A critical appraisal of South Africa’s market-based land reform policy: The case of the Land Redistribution for Agricultural Development

SCHOOLof (LRAD) programme in Limpopo GOVERNMENT UNIVERSITY OF THE WESTERN CAPE

Marc Wegerif

Research report no. 19 Research report no. 19

A critical appraisal of South Africa’s market- based land reform policy: The case of the Land Redistribution for Agricultural Development (LRAD) programme in Limpopo

Marc Wegerif

Programme for Land and Agrarian Studies December 2004 Hanging on a wire: A historical and socio-economic study of Paulshoek village in the communal area of Leliefontein, Namaqualand

A critical appraisal of South Africa’s market-based land reform policy: The case of the Land Redistribution for Agricultural Development ( LRAD) programme in Limpopo Marc Wegerif

Published by the Programme for Land and Agrarian Studies, School of Government, University of the Western Cape, Private Bag X17, Bellville 7535, Cape Town, South Africa. Tel: +27 21 959 3733. Fax: +27 21 959 3732. [email protected]. www.uwc.ac.za/plaas

Programme for Land and Agrarian Studies Research report no. 19

ISBN 1-86808-596-1

December 2004

All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, without prior permission from the publisher or the author.

Copy editor: Stephen Heyns Cover photograph: Richard van Ryneveld Layout: Designs for Development Maps: Anne Westoby (Figure 1) and John Hall (Figure 2)

Typeset in Times Printing: Hansa Reproprint Contents

List of figures, tables and boxes ii Acronyms iii Acknowledgements iv Chapter 1: Introduction 1 Chapter 2: International land reform debates 4 Contemporary redistributive land reform 4 Agriculture, the economy and poverty reduction 5 Market-based land reform1 6 Critiques of market-based land reform 8 Land reform in South Africa 9 Post-1994 redistribution 10 Chapter 3: Methodology 14 Chapter 4: Background to Limpopo 15 Chapter 5: The LRAD programme 18 Aims and objectives 18 LRAD services and support 19 LRAD structures and procedures 20 Achievements of LRAD 22 State land 25 Implementers’ perceptions 26 Chapter 6: LRAD projects in Limpopo 29 Manamead projects 29 Steilloop projects 31 Mankweng Integrated development project 32 Vaalkop 33 Vele Farm 34 Bellevue 34 Project design and land acquisition 35 The beneficiaries 36 Production, employment and sustainability 37 Markets 38 Post-transfer support 38 Challenges, hopes and recommendations 39 Chapter 7: Conclusions 41 References 45 Secondary source documents 45 Primary source documents 48 Interviews 48

i Hanging on a wire: A historical and socio-economic study of Paulshoek village in the communal area of Leliefontein, Namaqualand List of figures, tables and boxes

Figure 1: The homelands of South Africa before 1994 2 Figure 2: Map of Limpopo 15

Table 1: Summary of LRAD projects implemented in Limpopo 22 Table 2: Comparison of group and individual LRAD projects 23 Table 3: Comparison of average cost per hectare of land for individual and group beneficiaries 23 Table 4: Expenditure of planning grants on LRAD projects 24 Table 5: Land Bank-implemented LRAD projects 24 Table 6: Expenditure of planning grants on Land Bank-organised LRAD projects 25 Table 7: The projects at Manamead 30 Table 8: The projects at Steilloop 31

Box 1: Challenges for LRAD 27

ii Acronyms

ANC African National Congress DLA Department of Land Affairs (used to refer to the provincial office unless the national office or a district office is specified) DoA Limpopo Department of Agriculture Gear Growth Employment and Redistribution macroeconomic framework LRAD Land Redistribution for Agricultural Development programme NDA National Department of Agriculture NGO non-governmental organisation PGC Provincial Grant Committee RDP Reconstruction and Development Programme SADT South African Development Trust SLAG Settlement/Land Acquisition Grant

iii Hanging on a wire: A historical and socio-economic study of Paulshoek village in the communal area of Leliefontein, Namaqualand Acknowledgements

his research was carried out as a experiences, difficulties, successes and project of Nkuzi Development ideas. Thanks also to the officials of the T Association which paid all costs Department of Land Affairs, the provincial involved. Thanks to Mike Nefale, Ndiaphi Department of Agriculture who co- Kwinda and Kgalema Kalauba, all operated with the research, and Dr Edward colleagues at Nkuzi, who assisted with the Lahiff of the Programme for Land and field research. Agrarian Studies for providing feedback Thanks to the beneficiaries of LRAD and assisting in giving focus to the projects in Limpopo, who shared their research.

iv Chapter 1: Introduction

The land question remains one of the key challenges for post-apartheid South Africa. The history of colonisation and apartheid, and the dispossession of black people from the land that are central to this history, are well documented (Thompson 1995; Koch et al. 2001; Sparks 1991; Greenberg 2003).

n 1996 less than 1% of the population identified land reform as a key component owned and controlled over 80%1 of of its programmes of ‘meeting basic needs’ Ifarm land.2 This 1% was part of the and ‘building the economy’ (ANC 1994). 10.9% of the population classified as white The White Paper on South African Land (Stats SA 2000). Meanwhile, the 76.7% of Policy included in its strategic goals the the population that is classified as African promotion of economic growth and had access to less than 15% of agricultural poverty reduction through land reform land, and even that access was without (DLA 1997). clear ownership or legally-recognised Over the last decade land reform rights. An estimated 5.3 million black policies around the world have, with a few South Africans lived with almost no tenure exceptions such as the case of Zimbabwe, security on commercial farms owned by revolved around variations of market- white farmers (Wildschut & Hulbert 1998). based land reform. This trend fits with The legacy of apartheid was not just the broader shifts in global economic policies, inequality in access to resources such as following the end of the Cold War, that land, but a faltering economy that by 1994 have seen a reduced role for the state, had been through two years of negative liberalisation of markets and privatisation growth and left the majority of the of state enterprises and assets (Williams population in poverty (Sparks 2003). 1996; Greenberg 2003). It is within this Policy makers pre- and post-1994 took an context that the first democratically elected interest in arguments that land reform government in South Africa followed could play a significant role in boosting international trends and World Bank economic growth and alleviating poverty. advice by adopting a market-based ap- World Bank and other advisors in South proach to land reform (Williams 1996). Africa in the early nineties argued for a A range of civil society organisations, far-reaching land reform programme on including social movements, NGOs and these grounds (Greenberg 2003). trade unions, have raised strong criticisms Arguments that increased productivity and of market-based land reforms around the job creation could result from reducing world. They have argued that this model farm sizes were supported by a number of will not benefit small producers and the local and international scholars (Van Zyl et rural poor, but serve to tighten the control al. 1996). of powerful land owners and concentrate The need for land reforms to address land in the hands of those with financial the legacy of the past was clearly identified and political power (El-Gonemy 1999:125; in the new South African Constitution (Act Ghimire 1999:23; Greenberg 2003:22). 108 of 1996, Section 25). The Reconstruc- The South African land reform tion and Development Programme (RDP) programme, developed by the African

1 A critical appraisal of South Africa’s market-based land reform policy

National Congress government that won creating black commercial farmers. This the first democratic elections in 1994, shift was in line with changes in South comprises three main programmes: African economic policy that took on a restitution, tenure reform and redistribu- more market- and investor-friendly tion. This study focuses on redistribution. direction with the adoption of the Growth Redistribution is of particular interest as it Employment and Redistribution (Gear) is the only programme ‘specifically aimed policy in 1996 (Department of Finance at transforming the racial pattern of land 1997). ownership’ (Jacobs et al. 2003:4). Critics of the LRAD programme claim The White Paper on South African Land it will not meet its targets for redistribution Policy stipulated that land redistribution of land, nor shift the basic structure of would be implemented through a ‘willing agriculture, it will merely change the racial buyer-willing seller’ approach in terms of composition of land owners, and will, at which land would be acquired through best, benefit only a small minority of the purchases at market rates from owners already privileged (Tilley 2002; NLC who agreed to sell. The first version of the 2003). This is in line with international redistribution programme, implemented critiques of market-based land reform. from 1995, involved the Department Authors such as Borras (2003:389–90) and of Land Affairs (DLA) providing a Settle- Ghimire (1999:23–4) have argued that ment/Land Acquisition Grant (SLAG) to market-based land reform models will assist the poor with land purchases (DLA never bring the far-reaching changes in 1997). This was largely replaced in 2000 property rights and power relations that are by the Land Redistribution for Agricultural required, and will only benefit those Development (LRAD) programme that already better off who are best able to removed poverty as a criterion for bene- access the market and the opportunities ficiary selection and focused more on presented by such programmes. Despite

Figure 1: The homelands of South Africa before 1994

2 Chapter 1: Introduction

the critiques of LRAD there has been projects, primarily information gathered almost no documentation on the effective- directly from the beneficiaries through ness of LRAD in achieving its objectives interviews and site visits. Finally, Chapter or its contribution to the broader objectives 7 presents an analysis of the findings, of land reform. raising some concerns about the pro- The focus of this report is market-based gramme while also acknowledging what land reform. The topic is addressed pri- it has achieved. marily through a critical examination of This compilation and analysis of the implementation of LRAD in Limpopo empirical information on the implemen- province. Chapter 2 discusses some of the tation and impact of LRAD is intended to main land reform debates and experiences contribute to ongoing debates about LRAD in order to locate LRAD within the context and the relevance of market-based land of market-based land reforms internation- reforms in South Africa. ally and in South Africa. Chapter 3 presents the methodology used for this Endnotes study, while Chapter 4 provides a brief 1. Total hectares of farmland owned as commercial background to the study area. Chapter 5 farming units (82 209 571ha) as a percentage of total explains the LRAD policy, the structures farmland (100 665 792ha). Figures sourced from and procedures used for its implementation Development Bank of Southern Africa and N Vink, Chair: Department of Agricultural Economics at in Limpopo, and some of the achievements Stellenbosch University. of the programme. Chapter 6 presents the 2. Calculated from population, farm unit and information gathered on individual LRAD agricultural land figures.

3 A critical appraisal of South Africa’s market-based land reform policy Chapter 2: International land reform debates

This chapter situates the LRAD programme, as the primary land redistribution programme in South Africa, within the debate around land reform internationally, with a focus on market-based land redistribution.

Contemporary redistributive 1993:262). The reasons for this continuity, land reform according to Okoth-Ogendo, were the rguments for land reform weak nature of many post-colonial states, programmes typically revolve constitutions that preserved existing around issues of equity, poverty institutions and laws, the extent and A influence of foreign investments, and the reduction, economic development and need to earn foreign exchange (Okoth- political stability (DLA 1997). Land Ogendo 1993:261–4). reforms are also seen by some as important Many of the reforms initiated in the in contributing to human freedoms, civil colonial era focused on tenure upgrading liberties and sustainable democracies and village re-organisation, rather than a (Prosterman & Riedinger 1987:88–91; redistribution of land (Okoth-Ogendo World Bank 2003:xvii, 16). Access to land 1993:262–3). However in the 1960s the remains critical for people’s very survival British also initiated a large-scale in most developing countries where ‘land redistribution of land in Kenya out of fear is the primary means for generating a that there would be a wave of land livelihood’ (World Bank 2003:xix). During seizures. The Million Hectare Scheme th the 20 century many governments involved the acquisition of 1.5 million developed land reform policies to meet hectares by the state from colonial these objectives and to try and deal in a landowners and the settlement of 34 000 controlled way with the demands and families on this land by 1971 (Bruce tensions around land. 1993:42). Governments in post-colonial states In many other African countries have found themselves under particular independent governments implemented pressures with regard to the land reform their own radical and redistributive land they could implement. They have had to reforms. In the 1970s the Marxist regime consolidate their newfound power, take in Ethiopia abolished the feudal system control of land for development purposes, of landholding, nationalised all land, and respond to the interests of traditional and distributed it to those willing to work it emerging local elites, and meet the needs (Okoth-Ogendo 1993:265). In Mozam- of the majority of the rural poor (Toulmin bique the abandonment of farms by the & Quan 2000:8, 11). Portuguese at independence made the In Africa there has been a lot of nationalisation of land relatively easy. The continuity from colonial to post-colonial land was split between state farms, co- land reforms. For example the Kenyan operative farms, and the distribution of land reforms that were started by the land to individuals through a registered British rulers in the 1950s were continued licence to land that left the state with an with even greater vigour by the first post- overriding power (Okoth-Ogendo 1993: independence government (Okoth-Ogendo 265). Land was nationalised through

4 Chapter 2: International land reform debates

legislation in a number of other countries plantations – to peasants or labourers, as such as Tanzania, Guinea, Sudan, Mali, has been attempted in Latin America and Nigeria, Burkina Faso, Zaire, Uganda, parts of Asia and Africa, have been far less Somalia and Zambia (Bruce 1993:24). successful (World Bank 2003:143; Post-independence Zimbabwe was Binswanger & Deininger 1996:75). constrained in its redistribution of land by However, as mentioned above, shortages of cash and the Lancaster House positive impacts have been reported agreement that prohibited expropriation of from countries such as Kenya and land without paying market-value Zimbabwe in the early phases of compensation (Ghimire 1999). Despite this their post-independence land the Zimbabwean government acquired 2.7 reforms. (World Bank 2003:xl). million hectares during the 1980s, most of which was allocated to 52 000 black Agriculture, the economy and families who were issued with land-use poverty reduction permits (Bruce 1993:28). One of the strongest arguments for re- Radical land reforms have not been distributive land reform is that it can create confined to Africa. All land above a set an environment for growth in agricultural ceiling for maximum landholding was production that will in turn support broader acquired through compulsory purchases economic growth and have a positive im- by the governments of Taiwan, South pact on poverty reduction. Such arguments Korea and Japan during the 1940s and are supported by information showing that 50s. Some compensation was paid, but at a countries with a more equitable distribu- rate well below market value. The peasant tion of land tend to have higher levels of farmers were assisted with the purchase, at economic growth, while high levels of nominal prices, through the provision of land concentration are often associated credit (Griffin et al. 2002:303–9). In China with less efficient resource utilisation and Vietnam landlords were overthrown (World Bank 2003:18–20). after the seizure of power through The growth in agricultural production revolutionary action. China and Vietnam that has been attributed to land reforms followed similar paths of land seizure, has come from the de-concentration of distribution of land to poor peasants landholding to create or strengthen small- followed by collectivisation of production scale owner-operated or family farms. and, in the 1980s, a return of the land to Prosterman and Riedinger, amongst others, peasant families who were found to be have argued that there is an inverse farm more productive than the collectives size-efficiency relationship in which (Griffin et al. 2002:313). smaller farms, where the producer has a Land reforms in the 20th century that secure owner or owner-like relationship to have been successful in increasing the land, produce a substantially better productivity and reducing poverty1 have return per hectare and on investments than largely involved breaking up large any other model of agricultural production landholdings. Ownership of small pieces (Prosterman & Riedinger 1987:46–9). of arable land was given to tenants who They also argue that such analysis of already worked the land but previously productivity probably hides the full extent had to pay rents or share their crops with a of the advantage of the owner-operator landlord. These peasant farmers, freed system as it is based on only the main from the burden of the landlord, utilised crops and does not take into account the the land more intensively thus increasing variety of other crops normally grown on productivity, creating employment, and small owner-operated farms (Prosterman & reducing poverty (Griffin et al. 2002). Riedinger 1987:58–66). Land reforms involving the transfer of Other reasons offered for the beneficial land from ‘haciendas’ – large estates or affects of redistributive land reform are the

