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Land Reform Threatens Stability

Land reform is the road to stability in South Africa, but it is often painted as stability’s biggest threat. As the myth goes, meaningful reform will spark a ‘Zimbabwean-style’ economic crisis. This falsehood leads many South Africans who agree with land reform in principle to disagree with it in practice. We cannot afford this: the most dangerous thing that South Africa can do for its long-term security is to pursue the course it is currently on.

Roots

South African land reform since 1994 has been an enormous failure. 67% of South Africa’s land mass is considered commercial land, most of which is enjoyed by 40 000 commercial farms.69 Although this land accounts for a large proportion of South Africa’s surface area, it only houses about 3% of the population. By contrast, 8% of South Africa is ‘urban land’,70 which includes cities, towns, townships and informal settlements. Although this land accounts for a small amount of total land, it houses most of the population, at 62%. A further 15% of South African land is ‘communal land’ or the former ‘Bantustans’. About 35% of the population occupies such land. The remaining land is state-owned, consisting of government buildings, roads, railways, schools, hospitals, conservation areas, and national parks. So, there are four types of land: commercial land, urban land, communal land, and government land.

In this context, the government’s land reform programme revolves on three often-confused processes: restitution, redistribution and tenure reform.71

Restitution is the easiest to understand. It involves providing compensation to the direct victims of land dispossession. In other words, if person A was forcibly removed from piece of land B, restitution involves returning that specific piece land to that specific person, or their direct descendants. If direct return is impossible or undesirable, then restitution happens through financial compensation.

Redistribution is a similar, but distinct, process. It also relates to land restoration, but it doesn’t require that the beneficiaries be direct casualties of an identifiable act of dispossession. Rather, it focuses on sharing between white and black South Africans. Therefore, restitution and redistribution aim to address two related, but different, injustices: restitution addresses the dispossession of actual people and families, while redistribution attempts to address the structural injustice of racialised land dispossession; one is specific, the other general.

The third, and final, aspect of government’s land reform strategy is tenure reform. This aspect of land reform is neglected but no less crucial. Its roots lie in the criminalisation of black landownership at the turn of the twentieth century, first institutionalised by Cecil Rhodes’ Glen Grey Act of 189472 and later deepened through the Union of South Africa’s Natives Land Act of 1913.73 Both acts stripped black South Africans of the benefits of landownership. Specifically, in areas demarcated as ‘black reserves’, later ‘Bantustans’, black people could occupy, but not own, the land. Thus, they couldn’t enjoy usual landownership rights like the ability to extract rent or use land as collateral. They became landless land-dwellers, and their only two immediate options for economic survival were subsistence farming or exploitative employment in a distant labour market designed for their subjugation – the mines.

This was supposed to change in 1994. In its White Paper on Land Policy of 1997, the South African government promised to resolve the rural tenure issue by restoring land formerly comprising the ‘Bantustans’ to the people who lived on it.74 The White Paper promised that rural land tenure rights would finally change from ‘permit rights’ to ‘ownership rights’. This would have constituted one of the most far-reaching and impactful transfers of wealth in South African history: at once, government would have empowered twenty million South Africans with access to real landownership and the rural poor would be asset owners, counteracting the vice-like grip of the monstrous Rhodesian-apartheid legacy. But, inexplicably, government never followed through.

Failures

Land redistribution is the thorniest of the three pillars of land reform. Like tenure reform and restitution, it has seen false starts and broken promises. In 1997, government’s White Paper on South African Land Policy argued that we could transfer 30% of commercial agricultural land to black South Africans by 2014. To date, long past that deadline, only 6–8% has been transferred. Excuses often given for this dramatic failure are that ‘not all black people want to be farmers’, or that ‘it takes time to train people to use land productively’. This is entirely beside the point and elides a key distinction: you do not need to be a farmer to be a landowner. Commercial agricultural ventures operate at two levels: first, there is the land on which the farm is built; then, there is the business on the land. Therefore, there are actually two assets in one place. It is possible for someone to own land and rent it to a business that uses it. Suggesting that black people need to become farmers to own land is like arguing that they need to become retailers to own property. So, the question of productivity is a non sequitur.

