The plan revealed to the African Farmers Association of South Africa (Afasa) in Pretoria proposes a district-based approach to land reform and its financing. Zuma said: “We need to find ways of providing tenure security for communal farmers, and investigate better ways of financing land reform so that new farmers do not become saddled with debt,” said Zuma at the African Farmers Association of South Africa (Afasa) gala dinner outside Pretoria on Monday evening.
The plan proposes that each district should establish a land reform committee where all stakeholders can be meaningfully involved.
The committee would be charged with identifying 20 percent of the commercial agricultural land in the district and giving commercial farmers the option of assisting in its transfer to black farmers, in line with government’s land reform targets. The implementation of this land reform proposal would entail identifying land that is readily available from land that is already in the market; land where the farmer is under severe financial pressure; land held by an absentee landlord willing to exit; and land in a deceased’s estate. In this way, land can be found without distorting markets.
After being identified, the land would be bought by the state at 50 percent of market value, which is closer to its fair productive value.
The shortfall of the current owner would be made up by cash or in-kind contributions from the commercial farmers in the district who volunteer to participate. In exchange, commercial farmers would be protected from losing their land and gain black economic empowerment status.
Zuma said this should remove the uncertainty and mistrust that surrounds land reform and the related loss of investor confidence, adding that a stepped up programme of financing should be created. “This would include the involvement of the National Treasury, the Land Bank as well as established white farmers. The model envisages that the cost of land reform be spread between all stakeholders. It also envisages new financial instruments being designed for the purpose of facilitating land reform.
“These could include 40-year mortgages at preferential rates for new entrants into the markets, as well as land bonds that white farmers and others could invest in,” he said.
The President said this was an innovative proposal that needed to be tested and that it would be useful to hear from members of the farming sector if they would support such an approach. Zuma said the food security situation was too serious to leave to short-term planning only.
“Our long-term vision document, the National Development Plan, forecasts that by 2030, more than 70 percent of South Africa’s population will live in urban areas, compared to just over 60 percent today.
“Even with these changes, rural areas will remain home to millions of our people. We know this because there is also considerable movement within rural areas resulting in a consolidation into denser settlements,” he said.
The National Development Plan argues that agriculture is the primary economic activity in rural areas and has the potential to create close to one million new jobs by 2030, and the President said this could be done by expanding irrigated agriculture.
“There is evidence that the current 1.5 million hectares under irrigation can be expanded by at least 500 000 hectares through more efficient use of existing water resources and the development of new water schemes,” he said.
Agriculture, Forestry and Fisheries Minister Tina Joemat-Pettersson said government was working extremely hard to assist smallholder farmers to become commercial farmers.
“We are working very hard to turn rural areas into commercially viable zones. We are trying to eradicate deeply entrenched poverty in rural areas through programmes that will overhaul the entire social system.
“We need to decisively move so our programmes translate to visible change in our communities,” she said.
“In 2009, we made a commitment to transfer 30 percent of the 82 million hectares of agricultural land which was white-owned in 1994 to black people by 2014. This 30 percent translates to 24.5 million hectares. “Between 1994 and December 2011, 3.9 million hectares were redistributed through the land acquisition and redistribution programme. We have learned a number of lessons from the exercise,” he said.
According to the President, one major lesson was the process of acquiring and distributing a particular piece of land was often lengthy and this escalated the cost of redistribution because the previous owner stops investing in the land.
He said many farms are in a poor state of repair at the point of acquisition, adding that there has often been a decline in productivity on the redistributed farms. This led to the adoption of the recapitalisation programme in November 2010. The objectives of the recapitalisation programme include increasing food production, food security, commercialisation of small farmers and creating employment opportunities.
By December 2011, 595 farms were in the process of being rehabilitated through mainly rebuilding infrastructure. “We are also already looking ahead as a country as to what our agriculture sector should look like in the next 30 years or so, through the National Development Plan, produced by the National Planning Commission in the Presideny,” he said.
Commercial agriculture is currently producing 90 percent of the agricultural output. It is estimated that it consists of about 37 000 members.
On the other hand, there are 25 million people who live in the rural areas and they produce 10 percent of the agricultural output through subsistence farming.
The President said more support for emerging farmers will enable government to improve the participation of black people, in particular Africans in commercial agriculture.
He further said 11 000 new smallholders have been established since 2009, out of a 50 000 target that was set for up to 2014. Support has been provided to both new and long-established farmers through many programmes including Letsema, the Recapitalisation and Development Programme and through the funding agency MAFISA.
Despite the support, only a marginal number of 5 381 smallholders are involved in agri-businesses and a mere 3 910 are linked to markets.
“To achieve further success, smallholder farmers require a comprehensive agribusinesses support package including favourable commodity pricing; access to finance; provision of technical expertise and mentorship; and contracted markets,” he said.
The Transvaal Agricultural Union of SA (Tau SA) responded by saying the plan is not feasible. “Overall, President Zuma’s proposals are not feasible, and may even be counter-productive in terms of food security,” said Tau SA president Louis Meintjes.
