices set by a new office of the valuer-general.

His administration has also reopened a process under which communities or individuals can lay claim to land they say was taken during white rule. It is an emotive subject that dates back to the 1913 Natives Land Act that limited African land ownership to just 7 per cent of the country.

Still, Mr Nkwinti insists that South Africa will not follow Zimbabwe, which had a similar dynamic of white farmers controlling the vast majority of its fertile soils. There, violent seizures of white-owned land triggered the collapse of one of the continent’s most developed economies. “That’s why you must do this, to avoid that,” Mr Nkwinti says. “Once the tail wags the dog you have a problem. In Zimbabwe they left it [reform] too late.”

He describes a vision of greater partnerships and co-operation between white commercial farmers and new black farmers. With the 12,000ha land cap, for example, his idea is that if excess hectares are transferred to black ownership, the white farmer could then act as a mentor. “You may change the structure of ownership but it doesn’t necessarily mean it must translate into [changing] the structure of production,” Mr Nkwinti says.

But even among black farmers there are warnings about rushing the process. “There’s a lot of pressure on the ANC, especially as there are other political parties who are coming in and want to use land as an issue for politicking,” says Aggrey Mahanjana, managing director of the African Farmers Association of South Africa (Afasa), which represents about 10,000 black farmers. “But at the end of the day these things are not going to be practical on the ground and any shortcut is not going to be of benefit to South Africa.”

Putting the land to work

Still, the shrill political noise means little to emerging black farmers who say the government’s priority should be assisting those already on the land to become more productive.

“Each time when there’s a new ANC leadership they come with fancy beautiful policies but co-ordination and implementation, that’s where the whole thing collapses,” says Mr Mahlangu.

In Rust De Winter, a small agricultural town in Limpopo province, residents talk of a rich and fertile region that harvested fruits, tobacco, maize and cotton when under the control of white farmers. Today, the town’s farms are mostly in the hands of black farmers who lease the land from the government. But utilisation is patchy.

In many areas it appears fallow, with livestock grazing. Elsewhere, abundant maize crops are being fed by huge, expensive irrigation pivots. The maize is being grown by better-resourced white farmers who, seeing the land underused, have rented from black owners.

“Some of the commercial farmers are exploiting some of the people because they are ignorant, but in other places it’s doing well,” says Mr Mahlangu, who is also Afasa’s regional representative.

He believes agriculture will only prosper if smallholder black farmers, white commercial farmers and the government work together. Such sentiments are a common theme, with the growing realisation among commercial farmers that the status quo is not sustainable.

A short distance from Mr Mahlangu’s farm, Willem Basson, an Afrikaner, has been helping train local black farmers at his game lodge. He wants to set up a training centre and create a machinery pool so poorer farmers have access to tractors, ploughs and other equipment.

He is convinced land reform can be successful, but only if support mechanisms are in place. South Africa has so far failed to find a scheme that has the buy-in of all parties, allays concerns over production and investment and meets the goals of transformation.

“We need to get it right at the grassroots level,” Mr Basson says. “There’s a lot of cultures in this country, but one common one – that’s agriculture. Agriculture is the one thing that can pull South Africa through, not sport. Nothing else can do what agriculture can do.”

Zimbabwe: Output slump shows perils of forced redistribution

Political success but economic failure is a fair assessment of Zimbabwe’s 35-year land redistribution policy, which began soon after independence in 1980. Launched on a “willing buyer, willing seller” basis with the target of resettling 162,000 families by 1985, the programme won support from the donor community, spearheaded by the former colonial power, Britain.

But with no more than 50,000 families resettled in a decade, President Robert Mugabe’s Zanu-PF party grew impatient, and the stage was set for the escalation of the stand-off between the government and the country’s 5,000 to 6,000 white farmers.

Matters came to a head in 2000 after the government lost a referendum on a new constitution. Facing the prospect of electoral defeat in parliamentary polls, Mr Mugabe unleashed so-called “war veterans” to drive white farmers and their employees off their farms.

The consequences were disastrous. Farm production dropped 44 per cent from 6.3m tonnes in 2000 to 3.5m tonnes in 2005, according to the UN’s Food and Agriculture Organisation, while two-thirds of the 325,000 farm employees lost their jobs. The collateral damage extended well beyond agriculture and by 2008 gross domestic product had virtually halved, hyperinflation was running at billions of per cent a year and millions of Zimbabweans left the country.

Many of the farm seizures were violent and the regime was hit with sanctions as Zimbabwe became an international pariah. Dollarisation at the start of 2009 and the installation of a unity government restored a semblance of stability. By last year, farm output had almost doubled from its low of 2.8m tonnes in 2008. This was mostly due to the recovery of maize production, but output was still 40 per cent below pre-reform levels.

Tobacco last year regained its place as the country’s top export, with output quadrupling from 2008 lows. But although there are now about 90,000 growers – mainly black smallholders – against less than 10,000 in 2000, output is still lower than the peak of 227,000 tonnes in 2000. – Tony Hawkins

(c) 2015 The Financial Times Limited