Chapter 1: Introduction
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UNIVERSITY OF KWAZULU-NATAL Land Reform Projects as LED Contributors: KwaZulu-Natal Case Studies By Jim Matsho 210555458 A dissertation submitted in partial fulfillment of the requirements for the degree of Master of Commerce in Leadership (LED) Graduate School of Business and Leadership College of Law and Management Studies Supervisor: Mr. R.H Salisbury 2011 i DECLARATION I Jim Matsho declare that (i) The research reported in this dissertation, except where otherwise indicated, is my original research. (ii) This dissertation has not been submitted for any degree or examination at any other university. (iii) This dissertation does not contain other persons’ data, pictures, graphs or other information, unless specifically acknowledged as being sourced from other persons. (iv) This dissertation does not contain other persons’ writing, unless specifically acknowledged as being sourced from other researchers. Where other written sources have been quoted, then: a) their words have been re-written but the general information attributed to them has been referenced: b) where their exact words have been used, their writing has been placed inside quotation marks, and referenced. (v) This dissertation does not contain text, graphics or tables copied and pasted from the Internet, unless specifically acknowledged, and the source being detailed in the dissertation/thesis and in the References sections. Signature: ii ACKNOWLEDGEMENTS I wish to express my sincere gratitude to the following individuals and particularly to the community business managers and their supervisors who assisted me in various ways during the preparation of this thesis. Mr. R.H Salisbury, my supervisor for his guidance, expertise, understanding, motivation, assistance and constructive criticism. Ms Cheralyn Terblance, administrator at the university’s Leadership Centre for all the constant reminders about the research dissertation progress. Mr Zakhele Myeza, mentor to community land reform managers for setting up appointments with the respective managers. The community business managers for allowing me time to interview them and their supervisors. The community development facilitators from the private sector in completing the questionnaire. The Department of Rural Development and Land Reform officials who shared their valuable knowledge in the land reform programs challenges and opportunities. My colleagues at the Black Management Forum (BMF) for their understanding, encouragement and support. The community business managers who kindly provided the figures for Annexures, on conditions of anonymity. Mr. M Netshidzivhani for producing statistical report for data analysis. The University of KwaZulu-Natal Language Centre for the technical editing and proofreading. Last, but not least, my family, friends and colleagues for their concern, understanding, interest and support during this study. This Masters dissertation is dedicated to my wife, Mrs. Dipuo Mary Matsho and my son Mr Kgosietsile Onthatile Pleasure Matsho who I’m instilling the importance of education and business. Finally, to the Almighty for shining His light on me, giving me the strength, courage and determination to initiate this study and to see it through to the end. Signature: iii ABSTRACT This research focuses on KwaZulu-Natal case studies of land reform projects that serve as contributors to local economic development (LED). Key stakeholders and role players on LED matters within the KwaZulu-Natal province serve as respondents. The study seeks to answer critical questions regarding the success and viability of land reform projects. “Rural development is one of the the signature projects that swept the African National Congress (ANC) to power. It is supposed to distinguish the new administration from all that has gone before by having a dedicated ministry specifically to look after the forgotten countryside”, (Mabanga 2010, p. 36). For communities operating registered companies, some of the major challenges, amongst others, include a lack of farm management skills, business skills, financial skills and governance skills (including corporate governance). Leadership challenges are experienced between community members that ultimately may lead to the collapse of projects. There are also concerns regarding state support for post settlement. This affects the operation and capitalization of the projects and is required to kick-start projects after land transfers. Other challenges include skills shortage amongst managers and post settlement support for specific industries to ease transfer of skills to beneficiaries. The majority of the post-settlement support from the National Department of Rural Development and Land Reform has no, or limited, skills in specific industries like forestry, sugarcane, crop farming and animal farming. Consequently there is a shortage of proper advice to the community managers from inception and the incumbent official then still has to learn the industry operating systems. Ultimately all the parties rely heavily on consultants to provide assistance to newly emerging farmers or business entrepreneurs within the communities. The transfer of developmental grants is a major headache currently facing the majority of land beneficiaries. The department of rural development still owes communities post-settlement grants or development grants back-dated to the 2008/09 financial period. The objective of this study was to arrive at some guidelines and recommendations that will contribute to the success of land reform projects and thereby contribute to LED within KwaZulu-Natal province. iv TABLE OF CONTENTS COVER PAGE ………………..…………………………………………………………………………………………………………………….i DECLARATION ................................................................................................................................... ii ACKNOWLEDGEMENTS .....................................................................................................................iiii ABSTRACT ........................................................................................................................................ iv TABLE OF CONTENTS ......................................................................................................................... v LIST OF TABLES AND FIGURES ............................................................................................................ix LIST OF ANNEXURES …………………………………………………………………………………………………………………………ix CHAPTER 1: INTRODUCTION .............................................................................................................. 1 1.1. Introduction and Background ................................................................................................ 1 1.2. Problem statement ............................................................................................................... 1 1.3. Research Questions .............................................................................................................. 3 1.4. Aim of the study ................................................................................................................... 3 1.5. The importance of the study ................................................................................................. 4 1.6. Hypotheses ........................................................................................................................... 4 1.7. Literature Review .................................................................................................................. 4 1.8. Research methodology ......................................................................................................... 7 1.8.1. Sampling ........................................................................................................................ 7 1.8.2. Methods ........................................................................................................................ 8 1.8.3. Analysis of data.............................................................................................................. 8 1.9. Limitation of the study .......................................................................................................... 8 1.10. Delimitations of the study ................................................................................................... 9 1.11. Organisation of study ........................................................................................................... 9 CHAPTER 2: SOUTH AFRICAN AGRICULTURE INDUSTRY ................................................................... 11 2.1. A Background to the South African Economy ...................................................................... 11 2.2. KwaZulu-Natal Perspective.................................................................................................. 17 2.3. Agricultural Economy .......................................................................................................... 21 2.4. Conclusion .......................................................................................................................... 24 CHAPTER 3: LAND REFORM PROJECTS REVIEW ................................................................................ 25 3.1. Introduction ........................................................................................................................ 25 3.2. Background History ............................................................................................................. 26 3.3.