5 A critical appraisal of South Africa’s market-based land reform policy breaking of control of labour by large policies and those of the International landlords (Griffin et al. 2002:287), a better Monetary Fund (El-Ghonemy 1999:106). total factor productivity of small farmers, The market-based approach has been the labour-intensive nature of small farms bolstered by critiques of the state-led land (Griffin et al. 2002:286; Prosterman & reform programmes of the past (Borras Riedinger 1987; Wilson & Ramphele 2003:367). The risk of landlord resistance 1989:311), and the large contribution of to the forced seizure of land is argued to agricultural growth to the non-farm rural be counter-productive to land reforms. sector (Mellor 1999:23; Van Zyl et al. Interventions such as setting maximum 1996:5). landholding sizes have been hard to Studies in countries from Sierra Leone enforce and have had negative effects such to India and Malaysia show that growth in as reducing the ability to use land as agriculture makes a significantly larger collateral for loans (World Bank 2003: contribution to overall economic growth 124–5). Further problems have been the than growth in other sectors such as drop in productivity on land inappropri- industry (Mellor 1999:8). Growth in ately divided up and, in some cases, given agriculture also has a disproportionately to beneficiaries without the potential to positive impact on poverty levels. Part of become effective producers. Programmes the reason for this can be found in the have focused on the land redistribution labour-intensive nature of agricultural process without giving attention to mea- production and the large proportion of sures such as farmer support to ensure people in the lower income bracket who effective production (World Bank 2003: participate in agriculture. It was found in 146). Bloated bureaucracies, needed to a study of 27 low to middle-income drive state-led land reforms, are expensive countries that agriculture accounted for and inefficient, have little understanding of only 25% of GDP (gross domestic local dynamics, and often end up stifling product), but 51% of the labour force land reform due to the development of (Mellor 1999:9). Not only is agriculture a their own interests (Borras 2003:368). large employer, it is a large employer of Fiscal arguments against state-led land the poor. Thus a relatively small increase reforms suggest that they are too expen- in growth in agriculture will have a large sive as the beneficiaries do not contribute positive impact on employment and and the state has to pay for the land and incomes for the poor. An assessment by other support services. In addition, the Prosterman and Riedinger of poverty bureaucracies necessary for implemen- indicators across more than 120 countries tation consume a substantial portion of the showed that those that adopted the family- budget, the state has often ended up farm model of development fared paying more than market value for land, consistently better than others (1987: and this approach has contributed to other 74–9, 100–1). distortions that have pushed up prices (Borras 2003:370; World Bank 2003:153). 2 Market-based land reform In the face of these critiques, it is The primary mode of redistributive land claimed that the market-based land reform reform over the last decade has been model offers an efficient way to enhance market-based land reform and debates equity in asset distribution. The key have increasingly revolved around the features of the ‘market-led’ land reform merits and disadvantages of this approach model according to Borras (2003:370–3) (Borras 2003:367). The market-based are: landlord co-operation in the form of approach has been particularly strongly voluntary land sales (encouraged by pushed by the World Bank on the basis payment of full market prices); production that this is the only form of land reform of ‘viable farm plans’ before land is pur- that is compatible with its economic chased; and programme financing through

6 Chapter 2: International land reform debates

the flexible provision of loans and grants. Decentralised delivery mechanisms – Essential to the market-based approach is preferably with some form of local the liberalisation of the agricultural sector government involvement – strong roles to remove distortions in various land and for non-government and private sector agriculture-related markets, especially service providers, and a community-based those that favour or have been captured by approach are also recommendations large farmers and elites. Pro-market common to the market-based approach economists argue that liberalisation will (Bernstein 2002:447–8; Borras 2003:371). lead to a de-concentration of landholdings According to the World Bank (2003:156), since distortions have favoured land- ‘the implementation of any land reform holdings larger than the optimal size programme should be decentralized, with (Borras 2003:372; Binswanger & Deinin- potential beneficiaries and communities ger 1996:68–9; World Bank 2003: taking a lead’. 155; Van Zyl et al. 1996; Williams 1996). The provision of grants to beneficiaries Proponents of market-based land redistri- to buy privatised extension and support bution acknowledge that: services for farm planning and production (t)he land market cannot be is seen as the route to cost-effective provi- expected to lead to an efficiency- sion of the necessary expertise. However, enhancing redistribution of land government support for the development because poor family farmers who do of technology and extension ‘at least in the not have much equity cannot acquire initial stage’ is not ruled out (World Bank land even if they have access to 2003:156; Binswanger & Deininger 1996: mortgage credit (Binswanger & 93). It is assumed that the private sector Deininger 1996:70). will become more active in providing credit This is because market prices are, for a if beneficiaries become outright owners of range of reasons, higher than the pro- their land and once they have established duction value of land.3 Therefore, the role themselves as successful commercial of the state in facilitating land purchases at farmers (Borras 2003:372). For land to be market prices is to provide a grant to sub- used as collateral it is considered impera- sidise the buyer: ‘such a grant element is tive that there be as few limitations as required to provide the equity that the poor possible on sales and rentals of the land by do not have’ (Binswanger & Deininger the beneficiaries (Van Zyl et al. 1996:17; 1996:71). World Bank 2003:155). Another key element of the market- Financing of land redistribution is to be based approach is the self-selection of in the form of beneficiary contributions beneficiaries who are best equipped to and government grants and loans. make good use of the land. Strategies to Economists argue that the provision of facilitate this self-selection are a demand- grants rather than subsidies on loans and led approach, which only responds to other inputs will have less of a distorting those who request land, and requires effect on the economy and be more easily potential beneficiaries to work as a group. managed and transparent (Borras 2003: It is assumed that applicants in a group will 373). The required funding is expected to know each other and therefore exclude come from a combination of government those who they know are less likely to be contribution from the fiscus (some of this effective members of the group (Borras available from savings made through the 2003:371). Requiring beneficiaries to reduction or elimination of existing contribute is suggested to ensure only subsidies) and from international donors those with commitment are involved, while and aid agencies (Van den Brink et al. also encouraging a sense of project 1996:449–51). ownership (Binswanger & Deininger There is general agreement that there is 1996:93). a need to target the poor, primarily through

7 A critical appraisal of South Africa’s market-based land reform policy

‘targeted financial assistance to poor sector loan financing has generally not buyers’ (Van Zyl et al. 1996:17). Other materialised (El-Ghonemy 1999:117–9). support such as training and technical In fact it appears that the only real success assistance should also be ‘explicitly has been the welcoming of the programme targeted toward the poor’ (World Bank by the current landowners (Borras 2003: 2003:156). Without targeting there is a risk 377–90). The anticipated decentralisation of elites ‘capturing’ opportunities and of land reform implementation has not resources leading to inefficiencies and happened systematically and, where it has reducing the positive impact on poverty occurred, it has not brought the anticipated alleviation. benefits of accountability and transparency as local elites have been able to influence Critiques of market-based land local institutions and reform programmes reform (Borras 2003:389–90). One of the strongest attacks on market- The benefits of de-concentrating based approaches to land reform is the landholding are questioned by some who argument that it will not lead to substantial argue that small farmers cannot benefit change in land distribution. Even the from economies of scale, which even World Bank (2003:15–6) notes that proponents of de-concentration such as ‘(a)ttempts at land reform without massive Griffin et al. (2002:317–8) acknowledge political upheaval have rarely succeeded in may be required under some circumstan- transferring much of a country’s land’. ces. There is no doubt that, where expen- It is notable that none of the abovemen- sive machinery and other infrastructure tioned land reforms that were successful in investment is required and is not divisible, bringing a substantial de-concentration of there are advantages to larger scale opera- landholding and the related benefits tions. Larger scale operations are also claimed by proponents of market-based normally more able to access capital at land reform were able to achieve this lower costs (Van Zyl 1996:261–3). The through a market-based approach. The labour-intensive nature of production on transfers were mostly based on the con- small farms is often seen as an advantage, fiscation of land with compensation at but the downside is that small farms have considerably below market value. Griffin lower levels of capitalisation and lower et al. (2002:321) go so far as to say that labour productivity compared to large ‘(a) market-friendly land reform of East farms (Griffin et al. 2002; Van Zyl 1996). Asian magnitude is a non-starter’. They Central to the argument of the benefits conclude ‘a major redistributive land of the family-farm model and the poverty- reform is impossible if land transfers are reducing effects of agricultural growth is based on free market prices’. an assumption that there is available Leading examples of countries that under-utilised labour. This assumption is have tried the market-based approach are questionable given that rural people, in Brazil, Colombia, and South Africa (World particular women, have a range of impor- Bank 2003:147–50; Borras 2003:377).4 In tant tasks and obligations in the home and all these cases a number of key problems community. The multiple livelihood have emerged. The programmes have not strategies adopted by the poor for survival delivered at the scale and speed expected, are also leaving many in rural areas ‘too they have not managed to involve the very busy to farm’ (Bernstein 2002:454). Even poor, nor have they reached the most where labour is under-utilised for much of capable beneficiaries. Land purchases the year, it may still be inadequate to meet have not been cheaper than with state-led production demands at key points such as programmes; procedures have been during harvesting. complicated, slow and costly; much land The growing scourge of HIV/Aids, acquired has been marginal; and private especially in many parts of Africa inclu-

8 Chapter 2: International land reform debates

ding rural South Africa, raises further 2001 and the Strategic Plan for South questions about the availability of labour. African Agriculture released in 2002.5 Studies are increasingly showing a nega- Other inputs to the policy discussions tive impact on productivity in agriculture came from local academics and land activists due to HIV/Aids. A study in Kenya found through local research and community that the labour-intensive agricultural sector consultation processes (Williams 1996). A suffered most from the impact of HIV/ national research project co-ordinated by Aids, compared to other sectors (Topouzis the Land and Agriculture Policy Centre 2000:24). A study in Tanzania found that (LAPC)6 included community-level women spend 45% less time in agriculture research and consultation and attempted if their husbands are sick (Guinness & to find ways of delivering land that Alban 2000:5). Agricultural outputs have responded to a demand for land that was dropped dramatically in Aids-affected informed by social needs, not just market households in Zimbabwe, with a 61% fall forces (Marcus et al. 1996:1). The assum- in maize production (Guinness & Alban ption at the time was that government was 2000:8). The effects of HIV/Aids may well committed to a land reform that would neutralise the prospects for growth in target the ‘poorest of the poor’ (Marcus et agriculture and wipe out the benefits, al. 1996:13). perhaps even the viability, of the small- The land reform policies of South scale owner-operated farm model. Africa’s first non-racial democratic government begin with the Constitution Land reform in South Africa and the Reconstruction and Development Programme. The RDP document, which As negotiations to end apartheid pro- became the election manifesto of the ANC ceeded in earnest in the early 1990s, those in its 1994 election campaign, was drawn aspiring to lead the country after liberation up by activists from the liberation move- faced a crisis of slow economic growth, ment, but clearly showed some of the high inflation, mounting government influence of the World Bank and other debts, growing poverty and massive advisors. It was also heavily influenced by inequalities in wealth (Thompson 1995: the compromises that were being negoti- 261). In this context it would be necessary ated in order to facilitate the relatively to meet the redistributive demands of those peaceful change of regime in South Africa. in the liberation struggle and the poor in Demands that had been part of the politics general, while not provoking a right wing of liberation movements, such as the call back lash, and avoiding the flight of of the 1955 Freedom Charter that the land capital and skills from the country. should belong to those who work it, were The World Bank, along with allied not given expression in the RDP. academics, had started to engage in policy Section 25 of the Constitution deals debates in South Africa from 1990, and with property and land rights. Existing they appear to have had a strong influence property rights are protected under Section on policy development with their 25(1) while Section 25(2) allows for ex- proposals for a market-based land reform propriation only in terms of a law of model (Williams 1996). These proposals general application ‘for a public purpose were well captured in the book Agricul- or in the public interest’ with ‘just and tural land reform in South Africa edited by equitable’ compensation (Section 25(3)).7 academics from the University of Pretoria However, Section 25(4) goes on to say ‘the and the World Bank. The influence of public interest includes the nation’s some of these academics has continued commitment to land reform’. Sub-sections with their involvement in the drafting of 25(5), (6) and (7) require the state to take the Land Redistribution for Agricultural legislative and other measures to ensure Development policy document released in land reforms. Thus the Constitution, while

9 A critical appraisal of South Africa’s market-based land reform policy placing some constraints on the methods done little to give people their own land or that could be used, mandates land reform, long-term security of tenure. The process allows for expropriation, and allows of developing legislation to deal with compensation at less than full market value tenure in communal areas dragged on for (Lahiff & Rugege 2002). years with little progress until the Commu- The 1997 White Paper on South African nal Land Rights Bill was gazetted in Land Policy sets out a wide range of August 2002 (Government Gazette no. objectives ranging from dealing with the 23740) and later re-gazetted in October injustices of racially-based land dispos- 2003 (Government Gazette no. 25562). session, to promoting economic growth The Bill came in for heavy criticism from and providing ‘secure tenure for all’ (DLA land activists and academics, but never- 1997:7). The White Paper also states that theless it was passed by Parliament in the vision is ‘of a land policy and land February. The Communal Land Rights Act reform programme that contributes to (Act 11 of 2004) was signed into law by reconciliation, stability, growth and deve- the President on 14 July 2004. It will come lopment in an equitable and sustainable into effect on a date still to be decided way’ (DLA 1997:7). The programme (Claassens 2003; Cousins & Claassens elaborated in the White Paper comprises 2003; Sparks 2004). redistribution, tenure reform and restitution programmes, as required by sub-sections Post-1994 redistribution 25(5), 25(6) and 25(7) of the Constitution The RDP saw land reform as ‘the central respectively. and driving force of a programme of rural Restitution sets up a legal and ad- development’ and set a specific target of ministrative process, governed by the redistributing 30% of agricultural land Restitution of Land Rights Act (Act 22 of within five years (ANC 1994:21–3). This 1994), to restore rights in land to people target was first proposed in the 1993 World who can prove that they were dispossessed Bank document Options for land reform of such rights after 19 June 1913 due to and rural restructuring in South Africa racist laws or policies of former govern- (Williams 1996:139–40). The RDP ments. The restitution process does not aim suggested a range of measures for to meet any target for redistribution of redistributing land, including a land tax to land, and successful land claims can be free up land, ‘substantial funding’, settled with the return of land, alternative expropriation of land, and provision of land, payment of cash or another form of support services to ensure effective land compensation (DLA 1997:52–7). Land use (ANC 1994:21). The RDP also claims settled so far have not contributed suggested other measures that fell outside significantly to unravelling apartheid the main thrust of market-based land spatial planning – the majority of claims reform policies, but it did not map out a have been settled through financial path for economic restructuring that would compensation, not the return of land (Hall have been supportive of radical land 2003:26, 35). reform. Statements in the RDP that clearly Tenure reform has two distinct aspects fell outside a neo-liberal economic to it, one dealing with improving the approach, such as ‘increasing the public security of tenure for those living on other sector in strategic areas through, for people’s land, primarily farm dwellers on example, nationalisation’, (ANC 1994:80) commercial farms, and the other aimed at quickly disappeared from subsequent providing legally secure tenure for people policies. living on communal land, primarily in the The White Paper on South African Land former bantustans. A number of new laws Policy sets out a clearly market-based have sought to give at least procedural approach to land redistribution: it is to be rights to black farm dwellers, but have demand-led, with a limited role for the state:

10 Chapter 2: International land reform debates

Redistributive land reform will be and officially launched in August 2001 largely based on willing-buyer willing- with the handover of title deeds at seller arrangements. Government will Nkomazi in Mpumalanga (DLA 2002: assist in the purchase of land but will 55–9). in general not be the buyer or owner. LRAD is a more explicitly market- Rather it will make land acquisition friendly approach, closer in design to the grants available (DLA 1997:38). suggestions of the World Bank (which was The White Paper suggests co-operation closely involved in its drafting) and other with the private sector and NGOs, inter- proponents of market-based land reforms departmental co-ordination, capacity than the SLAG programme had been building at community level, and regular (Lahiff 2001:5). This follows a broader monitoring and evaluation (DLA 1997:95) shift in the post-liberation government’s The first redistribution programme was economic policies that took on a more structured around the Settlement/Land market- and investor-friendly direction Acquisition Grant provided by the govern- with the adoption of Gear, the Growth ment to assist families with an income of Employment and Redistribution macro- less than R1 5008 per month with land economic policy, in 1996. purchases. The poor were clearly the target The LRAD programme has replaced an group and poverty alleviation was a main income ceiling under SLAG with an entry objective. Further innovations allowed for floor, requiring all beneficiaries to make communal or group ownership and muni- their own contribution to projects (see cipal commonage under the ownership and Chapter 5 for details). It also puts more control of local government (DLA 1997). emphasis on ensuring an economic benefit A review of the SLAG policy conducted from land redistribution and the promotion by DLA from 1998 to 1999 identified a of a black commercial farming sector range of weaknesses in implementation (Lahiff 2001:4–5). At the same time and with the quality of the group projects LRAD, like SLAG, has stated objectives of created. A new Minister for Agriculture improving the nutrition status and incomes and Land Affairs was appointed in June of the poor and addressing the legacy of 1999 and she immediately called for inequitable landholding in South Africa changes to the redistribution policies and (DLA 2001). placed a moratorium on new SLAG Alongside the land reform programme projects (Lahiff 2001:4). In February 2000 there has been a dramatic liberalisation of the Minister released a policy statement the agricultural sector more broadly. This confirming weaknesses of the SLAG has been in line with market-based approach including the failure to realise prescriptions of smaller state involvement, land reform objectives, the reliance on less regulation, the encouragement of ‘free market forces for redistribution failing to trade’, and the removal of the ‘distortions’ produce the desired results, and the SLAG that had been a central part of the South grants being unsuitable for the creation of African agricultural economy for decades a group of black commercial farmers (Binswanger & Deininger 1996:92–3; (DLA 2000b:2). The policy statement Williams 1996:148; World Bank 2003: outlined the new approach to redistribution 151). During the 1980s the govern-ment and was followed shortly thereafter with provided more than R4 billion in direct the release of the first draft9 of the Land financial assistance and subsidies to about Redistribution for Agricultural Develop- 27 000 white farmers (Kirsten & Van Zyl ment programme, which was to become the 1996:231). Government subsidies of wheat primary mechanism for land redistribution. and maize alone amounted to over R500 DLA immediately started dealing with million in 1988. In addition to direct redistribution in terms of LRAD, although financial subsidisation, the government the policy was only finalised in April 2001 maintained a high level of tariff protection

11 A critical appraisal of South Africa’s market-based land reform policy for agriculture in South Africa. By the end has raised new concerns. Primary amongst of the 1990s all direct financial assistance, these is the criticism that it will only be: subsidies, and other protections had been those who are already in positions of removed, leaving the South African agri- power in communities who will be cultural sector as one of the least protected heard and who will have the in the world (Tilley 2002:4). wherewithal to exercise their rights, Critics argue that, far from creating a while those who are currently level playing field, the liberalisation of the voiceless and marginalized will be agricultural sector will enhance the domi- shunted further to the peripheries of nance of those already holding economic access and development (Tilley power and further alienate potential new 2002:41). entrants into the sector. Increasingly the Other specific concerns raised about producers’ share of food prices, profits, LRAD are the lack of any mechanism to and control is dropping as the large com- ensure that women benefit, the willing- panies which control the off-farm activities seller approach that will allow current land have more and more power in the sector. owners to continue dictating the availa- The ‘(p)romotion of competition requires a bility of land, the lack of any specific role restructuring of the dominant firms in the for local government, and the failure to processing, wholesaling and retailing of make clear links with other legs of the land food, tobacco and alcohol’ (Williams 1996: reform programme and rural development 135). Without such restructuring there will more broadly (Lahiff 2001). be a renewed ‘regulation’, imposed by the Despite the sometimes heated debates dominant firms, which will further disad- on the merits of LRAD, there has been vantage small black farmers (Williams almost no empirical research to assess the 1996:154). With no tariff protection and actual impact of the programme. Hopefully competition from subsidised agriculture in this report will contribute to filling that Europe and North America, it is hard for gap. many large established farms with accu- mulated equity to survive. For new farmers Endnotes with little equity it will be even more 1. The most commonly referred-to success stories for difficult to compete. redistributive land reform in the 20th century are Land activists and some academics Japan, Taiwan, South Korea and China (Griffin et al. have questioned whether a market-based 2002:302–10; Binswanger & Deininger 1996:74; Prosterman & Riedinger 1987; Wilson & Ramphele land reform programme, in particular the 1989:315; World Bank 2003:xxxix, 144). reliance on the willing-seller model, can 2. What is referred to here as ‘market-based land bring about the fundamental shift in pro- reform’ includes what is also referred to as ‘market- perty rights required, given the history and led agrarian reform’ (Borras 2003), ‘market-assisted the extreme inequality in landholding that agrarian reform’ (Tilley 2002), or ‘market-friendly prevails in South Africa. Some have land reform’ (Bernstein 2002; Griffin et al. 2002). argued for a more interventionist and 3. The production value of the land is equivalent to the loan that any person using the land effectively could robust approach from the state to ensure a afford to repay from production on the land. This is fundamental transformation of landholding sometimes referred to as the ‘capitalised value of (NLC 2003; Lahiff 2003; Greenberg agricultural profits’. The reasons given to explain the 2003). The lack of delivery was confirmed difference between the market and the capitalised by implementation statistics which showed value of the land are factors such as the collateral that less than 1% of agricultural land had value of land for securing access to credit, subsidies been redistributed between 1994 and for large farmers, income tax exemptions, and the use of land for speculation (Binswanger & Deininger 2000. The government response, which 1996:70). has been to move away from a pro-poor 4. The critiques by Borras and the World Bank of the focus to a more clearly commercial farmer- South African land redistribution experience are oriented programme in the form of LRAD, based on the Settlement/Land Acquisition Grant

12 Chapter 2: International land reform debates

process that was replaced in 2001 by the LRAD 7. According to section 25(3) of the Constitution there programme. are five factors to be considered when calculating 5. The Strategic Plan for South African Agriculture was compensation that is just and equitable, namely the drawn up primarily by two farmers’ unions, Agri-SA current use of the property; the history of the and the National African Farmers’ Union (NAFU), in acquisition and use of the property; the market value response to a request from President Thabo Mbeki. of the property; the extent of direct state investment Professor Kirsten produced the drafts and the United and subsidy in the acquisition and beneficial capital States Agency for International Development improvement of the property; and the purpose of the (USAID) funded the process (NDA 2002:3). expropriation. 6. LAPC was set up in 1993 to assist in policy 8. At the time – 1996 – this was worth approximately development, on the initiative of the Land Desk US$250. within the ANC that was headed by Derek Hanekom 9. The first draft of the policy was titled the Integrated who became the first Minister of Land Affairs in the Programme for Land Redistribution and Agricultural first ANC government in 1994. The LAPC carried Development in South Africa. out a range of studies including a 1994–95 national study of demand for land that culminated in the book Down to earth (Marcus et al. 1996).

13 A critical appraisal of South Africa’s market-based land reform policy Chapter 3: Methodology

This study is a critical examination of the implementation of LRAD in Limpopo up to 2003. The key questions addressed by the study are:

! What kinds of projects are being created by LRAD?

! Who is benefiting from LRAD?

! Is LRAD achieving its own objectives?

! To what extent is LRAD achieving what is expected of market- based land reform?

! Can LRAD and market-based approaches to land reform achieve the objectives of land reform in South Africa?

he data was gathered as a research Key informants, primarily in DLA, but project implemented by the Nkuzi also from the Limpopo Department of TDevelopment Association under the Agriculture (DoA), the Land Bank and the management of the author.1 The author Human Sciences Research Council, were was assisted in the data-gathering phase by interviewed using structured interviews a team of three other Nkuzi staff.2 The core with open-ended questions. Additional of the study involved the administration of data such as reports and lists of projects questionnaires that were complemented by were provided by some of the key field notes. informants. The scope of the study covered all 20 Fourteen beneficiaries were interviewed LRAD projects approved by DLA in using two questionnaires, one that obtain- Limpopo up to the end of March 2003. ed mostly biographical information and the Information was obtained on all of these other which focused on agricultural pro- projects, and direct interviews were carried duction. Some points of interest that went out with beneficiaries from 14 of them. beyond the structure of the questionnaire Information was also gathered from the were explored further and noted. This Land Bank on the LRAD projects that it information was complemented by site had approved in the province. However visits and supplementary interviews. difficulties in accessing information and limited time and resources made a full Endnotes investigation of the Land Bank projects 1. Nkuzi Development Association is a non-profit impractical. organisation working on land and agrarian reform in Most of the information was gathered the Limpopo and Gauteng provinces of South Africa. from November 2002 to April 2003. Some The author of this study was the Director of Nkuzi at the time the research was carried out. follow up interviews were done with key 2. Mike Nefale, Ndiaphi Kwinda and Kgalema informants later in 2003 and early in 2004 Kalauba. to fill information gaps or clarify areas of uncertainty that emerged during the analysis of the data.

14 Chapter 4: Background to Limpopo

This chapter provides basic information on Limpopo province in order to illustrate the context within which the LRAD programme is being assessed.

impopo is 123 600km2 in size and approximately 5.3 million people at the is bordered by Zimbabwe to the time of the 2001 census. Around 2.4 mil- Lnorth, Mozambique to the east, lion of the population are male, and 2.9 Botswana to the west and the South million female. More than 97% are black African provinces of Gauteng, Mpuma- African, 0.2% coloured, 0.2% Indian or langa and North West in the south. It is the Asian, and 2.4% white (Stats SA 2003). fifth largest of South Africa’s nine provin- Over two thirds of the land in Limpopo, ces and has the fourth largest population – approximately 87 000km2, was allocated

Figure 2: Map of Limpopo

15 A critical appraisal of South Africa’s market-based land reform policy for white ownership and use in the past, Limpopo had three ‘homeland’ govern- primarily commercial agriculture with ments during the apartheid era: Lebowa, some forestry and conservation. Farming Gazankulu and Venda. African people on this land was carried out on about were forced to live in these areas on the 7 200 commercial farming units (Stats SA basis of their ethnic origin. Forced 1996). Meanwhile the former homelands removals, for the purpose of consolidating occupied 36 000km2, just under one third these homelands, are the basis of many of the land area, and accommodated ap- restitution claims. Overcrowding in these proximately 299 000 small farmers as well areas resulted in soil erosion and the as the majority of the 5.1 million African development of rural slums, whose resi- population (see Figure 1 on page 2). dents have little opportunity to enter paid Limpopo is arguably the poorest pro- employment. This situation is compounded vince in South Africa and faces enormous by the large-scale exodus of men to the development challenges. It is the most industrialised centres such as Gauteng in rural of any province in the country with search of work (Wilson & Ramphele approximately 89% of the population 1989:42). As a result, over 55% of the living in non-urban areas. Less than 10% province’s population is female. Children of the households have piped water in their and youth make up the largest proportion dwellings, 38% rely on public taps for their of the population with 52.6% of the water supply and 10.5% rely on dams, population under the age of 20 (Stats SA rivers or springs. A total of 59.5% of 2003). households use wood for cooking and Limpopo has varied geography, rainfall heating. Limpopo has an unemployment and soil fertility. In the fertile areas rate of 48.8%, according to Statistics South agriculture is an important source of Africa figures, which count those actively income. Here maize is the main crop, with seeking work who could not find work at fruit, vegetables, tea and cereals grown the time of the survey. A closer analysis where possible. Cattle farming is practised shows that only 22.7% of the population in the western and northern parts where the between the ages of 15 and 65 actually rainfall is generally too low for cultivation have work (Stats SA 2003). (Kirsten 1996:306–9). The agricultural sector is the largest The rural communities of Limpopo are employer outside the public sector characterised by a low degree of self- employing 118 261 people. Only the organisation, with weak and limited Western Cape has a larger number of farm relations between the traditional authorities workers (Stats SA 2000). Many of these and the new local government structures people and their families live on the farms. that were set up in 1995 and restructured Others live on the farms, but no longer in 1999. Neither the traditional structures work there. It is common in Limpopo for nor the newly-established democratic local families to have lived for generations on government structures have engaged one farm. In some cases people can trace actively with the land reform programme, their occupation of the same land to times with one or two exceptions. These struc- before the first white settlers arrived. tures have not been effective in providing Conditions on farms are typical of those communities with information on deve- across the country with farm residents and lopment programmes and reforms, with the workers receiving extremely low wages result that communities often do not know and suffering under notoriously poor how to access the (limited) support working conditions. A national study available from the state (Nkuzi 2001). carried out for the Department of Labour Land reform in Limpopo has suffered (2001) found that ‘(c)hildren living on many of the same shortcomings as the commercial farms are more likely to be rest of South Africa. It was very slow to stunted and underweight than any other get started and the projects that were children’.1 implemented under SLAG in the period

