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50/50 DOWN ON THE FARMS

 

The Department of Rural Development and Land Reform (DRDLR) has just published its final policy proposals on land reform titled “Strengthening the Relative Rights of People Working the Land“.

According to officials of the DRDLR, the Minister, Gugile Nkwinti, must first consult with role-players in the agricultural sector regarding the proposals. A final version will then be submitted to the new cabinet after next month’s elections. This is just as well because the proposals in their present form would have extremely serious implications for property rights, food security and for the future viability of our agricultural sector.

They propose, in brief, that all farmers would be required to hand 50% of their farms to their workers. The farm workers’ share “will be allotted to them, proportional to their contribution to the development of the land, based on the number of years they had worked on the land”. Accordingly, labourers who have worked for 10 years on the farm will be granted 10% of the workers’ land allocation; those who have worked for 25 years will receive 25% of the land allocation and those who have worked for 50 years of the farm will be entitled to 50% of the land allocation. (It is not clear what will happen if there are eight workers who have worked for 10 years and three who have worked for 25 years?).

The state will buy the 50% of the farm that will be allocated to the farm workers. However, it will not pay the proceeds to the farmer but “into an investment and development fund (IDF) to be jointly owned by the parties constituting the new ownership regime. The Fund will be used to develop the managerial and production capacity of the new entrants to land ownership, to further invest on the farm as well as to buy out people who wish to opt out of the new regime”.

According to the proposals, “the acquisition of equity by farm workers” must result in “a fundamental change in the control mechanism of the farm”. This is seen as “a fundamental game-changer”. “It introduces co-management of the farm, based on relative equity-holdings and the capacity of each participant in production and management”.

The system would continue to protect farm workers’ tenancy and other rights. However, it would also prescribe “a regime of duties and responsibilities” with which worker-dwellers would have to comply in order to retain their share-equity in the farm. If workers fail to meet their obligations, the new combined farm management will have to refer their cases to a proposed Land Rights Management Committee that would have the power to require them to leave the farm.

The DRDLR is clearly aware of the need to avoid the collapse of future land reform projects by retaining the expertise and interest of existing farmers. As it says, the government “seeks to deepen the security of tenure of farm workers and farm-dwellers, without threatening household food security and national food sovereignty. This sensitive balance between security of tenure rights, on the one hand, and food security and sovereignty, on the other, must be maintained at all times.”

The authors of the proposals evidently wish to ensure continuing food production by allowing present farmers to retain a 50% stake in their farms. However, farmers would be required “by law” to train farm workers in management skills and would retain responsibility for the farm’s “up-keep and maintenance, including ensuring that workers on the land have decent living conditions, are paid decent wages.” They would pay rates and income tax, “while the farm worker does not carry such legal burdens.”

The bottom line is that farmers would be deprived of 50% of their farms without any compensation. Such an attack on property rights would inevitably raise red flags at ratings agencies that are already scrutinizing the evolution of government policy with growing concern.

It is also not clear how farmers could be arbitrarily deprived of their property without breaching the requirements of section 25 of the Constitution – although Minister Nkwinti seems to think that farm workers may already have acquired substantive ownership rights in terms of the Land Tenure Act.

Also, the proposed co-management regime – with the intervention of the government and the Land Rights Management Committee – would inevitably undermine the ability of farmers to carry out their basic function of producing food.

Like so many other facets of the government’s increasingly aggressive racial policies, these sad and clumsy proposals have their origin, on the one hand, in the National Democratic Revolution’s fixation with the conflicts of the past and, on the other, in a profound misunderstanding of how effective modern economies function.

Minister Nkwinti believes that “the moral basis for these proposals is that fellow South Africans (white farmers) who benefitted from the proceeds of the land dispossession wars and the race-based segregation policies and laws of successive Colonial and Apartheid regimes have a moral duty and responsibility to contribute to the restoration of justice and national reconciliation effort.”

An estimated 5% of agricultural land comes onto the market each year. This means that a sizeable percentage of farms have been bought since 1994. How can such farmers – paying minimum wages set by the government – still bear some moral burden for former “colonial and apartheid regimes?”

But why stop at 50%? Once the state has dispensed with the principle of property rights – and once farmers have transferred sufficient managerial skills to their workers – why not push the workers’ share up to 60%, 80% or even 100%?

Minister Nkwinti also points out that “maintaining the current status quo is politically undesirable and unsustainable”. All reasonable South Africans would agree that we need a balanced and workable land reform process. AgriSA and other parties involved in the debate have made constructive proposals in this regard – but without success. These latest proposals will certainly not achieve their desired objective – and one must hope that they will be substantially amended during the consultation process that lies ahead.

There are only 37 000 commercial farmers left in South Africa – and their average age is more than 60. Their children do not want to continue farming because of the increasing obstacles that land reform presents and because of brutal farm attacks. The real challenge for Minister Nkwinti might be to persuade commercial farmers – under any circumstances – to remain on the land and to continue to produce the food upon which we all depend.

By Dave Steward, Executive Director of the FW de Klerk Foundation