Of course, decolonisation must also happen at the level of the businesses on the land. Here, we should see similar transfers to those envisaged by Broad-Based Black Economic Empowerment. The implementation of black empowerment policies has too often led to elite capture. Much more important than a few rich businessmen owning stakes in commercial farms is worker ownership. Instead of seeking external partners, farm-owners should be encouraged to transfer a portion of their businesses to worker-owned and worker-controlled entities.75 Not only would this contribute to land reform, it would also combat economic inequality, and improve agricultural productivity. Farmworkers in South Africa have experienced some of the worst subjugation of all, and their shameful treatment has persisted through democracy. They earn among the lowest minimum wages in the world, lower even than factory workers in China. Transferring ownership of commercial ventures directly to them would be an important material and symbolic move to address the need for a more equal society.

The final aspect of the commercial agricultural picture is worker eviction, still commonplace in South African agriculture. Farmworkers, who already work under reprehensible conditions, are regularly illegally evicted from their workplaces. Government has a responsibility to enforce laws that already exist to protect these workers. Worker ownership would certainly help to avoid this, but more can be done. Government enforcement does not only mean more inspectors and bureaucrats, it also means using the coercive apparatus of the state to enforce the law. Where farmers have unfairly evicted workers, the state should embark on legal action against them, to send a message about the seriousness of the issue. The Department of Rural Development and Land Reform could – and should – have a dedicated litigation wing, which deals with enforcing the expropriation of land, and enforces the law on evictions. Once some farm owners are held accountable for their actions, the message will spread to others, and conformity with the law will become more likely.

Tenure reform is a failure of equal proportions. The idea of tenure reform as imagined in 1997 is clear: instead of granting people permit rights, so that they can live on but never actually own their land, tenure reform would quite literally transfer land to the people. The state would, with the strike of a pen, transfer land from itself directly into the hands of the rural poor. No starker realisation of the Freedom Charter’s land clauses is imaginable. Unlike restitution, tenure reform would not require eviction, or significant amounts of compensation to be dispensed by the state. It would just require an act of parliament, and a government ready to implement it. That’s why the lack of tenure reform has been so frustrating.

Now, far from remedying the problem, government is exacerbating it. In 2014, the Department of Rural Development and Land Reform published its Communal Land Tenure Policy, which proposed transferring ownership rights from the state to traditional elites – not to the people. Here’s the idea: instead of transferring the land directly to the people, government will transfer it to ‘traditional councils’ who will administer the land on the peoples’ behalf. At first, this sounds benign, but it continues to deprive the rural poor of direct ownership of their land. Instead, centralised traditional funds, controlled by traditional leaders, will have access to all of the potential wealth. This is important not only because of the wealth of the land itself, but also because of the possible existence of lucrative mineral resources on the land.76 This extends the reach of traditional power far beyond its pre-colonial limits, entrenches a rural elite at the expense of the rural poor, and exposes the ANC government’s unwillingness to follow through on its most basic promises.

At first, it seems inexplicable that government would fail to fulfil its obligations on tenure reform. But the process is tangled in a web of political mismanagement, expedience and deceit which have delayed tenure reform in both the Mbeki and Zuma eras. Why would the ANC not want to transfer land and wealth to the people? Activist Nomboniso Gasa and researcher Ben Cousins77 suggest that the ANC wants to woo traditional leaders, trading tenure reform for the rural vote, or what academic Raymond Suttner calls a ‘re-Bantustanisation’ of South Africa.78

This is not to say that traditional leaders have no role to play in rural areas. Indeed, it makes sense that they should have regulatory powers in settling land disputes, or administering permits and sales. But the notion that traditional councils themselves should own land is different. It contravenes the ANC’s own aspirations and gives even more control to elites than they had under apartheid. A flip-flop as radical as this must therefore be seen in light of what the ANC gains.

But even this strategy is politically short-sighted, because transferring land directly to the people would result in tremendous political spin-offs for any political party that achieved it. It would constitute perhaps the most significant change in rural peoples’ living conditions in post-colonial South Africa. But it would deprive traditional elites of a great deal of power, which the ANC has calculated would hurt it in the short term, before the benefits of the programme were felt on the ground. However, consider the social and political benefits that the government has compromised through this calculation. First, the 1997 plan would make a radical dent on poverty and inequality. It would also deracialise these measures, given the demography of rural South Africa. South Africa’s Gini coefficient would improve significantly and poverty-stricken families would have wealth against which to trade, in the form of loans for businesses or educational pursuits. The social consequences would also be immense since this capital transfer could spark the rural economy and slow urbanisation, currently straining many of South Africa’s urban centres.