16 Chapter 4: Background to Limpopo

1995–99 were often of very poor quality improvements be made to make the state a with questionable viability. A study of land more effective agent for purchasing land reform in the then Northern Province at the on the open market, or a policy shift be end of 1998 identified serious problems undertaken away from the willing seller- with the nature of project identification, willing buyer approach (Lahiff 1998). The ineffective land acquisition, and inap- project planning was found to be largely propriate project planning (Lahiff 1998).2 inappropriate, involving little consultation By mid-1998, four years into the with beneficiaries and no consideration of democratic dispensation, only three land the current skills and experience of bene- redistribution projects had been imple- ficiaries. There was also a strong emphasis mented in the province, a number which on commercial farming, regardless of the rose to seven by the end of 1998 (Lahiff interests and abilities of the beneficiaries, 1998). These redistribution projects were and no programme for building capacity all on private land and appeared to be amongst beneficiaries and their structures largely initiated by the landowners. This (Lahiff 1998). contributed to inappropriate project design By the time the LRAD policy had and poor group dynamics as groups of been completed in 2001 there had been a people were put together to ‘fit’ the land considerable increase in SLAG delivery in rather than land being found to fit the terms of the numbers of hectares trans- needs of an existing group. The tailoring ferred and beneficiaries. At the beginning of groups to the land was done in order to of this study early in 2003, DLA reported combine the grants of R15 000 (later that 77 SLAG projects had been implemen- increased to R16 000) per family into a ted for 6 753 households which gained total grant amount sufficient for the pur- access to a total land area of 45 110ha. chase of the land. Unfortunately this However according to DLA officials, the process of combining grants was done organisational and production problems with little consideration of other inves- with the projects created remained as tments required for the farms to become severe as before (interview 3). productive. The state proved to be a very poor Endnotes buyer of land with the long delays and 1. For more details refer to page 25 of Part 1, uncertainties leading current owners who Livelihoods of farm workers in South African had been willing to sell to withdraw from agriculture (Department of Labour 2001). deals. Lahiff recommended that either 2. The name of the province changed in 2002.

17 A critical appraisal of South Africa’s market-based land reform policy Chapter 5: The LRAD programme

This chapter provides an overview of the LRAD policy and its implementation in Limpopo, based on official policy documents and reports and elaborated by implementation officials. It explains the aims and objectives of the programme, the services provided to beneficiaries through LRAD and the implementation structures and procedures in Limpopo. It also analyses some of the data available on progress to date, and outlines perceptions of progress and challenge held by the government officials responsible for LRAD implementation.

Aims and objectives in rural areas ccording to DLA policy ! empower beneficiaries to improve documents the objectives of their economic and social well- ALRAD, which are to be achieved being in the 15 years from 2000, are to: ! enable those presently accessing ! increase access to agricultural agricultural land in communal land by black people (Africans, areas to make better productive Coloureds and Indians) and to use of their land contribute to the redistribution of ! promote environmental approximately 30% of the sustainability of land and other country’s commercial agricultural natural resources land (i.e. formerly ‘white (DLA 2001:6). commercial farmland’) over the Most of these objectives are vague and duration of the programme have no quantitative or qualitative ! contribute to relieving the component that could be effectively congestion in over-crowded monitored. The target of redistributing former homeland areas ‘approximately 30%’ of commercial ! improve nutrition and incomes of agricultural land may sound reasonably the rural poor who want to farm clear on first reading, but it is not ex- on any scale plained anywhere how much of this 30% ! overcome the legacy of past LRAD is expected to ‘contribute’. In racial and gender discrimination addition, exactly which land is not clear as in ownership of farmland the previous section of the LRAD policy ! facilitate structural change over document refers to 30% of ‘all agricultural the long term by assisting black land’ while the objectives section refers to people who want to establish 30% of formerly ‘white commercial small and medium-sized farms farmland’. There is a distinct difference ! stimulate growth from agriculture between these two types of land. This lack ! create stronger linkages between of clarity on the targeted amount of land farm and off-farm income combined with the long list of various generating activities types of objectives does not help give a ! expand opportunities for clear focus and purpose to the programme. promising young people who stay The nature of the objectives also makes it

18 Chapter 5: The LRAD programme

difficult to hold government accountable contribute to the overall objectives for delivery. contained in the White Paper: The uncertainty about the target for to address the injustices of land redistribution is shared by Limpopo apartheid; to foster national implementation officials. The provincial reconciliation and stability; to DLA officials we interviewed believed the underpin economic growth; and to target for LRAD is to redistribute 30% of improve household welfare and land in 15 years to ‘black, Indian and alleviate poverty (DLA 1997:v). coloured’ citizens who are at least 18 years When assessing the LRAD programme, its of age. However they were not clear about contribution to the achievement of these whether the 30% refers to all land, or only broader objectives should also be agricultural land (interviews 1, 2 and 3). considered. The provincial DoA official interviewed noted that LRAD is not the only land LRAD services and support reform programme; implying that 30% is The primary mechanism of LRAD is a target for all forms of land reform, in- grants to beneficiaries. The size of a cluding restitution (interview 4). DLA staff grant depends on the applicant’s own have not done any calculation to establish contribution, skills and management what the 30% target would mean in terms ability, although in practice there is no of hectares of land to be delivered in systematic assessment of management Limpopo, or any estimate of how much ability (DLA 2001:7; NDA 2001:5). To land they would need to deliver every year receive a R20 000 grant a person must to reach the target, or what any of this contribute R5 000. The more a potential would cost. beneficiary can contribute, the larger the According to the LRAD policy docu- grant he or she qualifies for, up to a ment (DLA 2001:10) the programme is maximum of R100 000, for which an own intended to assist people to acquire or contribution of R400 000 would have be lease land for agricultural purposes ran- made (DLA 2001:8–9). The own con- ging ‘from subsistence to medium-scale tribution may be in the form of the bene- commercial’ operations. However the ficiary’s own labour up to a maximum officials we interviewed felt that land value of R5 000. Contributions may also acquired through LRAD is not for sub- be made in the form of cash, assets or sistence, it is strictly for commercial loans. All of these may be combined to agricultural purposes. make up the full value of the contribution LRAD beneficiaries must be adults who (DLA 2001; NDA 2001). Those applying were previously disadvantaged in terms of as a group have to register a legal entity to race and who want to use the land for own the land and may combine their agricultural production regardless of grants in order to muster sufficient finance whether they are rich or poor, although for the purchase of the targeted land (NDA civil servants are excluded. The LRAD 2001:3). DLA also assists beneficiaries to policy document also gives particular access loans from the state-owned Land attention to addressing gender imbalances Bank in order to make up any shortfall for in access to land. In this area LRAD sets a land purchase. very clear target: ‘not less than one third of The LRAD policy makes provision for the transferred land resources must accrue beneficiaries to ‘graduate from smaller to to women’ (DLA 2001:7). The officials larger farms’ through receiving further interviewed also emphasised that the grants, as long as the total amount of policy requires the targeting of women and grants received by one person never youth (DLA 2001:6–7). exceeds the R100 000 maximum. This LRAD, as the primary means of facility is intended to enable farmers, who redistributing land, is also expected to initially do not have the skills and

19 A critical appraisal of South Africa’s market-based land reform policy experience for larger projects, to expand ted to provide training, agricultural support their operations once they have established services and technical opinions on the themselves (DLA 2001:10; NDA 2001:6). proposed farm plans (DLA 2001). The This opportunity for ‘graduation’ has not DoA provides assistance with business yet been implemented in any case in planning, development and aftercare sup- Limpopo. port, implementation, and provisions of LRAD grant money is never given technical assistance. It emerged from the to the beneficiary, it is paid directly to the beneficiary interviews, and this was seller of the land or other assets being confirmed by some of the officials, that purchased. While there should be consul- most LRAD projects are not yet receiving tation with the beneficiary, the final de- support and the DLA ‘is still arranging to cision on the release of the grant money service them’ (interview 1). and the payment is made by DLA. Land targeted for redistribution through LRAD structures and LRAD is to be purchased from willing procedures sellers. Officials from the various depart- The national departments of Agriculture ments of agriculture and DLA ‘as well as and Land Affairs are responsible for potentially officials from other government overall design and monitoring of LRAD departments’ are expected to play a facili- implementation. The national DLA tative role in making applicants aware of budgets for the provision of LRAD grants, land that is available on the market (DLA while the provincial DoA is expected to 2001:7). DLA organises the valuation of the budget for the post-settlement support land and normally pays the seller a market- work. The DLA Provincial Director is the related price as determined by a valuer. responsible accounting officer for pur- A ‘planning grant’ is available in poses of authorising the release of grants, addition to the main LRAD grant to pay but he or she is expected to work with the for ‘design agents’ to work on the project Provincial Grant Committee (PGC) that design, business plans and proposals. The must first approve all projects (DLA 2001). planning grant is also used to pay for The PGC is made up of officials from the services such as land valuations and land departments of Agriculture, Land Affairs, sub-division. The planning grant should Public Works, and Local Government and not exceed 15% of the projected total Housing (interview 1).1 The PGC in capital costs of the project (DLA 2001:10). Limpopo is chaired by the Director for The DLA team working on LRAD Farmer Settlement in the provincial DoA implementation in Limpopo in the first (interview 32). quarter of 2003 comprised approximately DLA allocated an amount of LRAD 23 staff: 18–19 planners, plus deputy money to the Land Bank for it to directors, and the Director. The provincial implement LRAD projects nationally. DoA claims it can draw on almost all its In the projects it implemented, the bank staff to assist with LRAD, including crop arranged the loan component, the LRAD scientists, horticulturalists, animal scien- grant, and the appointment of design tists, and people with expertise in business agents or other required service providers. planning (interview 4). The Land Bank substantially overspent its According to officials, additional LRAD budget so from the end of the support offered by DLA in Limpopo 2002–03 financial year, DLA withdrew includes the drafting of business plans, this mandate (interview 34). However arranging training, making contributions there is still a role for the Land Bank as it towards the cost of training, assistance in provides loans for beneficiaries of DLA- marketing of produce, and arranging other implemented LRAD projects and can assist support from the DoA (interviews 1, 2 and its clients to make applications for LRAD 3). The relevant provincial DoA is expec- grants through the normal procedures.

20 Chapter 5: The LRAD programme

According to the policy (DLA 2001; NDA were that the land is not suitable or of 2001) the process of accessing LRAD sufficient size for the intended use, the grants starts with beneficiaries who may land is overpriced, or the applicant has apply as individuals or as a group. Bene- already received other land-related grants ficiaries are expected to decide on the size (interviews 1, 2 and 3). Alternatives for of grant they would like, identify land, those whose applications have been develop a business plan, show proof of rejected include applying for access to their own investment in the project, and municipal commonage or the lease of a submit all of this to the PGC. A project also government farm. At the time of writing, has to have the endorsement of the local no municipal commonage projects had DoA office regarding the feasibility of the been implemented in Limpopo (interviews plan and a confirmation from a profession- 1 and 3). Another approach is for the DLA al valuer that the land price is reasonable. project officer to adjust the proposal to try The beneficiaries may choose to ask a and make the project more viable. One design agent to assist them in any of the option is to arrange a Land Bank loan to tasks or they may prepare the proposal ensure sufficient investment for the project themselves. On seeing that an applicant to succeed. However there was concern needs assistance, DLA may also appoint that this could lead to the Land Bank design agents and valuers to assist, and repossessing land if beneficiaries failed to such costs may be paid from the planning repay their loans (interview 2). grant. Once approved, DLA appoints a While there is a clear target for the conveyancer, organises any subdivision of extent to which women should access land that may be required, and releases the land, there is little indication in the policy money. The relevant DoA should then documents as to the measures that should appoint a ‘mentor/extension officer’ to be used to ensure this takes place. The provide support and organise training for policy document, apart from recommen- the project (NDA 2001:4). ding the encouragement of women-only According to the officials we projects, simply highlights basic principles interviewed, projects are allocated to a such as pointing out that ‘women can specific district project officer who refers apply for grants to acquire land indivi- the application to the PGC when it is ready. dually’ and officials ‘must ensure that Applicants are assisted to check that the women are able to participate on an equal application forms are complete. If appli- footing with men’ in the implementation of cants have not identified a particular farm LRAD (DLA 2001:6–7). According to the for the project, they are assisted to do so. officials we interviewed, women who do DLA checks with the Regional Land Claims participate are treated the same as men and Commission (RLCC) to ensure the targeted become landowners in their own names, as land is not subject to a land claim. Appli- opposed to the situation in communal cants are interviewed to make sure they areas and in some of the earlier SLAG know what they are embarking on and to projects where land is often registered in inform them about how LRAD and the the name of a male household head. It was application process works. Project officers acknowledged that the DoA does not have continue interacting with applicants until any specific programme to involve women they have all the information needed to (interview 4). DLA officials try to promote process the application. women’s participation through specifically When reviewing a project application encouraging them to apply, explaining that the PGC may approve the application, women are meant to benefit from the reject the application, or return it to the programme, and dividing men from applicant for further information (DLA women in meetings to give women an 2001:11). Some potential reasons that opportunity to talk without men being officials gave for rejecting applications present (interviews 1, 2 and 3).

