New land reform proposals in South Africa

In what must read like something from a parallel universe to non-South Africans (and non-Zimbabweans, for that matter), South Africa’s department of Rural Development and Land Reform last week released its latest proposal for land reform. Far from limiting itself to the restitution of property rights violated under previous governments, the proposal instead aims at “deracialising the rural economy” and “democratizing the allocation and use of land across gender, race and class.

You can read the FINAL POLICY PROPOSALS ON “STRENGTHENING THE RELATIVE RIGHTS OF PEOPLE WORKING THE LAND” for yourself, but here’s the gist of it. According to the draft proposal, it is born of

the necessity to address historical land hunger, which could be absolute in most instances; and, extreme concentration of land ownership and control in a few hands, on the other hand.

In Section D, called “What is to be done”, the following measures are put forward:

The historical owner of the land automatically retains 50% of the land, while the labourers on the land assume ownership of the remaining 50%, proportional to their contribution to the development of the land, based on the number of years they had worked on the land.

[...]

The Government will pay for the 50% to be shared by the labourers, but the money will go into an investment and development fund (IDF) to be jointly owned by the Parties constituting the new ownership regime.

[...]

All labourers who would have worked on a farm for ten consecutive years (but less than twenty-five years) of disciplined service, based on the regime of duties and responsibilities historically obtaining on the farm, the worker-dweller must be entitled to ten percent share-equity on the land, based on its market value.

[...]

Should the worker/dweller wish to leave the farm, after ten years of disciplined service, having earned the ten percent share-equity ownership of the land, he/she should be compensated to that extent, over and above whatever other rights were due to him or her, as an employee.

Inevitably, a disjointed version of the labour theory of value also makes its appearance:

That labour power was never fully compensated for, in the form of wages. That much is clearly demonstrated by the vast difference between the affluence of the farmer and the abject poverty of the farm-worker.

The relative equity stakes recognize this full contribution, which the exploitative wages have denied the workers for all of those years. The contribution by the government is an attempt at restoring the dignity of the worker.

Two points need to be made.

1. The proposals have almost nothing to do with land restitution (which would have been a good thing) and almost everything with land redistribution (which is also fundamentally in conflict with redistribution restitution of property, since redistribution is at a complete odds with a respect for property).

2. The specific proposals are not very important. Instead, it is the thrust of the document which is most telling and which one would ignore at one’s own peril. As should be obvious to most readers, the proposal is incoherent, full of errors ranging from math* to economics to history to grammar and to the basic requirements of argumentation. In the end, one must understand that this document is a reflection of conventional wisdom and widely held policy convictions in (and even outside) of government.

*Consider the graph below, found on page 19 of the report. The pie chart adds up to 150%, suggesting that after land reform a farm will be worth 1,5 times what it was worth before the reform. Which is still not enough, when considering, for example, that each “disciplined” worker who has worked on a farm for 10 years “must be entitled to ten percent share-equity on the land, based on its market value.” Under this latter provision, a farm with 50 workers who have worked there for 10 years will see workers own 500% of the farm. Of course, all of this just demonstrates how unclear and ill thought through the whole document is (which takes us back to point 2 above).

Farms are worth 150% after land reform.

Farms are worth 150% after land reform.

 

 

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About Piet le Roux

Piet le Roux writes as an associate of the Mises Institute of Southern Africa. He is also a senior researcher at the Solidarity Research Institute.
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