Ministry of National Development Planning

• This has resulted in an incorrect understanding of the real progress made to correct the racial distribution of farm land ownership in South Africa.
• In 2012 the National Development Plan set a target to redistribute (or restore) 30% (or 23.7 million hectares) of all freehold agricultural land to black South Africans by 2030.
• The general perception is that the land reform programme has failed to deliver a recognisable shift in ownership patterns.
• I have also identified steps that the government should take to fix the problems.

Land acquisition

• Since then, by our calculations, the total area of land rights transferred away from white ownership – either to the state or black beneficiaries – or where financial compensation has been made, is equal to 19,165,891 ha.
• This is equivalent to 24.7% of all freehold agricultural land.
• Although the number may look heartening, given that it is close to the 30% target set out in the National Development Plan, the issue of concern is that the state is now a major owner of agricultural land (more than 2.5 million hectares).

Flawed design

• Through the scheme the land is then held by the state for the use by lessees of the programme.
• By June 2023, the state had acquired 2.5 million hectares of productive farmland through the programme.
• Most of the roughly 2500 beneficiaries have a 30-year lease agreement with the state.
• It's not gone well

  I have gained further insights in conversations with farmers currently leasing land from the State.

Major obstacles

• This makes it difficult – or impossible – to invest in the land or secure loans for improvements and growth.
• Beneficiaries have to rely on government grants to do business.
• Farmers have limited credit history, collateral or access to formal financial institutions because of the nature of the lease arrangement.

Action that needs to be taken

• Firstly, the government should transfer the asset to an institution with a vested interest and capacity to provide both oversight and finance.
• Fifth, the purchase price (pegged value minus lease amounts paid) should be financed over 25 years at a preferential interest rate.
• Seventh, put a moratorium on the allowed window of reselling the farm to 10 years and let government have the first right of refusal.