/ 4/726-60 073'10 3 pc B /DC 5 Ac Price 40c g35Vol. 19 No. 2 APRIL 1980 MEM 11111111111111 11101111111" 111111111111111 111111111111111111 111111111111111 11111111111110111 ME= 11111111FAII IlIlliIIWl 11111" 1111101111111111111111111 MIL ling111111M1ILIVAII 11111111111111111M1111111111111 1111111111111 1111111111111=1111111111111111 1111111 1111111 111111 111•11111111111111111111111111111 1111111111111 MOMUUJUIIIIIII rul LITAI LIE 111111111thill IN11111111111 111111111111111111 1111 11111111B1 111 LUUNUMaalUalA Issued by the Department of Agriculture and Fisheries, Pretoria THE CO-EXISTENCE OF A LAN KET AND THE COMMUNITY OCCUPATI N IF LAN by H.I. BEHRMANN University of Natal A LAND MARKET variations are of course distinguishable amongst those four categories. Freehold conditions tend to A land market exists where land itself or the prevail in the more highly developed economies and rights to land may be exchanged by occupiers for traditional tenure is more characteristic of less money or other considerations. In this broad sense developed economies. Gras (1946) has referred to even the community occupation of land represents traditional tenure as allodial tenure whereby a primitive market, because land is seldom families in a community or tribe are allocated areas completely free, without some due having to be for cropping land, and grazing land is held in paid to the tribal authority, either chief or common. This type of land tenure survives among headman. Yet exchange of rights to land in a tribal tribal peoples in South Africa today. Feudal tenure or community situation is so rudimentary that it is exists when tenants pay for their land by rendering clearly distinguished from a situation where land labour services to the landlord, a form of tenure has a money value, and where price changes reflect that is at present being phased out in parts of Natal a supply and demand situation. and the Northern Transvaal. Where labour services Conditions for an open market for land exist are commuted into money rents a quitrent is paid when the units are reasonably homogeneous and in cash, indicating that the tenant is quit or free of can be measured in a standardised form such as his services to the lord. Quitrent may also take the hectare, acre or morgen, when there are a large form of sharecropping or livestock share leasing. number of buyers and sellers and no individual can In that a land market is associated with more exert an undue influence on the price, and where highly developed agricultural economies and that full knowledge of prices and sales is available to less developed agriculture takes place in the absence buyers and sellers. Land is not mobile and its value of the conditions for an open market for land, the is influenced by its location, through the effect of question that is posed is: can a land market be costs of inputs and the prices of products. developed from a traditional situation, thereby Agricultural land that is bought and sold in the promoting a more modernized agriculture with a white farming areas of South Africa is exchanged higher productivity and welfare for producers? A under conditions approaching those of an open further question is whether the operation of the market and sales are advertised and officially land market itself is indicative of any necessary recorded, and it is possible to compile statistical change in the agricultural industry. records. The first free burgers that were granted land WHITE AGRICULTURE by the Dutch East India Company were given freehold title to all the land that they were able to It is well known that the numbers of cultivate after three years. They were granted loan commercially operated, mainly white-owned, farms tenure to grazing land. The system of loan tenure has declined drastically from 106 000 in 1960 to for livestock farming was the prevailing form of about 73 000 at the present time. The average size land tenure, alongside a limited amount of freehold of farm that each entrepreneur has to manage has occupation, when authority at the Cape passed to increased and the capital value of farms has been the British in 1806. Various Acts of the Cape going up because of the larger farms that come on Parliament enabled farmers to gain greater title to to the market. At the same time some farms have land, and in the Orange Free State and Transvaal been abandoned altogether adding to the problem Republics farmers were able to obtain land at that was first disclosed by the Commission of relatively low costs, which enabled the majority of Enquiry into the European Occupation of Rural farmers to become landowners. This situation Areas (1960), which expressed its concern at the prevails at the present time when approximately 80 number of farms occupied by black squatters, and per cent of white farms are owner-occupied. not adequately managed by absentee owners. A broad distinction may be made between the With a growing population and increasing different types of land tenure. Historically, land demands for food the agricultural industry must at occupation has been according to traditional, least double its output in the last quarter of the feudal, quitrent or freehold conditions. Many century. The larger farms demand more of 18 management and Tarr (1975) has shown in his TENURE OF BLACK AGRICULTURE input-output study of South African agriculture that management is likely to be a limiting factor. The occupation of most farming land in the Cross-section production function studies black areas of South Africa is according to have measured the marginal productivity of traditional tenure. Authority over the land is vested resources in South African farming. In a macro in the Chief acting on behalf of the tribe. Each study based on the 1960 agricultural census family is allocated a kraal site, an area of cropping Nieuwoudt has shown that the marginal land for subsistence use, and has the right to graze productivity of farm land in South Africa was 59 stock on the communal grazing. Magistrates play a per cent of the opportunity cost of land. This role in the allocation of land and in the settling of finding has been confirmed by other smaller scale disputes. studies by Kassier (1966) and Le Clus (1969), in While the land is held as a right, a new East Griqualand, Du Toit (1972) and Van Heerden occupier of land, such as a newly married man, is (1974) in Northern Natal and the writer (1977) in required to pay a traditional fee to the Chief or that in the respect of Eastern Highveld farms. Some studies headman. Erasmus (1978) reports tribe in Natal the Chief is paid have shown high marginal productivity on cropping Abakwamkhwanazi plus gifts, such as drink, while land, Joubert and Kassier (1970) and Behrmann approximately R40, R10 plus gifts. Jeppe (1968), but cropping land is a relatively scarce the induna receives about that the rights to land resource particularly in certain areas, and (1978 p. 72) also mentions amongst tribespeople, Behrmann's study on sugar-cane was done at a time may be sold or leased or mortgage. when quota restrictions were being imposed on the although not on credit land may not be sugar industry. Studies have generally shown high Generally, however, of land that any family marginal productivities on capital inputs. Labour exchanged and the amount The fact that grazing is inputs have also tended to have high marginal may hold is strictly limited. free contributes to overstocking because any family productivities, except in the case of sugar-cane that does not keep up its stock numbers is liable to large numbers of labourers have been farms where surrender available grazing to other families. Even -type system. ,used in a plantation the right to cropping land may be divisible. While marginal productivity The effects of the low crops are growing a cultivator has full right to his done of land resources may be seen in a calculation land, but once the crops are removed the land may by the writer (1975). The net income accruing to be thrown open to common grazing. the agriculture sector, as determined by the Under such a system of tenure, incentives to Department of Agricultural Economics and improve agricultural standards are lacking, for Marketing, and deflated by the retail price index there is no provision for compensation for grew at an annual compound rate of increase of 5,9 improvements, crop rotations and the production per cent over the 9 year period 1964/65 to 1973/74. of winter feed are difficult, and there is no incentive Over the same period the real price of land rose at for stock improvement on the common grazing. a slower rate than real net farm incomes, 3,7 per Any capable farmer is unable to exercise initiative cent per annum. Per farm, the upward trend in net and the sizes of farms are approximately the same, farm income would be at a higher rate because the with 2 to 4 hectares of cropping land. number of farms has been declining. If land, The necessity for land reform and the because of its lower marginal productivity, has not improvement of agriculture has long been been contributing to farm output, the increase must recognised. Although it may not be looked upon as largely be attributed to other factors of production. a measure to introduce land reform in itself the This supports the conclusion of Ruttan (1974) that Native Trust and Land Act of 1936 set out to make areas ofs South human capital and technical inputs have become more land available to the black through the purchase of approximately 7 the dominant sources of output growth in Africa million hectares of white-owned land.