The agricultural sector has thrown its weight behind President Cyril Ramaphosa’s proposals to increase funding for land reform and prioritise the transfer of state land, saying this has the potential to unlock the commercial value of more than 2-million hectares of underutilised state land.
The Agricultural Business Chamber said on Monday that Ramaphosa’s land-release programme could bring more black players into the sector.
In his opening of parliament address last Thursday, Ramaphosa outlined plans to boost funding for land reform, prioritising the transfer of state-owned land and enhancing post-settlement support by strengthening the institutional capabilities of relevant bodies.
The chamber said that over time the government had amassed more than 2-million hectares, and it was never released to beneficiaries with title deeds.
“These now mostly underutilised government-owned farms were acquired through the Proactive Land Acquisition Strategy and sit in the government’s landholding account,” said Wandile Sihlobo, Agricultural Business Chamber chief economist.
Writing in the chamber’s weekly viewpoint newsletter, Sihlobo highlighted the challenges faced by black farmers, who often struggle to expand and commercialise their operations due to insecure land access and short-term leases provided by the government.
“In instances where they have access to the land, the short-term leases that the government provides them hinder accessing capital and expanding their farming operations to commercial and viable businesses that could create sustainable jobs for communities,” said Sihlobo.
John Steenhuisen, the new agriculture minister who was appointed to the role after agriculture, forestry & fisheries was split from land reform, also recently outlined the importance of agriculture in the economy and expressed his commitment to maximising the sector’s potential for growth and job creation.
Sihlobo said that while this was not the first time Ramaphosa had spoken about the need to accelerate land reform, “it was certainly one of the few times where there was clarity about the need to release state land to beneficiaries”.
Blended finance
Regarding the “post-settlement support” mentioned by Ramaphosa, the chamber believed this would benefit individuals that were part of the blended finance scheme run by the agriculture department, Land Bank and other financial institutions and agribusinesses. This would create space for commodity associations to lend support through training initiatives for beneficiaries.
Last year, the commission on restitution of land rights said that it would take SA more than 30 years and more than R170bn to settle land claim backlogs given the present budget and rate.
Previously, land claims in SA were settled mostly through cash compensation. Claimants settled for this option because of the challenges to raise capital for farming operations.
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