Transcript Land Reform: Restitution/Redistribution of Large Scale

Land Restitution / Redistribution
of Large Scale Enterprises: Overview of
Issues faced by Beneficiary Communities
Ruth Hall
(with acknowledgements to Edward Lahiff, Bill Derman and Espen Sjaastad
and their paper on Strategic Questions for Strategic Partners)
TIPS Forum 2008, Cape Town
Introduction
• The thrust of land redistribution has been away from
large community projects and towards smaller groups or
family farming, given:
– view that group dynamics are largely to blame for poor outcomes
– changes in grant structure (revised LRAD grants) and
– introduction of proactive land acquisition which does away with
the grant formula
• In the future, land reform will affect large scale farming
enterprises in two major ways:
– AgriBEE deals (with workers or 3rd parties)
– Restitution claims
• The latter are increasingly being resolved through the
establishment of strategic partnerships or other forms of
joint venture.
• Indeed, this is already effectively a condition for
settlement of such claims.
Strategic partnerships in Limpopo
• Restitution is finally addressing the transfer of large
areas of high quality agricultural land: approx. 5,000 rural
claims in Limpopo, 70% of land area
• North-eastern Limpopo forms part of the ‘last frontier’:
area of post-1913 settlement, forced removals continued
into the 1970s on white farms and through homeland
consolidation
• New model of strategic partnerships (SP) is now
dominant method of settling community claims on
commercial farms – joint ventures between claimants
and private investors
• SP model raises questions about the direction of the
restitution programme, land rights, and the realisation of
benefits among restitution claimants.
Background
• Upper Luvuvhu (Levubu) Catchment, high-value
irrigated land, situated close to the town of
Makhado (formerly Louis Trichardt).
• Relatively recent date of dispossession means
that claimants have personal memory of the
land; many continue to live close to the claimed
land, and many communities remain relatively
intact, and have actively contested their
dispossession over the years.
• Land under claim is largely used for export
quality subtropical fruit and nuts (and some
forestry), and many claimants remain involved in
agriculture in various capacities
• Strong argument for restoration of the land.
Claimant communities
• Claims at Levubu are all community claims, in terms of
the Restitution Act, and identify themselves as tribal
claims (i.e. restoration of tribal land to entire
communities), and traditional leaders are generally at the
forefront of these claims
• Claimant communities are typically upwards of 1,000
households in size
• Claims process has reinvigorated numerous local
disputes around boundaries and hierarchy between and
within chieftaincies (inc. sub-chiefs)
• Fuelled by ethnic segregation during apartheid, of what
were often mixed (Venda, Shangaan) communities prior
to removals.
• Potential for conflict with non-claimant communities living
adjacent to claimed lands (many of whom currently work
on the farms)
Return of land to claimants presents
numerous challenges
• In upper Levubu alone there are 350 portions, nine claimant
communities, upwards of 10,000 ha of agricultural land;
potential cost of R1 - 2 billion
• CRLR has limited staff and technical resources
• Potentially disruptive of local economy – agricultural
production, employment, upstream and downstream
industries, property values.
• Concerns expressed across the political spectrum and
business interests
• Opposition among landowners, although the threat of
expropriation led many owners to accept the state’s cash
offers.
• Failure of a few projects in the Province has attracted
negative publicity, adding to the pressure on the CRLR to
come up with ‘sustainable’ solutions that preserve the
productive capacity of the farms and ensure material
benefits for the claimants over time.
Three imperatives
behind the SP model
(with some contradictions between them…)
• economic imperative to maintain productivity of farms
and minimise the impact on employment and the local
economy
• developmental imperative to ensure long-term benefits
to claimants (over and above the limited benefits
perceived to flow from alternative land uses – i.e.
‘subsistence’)
• political imperative to preserve the image of
government as competent in the implementation of its
programmes, dependable in fulfilling its promises, and
responsible in the use of state resources, in the eyes of
political opponents, potential investors and international
commentators.
The Generic Strategic Partnership
Model (1)
• Successful claimant communities, through their
Communal Property Associations (CPAs), must
enter agreements with a SP to form new
company to undertake agricultural production
• Operating companies will pay rent to CPA over
ten-year lease
• Two SPs selected for Levubu– South African
Farm Management (SAFM) and Mavu
Management Service (MMS) – controlled by
white agri capital and new BEE partners
• SP will be retained as managing agent with full
operational control over the farms; management
fee of 4-8% of turnover.
The Generic Strategic Partnership
Model (2)
• Existing workers will be granted small
shareholding in operating company (2%)
• Profits to be divided between shareholders:
50% to CPA, 48% to SP, 2% to workers.
• Preferential employment and training
opportunities for community members
• After 10 years, new agreement can be signed
with SP, or CPA can buy out SP’s share
• Rental income and dividends to be used for
benefit of community
• No access to land or livelihood opportunities for
community members, other than through the SP
What does the SP model at Levubu mean
for the Restitution Programme?
