The successful implementation of land reform is not only a political and moral imperative but a necessary intervention required, among others, to stimulate rural economies and mitigate against -poverty, unemployment and in–equality.
Although the rural population makes up nearly 32% of South Africa’s populace, as indicated by World Bank demographic data, there are limited economic opportunities, widespread poverty and high unemployment.
The most recent StatsSA estimate put the poverty headcount ratio of around 81% in rural areas, compared with 40% in urban areas, highlighting the significant disparity in economic conditions between the two.
About 68% of the population lives in urban areas and it is projected to increase to about 80% by 2050, according to the UN.
This rapid urbanisation will exert unprecedented pressure on social services in the cities, and create unbalanced development. Land reform presents an unique opportunity to revitalise rural economies and mitigate the migration of people from rural areas to cities in search of economic opportunities.
The land restitution and redistribution initiatives have the potential to drive rural economic development and create significant new opportunities in rural areas. In an editorial titled Agriculture, Structural Transformation, and Poverty Reduction, academics Johann Kirsten from the Bureau for Economic Research, Wandile Sihlobo from the Agricultural Business Chamber of SA and Natalie van Reenen from Treasury highlight that agricultural growth is typically two to three times more effective at reducing poverty than other sectors.
However, as they discuss in their paper How Land Reform Can Boost Inclusive Agricultural Growth, simply reallocating land without post-settlement support is unlikely to achieve the desired impact.
They emphasise that a stable policy and investment environment, well-developed infrastructure – including electricity, water, roads, rail and ports – efficient local municipalities, effective farmer support, and functioning state services such as veterinary care, agricultural research, biosecurity measures, and trade support are essential for successful land reform.
To enhance growth, there is an urgent need for a central agency that manages the land reform and development. The Land Reform and Development Agency, which was announced by the president a while back, must be implemented urgently to facilitate better coordination, reduce red tape and serve as a one-stop on issues related to land reform and development.
Post-settlement support remains crucial, where beneficiaries can receive financial and technical support, along with off-take agreements or contracts to ensure sustained growth and productive use of land.
Over the past 12 years, the Vumelana Advisory Fund has consistently advocated for a supportive environment where emerging farmers can use their land as collateral to access funding from lending institutions.
We have called on the government to explore innovative and affordable financing solutions to address the challenges faced by land reform beneficiaries.
As one way of dealing with the challenges, we have facilitated strategic partnerships between claimant communities and private-sector investors.
We are confident that the private sector holds the necessary expertise, access to finance, and market reach to enable beneficiary communities to sustain and expand their operations.
Land reform can work. Working with land reform beneficiaries we have been able to demonstrate this. Over the past 12 years, Vumelana has facilitated 26 partnerships between land reform beneficiaries and private investors. Through these partnerships we have been able to mobilise R1-billion in investments, putting 76 000 hectares of restituted land to productive use. This approach has created 2 500 jobs.
Policymakers have a unique opportunity to harness the land reform programme to bring transformative change to the lives of millions of South Africans. For this impact to be meaningful, structural reforms at the municipal level and targeted support for claimant communities are essential to revitalising rural economies.
When not driven by short-term political agendas, the land reform programme can be a powerful tool in reducing poverty. It holds tremendous potential to create sustainable pathways to prosperity for the rural poor.
- Setou is the CEO of the Vumelana Advisory Fund, a non-profit organisation that works with land reform beneficiaries to make their land productive by facilitating partnerships with investors
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