21 A critical appraisal of South Africa’s market-based land reform policy

Achievements of LRAD R20 000 to R821 236, with an average From LRAD’s inception in 2000 until the asset value of R173 158 per person. The end of December 2002, 504 projects had own contribution from the group projects been implemented, redistributing 267 680ha was only in the form of labour and was of land. Of this total, 415 were implemen- valued at the amount of R5 000 per person ted by DLA, involving the redistribution of (Makharamedzha 2002). There is no 208 564ha of land (Jacobs et al. 2003). By specific information available on the March 2003 the Limpopo PGC had appro- income of the beneficiaries nor does DLA ved a total of 49 LRAD projects affecting appear to have any mechanism in place to 22 291.81ha of land for 326 beneficiaries. gather such information, but the assets put Of these 20 were implemented by DLA into the projects by the 18 individual and the remainder by the Land Bank. The beneficiaries indicate that they are fairly 20 DLA-implemented projects involved wealthy. the transfer of 14 147ha to 251 people. Only eight of the 251 beneficiaries are The total grant money approved for these youths (under 35 years old) and they all 20 projects was R5 977 307. belong to one of the group projects. The Of the 20 DLA projects 18 are for fact that almost all the women belong to individual beneficiaries and two are group groups indicates the important role that projects, one with 203 and the other with group projects will play in benefiting 30 beneficiaries. Of the 18 individual marginalised sectors of the society. beneficiaries only one was a woman. The The average figures calculated from this average grant amount received by men information give a misleading impression was just over 25% higher than that of the projects (Table 1). When looking received by women and the average loan more closely at the figures one sees that amount received by men was more than 12 there are really two distinctly different times higher than that received by women. types of projects being implemented, one Overall women will access only 17.9% of for relatively wealthy individuals, and the the land, just over half the targeted one- other for poorer groups (Table 2). third (33.3%). Only 11 of the individual While the vast majority of the benefi- beneficiaries received loans. These 11 ciaries (92.8%) are part of groups, the bulk beneficiaries also had higher amounts of of the land acquired (86.4%) has gone to their own assets invested in the projects only 18 individuals. Averaging the figures than any of the others. The loans referred as is done in Table 1 above creates a to were obtained from the Land Bank. picture of a well-balanced programme, DLA has no information available on any with roughly half of all beneficiaries being loans that beneficiaries may have obtained women, and beneficiaries acquiring 50 to from private sector sources. 60 hectares of land each. The reality, as According to figures provided by DLA, revealed in Table 2, is of a two-tier the individual beneficiaries invested assets programme where the group beneficiaries of their own ranging in value from get around 8ha of land each, while a small

Table 1: Summary of LRAD projects implemented in Limpopo Number of Hectares Average Grants Average Land Bank Average beneficiaries hectares per (R) grant per loans (R) loan per person person (R) person (R) Total 251 14 147 56.4 5 977 307 23 814 4 623 251 18 419 Men 127 11 617 91.4 3 417 307 26 908 4 268 251 33 608 Women 124 2 530 20.4 2 560 000 20 645 355 000 2 863 Source: DLA Provincial Office (Makharamedzha 2002).

22 Chapter 5: The LRAD programme

Table 2: Comparison of group and individual LRAD projects Number of Hectares Average Grants Average Average of Average beneficiaries hectares per (R) grant per own assets loan per person person (R) put in per person (R) person (R) Total 18 12 226 679.22 1 317 307 73 184 163 538 256 847 individual Total 233 1 921 8.24 4 660 000 20 000 0 0 group Individual 17 10 598 623.41 1 217 307 71 606 169 040 252 250 men Men in 110 1 019 9.26 2 200 000 20 000 0 0 group Individual 1 1 628 1 628.00 100 000 100 000 70 000 335 000 women Women 123 902 7.33 2 460 000 20 000 0 0 in group Source: Makharamedzha 2002. number of individuals are assisted to that the individual beneficiaries are getting acquire portions of land averaging close far more land for their money (see Table 3) to 700ha per person. The smallest portion than the beneficiaries in the group projects. obtained by one of the individual benefi- Not only did the small group of individual ciaries was 159ha and the largest 1 710ha. beneficiaries start with access to conside- Thus even the smallest portion obtained by rable assets and finance, but the LRAD an individual is almost 20 times the size of programme gave them grants that were on the average obtained by the group mem- average nearly four times as large as those bers. It is quite clear that one reason for received by poorer group members. Indivi- this dramatic difference is the sizeable dual beneficiaries are further favoured assets of the individual beneficiaries that over beneficiaries in groups through being enable them to access larger LRAD grants, assisted to acquire more than four times as combined with their ability to access loan much land per rand of project costs. finance. There is no information available on the Analysing the total projects costs and land cost in the largest group project as the the hectares of land obtained makes it clear land was donated (see information on the

Table 3: Comparison of average cost per hectare of land for individual and group beneficiaries Total hectares Total own contribution* Average per hectare plus grant project cost Total 14 147 14 834 244 1 048.58 Individuals 12 226 9 009 244 736.89 Groups 1 921 5 825 000 3 032.27 * Own contribution includes cash, loan component, assets in the project and labour (normally calculated at R5 000 per person to enable people without other assets to access the minimum grant). Source: Makharamedzha 2002.

23 A critical appraisal of South Africa’s market-based land reform policy

Vaalkop project in Chapter 6). Land prices valued at market rates. DLA information for the rest of the projects reveal that in the on projects approved identifies four other group project, Mankweng Integrated categories of planning grant expenses: (see Chapter 6), the land price was business planning, valuation, legal entity, R11 666 per hectare while the individual and other (Table 4). The largest amount of beneficiaries got their land at an average planning grant money reported as spent is price of just R269 per hectare. Differences allocated to ‘other’, giving little idea what in land prices could be explained by it was actually used for (Makharamedzha objective factors such as the difference in 2002). According to one DLA official, the land quality and assets on the land, but planning grant money listed under ‘other’ administrative practices also appear to may be a provision and not money have been a factor. actually spent, as he did not know what it Making direct contact with the had been spent on (interview 33). The beneficiaries quickly revealed at least part Agricultural Research Council (ARC) of the reason for some of the differences in carried out the business planning for most land prices noted above. Seventeen of the of the projects free of charge; other 18 individual projects approved are on two planning required was done by DLA blocks of state owned land, at Steilloop, officials, so there was little expenditure on where there are five beneficiaries, and at business plans. The Land Bank was paid to Manamead, where there are 12. It emerged do the land valuations on all the state land. that in both of these areas the beneficiaries In addition to the DLA projects, 29 had already been leasing the land in projects implemented by the Land Bank in question before the initiation of the LRAD Limpopo involved the transfer of 8 144.81 project. The state land they were on was hectares to 125 beneficiaries (Table 5). priced at production value rather than at A comparison with DLA-implemented market value, yielding substantially lower LRAD projects shows that the DLA prices per hectare than could have been reached twice as many beneficiaries with obtained for land on the open market. The less than two thirds of the grant money. private land to be acquired for the Not surprisingly the loan component of the Mankweng Integrated group project was DLA-implemented projects is far smaller

Table 4: Expenditure of planning grants on LRAD projects (R) Business plans Valuations Legal entity Other Total 28 000 62 323 16 850 448 759 555 932 Source: Makharamedzha 2002.

Table 5: Land Bank-implemented LRAD projects Number of Hectares Average Grants Average Loans (R) Average beneficiaries hectares per (R) grant per loan per person person (R) person (R) Total 125 8 144.81 65.16 9 225 264 73 802 27 455 807 219 646 Men 92 6 960.92 75.66 6 373 293 69 275 16 581 692 180 236 Women 33 1 183.89 35.88 2 851 971 86 423 10 874 115 329 519 DLA-implemented LRAD projects (for comparison) Total 251 14 147 56.4 5 977 307 23 814 4 623 251 18 419 Source: Land Bank, Polokwane Branch (Land Bank 2003).

24 Chapter 5: The LRAD programme

than that of the Land Bank-implemented of the project has given it a large influence projects with the average beneficiary of over the total and average figures for the Land Bank projects acquiring almost 12 Land Bank implementation of LRAD in times the amount of debt. While spending Limpopo. more money, the Land Bank has assisted The Land Bank spent considerably with the acquisition of a far smaller more than the DLA on planning grants, amount of land than the DLA. This is especially for business planning. It spent undoubtedly due to the type of projects nothing on land valuations and little on supported and the payment of market ‘other’. It should be noted that consi- value for land acquired by the Land Bank derably more than half of all the planning compared to the low cost of the state land grant money (R650 000) spent by the that DLA acquired for some beneficiaries Land Bank went on the Development at less than market rates. Focus project (Land Bank 2003). At the It is interesting to note that in 8 out of same time a number of projects had no 14 projects involving women the women planning grant money spent on them at all. have the same surname as another male The nature of the planning grant ex- project member, indicating that they may penditure raises questions about how and be applying as part of a family (Land Bank when the Land Bank decided to spend 2003). While women end up with a far planning grant money. Land Bank officials lower average amount of hectares than explained that some applicants came with men, they get a higher average loan and business plans already prepared so there grant amount. This is due to the concen- was no need to spend money on further tration of women in a few high cost, low planning. Even if people were assisted in hectare, projects; primarily one R24.2 drawing up the business plans the Land million project discussed below. In total Bank felt they could not pay retrospe- women obtained only 14.5% of the total ctively for a service provider who was land transferred. This is less than half the not appointed by the bank. If people have 33.3% promised in the LRAD policy no business plan the Land Bank goes document. through a tender process to identify and The Development Focus poultry project contract a service provider who it will pay alone used R20 million of loans (almost (interview 34). 75% of all the loans issued by the Land Bank), and R4.2 million of LRAD grant State land money. It has 42 beneficiaries (18 women According to the Chairperson of the PGC, and 24 men) who each received a loan of a decision was taken by DLA and DoA to over R470 000, on top of the maximum dispose of state land through the LRAD grant of R100 000, to purchase less than process. Current lessees would be given 15 hectares of land per person (Land Bank the first option to purchase, at the pro- 2003). The project involved the purchase ductive rather than market value of the of a chicken farm that had been known as land, provided they qualified to be LRAD Mike’s Chickens, about 20km north west beneficiaries (interview 32). There was no of Polokwane (interview 34). The details advertising of the opportunity to acquire have been provided here because the scale the state land. The DoA identified the land

Table 6: Expenditure of planning grants on Land Bank-organised LRAD projects Business plans Valuations Legal entity Other Total 931 883 0 29 405 101 414 1 062 702 Source: Land Bank 2003.

25 A critical appraisal of South Africa’s market-based land reform policy that was not under land claim, and the Implementers’ perceptions current lessees were approached to All the officials interviewed believed that establish if they qualified for LRAD grants the implementation of LRAD was going and wanted to participate in the pro- slowly in Limpopo, although one felt that gramme. In all cases they qualified and it was better than a number of other became LRAD beneficiaries for the provinces (interview 1). The main reasons purpose of purchasing the land they were suggested for the slow pace of delivery leasing (interview 32). are the high prices being demanded by The state land acquired by LRAD landowners, the slow process of buying beneficiaries in this manner is all adjacent land by the government with all the to former homeland areas. It was bought information and stages of approval that by the apartheid regime and held by the are required, and the amount of land under South African Development Trust (SADT) restitution claims. for incorporation into those homelands. There were differing opinions on the The process of transferring the land into extent of involvement of women in the homelands was not done; instead it was projects, and officials did not seem to have leased to farmers. The White Paper access to, or were not aware of, any identifies former SADT land as available figures showing how many women were for redistribution and requires it, along involved and how much land they had with other public land, to be used to obtained. Where women are involved in support ‘government’s macro economic, decision making, officials remain con- human development and redistribution cerned that they often remain passive and goals’. It also calls for the establishment of ‘rubber stamp’ decisions. One reason ‘acceptable mechanisms for public given for a lack of women’s involvement consultation on the use of state and public was that ‘women want land close to where land’ (DLA 1997:83–4). The LRAD policy they live’ (interview 4). Given the lack of envisages that the programme could be access to transport for most rural women used for the disposal of agricultural and judging by the long distances that state land. It also calls for a public many beneficiaries have to travel to the announcement of intent to sell the state land acquired, this could be a significant land and suggests a three-month notice factor which is not considered in LRAD period to give an opportunity for bene- project design (see Chapter 7). It was ficiaries to organise themselves to make commonly agreed that further efforts need bids for the land (DLA 2001:12; NDA to be made to ensure that women get 2001:9). actively involved and benefit from the The LRAD policy requires proposals to redistribution programme. include the ‘value of the land relative to Estimates for the time taken to process market prices’ and makes no mention of a applications from the initial application to different approach for the valuation of project approval ranged from 2–6 months state land (DLA 2001:11). However the (interview 1) and a minimum of six decision taken for the LRAD programme months (interview 2). Factors identified as in Limpopo to value the state land at causing delays were: delays in getting production values is in line with the DLA valuation reports; farmers refusing to sell Handbook on property valuation. The or delaying the sales; the general delays handbook states that the general policy is from government due to its protocols and ‘to estimate fair market value’, but goes on procedures (it was noted that the DLA is to say that where state land is to be revising the project cycle to try and disposed of for redistribution projects ‘the shorten it); and problems in the committees preferred valuation approach is to estimate dealing with project approvals, because the productive value of the property’ (DLA they were initially not sure how to handle 2000:2, 19). applications.

26 Chapter 5: The LRAD programme

The officials interviewed largely felt that commercial farming, and trying to access it was too early to say whether the projects support from municipalities when there are are sustainable or not, although they be- natural disasters. According to a respon- lieve they could be, as long as the bene- dent, the Minister for Agriculture and Land ficiaries are dedicated. Some difficulties Affairs is speaking to farmers’ unions in that they identify as negatively affecting order to encourage them to release land for sustainability are: conflicts within group the LRAD programme (interview 3). Offi- projects; an over-dependency on DLA; cials would also like to see more subdivi- some beneficiaries knowing nothing about sion of land, but say there are policies farming; and others not being committed blocking this. to farming. Government officials also had a number DLA had no information on the produ- of recommendations for policy changes ctivity on the farms or of the improvement that they believe would improve the in the lives of the beneficiaries. The offi- programme. They would like to see LRAD cials interviewed seemed to believe that used in communal areas where people the LRAD projects had improved people’s already have access to land, but do not lives, but did not have a sense of the extent have the resources to fully utilise the land. of this improvement or any data to support This is possible, according to the LRAD their view. The main reason cited for a lack policy document (DLA 2001:10), but has of information was the newness of the not happened yet in Limpopo. Another projects. suggestion made was to ensure that more The officials interviewed identified of the beneficiaries are people with agri- a number of key challenges for LRAD cultural and management skills, including implementation, ranging from the size of civil servants, so that they can share their the grant and attitudes of beneficiaries to skills. It was also suggested that the grant natural disasters such as droughts (see should be increased to keep pace with Box 1). They are responding to these increasing land prices and to allow people challenges through providing training and to purchase larger farms in order to have a technical assistance, encouraging benefi- better chance of making a reasonable ciaries to move from subsistence to income. In particular the minimum grant of

Box 1: Challenges for LRAD

Officials interviewed identified the following challenges for LRAD: 1. The grant is not enough, given the price of land and the plans of the beneficiaries. 2. Land owners are not willing to sell, or are demanding exorbitant prices. 3. Most white farmers do not respect the government and do not support LRAD. 4. Municipalities are not involved in assisting with projects. 5. People do not know which department does what. Despite close relations between DLA and DoA, there is sometimes confusion, mostly arising from the high staff turnover. 6. Beneficiaries lack skills. 7. Natural disasters such as the drought are affecting the projects. 8. People are not willing to move to where the commercial farms are. 9. People who are involved in subsistence agriculture are not ready to be involved in commercial ventures and are not willing to take advice.

27 A critical appraisal of South Africa’s market-based land reform policy

R20 000 was felt to be too small, but it more agricultural specialists as much of the was not clear if officials felt the maximum work is agriculture-related. grant size should also be increased. Tar- geting the poor was identified as important as they are struggling to access the pro- Endnotes 1. The composition of the PGC is: DLA – Director and gramme and have no other access to two Deputy Directors; Department of Public Works capital (interview 4). More training and – Director; Department of Agriculture – Director, practical experience is required for the Deputy Director and a Secretary; Department of beneficiaries and DLA should employ Local Government – Director.

