Improved Distribution And Utilization Of Land In Rural Areas - Our Approach

The HSF has made a parliamentary submission on the possible amendment of Section 25 of the Constitution (to read click here) and has published a brief summarizing it (to read click here).

Introduction

We urge that eight key principles guide land reform in rural areas.

The objectives of rural land reform

Rural land reform should have two objectives:

• To strengthen household residential tenure rights
• To encourage productive use of agricultural land.

We urge an approach to land reform which calms, rather than inflames, emotions about land. On our view, land reform is about the better use of land in a modernising economy, and not about conflictual, zero-sum approaches which will set communities against each other.

The route to improved distribution and utilization of rural land lies through the establishment of more property rights, not fewer

The contribution of secure property rights to economic growth has been much discussed in the economics literature. Two useful literature summaries and assessments have been published by the Overseas Development Institute[1]. These assessments conclude that there is ‘a medium/large body of evidence showing that secure property rights are an important determinant of long-term economic growth’[2] and that ‘that unequal asset/property distribution will have a negative impact on the security of property rights and the quality of institutions in general’ [3]

Efficiency in agricultural production requires that land markets assign land to those who can use it most productively

The function of an asset market is to render the use of an asset as efficiently as possible. This can be done both through the transfer of a freehold title and within a system of traditional rights. Research in Africa shows that under customary law, there is strong evidence of informal markets operating in which land is rented and sharecropped through various mechanisms, allowing households with low endowments to access land[4].

Rural land reform should not damage financial institutions which support farmers

Farmers depend on credit to acquire land, to invest in farm infrastructure, and to provide for working capital. Loans are provided by commercial banks, the Land Bank and other financial institutions and advances run into hundreds of billion rand. Should land reform increase the risk of default, tougher terms for loans and credit contraction will follow. Neither would be good for farming.

Conditions in rural traditional areas cannot be ignored

Three quarters of the rural population live in traditional areas[5]. Two developments threaten security of land tenure: mining development, which can lead to dispossession without consent or compensation, and claims by traditional authorities that they own land, and can extract formal or informal rents from it. This accords with the ODI’s conclusion from studies of Africa that communally-held lands which are under customary tenure systems are likely to be at a higher risk than individually or communally titled lands, as the low statutory level of protection offered to them under national laws makes it relatively simple for them to be appropriated and leased to commercial interests[6].

We believe that the remedy is to strengthen the rights of households to land in traditional rural areas and we support the recommendation of the High Level Panel to create a Land Records Act to develop a robust, inclusionary land rights administration system[7]. 

Existing commercial farming capacity should be regarded as a national asset, rather than a liability in so far as it exists in the hands of the ‘wrong’ race

Any sane approach to the improved utilization of land must recognise that the development of black farming capacity is essential. Many white farmers recognize the necessity and are prepared to co-operate with it. They know from their daily experience the importance of cross-racial co-operation in producing agricultural output. They also know that there is plenty of room for more labour intensive land development, especially in the current context of a declining rural population. But uncertainty about property rights and the threat of personal ruin undermines commercial farming capacity, reducing agricultural efficiency and undercutting the capacity for constructive contribution to change. 

While more secure rights are a necessary condition for improved utilization, they are not sufficient. A raft of complementary inputs needs to be provided

Many cases of failure of emergent commercial farmers with access to land can be traced to failures to deliver title, inappropriate yoking together of people expected to farm a particular piece of land, inability to raise finance for working capital and longer-term investment, lack of extension services, and insufficient expertise in operating and maintaining farm infrastructure. The latter is an area where the support of experienced neighbours would be particularly valuable. The rate at which these complementary inputs can be supplied, rather than the availability of land itself in depopulating rural areas, will determine the growth rate of agricultural output produce by emerging farmers.

The beneficiaries of land reform should be insecure households and rural households who will work the land

Putting rural land in the hands of people who will work it is the appropriate goal. There is no obligation to put it in the hands of others, and beneficiaries of land reform should not include the urban wealthy having no interest in agricultural production themselves. Without careful attention to beneficiary selection, a land grab will ensue and the rural poor will see no benefit, and a probable worsening of their situation.

Doris Lessing, no friend of white minority rule, said it all:
A white farmer's wife watched a black woman arrive in her smart car. She was pushed out of the way, while the interloper began measuring for curtains. "Are you going to live here?" inquired the dispossessed wife. "Me? I wouldn't live in this dump," the black woman said scornfully. "I'm going to let it. I've already got three housesin Borrowdale" (the most fashionable suburb in Harare)[8]

Charles Simkins
Head of Research
charles@hsf.org.za

[1] These are (a) Giles Henley, Property rights and development briefing: property rights and rural household welfare, ODI, August 2013 and (b) Anna Locke, Property rights and development briefing: property rights and economic growth, ODI, August 2013.