25/04/2018 11:42 BST | Updated 25/04/2018 11:42 BST

Land-Reform Success Hinges On Trust Between Public And Private Sector

The NDP already outlines a strategy that could facilitate rapid, productive land redistribution.

There has been a lot written on land reform since December 2017, when the ANC adopted the notion of expropriation without compensation. A number of analysts (ourselves included) warned of the unintended consequences of this policy proposal. The abundance of thought pieces on the negative outcomes of badly managed land-acquisition programmes has not been matched by ideas of how to address them.

Having reflected on possible unintended consequences, it is worth relooking at some existing proposals of means to facilitate land redistribution that were never fully tested. These include the resolutions from the NAREG process, the High-Level panel report, Operation Phakisa, as well as a variety of private-sector and academic proposals, among others.

We must first appreciate that the current land-policy proposal arose from frustration at the perceived slow progress — although we have shown in this piece that there has been progress, if one views the process in terms of hectares moved from white farmers to black farmers, rather than looking purely at the productivity of the land).

With that said, the ongoing land-reform discussions provide a window of opportunity to share ideas on how we imagine the land-reform process going forward. In other words, after having highlighted the unintended consequences of expropriation, we can also use this opportunity to share views on the best practice to acquire agricultural land for redistribution.

In June 2017, we argued that land-reform processes should be more aligned with the ideas raised in chapter six of the National Development Plan [NDP], as we believe it has more practical steps to achieve effective land reform productively.

The NDP suggested that the identification of transferable farms and beneficiaries should take place at a district level, facilitated by district land-reform committees that were established in 2015. Under the auspices of district committees, a tripartite joint-venture approach on land reform will be established.

One of the most enduring and fundamental factors in the land-reform debate is the trust deficit between the government and private sector.

Farms for sale could be identified by the committee, and a leading successful farmer appointed as mentor or co-investor to acquire new land with a qualified beneficiary. The beneficiary should be selected only by the land-reform committee, to ensure a good working relationship.

In acquiring the farm, the state can contribute 30 percent of land value in grant money to the beneficiary. Another 30 percent can be a loan from the state-owned agricultural bank in the name of the beneficiary and farmer, and the remaining 40 percent is a cash contribution by other farmers in that particular district.

The contributing farmers would then be exempted from future land-reform claims, and the farm could be operated via the farmers' existing operations to ensure success. A subsidised interest rate would need to be provided by the state-owned agricultural bank for the loan, and backed by a state guarantee in the spirit of risk sharing.

If farmers in districts work together and get at least 30 percent of land in each district transferred to black farmers and thereafter utilised productively, then land expropriation without compensation would not be needed. Agribusinesses and commodity organisations would also have to provide post-transfer support and mentorship to new beneficiaries.

This can be done only if there is a fair and transparent beneficiary selection, grants and loans are disbursed fast, title deeds are transferred and registered speedily, the government shares in the risk of redistributing land and developing new farming operations, and there is policy stability.

One of the most enduring and fundamental factors in the land-reform debate is the trust deficit between the government and private sector. Trust needs to be built in order to ensure the success and sustainability of the land programme and the agricultural sector.

* Wandile Sihlobo (@WandileSihlobo), Tinashe Kapuya (@TinasheKapuya) are agricultural economists. Theo Boshoff is a land policy analyst.