Land reform: time to dust off the partnership plan

It looks as if the drastic lockdown measures against the coronavirus disease (COVID-19) have, to some extent, doused the hottest flames of the expropriation without compensation (EWC) discourse in South Africa.

Perhaps Moody’s Investor Service’s long-expected downgrading to ‘junk’ status and Fitch Ratings’ further downgrading into sub-investment grade, together with the record lows in the value of the rand, have also played a role.

One gets the impression that a growing number of the ANC’s decision-making elite are beginning to better understand the disastrous consequences of EWC, halfheartedly driving the ANC’s resolution in this regard as if they are discreetly putting it up to be shot down either through parliamentary process or in the Constitutional Court.

It would, in any case, not have been the end of the debate or the pursuit of radical land reform, but merely postponing the explosion and buying some time.

The potential offered by the land issue to score cheap political points in the run-up to an election, particularly among the poorest section of the rural electorate, is too vast to pin one’s hopes on the disappearance of the issue. At most, it could offer South Africa an opportunity to come up with a feasible alternative.

the Partnership plan

The partnership plan for land reform is such an alternative, and there has never been a more opportune time to dust if off again.

It is based on Chapter 6 of the National Development Plan (NDP), which, unlike the expropriation resolution of 2017, was accepted unanimously by the ANC’s 2012 policy conference in Bloemfontein.

Some farmers call it the Karaan plan, agricultural enterprises call it the Banks Association of South Africa (BASA) model, and Minister of Rural Development and Land Reform Gugile Nkwinti referred to it as the 50/50 model. It is largely the same thing, and in practice, by far the most successful model, if success is measured against profitability, sustainability and wealth creation.

Chapter 6 of the NDP proposes that every fifth farm in a district (20%) be identified for land reform by “inclusive

‘ ninety percent of land reform projects have failed’

district committees”, and then be bought in a market transaction. The state would pay half of the purchase price and the remaining farmers in the district would have to contribute to pay the other half.

Initially, the model gained no traction among farmers, banks or agricultural enterprises because it implied that landowners would have to pay an additional tax, and in what kind of democracy are individuals required to foot the bill for a national necessity?

During talks in Stellenbosch in March 2013 among Agri SA and members of the National Development Committee, led by Prof Mohammad Karaan, it was agreed that the 50% contribution by local farmers could be in the form of buying shares in land reform farms, thus creating partnerships among established farmers and beneficiaries. This could result in beneficiaries being able to farm profitably within a couple of years.

In the same year, Nkwinti admitted in Parliament that more than 90% of all land reform farms had failed.

The pilot project for the partnership plan, which was launched on a citrus farm in Mpumalanga in 2014, was a failure because the state never paid its 50% contribution. After three years of intense efforts by Agri Limpopo, Agbiz, Wild-SA, the Land Bank and the mega farmer group Pro-Agri, the Chapter 6 Implementation Committee reached the conclusion that the partnership plan could not work because the senior management of the Department of Rural Development and Land Affairs did not want it to succeed. It would undermine their ‘revolution’!

However, the BASA, big farmers such as Milaan Thalwitzer, Nick Serfontein and Rossouw Celliers, and Afgri, Humansdorp Koöperasie and the Land Bank pushed ahead without the state’s contribution and made the plan work in practice. By 2018, Humansdorp Koöperasie had successfully established 74 of these projects. The model also caught the attention of the German government, who, notwithstanding scepticism about the state’s will and capacity to implement any such programme, is still investigating channels to support it.

reasons for supporting the model

The partnership plan can in no way be reconciled with EWC, but serves as an ideal alternative to it for the following reasons:

• It is the ANC’s own plan, based on a resolution that has a stronger foundation than the expropriation resolution. • It is voluntary, maintains market value (and therefore also agricultural financing) and partners may choose one another.

• It does not divide the existing agriculture cake into smaller slices, but instead enlarges the agriculture cake and allows everyone to share in its growth.

• It makes business sense.

• It has, excluding the public servants and a few other role players, the widest public support of all models proposed so far: the banks and agricultural enterprises, civil organisations, several agricultural organisations (and even those who opposed it initially) appear to be more tolerant towards the model since the Landbouweekblad

Land Conference in Modimolle in 2018.

• It is an already working model with proven success. Of the more than a hundred projects based on this model, only four have failed, and that was predictable because not one of the four complied with the selection criteria of the Chapter 6 Implementation Committee.

While there are many uncertainties in the agricultural sphere, one thing is for sure: if we do not manage to create a class of profitable black farmers in South Africa, there is no future here for anyone!

The partnership plan certainly isn’t the only feasible model, but it is the best one that has been tested so far!

Dr Theo de Jager, chairperson of the Southern African Agri Initiative

FW ARCHIVE The partnership plan for land reform is a far more feasible model, as it makes business sense and has widespread support, says Dr Theo de Jager.