Don’t ne­glect cities in the land re­form de­bate

Mil­lions of jobs must be cre­ated in ur­ban ar­eas, where 70% of peo­ple live

Sunday Times - - Opinion - By ANN BERN­STEIN

● Cen­tral to Pres­i­dent Cyril Ramaphosa’s plans for re­vi­tal­is­ing SA is “a mas­sive in­crease in in­vest­ment in the pro­duc­tive sec­tors of the econ­omy”. What does this mean for land re­form and the agri­cul­tural sec­tor?

The bot­tom line is that new farm­ers on re­dis­tributed land will not be suc­cess­ful and new jobs will not be cre­ated un­less the pro­duc­tiv­ity of land is im­proved. Pro­duc­tiv­ity will not im­prove un­less in­vest­ment in agri­cul­ture is in­creased. The govern­ment can­not gen­er­ate such in­vest­ments, so growth and jobs in agri­cul­ture can only be pro­duced by the pri­vate sec­tor. En­cour­ag­ing this kind of in­vest­ment re­quires a new ap­proach to land re­form.

How can the en­vi­ron­ment for in­vest­ment, growth, trans­for­ma­tion and jobs be made more sup­port­ive?

The first prin­ci­ple should be to re­frain from chang­ing the con­sti­tu­tion. There can be oc­ca­sions when a con­sti­tu­tion should be changed. How­ever, some parts of a con­sti­tu­tion are more sen­si­tive than oth­ers; given the enor­mous eco­nomic chal­lenges we face and the col­lapse of growth over the past decade, prop­erty rights is an area of par­tic­u­lar sen­si­tiv­ity.

Blam­ing the con­sti­tu­tion for the fail­ure of land re­form is clas­sic po­lit­i­cal mis­di­rec­tion; act­ing on it will at best raise un­cer­tainty and re­duce in­vest­ment and at worst pro­voke a bank­ing cri­sis that will de­stroy in­sti­tu­tions such as the Land Bank, spill over into the rest of the econ­omy and make ev­ery­body, par­tic­u­larly the poor, worse off.

A sec­ond pri­or­ity is to clear the decks. The re­port last year of the high-level panel chaired by for­mer pres­i­dent Kgalema Mot­lanthe es­ti­mates that there are more than 26,000 un­re­solved land claims dat­ing from be­fore the ini­tial cut-off date of 1999. Since then thou­sands of ad­di­tional claims have been lodged. The process has de­cayed as a re­sult of poor de­sign, ex­ac­er­bated by cor­rup­tion, poor in­sti­tu­tional ca­pac­ity and le­gal and pol­icy con­fu­sion. The po­lit­i­cal ur­gency of land re­form is clear, but em­bark­ing on ac­cel­er­ated and extended state-led land re­dis­tri­bu­tion be­fore strength­en­ing a shock­ingly weak in­sti­tu­tional in­fra­struc­ture would be a dan­ger­ous gam­ble.

One of the keys to en­cour­ag­ing a sup­port­ive en­vi­ron­ment for in­vest­ment and hence for suc­cess­ful land re­form is to har­ness the pri­vate sec­tor’s ex­pe­ri­ence and ex­per­tise, not only in core ar­eas such as agribusi­ness and pro­cess­ing but also in land re­form part­ner­ships. Over the past 10 to 15 years, many in­di­vid­u­als, or­gan­i­sa­tions and sup­port­ing in­sti­tu­tions in com­mer­cial agri­cul­ture have worked hard to make such part­ner­ships vi­able. If prop­erly sup­ported by govern­ment pol­icy, at­ti­tudes and in­sti­tu­tions, such part­ner­ships could spread and mul­ti­ply.

If th­ese prin­ci­ples and pri­or­i­ties guide the process, land re­form will have a much bet­ter chance of work­ing. How­ever, if the eco­nomic ben­e­fits are to be shared more widely than within a re­stricted class of new com­mer­cial farm­ers, then ad­di­tional goals need to be tar­geted.

Ad­dress­ing poverty, in­equal­ity and eco­nomic in­clu­sion re­quires, above all, em­ploy­ment growth. On most com­mer­cial farms, es­pe­cially in grain ar­eas, in­creas­ing mech­a­ni­sa­tion has meant fewer jobs per hectare, even when in­vest­ment leads to growth and ex­pan­sion. Other sec­tors are more labour in­ten­sive. Th­ese in­clude field crops (sugar cane and cot­ton) and hor­ti­cul­ture, such as av­o­ca­dos and macadamia nuts, for which there is fast-grow­ing de­mand. Mpumalanga and Lim­popo, where in­vest­ments in labour-in­ten­sive ex­portable crops could cre­ate many thou­sands of jobs, are among the provinces worst hit by un­cer­tain­ties over un­re­solved land claims, which sti­fle in­vest­ment and job cre­ation.

Per­haps the most im­por­tant prin­ci­ple of all is to see trans­for­ma­tion in land and agri­cul­ture in the per­spec­tive of the larger econ­omy. An un­der­stand­able sense of his­tor­i­cal in­jus­tice en­cour­ages some to see land as a stand­alone is­sue that is the source of all SA’s ills, and to see trans­for­ma­tion of farm own­er­ship as the means of heal­ing them all at once. This is to mis­take a part for the whole. We have to ac­knowl­edge that ill­judged land re­form has the po­ten­tial to desta­bilise the en­tire econ­omy.

The back­drop to the is­sue is that half the pop­u­la­tion is poor, and SA has vast in­equal­i­ties and the world’s deep­est un­em­ploy­ment cri­sis. Nearly 70% of its peo­ple are ur­banised. Any work­able land re­form scheme has to ac­knowl­edge that it would be fu­tile to try to re­verse the dy­nam­ics that have led to this ur­ban­i­sa­tion. In­deed, ur­ban­i­sa­tion can help drive growth.

Those who are com­mit­ted to farm­ing should be given the op­por­tu­nity and sup­port to do so. But the best places to cre­ate op­por­tu­ni­ties for mil­lions of poor and un­em­ployed peo­ple will be in dynamic, well-man­aged cities in which em­ploy­ment and en­ter­prise can grow.

Ur­ban land re­form is a key part of ur­ban man­age­ment and there is much to be done here. The govern­ment needs to pay more at­ten­tion to the needs of our ex­pand­ing cities.

Suc­cess­ful land re­form means a rapid and steady ex­pan­sion of black par­tic­i­pa­tion as own­ers, and also as man­agers and work­ers in the agri­cul­tural sec­tor. This would be enor­mously ben­e­fi­cial but on its own it will not re­solve most of our so­cial and eco­nomic chal­lenges. It is vi­tal that we en­sure that ef­forts to de­liver land re­form don’t make it harder to ac­cel­er­ate eco­nomic growth, in­clu­sion and em­ploy­ment.

Bern­stein is head of the Cen­tre for De­vel­op­ment and En­ter­prise, which re­leased a new re­port on agri­cul­ture, jobs and land re­form this week

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