One objection is that transferring land directly to individuals reinforces the individualism of Western land rights. But this could be overcome through a communal ownership system agreed upon by the occupants themselves. Families could establish land trusts, or villages could vote on combining wealth into village trusts, for instance. Others may wish to pursue individual ownership. If this process is handled democratically, this problem is not insurmountable. Further, either individual or communal ownership is superior to no ownership at all.

Urban tenure reform is another important element of the equation. Because most of the country’s population lives in urban areas, relatively small changes in urban land tenure would have relatively large effects. And, as other modes of land reform fail, the urban land question becomes more pressing, given the pull of urbanisation in the face of landlessness. In this context, urban housing policy is often touted as one of government’s signal achievements, but this is inaccurate. As Hendricks and Pithouse note in their work on the subject of urban land in South Africa:

The post-apartheid state has built more than 2.5 million houses since 1994 but many residents of these houses have experienced them as profoundly inadequate in size, quality and location. They are much smaller and more poorly constructed than the township housing built under apartheid and are often further from cities than townships built under apartheid.79

Residents often abandon these houses in favour of living closer to metropolitan centres. ‘Illegal’ land occupations have provoked government into building more houses, but poor planning has only led to more land occupations, which has created an even deeper quandary: the erection of temporary enclosures to keep landless people from ‘squatting’ in urban centres. Blikkiesdorp, north of Cape Town, is the prime example: a ramshackle assembly of corrugated iron boxes stretching in authoritarian rows on barren, golden ground. Blikkiesdorp is often compared with Palestinian settlements or nineteenth-century ghettos, and is the embodiment of governmental failure, across political divides, to deal with the urban land question.

Restitution is often cited as the most successful area of land policy, but there is little cause for celebration. A deeper look at the facts reveals that it has, in practice, been reduced to a symbolic farce. For instance, the state received 79 678 restitution claims before its first deadline of December 1998. The original plan was to give claimants land in compensation for the harms done to their families, but administrative backlogs and financial constraints meant the Land Claims Commission focused mainly on symbolic financial compensation. 92% of the claims made on the commission were settled by cash payment, with the majority settling on measly sums between R6 000 and R15 000. Even this paltry sum was often divided among a family, so real compensation amounted to no more than the price of two average pairs of shoes. All this while the actual beneficiaries of centuries of land dispossession – the people who gained access to the land from 1913 onwards – were not asked to pay a cent towards restitution.

Further, government has pursued the counterintuitive path of wilfully accepting all the costs associated with land restitution, leaving apartheid interests free from any financial obligation. This means the state incurs both the political and financial responsibility for the success of the restitution programme. Those who live on stolen land therefore benefit twice: they enjoy the benefit of the land and they do not bear the cost of compensation. But as Atuahene remarks: ‘if the state cannot afford to give both blacks and whites just compensation, then both blacks and whites should receive only symbolic compensation’ [emphasis mine].80 Under current policy, white South Africans receive market value, and black South Africans get symbolic compensation, clearly a perverse outcome.

Thus, like too many ANC policies since 1994, restitution has been dressed in ‘feel-your-pain’ language but built on the logic of apartheid power structures. The spirit is right, but tepid implementation has created second-order problems, the magnitude of which rival the original one. What will South Africa do when the recipients of restitutionary compensation realise they have been dramatically short-changed? We cannot allow it to continue. Decisive action must be taken, and taken now. The financial compensation offered to the victims of land dispossession must become more substantial by government insisting that a portion be borne by beneficiaries of the historical crime. And, instead of cash transfers being the only alternative form of compensation, financial restitution should involve wealth transfer. This could be through educational endowments, financial equities, government bonds or housing improvement vouchers, for instance. As such, restitution will mean more than a simple symbolic pay-off, but truly an act intended to restore dignity.

Where to?

The problem of land reform is tractable. Resolving it decisively would make South Africa sturdier in the long-term. There are proposals that could achieve this which I now want to consider. Let us begin with the issue of commercial agricultural land. Despite argument to the contrary, expropriation without compensation for public purpose is constitutionally feasible. Former Deputy Chief Justice, Dikgang Moseneke, explains:

The Constitution does not protect property; it merely protects an owner against arbitrary deprivation. Deprivation that is not arbitrary is permissible. The property clause does not carry the phrase, ‘willing buyer: willing seller’, which is often blamed for an inadequate resolution of the land question. The state’s power to expropriate does not depend on the willingness of the landowner.81

He continues:

The compensation may be agreed but if not, a court must fix it. The compensation must be just and equitable and not necessarily the market value of the land. Market price is but one of five criteria the Constitution lists for a court to set fair compensation. The property clause is emphatic that the state must take reasonable measures, within available resources, to enable citizens to gain access to land on an equitable basis.82

Therefore, instead of blaming the Constitution for our lack of progress on land, blame should lie at the door of the government, which has taken two decades to draft an Expropriation Bill. One fear relating to expropriation without compensation is that immediate expropriation could hamper short-term stability if it turns violent. This problem is not so much a question of expropriation, as question of warning and timing. No one wants a situation where expropriation leads, for instance, to protracted civil conflict, or irreversible economic decline. However, this does not mean that expropriation should be indefinitely delayed.