28 Chapter 6: LRAD projects in Limpopo This chapter presents more detailed information on the LRAD projects implemented by DLA in Limpopo. This information was largely obtained from interviews with the beneficiaries themselves and from site visits. Information provided by DLA and other respondents with knowledge of the projects was also utilised.

he chapter first presents brief the mid-1980s for incorporation into the descriptions of the different projects former homeland of Venda. The farm Tand then analyses the information was run as a cattle farm by the Venda gathered thematically, covering project government and then by the Agriven design and land acquisition; the beneficia- parastatal (interview 5). The current ries; production, employment and sustaina- farmers remember it as being a very pro- bility; markets; post-transfer support; and ductive cattle farm until the early 1990s challenges, hopes and recommendations when it was more or less abandoned of the LRAD beneficiaries. (Wegerif 2003). In 1994, just before the Projects implemented by the Land Bank end of apartheid and the dissolution of the are not covered here, as assessing the DLA homeland governments, the Venda Land projects was felt to be more important, Board, established by the Venda admini- especially as the Land Bank mandate for stration, allocated portions of the farm to LRAD implementation was withdrawn in individuals on a lease basis (interviews 4 March 2003. In addition, limited time and and 5). After the first democratic elections other resources were available for this in 1994, Manamead was managed by the study, and it proved difficult to get access provincial DoA in terms of a power of to project information and contacts for the attorney granted by the Minister for Land Bank projects. Agriculture and Land Affairs. No change was made to the lease arrangements with Manamead projects the farmers (Wegerif 2003). There are 12 LRAD projects at Manamead, The same leaseholders who were each with an individual beneficiary. These allocated the land in 1994 became the projects are described together in this LRAD beneficiaries in 2002. A number of study as they were all implemented as part the respondents, when asked how they got of the same process on one large farm. involved in the project and acquired the The Manamead farm is situated in the land, referred to the procedure in 1994, as Vhembe district, approximately 90km this was when they were first allocated the north east of Polokwane. It is extensively land. In 1994 notices were placed in the used for livestock and, in some places, Venda DoA offices announcing the dryland cropping. The grazing is sweet intention to lease the land, and others veld and shrubs and is of good quality, heard through word of mouth. All of the provided there is reasonable rainfall successful applicants were prominent (interview 4). business people or civil servants. It The Manamead farm was a state-owned appears that they all knew each other or cattle farm acquired by the government in at least knew the Chairperson of the Land

29 A critical appraisal of South Africa’s market-based land reform policy

Board (Nefale 2003a). The Chairperson of easy and reported that it did not tax their the Board was also allocated a piece of time or resources (Kalauba 2003). The land – the second largest piece – and is only problem consistently raised by the now also one of the LRAD beneficiaries. beneficiaries was the slow pace of the While all respondents claimed to have held process. The initial meeting was in January and used the land on a lease basis, it emer- 2001, DLA documents confirm that the ged that they did not actually pay any rent projects were approved on 7 December during the nine years that they had 2001, but beneficiaries were only advised occupied the farms (interview 5). in March 2002. At the time of the inter- The beneficiaries did not take any views in April 2003 the beneficiaries had initiative to apply for the LRAD grant; a still not received the title deeds (Wegerif number of officials, including the Provin- 2003). cial Director for Land Affairs and senior The farmers each have their own piece officials from DoA came to explain the of land on the farm, the same portions LRAD programme to them on 21 January originally allocated to them in 1994, and 2001 (Wegerif 2003). The DoA and DLA make their own decisions about what to do had decided that they would dispose of the on that land. However they operated as a farms as part of the programme of state group in the process of accessing the land disposal and LRAD (interview 3). LRAD grants and co-operated in a number For a period after this there were regular of other activities such as pumping water monthly meetings at the farm where the from a common borehole (Wegerif 2003). officials from DLA came to brief the The landholdings acquired range in farmers on the progress of the grant size from 159–461ha. The beneficiaries application and to collect any outstanding received grants of R33 000–R100 000 to information and forms. Thus the benefi- buy the land. In addition to the grants, six ciaries found applying for LRAD rather of the 12 farmers received loans from the

Table 7: The projects at Manamead Beneficiary Hectares Grant* Loan Own Number of (R) (R) contribution**(R) cattle# Mafadza 461 76 951 29 604 166 700 56 Ramuthaga 185 38 000 0 20 000 Tlou 328 38 000 21 874 821 235 55 Tshikororo 375 78 090 31 497 173 350 Phume 256 52 000 0 60 000 Phadziri 235 48 000 0 50 000 Nyambeni 231 48 000 0 50 000 Netshilema 373 100 000 8 000 495 500 1161 Netshifhefhe 231 48 000 0 50 000 802 Nengovhela 451 84 392 9 854 242 600 96 Mudunungu 159 33 000 0 20 000 41 Mudau 264 72 874 1 444 167 300 64 * Information from DLA, but not confirmed by the beneficiaries since they did not have the information. ** Information from DLA, all contributions in the form of assets. # Limited to the numbers of cattle of interviewed beneficiaries.

30 Chapter 6: LRAD projects in Limpopo

Land Bank, organised for them by DLA, respondents employing only one or two ranging from R1 444–R31 497 (Makha- workers. All the workers are men and are ramedzha 2002). The land was valued by employed as labourers and to keep watch the Land Bank at production value and over the farms and the cattle. acquired for the beneficiaries at an average price of R223.71 per hectare. It appears Steilloop projects that the grant and loan amounts were cal- There are five LRAD projects on the culated to just cover the cost of the land, Steilloop farms, each with an individual since there was no finance available for beneficiary. The projects were imple- any other purpose. mented as part of the same process by Of the seven respondents from Man- DLA and will be dealt with together in this amead who were interviewed, six were section. The Steilloop farms are situated in business people, with shops, butcheries, the Waterberg District about 120km west cafes or taxi operations, and one was a of Polokwane. It is an arid area mostly civil servant in the Department of Health. used for cattle and, more recently, game All of them live and have their other farming (Kwinda 2003; Nefale 2003b). businesses quite far from the Manamead The Steilloop farms were state farms, farms. For example a number of them live like Manamead, bought by the South around Thohoyandou and Sibasa, over African Development Trust for incorpo- 100km away, and some stay in villages ration into a homeland, in this case that are even further. A few live nearer in Lebowa. The farms were never handed Makhado (about 45km) and Madombidzha over to Lebowa and, since their purchase, (about 50km). None of them are full-time have been leased out to different farmers farmers, most of them coming to the farm (Nefale 2003b). only about once a week. All of the five LRAD beneficiaries in the There is no indication of any change in project started leasing the farms around production resulting from the initiation of 1997 (interview 15) as part of a farmer the LRAD project and the farms continue settlement programme of the DoA. The with the same basic operations that have farms available for lease were advertised been going on since 1994–95 when the and a screening process undertaken, with beneficiaries were granted access to the priority being given to those living near to land under lease arrangements. All the the farms (interview 32). The respondents farms are used almost exclusively for beef say they heard about the leasing of the cattle farming. There has also been no farms and applied individually to the DoA. change in employment with all the They were interviewed by DoA officials

Table 8: The projects at Steilloop Beneficiary Hectares Grant Loan Own Number of Other (R) (R) contribution (R) cattle production Sikanka 1 710 100 000 219 000 185 000 130 Kgatla 1 580 100 000 299 582 102 000 197 50 goats, 30 sheep Morapedi 1 628 100 000 335 000 70 000 130 Lehong 1 470 100 000 233 396 170 000 125 Not known* 1 674 100 000 333 400 100 000 * DLA supplied information only on the farm name. This beneficiary was the only one at Steilloop not interviewed. Source: Beneficiaries and DLA.

31 A critical appraisal of South Africa’s market-based land reform policy and later told they were successful and received substantial loans in the range could lease the farms. R219 000–R333 400 from the Land Bank. The LRAD programme was initiated in The loans were organised by DLA as part 2001 by the DoA, which sent officials to of the LRAD process, and the full loan and explain the LRAD programme to the grant amounts were used for the purchase farmers who were leasing the land. The of the land. As in Manamead a production beneficiaries were told that the government valuation rather than market valuation was wanted to get rid of all the farms they done by the Land Bank and all the farms owned and were therefore offering them were obtained at a very reasonable price for sale to the leaseholders (interview 14). (an average of R232.94 per hectare). As They were encouraged to apply for LRAD one of the beneficiaries said, ‘I can say it grants and assisted with filling in the was for free, because it was not very required forms. It was explained that the expensive’ (interview 17). grant would reduce the amount of money There are five beneficiaries, four men they would need to borrow to buy the and one woman, four of whom were inter- land, and that they would receive the land viewed for this study. All of the beneficia- at less than the market price. ries are full-time farmers although Mrs While the beneficiary perceptions of the Morapedi is also a part time councillor in process are positive, there is some confu- the local municipality and has a sewing sion about the time frames for project business as well (interview 17). They live application and approval. DLA lists all the in villages about 40km away, although two projects on the Steilloop farms as having of them are now living on the farms at been approved on 12 November 2001, least some of the time. except that of Mr Lehong on Vergenoeg The production on the farms is pri- that was approved on 2 August 2002. marily beef cattle, with Mr Kgatla also However the beneficiaries report having keeping some goats and sheep. Three of been formally told of the approval only in the respondents employ two people each, September 2002 according to Mr Kgatla and one employs three people. Three re- (interview 15) and even January 2003 spondents also mentioned having family according to Mrs Morapedi (interview 17). members who assist. All of those em- At the time of the interviews in March ployed by the beneficiaries are men 2003 they were still waiting for the title employed as labourers. deeds, a factor hampering their ability to obtain further loans. Some are not even Mankweng Integrated sure of the exact size of the land they now development project own (interviews 13 and 14). Despite these This is one of the two group projects uncertainties, they noted that from the time that have been approved. It involves 30 of filling in the forms they were given beneficiaries, of whom 29 are women. All strong assurances by the officials that their the women are from Mankweng and are applications would be accepted. According members of the ANC Women’s League. to DLA the problems of establishing the The man was working and living on the correct land size stem from the use of old identified farm for the previous owner and data that turned out to be inaccurate. They has knowledge of the farm and farming in have since appointed surveyors to clarify general (interview 36). Mankweng is a the exact boundaries and farm sizes, and township about 35km to the east of will update this information on their Polokwane. The farm that the group is records of approved projects (interview 33). being assisted to purchase is located on the The farms acquired range in size from Polokwane-Dendron road (on the other 1 470ha–1 710ha and all are being used side of Polokwane from Mankweng) and is for cattle farming. All beneficiaries got the about 60km from where most of the maximum R100 000 grant and also beneficiaries live (Kalauba 2003).

32 Chapter 6: LRAD projects in Limpopo

The group first heard about the LRAD commercial farming, but have been doing programme at a local meeting organised subsistence farming. by the Polokwane Municipality at which The ‘own contribution’ of the benefi- the DLA Provincial Director spoke about ciaries to the project was in the form of LRAD. They also heard about it on the labour and calculated at R5 000 per radio. The Provincial Director is from the person, making a total of R150 000. They area and helped by advising them ‘as a did not get any loan or make any con- local woman’ (interview 36). The group tribution of assets. Each beneficiary was applied some time in early 2002 and was allocated the minimum grant of R20 000 told the project was approved around July and these grants were combined to give of the same year, although according to the group access to R600 000. The project DLA records it was approved on 2 August is to acquire a 24ha farm from a white land 2002. However, at the time of the inter- owner for the asking price of R280 000, an view in March 2003, the project partici- amount that had been confirmed by a pants had not yet received the transfer of valuer as a fair market price. The balance the land or started production. of the grant is to be used for the purchase Members of the group travelled at their of a vehicle and other equipment needed own initiative and cost to the DLA office for the project. in Polokwane to make and follow up on Production has not started as the land the applications. The project members transfer has not gone through, but it is the incurred a lot of transport costs travelling intention of the project to grow mealies to the DLA office and felt that the process and other vegetables for their own use and was slow and inefficient with ‘a lot of to sell locally. hassles’ (interview 19). This contributed to a number of group members dropping out Vaalkop when they saw no progress in the project. Vaalkop is a 1 897ha piece of land that The LRAD application itself went rea- was part of a mission station owned by the sonably smoothly; problems seem to have Catholic Church. It is located about 30km arisen with registering a trust and the south west of Polokwane in the former transfer of title on the property. homeland of Lebowa. There has been a The members of the group rejected the community living on the land for gene- agents appointed by DLA to register the rations. They are descendents of the early trust and this caused some tensions converts who came to stay close to the between the group and the DLA Project church. No interview was conducted with Officer whom the Chairperson of the the beneficiaries, but information was group referred to as ‘unco-operative and obtained from the DoA and DLA rude’ (interview 19). The Chairperson (interviews 32 and 33). complained that she was instructed by the The LRAD project was initiated by the Project Officer to sign blank forms that she church that approached DLA for assistance was told were for the change of ownership, when it wished to dispose of the land to but at the time of the interview the group the community living there. The land was had still not been able to take occupation donated by the church and all those al- of the farm. She was also asked to sign a ready living on it are listed by DLA as the form to confirm receipt of the grant LRAD beneficiaries. This project has by money, but refused to sign, as the group far the largest number of beneficiaries of had received no money. DLA-implemented LRAD projects in The group members are unemployed Limpopo, accounting for 203 out of a although they have an existing project on total of 251 (that is, over 80%) (Makhara- some land close to Mankweng and have medzha 2002). managed to sell some produce to a local The own contribution by the benefi- school. They have no experience of ciaries was in the form of their labour and

