Twelve steps to successful land reform

19 June 2019 - William Gumede

Developing and protecting agriculture-related industries will be crucial to creating jobs and achieving a just new order.

An integrated land reform model for SA would safeguard commercial agriculture and would develop black farmers already farming as well as agriculture-related manufacturing, infrastructure and skills.

Given the fact that the ever-growing population of the world needs food, agriculture-led manufacturing, which can absorb millions of unskilled and low-skilled black South Africans, is the best strategic option for SA to create jobs, reduce poverty and lift growth levels.

Land reform done for ideological, populist or revenge reasons will collapse the structure of the economy, as it did in Zimbabwe, Tanzania and Algeria, all of which had to seek a foreign bailouts after their economies collapsed following failed land reforms.

Crucially, land reform has to be conducted under the rule of law. If it is not, it could collapse the rule of law across wider society. Aspects of land reform have already been captured ¡ªthere have been incidents where farmers have been forced to transfer farms to ¡°political farmers¡±, politically connected leaders masquerading as black farmers. On other occasions local strongmen, gangsters and vigilantes have organised themselves as black ¡°farmers¡± and pressed fearful white farmers to hand over land to them.

Land reform must fit within a long-term industrialisation strategy, bring new technology, diversify production and expand institutions supporting the agriculture value chain.

It must also be done in a way that protects food security, by retaining the existing competitive agriculture sector and making blacks who are already farming ¡ª whether informal, small-scale or emerging farmers ¡ª more efficient, diversified and export competitive.

Land reform must revitalise rural economies, not only by diversifying farm products but by fostering agricultural manufacturing, processing and technology related to farm products and developing specialist vocational and higher education that will add relevant skills to the sector.

In pre-apartheid and pre-colonial times most African cultures¡¯ sense of self and communal belonging were integrally woven into land ownership. The first crime of colonialism and apartheid was the removal of Africans from the land.

Land was expropriated from blacks without compensation during colonialism and apartheid. Because of the existential, deeply emotional and cathartic imperative of land reform, policies could therefore easily be driven by populism, sloganeering and short-termism.

Algeria, Tanzania and Zimbabwe, the three left-populist African governments that after independence pursued populist land reform without compensation, plunged their countries into mass starvation, crashed their currencies and caused mass foreign and local investor flight, depleting human capital and policy credibility, with consequences they have for decades struggled to reverse.

An integrated model of land reform would have 12 strategic pillars:

1. President Cyril Ramaphosa and the ANC government must take a strong position in public for pragmatic land reform, to counter calls for land expropriation without compensation purely for self-enrichment, opportunism and criminality. The ANC government must also firmly clamp down on opportunistic land grabs mushrooming across the country to restore order, the rule of law and peace.
2. Land redistribution must be pragmatic. The government must ring-fence commercial agriculture to keep the country food self-sufficient, and retain current agricultural jobs, high-grade farming skills and export income. Commercially viable farms in white hands should ideally be left untouched. Legitimate farm employees who are active in agriculture could be given shareholder options and profit-sharing and, of course, be treated with dignity.
3. The government must target the 5-million active black farmers for upliftment: provide them with cheaper finance, commercial skills and access to markets. Black farmers should be made more efficient and produce more diversified products that local and global markets need to allow them to become export competitive. Black farmers must get access to the supply chains of the public sector, state-owned enterprises (SOEs) and the private sector, such as large retailers. The government must use its foreign policy to open up markets in Africa and the developing world for the produce of black farmers.
4. Communal land must be immediately transferred to individual households. Communal land under the control of traditional leaders, chiefs and kings rather than individual owners is one of the biggest obstacles to development, equality and economic growth in SA and Africa. The communal land system locks the majority of Africans into poverty, undermines their individual entrepreneurial spirit and makes them subservient to often tyrannical traditional leaders and kings. 
5. Black farmers can pool into co-operatives to collectively access training, new productive methods and markets. However, as experience shows, attempting co-operatives on communal land has largely failed in Africa and is likely to fail in SA too. The basic condition for agricultural co-operatives to work is to hand over communal land to individual farmers who can then organise themselves into co-operatives. State land, whether under the control of SOEs, municipalities or provinces, should be made available to black farmers already active in farming, not given to political farmers.
6. Government will need to restart the social housing build programme, which has now come to a virtual standstill. A strategic national infrastructure strategy that links employment, manufacturing and skills development to housing delivery is crucial to effective land reform.
7. Such a housing construction-led infrastructure programme must be done in partnership with private sector construction companies, which would also be a way to rescue the remaining construction companies ¡ª and the skills, technology and jobs they contain ¡ª that have failed largely because of government corruption, inefficiency and incompetence.
8. SA will need to foster a manufacturing sector out of agriculture, focusing on new products the global market needs, agricultural processing and beneficiation. Some small towns must be turned into agribusiness towns where products can be processed and beneficiated.
9. Land reform is complicated. It therefore needs a competent public sector to manage it. The agricultural and rural development government institutions, SOEs and lending institutions must be cleaned up, made more efficient and less corrupt. Right now, corrupt, ineffective and patronage-based agricultural and rural government departments and SOEs, whether local, provincial or national, are an obstacle to effective land reform. Appointments in these public institutions must be based on merit rather than patronage.
10. Educational, research and technology institutions in the agricultural value chain will also have to be cleaned up, better resourced and aligned to agriculture industrialisation. Agriculture-based vocational educational institutions that provide relevant technical training should be set up by governments, businesses and farmers. The best black empowerment would transfer relevant skills to adults, provide quality education for children and quality housing. Government and white farmers should co-operate to transfer skills and provide quality education to adult farmworkers and children.
11. White individual farmers, agricultural companies and the private sector will have to be more proactive. They can mentor, partner with and share markets with black farmers. White farmers must also create a social pact with their employees in which they provide housing, skills and profit-sharing. Such social pacts at the farm level will better protect farmers against political ¡°farmers¡±, local opportunists and gangsters.
12. Private financial institutions should give easier, cheaper financing and advice to black farmers ¡ª and of course to white farmers. Failed land reform can lead to investment, currency and capital flight, and the collapse of the financial and property system, the currency and the rule of law. It can result in mass starvation, unemployment and poverty.

William Gumede is an Associate Professor in the Wits School of Governance. This is an extract from a keynote address he made at the symposium of deciduous fruit producer Hortgro recently. This article first appeared in the Business Day.