Options are available. The state could set a target for the land it wants to expropriate for public purposes in a defined period, say 50% in five years.83 It could then offer commercial landowners an ultimatum: either they transfer their land by the given date, or it will be expropriated by the state by the deadline. If landowners comply with the ultimatum, then land will have been effectively transferred. If they do not comply by the deadline, then the demarcated land would be expropriated without compensation. In cases between these two extremes, a spectrum of compensation could be considered. This would not only solve the problem of land transfer, but would also cushion the blow of immediate expropriation, which could have dangerous unintended consequences. Such a policy would, to my mind, be perfectly capable of passing constitutional muster.

There is an easy way to test the constitutionality of this proposal in the short term, instead of waiting for a prolonged legal challenge on an Expropriation Bill. According to Section 79 of the Constitution, the president can refer bills directly to the Constitutional Court ‘for a decision on their constitutionality’. Instead of decisive action like this, we’ve had two decades of waiting and constitutional speculation.

Second, several alternatives to the current tenure system are available. First, we must scrap the current system of rural tenure. Next, we must avoid the new Communal Land Tenure Policy that gives land from the state to traditional elites at the expense of the people. What do we replace it with? Here there are two options. One is to transfer the land to the individuals who live on it, in a process known as formalisation. This would at once provide millions of South Africans with a form of wealth that has been denied them for centuries. But it would significantly curtail traditional forms of ownership and control that apply in rural contexts on South Africa.

Another option, therefore, would be to transfer ownership rights to collectives or communities, so that they can take decisions on what would happen with their land. Individuals would not directly own land, but the community itself would own land and individuals would own a stake in this corporate arrangement. A democratic process would determine how the wealth from the land would be shared in the community. There are also hybrid models between these options, where certain parts of the land are individually owned while common areas are communally owned. Basically, land would be transferred from the state to the people in a way determined by the people themselves.

As far as restitution is concerned, the state should use its power to ensure the financial burden of restitutionary claims is not borne solely by itself. This would mean more substantial financial compensation. Second, symbolic compensation should focus on wealth transfers instead of income transfers. This could be in the form of alternative housing in urban areas, which would also break the chokehold of apartheid spatial planning, or in the form of housing vouchers. It could also take the form of educational endowments or financial assets.

Conclusions

The myth that real land reform would lead us into a ‘Zimbabwean’ crisis is misguided and paralysing. Indeed, nearly every major economy in the world has formalised tenure rights, abolished feudally unequal land relations, and restituted stolen property. In the short term, achieving real justice on the land might make some squeamish about the potential unintended consequences. But is that worse than at least two centuries of systematic exclusion, mass murder and structural economic catastrophe? The reverse question is even more important: what are the potential developmental, social and political benefits of a just solution to the land problem? Much potential would be unlocked if millions of black South Africans finally became the owners of their country again. Imagine the extent to which inequality, unemployment and poverty could be turned around once the land issue was resolved. If systemic political risk, in the form of mass protest and urban turmoil, lie at the heart of the South African economy, how far could successful land reform go in creating a more stable and prosperous society?

There is no doubt that much of the blame for the state of land reform belongs to the ANC government, for failing to implement their own policies. The land reform budget of R2.6bn reflects government’s de-prioritisation of the issue. That budget could be scaled up by several orders of magnitude before some of government’s other priorities. Government must foreground land reform for the sake of its other developmental goals because, without it, long-term prosperity is impossible.

Yet it is also a mistake to exonerate those who currently occupy the land. State failure does not excuse the original injustice, and those who currently occupy land must also be part of the solution. That stolen land has changed hands over the course of history is a red herring: stolen goods do not automatically become fair game because they have been sold on. The ultimate remedy must involve both the state and individuals, in accordance with the dictates of the law and justice.

Now – more than ever – is the time to dispel the myth that real land reform is unwise or impossible.