33 A critical appraisal of South Africa’s market-based land reform policy calculated by DLA at the amount of grazing and also has 6ha of mango R5 000 per person. There was no loan orchards and 1ha of cultivated land. (Vele component or assets included as contri- Farm Project 2002). The farm was bution to the project. The grant money purchased for R560 000 with R460 000 they are entitled to, R4 060 000 in total, is paid cash by Mr Tshivase and DLA to be used for development on the land contributing the maximum LRAD grant of (interview 32; Makharamedzha 2003). No R100 000 (Makharamedzha 2002). Mr implementation had taken place at the time Tshivase raised the cash component this research was conducted and there through an overdraft with a private bank were no plans for any change to the land- (interview 36). use. Given the number of people already The farm is registered in the name of living on the land, the project is largely Nzwalo Investments CC, although the providing residential land, although there business plan approved by DLA names Mr should be some opportunity for small-scale Tshivase as the sole beneficiary. However agricultural projects. Nzwalo Investments is a close corporation that was set up in 1998 with two directors, Vele Farm one being Mr Tshivase, who has a 40% The Vele farm project involved an indivi- stake in the company, and the other being dual beneficiary, Mr Tshivase, purchasing a Mr Themeli who has a 60% stake in the a private farm that is registered as portion 13 company (Registrar of Companies 2004). of Spitskop. The 614.9ha farm is about Another anomaly is that DLA has recorded 42km west of Makhado, where Mr Tshi- it as approved in June 2002 and land vase lives. The land in the area is fertile transfer as taking place in August 2002 and used for livestock, dryland agriculture (Makharamedzha 2002). However, the and cash crops under irrigation (Vele Farm records in the Deeds Office show the Project 2002). purchase date to be 1 March 2002, three No interview was conducted with the months before the LRAD grant was beneficiary, but information was obtained approved (Deeds Office 2004). It was from the DLA Project Officer, a researcher beyond the scope of this study to from the Human Sciences Research investigate these matters further. Council who had interviewed the benefi- When the Human Sciences Research ciary, the Deeds Office, and the Registrar Council interviewed Mr Tshivase in June of Companies. This project turned out to 2003, it was found that he had started be the only one implemented by DLA up operations on the Vele farm with 30 pigs to the end of March 2003 that involved and 100 indigenous chickens and, by the the redistribution of land that had been time of the interview, had 66 cattle and white-owned, and the only transfer that 100 pigs. Three labourers were employed had taken place to a person who was not on the farm, all of whom brought useful already occupying and using the land. experience as they had all worked on Mr Tshivase initiated the project himself farms for years. Mr Tshivase claimed that as he wanted a farm. He approached an he was still subsidising the farm from his estate agent to assist in identifying a other business interests, but according to suitable farm and went to the regional his plans he would start making a profit office of the DoA to get assistance with a after two years (interview 36). business plan. He had read about LRAD, and the DoA officials gave him contact Bellevue information for DLA so that he could Bellevue is a farm in the Roedtan area apply (interview 36). about 120km south of Polokwane. The The intended farm use, according to the Roedtan area is very flat with a mixture of business plan, is livestock and cash crops. agricultural activities including crops such The farm had previously been used for as maize, vegetables with irrigation, and

34 Chapter 6: LRAD projects in Limpopo

cattle farming. Bellevue was a state farm, Vele and Mankweng Integrated projects like the Steilloop and Manamead farms, fits that description. and Mr Kutumela has been leasing it for Despite not significantly contributing about six years after it was made available to land redistribution, the LRAD projects by the DoA. implemented in Limpopo may have value Mr Kutumela applied for the LRAD as tenure upgrading projects. The benefi- grant in 2002 after hearing about it at the ciaries have certainly benefited in terms Zebediela Farmers’ Union meeting. He did of being assisted to purchase land at very not remember how long the application preferential rates. For example Mr Netshi- process took, but it was not long, ‘just a lema (interview 6) at Manamead had to few months’ (interview 16). Strangely pay just R8 000 for his 373ha farm. His DLA does not have the project listed as existing assets were considered to be his approved, so the project is not included in contribution to the project and calculated the statistics given for approved projects in to be of sufficient value for him to get the Chapter 5 above. The researchers were maximum grant of R100 000. Calculated referred to Mr Kutumela by the DLA at a production value of R231 per hectare, Project Officer responsible for that district. the total land price was R108 000. The Mr Kutumela believed his project had been R8 000 was paid with a Land Bank loan approved during 2002. organised by DLA. Six of the beneficiaries The farm is approximately 1 450ha of at Manamead are becoming owners of land paid for by an LRAD grant and Mr farms ranging from 139–256ha without Kutumela’s own cash contribution that having to borrow or contribute any money came from his pension payout when he themselves. The beneficiaries interviewed retired as a policeman. He now works full- also appreciated that they were able to time on the farm. He employs seven acquire land without being required to workers, three women and four men, and have their own finance or collateral. his son is also assisting him with the Worryingly, a number of the respon- farming. The main activity on the farm dents at Manamead did not know the value is cattle farming and there are currently of the land they had received, the size of 120 cattle. There are also some sheep and the grants they are purported to have re- goats. The relatively large number of ceived, or the amount of their own contri- employees are required to assist in clearing bution to the projects. This is probably due the land of dense thorny bush that to the way the projects were initiated and negatively affects the grazing capacity. administered entirely by DLA and further illustrates a lack of ‘ownership’ of the Project design and land process by the beneficiaries. Beneficiaries acquisition of the Mankweng Integrated project made Contrary to the LRAD policy that envisages ‘own contributions’ in the form of labour, a ‘demand directed’ process (DLA 2001:6) valued at R5 000 per person, and the entire most of the projects in this study were land cost was covered by the grant. In the initiated by DLA and DoA because they Vaalkop project the land was donated and are on what was state land and the decision the beneficiaries were allocated grants of had been taken to dispose of that land R20 000 each based on their own through LRAD. This approach raises contribution of R5 000 each in the form another question about the extent to which of labour. At Steilloop the beneficiaries such land transfers are addressing the acquired much larger farms and had to racial inequality in land access in South borrow substantial amounts of money, Africa. LRAD sets as a primary objective from R219 000–R335 000, to cover the the redistribution to ‘black people’ of 30% cost of the land purchased. A number of of ‘white commercial farmland’(DLA the respondents complained about the 2001:6) yet only the land acquired for the difficulty of paying off these loans.

35 A critical appraisal of South Africa’s market-based land reform policy

However there is no doubt that the Vele that were initiated in 2002 took less combination of the grant, the low (that is, than six months. A year after project production value) valuation of the land, approval, however, land titles had still not and the DLA-organised loans from the been transferred to some beneficiaries. Land Bank, has still given them a Communication, while very good on some significant benefit. projects in initial phases, has been erratic In all the individual projects on state when it comes to informing beneficiaries land, the amount of the grant and the loan about project approval and the dates of provided for the projects was calculated to land transfer. For example, there are gaps just cover the land price, leaving no of months between decisions being taken additional finance for any improvements in by the PGC and communication of these infrastructure or production. This despite decisions to beneficiaries. many of the respondents saying that their Business planning was done by the reason for agreeing to take up the LRAD Agricultural Research Council for the opportunity was in order to make inves- projects at Manamead and Steilloop and by tments in improvements such as boreholes DoA and DLA officials for the others. or improving the grazing. Not surprisingly, Vaalkop was the only DLA-implemented access to finance was identified by benefi- project where the planning grant was ciaries as the major constraint preventing actually spent. The business plans may further improvements. have served an administrative purpose for The Manamead and Mankweng Integra- the DLA, but there was no sign that the ted projects show through very different plans were having any effect on the nature examples that the use of beneficiaries’ of the production on the farms. Most of the ‘own contribution’ is not achieving the beneficiaries who are expected to imple- intended outcome of ensuring commitment ment the plans knew nothing about them. to the project. LRAD reduces the asses- Of the 14 beneficiaries interviewed, only sment of beneficiary commitment to purely three had seen the business plans for their financial terms and, in practice, this has projects, although even they did not have often become a book entry not necessarily copies of them. These three indicated that reflecting any actual input to the project. they were quite happy with the business At Manamead the beneficiaries did not planning process. Seven respondents said bring any assets to the projects. The assets they knew nothing about any business they were already using were valued and plans, while the remaining four had heard put down as their own contribution. The about business planning, but knew little relatively small place the farms have in the about what was in the plans. business operations and lives of many of None of the projects involved any de- the Manamead beneficiaries raises ques- concentration of landholding, a central tions about their level of commitment. factor in the success of international land In the Mankweng Integrated project the reforms that have brought increased pro- labour contribution has simply been ductivity and contributed to economic calculated at the maximum amount of growth and poverty reduction. All the R5 000 per person. This has done nothing projects acquired and continued to use to confirm or build commitment, as evi- land in the same ‘economic units’ as denced by members dropping out of the before and continued with the same land project before it started production despite use and modes of production that had their supposed R5 000 investment. existed before the land transfer. The speed of processing of LRAD applications seems to have been improving The beneficiaries over the years with the Manamead projects The individual projects involve benefi- that started in 2001 taking more than a ciaries who are either business people or year from initiation to approval, while civil servants (current or retired). Many projects like Mankweng Integrated and benefited because they had the where-

36 Chapter 6: LRAD projects in Limpopo

withal, information and contacts to obtain production impact nor any increase in state land on a lease basis some years ago. employment. The farming operations on Due to holding the leases, they then the state land that makes up most of the became the lucky beneficiaries of a land transferred were run by the same government decision to dispose of that farmers before the LRAD initiative. The land through LRAD. Mr Tshivase, who Vaalkop project has not involved any acquired a white-owned farm, had access change in living or production patterns as to significant credit and an ability to seek yet, and would appear to be more orien- out the professional assistance he needed, tated to housing, given the number of for example approaching the estate agent people involved who all live on the land. and finalising a deal with the landowner. The Mankweng Integrated project has not Mr Kutumela had a civil servant’s retire- yet started production, but the fact that it is ment package to enable him to make the providing less than one hectare per bene- investment required. ficiary indicates that the project will The group beneficiaries appear to be struggle to create a livelihood for those largely poor rural dwellers. However, they involved. were not without some useful connections. The individually-owned farms employ The Vaalkop project was an initiative of the from 1–7 people per farm, with most of church that owned the land. The initiation them employing only one or two people. of the Mankweng Integrated project was These employees are all labourers and assisted by the beneficiaries being both from discussions with the farmers it ANC Women’s League members who emerged that they are paid around R300 attend municipal meetings, and the fact per month. The workers also receive that they came from the same community benefits such as accommodation and as the Provincial Director of Land Affairs sometimes maize meal and access to fresh (interview 19). milk from the cows. There does not seem Some of the respondents have experi- to be any intention to comply with the ence of farming, mostly gained from their legal minimum wage for agricultural parents on communal land. For example workers.3 Mr Ramuthaga (interview 5) said he started This study did not include any detailed gaining farming knowledge from his father economic or livelihood analysis of the at the age of 12. He then bought some of projects, which would be a useful topic for his own cattle in 1992 and kept them on further research. However, some of the communal land. Others have been farming information provided by beneficiaries as far back as 1970 and have farmed in a gives an indication of the benefit of the number of different communal areas land to them. The farmers at Steilloop, and (interview 6). Only one farm worker has Mr Kutumela, all rely primarily on farming become a beneficiary and that was in the for their livelihoods and some of them Mankweng Integrated project, where the report making a reasonable income. Mr project incorporated an existing worker Kgatla sold 65 cattle in 2002 and said he on the land (interview 19). Other farm made around R165 000 (interview 15). workers who are involved remain as Mr Lehong was also confident that he is workers with no increased stake in the making a reasonable profit and claimed farms. that he now has two cars and is able to send his children to school and college Production, employment and (interview 13). sustainability The farmers at Manamead, and Mr As there has been no change in the Tshivase of the Vele Project, all rely on production on any of the farms due to other sources of livelihood and some of LRAD, with the possible exception of the them reported that they are currently Vele project, one cannot claim any positive subsidising the farms with their own

37 A critical appraisal of South Africa’s market-based land reform policy money from other sources (interviews 3 received lower bids (interview 11). One of and 36). A number of the farmers with the respondents believes there is nepotism land at Manamead have access to other and noted that all the salespeople he has land in communal areas and run busines- seen are white, except one who used to be ses such as butcheries. They clearly use there to sell livestock from state farms the Manamead land as part of larger (interview 10). farming and businesses operations (Nefale Most respondents said they get no 2003a; Kalauba 2003; Wegerif 2003). assistance with the marketing aside from According to the respondents, the Vleissentraal supplying the calendars of Manamead farms have a carrying capacity4 auction days and, in some cases, phoning of around 5–5.5ha per large stock unit and to tell them about prevailing prices. Ms the Steilloop farms have a carrying Morapedi, a farmer at Steilloop, used to get capacity of 11–14ha per large stock unit. the auction dates from Vleissentraal, but Information on carrying capacity was not has not received dates for the last year and available for the other projects. Some of now obtains the information from the beneficiaries had been informed of neighbouring farmers. Two respondents these figures by the DoA, but others were said the auction dates were provided to not aware of the carrying capacity of their them by the DoA (interviews 12 and 13). land. All of the farmers interviewed, except Some of the farmers at Manamead two,5 have herds that exceed the carrying slaughter their cows to sell the meat capacity of their farms. These herds ex- through their own butcheries. Mr Nengho- ceed the carrying capacity by an average vhela, who has a farm at Manamead, of 44%, raising a concern about the long- exchanges heifers for fully-grown cows term sustainability of the farms. from people in neighbouring villages. He then slaughters the cows and sells the meat Markets in his butchery. The main product of all the farms acquired through LRAD and currently in use is Post-transfer support cattle. The marketing and sale of cattle is The only form of post-transfer support being received by the beneficiaries is primarily done through the Vleissentraal6 agricultural extension services. There were auctions at the nearest auction point from mixed views on the availability and quality the farms. For the Manamead farmers this of these services. Of the 12 respondents is only about 20km away, at Bandelierkop. who are engaged in production, nine said The Steilloop farmers go to Baltimore, they had access to extension services, which is about 30km away, and sometimes while three said they did not. Where the travel further to auctions in Ellisrus and extension services are available, the visits Potgietersrus, both about 100km away. of extension officers are largely on The farmers are able to sell all the cattle request, or to attend meetings. There are that they take to these auctions, but not all few regular visits and little time is spent on were satisfied with the prices and treatment the farms providing practical advice or they receive. The majority of respondents assistance. All four of the Steilloop farmers had no problem with the auctions and interviewed said extension services were some said they were happy to be able to available; the availability and quality of compete and sometimes do better in terms services at Manamead seemed more of quality of cattle and price received than doubtful; and Mr Kutumela said he had no the white farmers (interviews 12 and 17; support. Two of the Steilloop farmers were Kalauba 2003). However four respondents very positive about a particular extension reported experiencing racism. There were officer, Mr Ngobeni, indicating the reports of auctioneers using certain com- importance of the individual on the ments to indicate when cattle came from perception of the quality of services being black owners and that these cattle then offered.

