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March 31, 2010

South African land reform: 90% of redistributed farms are now unproductive

by Brendan Boyle

Food security and economic growth are being undermined by the collapse of more than 90% of the farms that the government bought for restitution or redistribution to victims of apartheid.

Minister of Rural Development and Land Affairs Gugile Nkwinti also warned that, while the government would invest heavily to rescue these failing farms, it would also crack down soon on foreigners buying up South African land.

"The department has purchased going concerns and because they were going concerns, there was always that hope that they would continue to produce. The reality is that that has not happened," he told reporters in Cape Town.

"We have not talked about the revenue that the state has lost because farms totalling 5.9 million hectares, which were active and accruing revenue for the state, were handed over to people. And more than 90% of those farms are now not functional. They are not productive, and the state loses revenue. We cannot afford to go on like that," he said.

Nkwinti said proposals to rescue the flagship land reform project, which was intended to reverse one of the most visible legacies of white rule, would be published in a green paper that would be sent for Cabinet approval this month. It will be made public before May 31.

He said the policy proposal would put the restriction of foreign land ownership in South Africa back on the table.

"It's something which, if you don't deal with it in a responsible manner, might explode - or implode - like the Zimbabwe situation. It's not very much the same as our situation, but it could turn out to be actually the same if we don't act while we have the political authority as government," he said.

Former president Thabo Mbeki's government launched an investigation into controls on foreign land ownership, but did not follow through with specific proposals.

Nkwinti said he did not have figures available for how much land foreigners owned, but added: "What we do know is that at the rate we are purchasing land as government - whether for restitution or for redistribution - foreigners are buying land three times faster.

"That is why we have to look at the land tenure system. It is inevitable," he said.

Land restitution is intended to compensate blacks thrown off land they owned under white rule. Redistribution is designed to dismantle the white monopoly on 87% of the country's land, inherited in 1994.

Nkwinti said the proposed reform of the land tenure system would address both the foreign land ownership question and the status of the government when it pumps new money into land owned by failing farmers.

He said the state would invest close to R500-million this year to begin to rescue new black farmers who had not been given adequate support or resources to work the farms.

He said R254-million had been diverted in last month's Budget from land reform to recapitalise and develop 200 farms identified jointly by his department and by Parliament's portfolio committee on land and agriculture.

A further R207-million had been pegged to guarantee non-performing Land Bank loans and prevent the Bank from auctioning off failed farms.

Nkwinti said the government had accepted it would not nearly meet the original target of shifting 82 million hectares of white-owned land to black farmers by 2014, but he said the focus in the short term would be on reviving the development of a sustainable emerging black farming community.

"We want to balance the number of hectares [we buy] and the extent to which we are able to use those hectares to produce food."

Nkwinti said there would be no mercy for land redistribution beneficiaries who wanted to own land only for show.

The state would offer technical and financial support, including mentoring and possibly equity partnerships with experienced or retired farmers. After that, land owners would have to show they were willing to work hard and produce food.

"If they don't use that land, we will take it," he said.


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