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‘I’m Losing My Land to the Department of Land Affairs’

27 October 2010

What is happening with Land Reform?

by Karin Kleinbooi

Gus Pickard, a rural development consultant operating in the Western Cape, has a strange problem. He has been contacted by a farming family living on land near Elim: they desperately need help because they may lose their land — to the Department of Rural Development and Land Reform.

Gus Pickard tells of land reform recipients losing farms to the Department of Rural Development and and Land Reform

The family has been farming on the land for many years. Despite setbacks they have survived; but they have also accumulated significant debt — not enough to render them insolvent, but enough to put them under pressure. Seeking a way out of their conundrum, they applied for land reform funds.  Their application was successful — but nothing happened, until after a long silence, the Department contacted them and told that instead of getting money, the Department would buy the farm back from them for the amount of money needed to settle the debt. The Department proposed the family should then rent the farm from the Department, with the option to renew the lease after three years.

The family is understandably upset, not least because the Department’s offer is not based on the market value of the farm, but on the size of their debt. And how could it be that a government Department supposedly dedicated to redistributing land in favour of small black farmers should now, paradoxically, become an agent of dispossession?

Mr Pickard’s story was brought to my attention literally days after I was approached by other farmers facing similar dilemmas. This story highlights some of the strange paradoxes arising from the government’s failure to link land reform with a workable vision of sustainable smallholder agriculture. Policy documents and Department rhetoric might lead you to believe the Department is strongly committed to integrating land reform and agricultural development;  when the Department of Land Affairs (DLA) became the Department of Rural Development and Land Reform (DRDLR) in June 2009, land reform was incorporated into a broad comprehensive rural development strategy:

…to ensure that land reform, through redistribution and restitution, is more coherently linked to the creation of livelihoods for the poor’.

‘A critical part of the Rural Development Programme is to stimulate agricultural production to contribute to food security. Government will support the provision of agricultural implements and input to support emerging farmers and households nation­ally, also making agricultural loans accessible and ensuring high-quality agricultural extension services’.


But the reality for farmers like those in Mr Pickard’s story is totally incongruous with the policy. By November 2009 (as part of the legacy of a poor land reform vision since 1995) 5.9 million hectares had been redistributed since the end of apartheid but 90% of that land was unproductive or farmers had experienced a sharp decline in production and were unable to maintain infrastructure, due to inadequate post-settlement support and DRDLR’s failure to pay R3.4 billion in post-settlement grants to land reform beneficiaries. In response to the problem, Minister Gugile Nkwinti said his Department planned to release millions of rands this year to ‘recapitalise’ failing farms. But would it not have been more prudent for them to assess the projects in trouble, do an audit of the issues and thereafter innovatively try to fix these problem situations? Collective inaction from the Department has lead to atrophy in land reform; existing projects where no support — or very unstructured support — was given now face total collapse.

Minister Gugile Nkwinti: His department says it does 'not have a policy yet and we are still looking at a policy framework to address the situation; in the meantime PLAS applies.'

Out of desperation many land reform farmers approached commercial banks, who saw the government’s lack of adequate financial support as a business opportunity. For farmers, this seemed to be the only available option, but it was a risky as farms were used as collateral and while commercial bank finance gave temporary relief, it only provided financial support — not the whole spectrum of support needed by emerging farmers. So despite the financial injection, many farmers could not move out of their problematic situations, defaulted on  financial agreements, and an alarming number now face foreclosure and loss of land to commercial banks.

Can the Department help?

Perhaps — if the purpose is to guide farmers from the frying pan into the fire. Insolvent land reform farmers approaching the Department were met with only one option: the Department will buy back land from current land reform beneficiaries — but only at a price equal to the outstanding loan amounts owed to commercial banks. This ‘help’ is structured and paid for under Land Redistribution and Agricultural Development, with Pro-active Land Acquisition Strategy (PLAS). Many farmers see this option as the government taking away their assets.

So: Is ‘pro-actively’ purchasing farms back from land reform beneficiaries the rationale behind PLAS? Is this Minister Gugile Nkwinti’s ‘recapitalisation’ project?

According to the Department, farmers then have the option to rent the land back from the Department on a short or long-term basis. In earlier PLAS statements rental agreements are seen as trial periods, after which farmers/beneficiaries will receive the land when they have proven their ability to make the farm productive. While the Department vehemently denies it is nationalising land, it now seems that the state will own land, while farmers can simply get a 99 year lease. One short term solution is thus replaced with another. The embarrassment of the risk of foreclosure is forestalled, but new problems are created. For example, if farmers can only rent land they may hold back on real investment on land and they will probably never be able to get any kind of bank loan if it is needed. On a recent question about the Department’s response to farmers who approach them with the threat of foreclosure the land reform manager replied:

‘We do not have a policy yet and we are ‘still looking at a policy framework to address the situation; in the meantime PLAS applies’.

This comes nearly a year after the Department admitted that most land reform farmers are in trouble. The manager added:

‘Land reform farmers cannot expect market value for their land, they got it for nothing any way!’

True, but this declaration would have sounded more fitting in the context of farm land purchases from white farmers when the land reform programme was initiated. In a telephone conversation with an emerging farmer (facing foreclosure) shortly after his meeting with the DRDLR in Cape Town he cried out

‘I’m losing my land to the Department of Land Affairs [now DRDLR]!’

Meanwhile a new breed of consultants is now responding to the desperate situation of anxious land reform farmers by providing financing, or leverage financing from investors and development funding. One just has to wonder at what cost though? I don’t understand it well enough to make a comment about whether this is in the best interest of struggling land reform farmers but it is possibly the only immediate option for small farmers in trouble who do not want to lose their land. So the private sector continues to lead the way.

Regarding the slow pace and manner of the government’s approach to sorting out policy, the ongoing moratorium on farm worker equity schemes (FWES) without a tangible alternative, and the stalled process of getting the Green Paper before Parliament, one commentator, Andrew Porter, CEO AgriSmart – Growing your Profits, said the DRDLR was ‘fiddling while Rome burns’. Land reform in South Africa has now become commonly associated with doom and gloom, and we must wonder: ‘How much longer must we wait for land reform to get ‘started’ again?’

I doubt even the Department knows; the public certainly has no idea and this uncertainty is causing anxiety and tension as current land reform recipients (now facing reversal of this status), farm workers and other potential land reform beneficiaries just sit it out and wait. Could it be a blessing that the long awaited Green Paper keeps being postponed? Perhaps there is time to influence the Department to have a robust public debate about the content of this policy document and the outcomes it hopes to achieve. But whether delayed or not in the meantime farms are lost — and consultants are finding creative ways to fund farmers.

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One Comment leave one →
  1. 13 March 2012 2:17 pm

    please help i want the dept to buy me the farm in onbekend mpumalanga province in carolina and want to trade as soon as possible the cost of the farm including cattles is 4900000 rand so please help

    thanks
    vusi
    0741518447

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