38 Chapter 6: LRAD projects in Limpopo

The beneficiaries interviewed identified a Most respondents expressed an interest in range of other support services they felt expanding their production through would assist them to succeed as farmers. gaining more land or improving the The majority of respondents identified the carrying capacity of the land and the lack of access to finance for improvements quality of the livestock. For example Mr on the farms and expansion of production Ramuthaga (interview 5) hopes to improve as the most significant factor limiting them the carrying capacity on his farm through in achieving their goals. The next most de-bushing, planting other grass varieties commonly identified needs related to the and, if he had the money, feedlots. Other provision of water and improvement of plans that respondents have for improving roads. Other requirements mentioned by stock quality are to bring in better bulls, more than one respondent were: assistance improve access to water, and deal with with marketing; provision of fodder during sicknesses. Some beneficiaries shared their drought periods; agricultural extension hopes for building abattoirs or expanding services; and the handover of the title into dairy farming, poultry production or deeds for the land. crop production. All the farmers feel they could benefit The most common recommendation from training in a range of activities related that beneficiaries made for improving the to the farm operations. They specifically LRAD programme was to increase the mentioned training in the following areas: grant size. This was also motivated by financial management, marketing, artificial some as a way to reduce their debt and the insemination, veld management, identify- ing symptoms of different illnesses, appli- risk that they may not be able to repay the cation of vaccines, financial management, loans. The Mankweng Integrated group record keeping, and business skills. The also wanted grant money to come straight only training that has been organised for into the group’s own account, with DLA the beneficiaries so far was a workshop on monitoring the expenditure, rather than the finance and budgeting that the Steilloop current system where DLA holds the farmers attended. money and manages the expenditure. While calling for more access to finance, Challenges, hopes and some beneficiaries suggested that the Land recommendations Bank should not repossess the farms if the owners default on debt payments. One The beneficiaries have experienced a respondent emphasised that the Bank range of challenges as they have tried to farm. These have included veld fires, should write off any debts if losses were shortages of water, drought, poor or no suffered due to natural disasters. Another roads, damaged fences, theft of livestock suggested that more should be done to and poor disease control. In one case a ensure that the beneficiaries have the respondent believed that it was a neigh- knowledge, skills and commitment to use bouring white farmer who had burnt his the land productively. veld (interview 15). Another concern is not being able to get further loan financing Endnotes from the Land Bank, apparently due to 1. He moved cattle from Nwanedi farms, in former limits set by the Bank (interview 16). Mr Venda because the drought was bad there. His Kutumela had particular problems, the intention was to move some of the cattle to main one being lekkerbreek (a poisonous Malumulele, in the former Gazankulu, where he has plant) that killed about 30 of his cattle in access to communal grazing that he believed would 1998–99. His farm is also covered in thorn be better (Wegerif 2003). 2. He usually kept about 80 cattle at the farm, but due to trees that are reducing its potential for drought he had just moved cattle ‘home’ to a grazing, but Mr Kutumela has been told communal area in former Venda, and was left with that he cannot cut them down due to 30 at Manamead at the time of the interview. conservation laws. 3. Minimum wages for the agricultural sector came into

39 A critical appraisal of South Africa’s market-based land reform policy

force in April 2003, just a few weeks before the 5. One of the two who are not overgrazing is building interviews were conducted. The minimum wages up the herd, while the other had been forced to sell were set at R800 per month in certain magisterial some cattle in order to make the loan payments to the districts (‘Area A’) and R650 per month in Land Bank. magisterial districts with lower per capita income 6. Vleissentraal is a private company that sets up and levels (‘Area B’). manages cattle auctions. 4. The amount of land needed per large stock unit (approximately equivalent to one cow) for sustainable production.

40 Chapter 7: Conclusions

This study set out to critically examine the implementation of LRAD in Limpopo as an example of a market-based land redistribution programme. The major finding that emerges from the study is that LRAD, as it has been implemented in Limpopo, is neither a redistribution programme nor is it market-based.

f all the land acquired in terms of formerly white areas of the province. approved LRAD projects handled This is being generous to the programme, Oby DLA in the province, 95.5% however, as many of the projects had not was already occupied and used by the reached the point of land transfer and, as intended beneficiaries and 82% was state noted above, almost all the land to be land bought by the apartheid regime for acquired through LRAD was not actually incorporation into former homelands as in white ownership but had already been part of the scheme of grand apartheid. The allocated for black use by the apartheid implementation of these LRAD projects on government and was already being used state land has merely completed a project by black farmers. Clearly the programme initiated by the apartheid regime some 20 is falling dramatically short of its own years ago. The transfer of these farms in targets and making a negligible impact on ownership to those who were already the unequal and highly concentrated leasing them has done nothing to change patterns of land ownership. the racial inequalities or structure of the It is important to consider whether agricultural sector in the country. LRAD represents any improvement over the SLAG programme it replaced. While Out of the 20 projects approved, only the procedures for the approval of LRAD two actually involve the redistribution of projects have been streamlined to some ‘white commercial farmland’ as envisaged extent, the programme continues to rely on by the LRAD programme (DLA 2001). the willingness of sellers and a narrow These two are the Mankweng Integrated ‘demand-led’ approach. There is no in- project and the Vele Farm project. As crease in the amount of land provided Mankweng Integrated had not yet been through LRAD (22 292ha in three years) implemented at the time of the research over that redistributed through the SLAG (April 2003), this meant only one benefi- approach (45 110ha in six years). The ciary out of 251 had actually acquired SLAG projects, despite all their drawbacks, ownership of land in a previously ‘white’ did acquire land in formerly white areas. area. SLAG also involved far more beneficiaries: One of the key targets for LRAD is to 6 753 households against the 376 indivi- contribute to the redistribution of 30% of dual beneficiaries of DLA and Land Bank agricultural land over a period of 15 years. LRAD projects combined. The LRAD programme in Limpopo in its Surprisingly, while LRAD sets new first years of implementation up to March targets for the amount of land to be 2003 had approved the acquisition of redistributed, the budget allocations for its 22 292ha of land, counting both the DLA implementation have been reduced and are and Land Bank projects. This is equivalent a fraction of what is needed to meet the to just 0.9% of the agricultural land in the stated targets (Tilley 2002).

41 A critical appraisal of South Africa’s market-based land reform policy

This study found that there had not been profits (Van Zyl 1996; World Bank 2003). an open process for the selection of The valuing of state land at production beneficiaries, aside from the Vele project, value is positive in that it gives the bene- as only those who already had access to ficiaries access to more land than might be the land were offered the opportunity and acquired through the market at a given took it. When they first gained access to grant level, and could be seen as an the land, on a lease basis, it was also not appropriate use of state resources. through an open process or involving any However, it represents a substantial market forces. In the case of Vaalkop, the benefit and creates an inequality between beneficiaries were a community which had beneficiaries who acquire private land and been on the land for generations due to those who acquire state land. These factors their affiliation with a particular church. At make transparency and fairness essential Manamead, businessmen and civil servants in the beneficiary selection process. It is with good political connections gained questionable, especially in the case of access to the land free of charge through Manamead, whether the state farms targe- the old Venda Land Board. On the Steil- ted for LRAD projects should have been loop farms, the beneficiaries applied to given to the people already occupying lease the land and went through a selection them. There was no transparent process process that may have been fair, but was and no opportunity for other people who not linked to market forces. Although not may well have had greater interest, yet implemented, it is interesting to note potential or need to benefit. that even the Mankweng Integrated project The Vele project is an interesting seems to have benefited from political exception in that it appears to have been a connections. The beneficiaries are all case of an individual with resources and members of the ANC Women’s League, initiative going out to find land on the live in the same area as the Director of the market and obtaining financial assistance DLA Provincial Office, and received her from the DLA for the purchase of the farm. advice and assistance. All of these projects An estate agent performed the role one show in different ways how political, would expect, a willing seller was found, community or religious contacts have the beneficiary raised his own resources given certain people access to information and applied for the grant, and the deal and/or influence that has played a key role went through. This looks like the kind of in their access to the land and ultimately project that one would expect to find being the LRAD grant. There is no sign of a sys- implemented under LRAD. As this was the tematic programme from which landless only project of its kind that DLA imple- people without substantial resources, a mented, it is not possible to generalise too particular power base, or good contacts much from the experience of Vele. could be expected to benefit. However it is very clear that the person The price of 95% of the land approved involved had access to substantial financial for acquisition was not determined by the resources from existing business ope- market. The state land was valued by the rations that favourably positioned him Land Bank at production values that were to access a bank overdraft of almost well below the market value and, in the R500 000 and to subsidise his farming case of Vaalkop, the land was donated by operations during its initial years. It would the church. This is not necessarily a also appear that he intended going ahead problem, but it renders redundant the with a land purchase of this nature whether motivation for the state to give grants in he obtained the LRAD grant or not – he the first place, which is to assist those certainly had access to sufficient capital. without access to equity to acquire land The LRAD grant did no more than put an through the market at prices above the extra R100 000 in the pocket of someone capitalised value of potential production who already had substantial resources. The

42 Chapter 7: Conclusions

Vele project does not represent a route to constraint to their operations. In a bizarre land ownership that a person with more twist, even the quite wealthy beneficiaries modest resources could take. are still struggling to get finance to All the young people and almost all the improve their operations and unlock the women beneficiaries are members of potential of the land. It is unfortunate that group projects, whereas the individual the opportunities provided by LRAD to beneficiaries are almost exclusively older inject additional capital, over and above men. This indicates the difficulty women the purchase of land, were not taken. and youth will have in benefiting indivi- What has been hidden by the LRAD dually and the important role that group statistics, especially when averages are projects can play in benefiting the margi- calculated, is that this is actually a two-tier nalised. All the beneficiaries interviewed, programme. There are group projects with the exception of the women from accessing very small portions of land Mankweng Integrated project, were rea- (averaging 8.24ha per beneficiary, see sonably well-off and could certainly not Table 2) and individuals obtaining large be described as poor. tracts of land (averaging 679ha each). Despite not fitting the descriptions of Most of the larger individual farmers have how market-based programmes are meant already accessed the maximum or close to to work, experience in Limpopo has con- the maximum grant, while the members of firmed the concerns of critics that it is the group projects all received the minimum richer and more powerful who will benefit grant. Despite the concept of ‘graduation’ the most from LRAD. This has happened (NDA 2001:6) there is no reasonable not so much because of their wealth, but opportunity for beneficiaries to move from because of their access to information lower to higher-level operations – the gap and political influence. Far from endea- is just too great. In practice, beneficiaries vouring to bring poorer people into the are not aware of the possibility of ‘gradua- programme, DLA and the DoA have gone ting’ to better things, nor is anything being out of their way to benefit those already done to structure projects that could enable better off and already benefiting from state land, while making access to the this step up. programme expensive (in time and The projects approved have some merit transport) for poorer people, and almost as tenure upgrades in the context of past totally inaccessible for the very poor. insecure tenure rights. Especially in the A number of the larger farms at Steil- case of Steilloop, a number of the farmers loop and the one at Roedtan are already are reasonably successful and they are the generating a reasonable income for the type of emerging black middle class beneficiaries, and it would appear that this farmers that many in South Africa believe could be improved substantially with fur- should receive support. It is hard to en- ther investment, training and support. The visage a situation in South Africa today Manamead farms may not be viable as where black farmers who have been stand-alone enterprises, but they could be leasing state land for years could be more productive with increased investment moved in order to make way for others. and improved commitment to the project Providing them with formal ownership of from the beneficiaries. The land at Mana- the land makes a lot of sense and perhaps mead also appears to be adding value for in the future will encourage greater inves- some farmers as part of a broader and tment in the land. The Vaalkop project also more complex set of farming and business has logic as a tenure upgrading project for activities. the families living on the land – the land The difficulty of obtaining access to and the grants they would potentially have finance was a complaint from almost every access to could be used for development beneficiary, and was seen as a major projects. However it seems that these kinds

43 A critical appraisal of South Africa’s market-based land reform policy of projects should be handled under a gramme, one would have to say that different programme. LRAD in Limpopo is a failure. It is clear from South African and inter- LRAD is financed with public funds national experience that land redistribu- approved by Parliament for land tion, if not part of a broader development redistribution. The manner in which these programme accompanied by appropriate funds have been used in Limpopo has production, marketing and other support, denied much-needed resources to projects will not bring improvements in produc- that could truly address the needs of tivity or other potential development landless people and the stark racial benefits. There is no evidence that the inequality in access to land. Perhaps LRAD projects are part of any wider politicians are happy to report on the land rural development strategy, and local bought as if it were redistributed, creating government, despite its development co- a false impression of transformation in ordination mandate, is not involved in land access. Maybe officials have been these cases at all. There have been no excessively influenced by local elites or measures to restructure and improve just taken an easier route to meeting access to markets or to make inputs more implementation targets. Whether LRAD accessible and affordable. Some of the implementation in Limpopo has gone the farmers benefit from agricultural extension route it has by accident or design, it cannot services, but clearly these could be impro- be seen as an acceptable use of public ved. Existing production has continued in resources. cases where beneficiaries were already Perhaps even more unfortunate than the established on the land, but there has been inappropriate use of resources allocated for no noticeable improvement in productivity. redistribution is the waste of an The fate of any new farmer getting access opportunity for land redistribution to to land will be far more precarious. become an engine for economic growth in The LRAD programme in Limpopo impoverished rural areas. Empirical reflects some of the characteristics that are evidence from around the world has often associated with land reforms that are shown that effective land redistribution can not market-based, such as people acces- create growth in agricultural production sing land ‘by virtue of political power and that can, in turn, make a substantial official status, as well as granting of public contribution to broader economic growth land under concessional arrangements’ (El- and poverty reduction. The manner of Ghonemy 1999:108). So far, LRAD has LRAD implementation in Limpopo realises done nothing to stimulate land markets, none of these benefits. and has not encouraged any new invest- The findings of this study show that ments. LRAD has not brought about any implementation and achievements have change in existing farming operations and fallen far short of the objectives of the has created no new jobs. It has produced LRAD programme and market-based land no new, smaller-scale or more efficient reform. This leaves the question as to farming units, and has consequently whether this is an experience peculiar to yielded none of the benefits ascribed to Limpopo or a fair reflection of national the market-based model. The poorer bene- and international experience. Studies by ficiaries, some of whom may be, or aspire Borras (2003) and other critics of market- to be, peasant farmers, have not received based approaches indicate that this sufficient land to be viable commercial experience may be a common one. If this enterprises and the beneficiaries who have is so, it is time for the promoters of LRAD obtained substantial land are business and market-based land reforms to accept people or current and retired civil servants. the need for a substantial change of As a market-based land redistribution pro- approach.

44 References

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24. Netshifhefhe, 13-04-03. 33. A Malange, Project Officer, 25. Mudau, 13-04-03. Department of Land Affairs, 26. Nengovhela, 13-04-03. 05-01-04. 27. Lehong, 03-03-03. 34. T Lamola, Administrative Assistant 28. Sikanka, 03-03-03. for LRAD at the Land Bank, 29. Kgatla, 04-03-03. Polokwane Branch, 05-01-04. 30. Kutumela, 04-03-03. 35. M Ndivhuwo, Project Officer, Department of Land Affairs, 31. Morapedi, 17-04-03. 07-01-04. Follow-up interviews 36. R Randela, Researcher, Human 32. J Thupana, Director for Farmer Sciences Research Council, Settlement, Limpopo Department of 11-08-03. Agriculture, 05-01-04.

49 A critical appraisal of South Africa’s market-based land reform policy

50