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LAND: PRIVATE SECTOR MUST BACK GOVT – AND MOTSEPE TOOK FIRST STEP

Zamikhaya Maseti

Businessperson Patrice Motsepe’s plan for a multibillion fund for black farmers is a step in the right direction. It simply means in the long term the private sector will not be risk averse but, instead, have an increased appetite for small farmers – particularly land reform beneficiaries and communal land.

The fund will give more impetus to the R3.9 billion President Cyril Ramaphosa promised during his State of the Nation address in June.

The private sector must be brave enough to get involved in supporting the land reform programme.

The biggest challenge facing land reform is underused agricultural land. The presidential advisory panel on land reform and agriculture found government has delivered only 8.4 million hectares between 1994 and March 2018. Then minister of rural development and land reform, Gugile Nkwinti, bemoaned the fact that only 10% of redistributed land is productive. Government has also not been able to achieve the target of transferring 30% of commercial agricultural land to blacks by 2014.

The private sector has been a spectator for long. It did not help government in driving land reform. I guess the issue has been the problem of trust.

The walls have to come down and Patrice Motsepe is the right man to make it happen. He has the political pedigree and business acumen.

In return, government will have to level the playing fields and create a conducive environment for that coexistence and convergence. More importantly, it must pay urgent attention to the security of tenure by giving land reform beneficiaries bankable title deeds or long-term lease agreements. It is precisely the insecurity of tenure that makes agricultural finance institutions drag their feet in supporting land reform. The reality is the private sector expect returns on investment.

Second, government must drive the integration of agricultural development finance. The fragmentation of finance poses a challenge to agricultural transformation. The department of agriculture, land reform and rural development is still implementing programmes like Comprehensive Agricultural Support and Recapitalisation. There is no indication that the integration of agricultural finance will ever be concluded.

Undoubtedly, the establishment of the Land Reform Fund as proposed by the panel will give impetus to that integration. It will assist in the crowding in of the much-needed private sector funding and loans or grants from multilateral institutions.

The panel proposes that Land Bank be given the responsibility to manage the fund and issuing of Land Reform Bonds.

Governance is a critical area that government must address urgently. To have good governance, state institutions driving agriculture and land reform will have to be repurposed. Where there is duplication of mandates, realignment is the solution. If all those aspects are addressed, the private sector will undoubtedly throw its weight fully behind government.

But banks and agricultural cooperatives will have to transform their credit policies. Their policies happened to solidify the marginalisation of black farmers.

The fact that many have no assets meant that they just could not be assisted by the banks. This will have to be changed.

Land reform and agricultural transformation requires dynamic leadership. I am certain both Minister Thoko Didiza and Motsepe will help the sector overcome what seem to be insurmountable challenges.

Zamikhaya Maseti is a public and sector policy specialist at Land Bank. The views expressed are his own and do not necessarily represent policy positions of Land Bank.

Motsepe will help the sector overcome challenges