• Key shift is away from land access by claimants and
towards the maintenance of agricultural production
(within a ‘commercial’ context).
• Benefits are almost entirely indirect, in the form of rents
or dividends (or employment for a lucky few).
• Benefits accrue to the community (or CPA), meaning that
the allocation of benefits to individuals (if this is even
attempted) is entirely through collective processes, with
all the risks and contestation that this implies.
• Individual land rights are reduced to an ‘undivided share’
in a property which is leased to an entity which is,
effectively, beyond the control of the individual and of the
group for the duration of the contract.
• Difficult to see how the SP model promotes the land
rights of claimants
Strategic Question 1.
What benefits and opportunities will
accrue to claimants?
• Rent to CPA at 1.5% of land value p.a.
(more or less guaranteed)
• Dividends on profits (not guaranteed): and
may be retained by new company
• Training and employment opportunities for
a few (both as general workers and in
senior management)
Strategic Question 2.
How will benefits be distributed?
• Communities all represented by CPA or Trust,
dominated by tribal leaders, which will control
distribution of benefits and opportunities
• Pressure to retain income for eventual buyout of
SP
• Cash or other material benefits to all members
explicitly ruled out, in favour of public goods,
bursaries, etc (actually CPA office & 4x4)
• Benefits for the mass of poor, unemployed
members unclear
Strategic Question 3.
What’s in it for the Strategic Partners?
• Incentive to maintain turnover, as this ensures
management fee
• Farm profitability less certain, and has to be
shared with partners
• Key attraction is exclusive control of upstream
(inputs, machinery) and downstream
(processing, packaging and marketing)
processes
• Inherent risk of price discrimination, as value is
pushed up or down the chain
Strategic Question 4.
Are the interests of the SP compatible
with those of the claimants?
• SP has incentive to maximise short term profits, esp.
close to end of contract, putting them in potential conflict
with long term interests of communities
• SPs have stated interest in consolidation of production
across multiple farms and multiple communities – implies
radical restructuring of agricultural production at Levubu
• Shift away from on-farm diversification towards
specialisation in large blocks, spreading risk for the SP
but increasing it for specific communities
• SP has interest in reducing labour force and wages;
community leadership will face pressure to increase
both.
Strategic Question 5.
What is the future role of the state in
provision of post-settlement support?
• SP model viewed as the ‘solution’ to PSS in areas such as
Levubu: SP, through their agreements with the claimant
communities, becomes responsible for development
• Needs of claimant communities – not least their land needs
– are not necessarily going to be met in full through these
partnerships.
• Substantial support required in monitoring the performance
of the new joint ventures in order to protect the interests of
claimants.
• CPAs also likely to require extensive support in terms of
capacity building, business advice, monitoring of
compliance with the terms of settlement agreements,
dispute resolution and the like.
• Few systems currently in place for such monitoring and
capacity building, dispute resolution etc.
Strategic Question 6.
What’s in it for workers, and who
protects their interests?
• Neither Commission, CPA nor SP has responsibility to
establish Workers’ Trust (2% shareholding) – hasn’t
happened.
• Existing workers face constant pressure for replacement,
despite laws, agreements and interests of the SP
• Some layoffs already due to prolonged period of
transition/inactivity
• New workers from community may be less suitable in
terms of skills
• Scope for tension within communities, between those
employed and those not (plus connections to royal
family, etc)
• Irony: turnover in labour force, and insistence on families
not joining workers on-farm, entrenching spatial divide
between commercial farm and ‘Bantustan’.
Conclusions (1)
• The strategic partnership model represents at best a
partial solution to the needs of communities claiming high
value agricultural land.
• Emphasis on maintenance of production precludes a
radical restructuring of apartheid agriculture that might
produce very different outcomes in terms of access to
land, self-employment and livelihood opportunities.
• Land rights of individual community members have been
diluted to an extraordinary extent.
• The flow of material benefits to community members is
far from certain and, ironically, it is likely that the actual
land needs of members – for housing and food
production – will remain unaddressed.
• An emphasis on unitary solutions in large claims creates
enormous opportunities for top-down control (and self
enrichment) by community leaderships, whether elected
or hereditary.
Conclusions (2)
• Opportunities also created for private commercial
interests, both black and white, who have no connection
to the land claims, to benefit enormously from the
restitution process.
• Appropriate mechanisms have yet to be put in place to
monitor and support the long-term interests of claimants
(incl. minimal presence of NGOs, RLCC, PDoA)
• Under the SP model, provision of post settlement support
has effectively been privatised.
• Poverty alleviation has virtually disappeared from the
discourse.
• It appears highly unlikely that the SP model will achieve
the objectives of restitution, and is likely to face severe
contestation from within over time.
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