IMPACT ASSESSMENT OF LAND REFORM IN South Africa

1. IMPACT ASSESSMENT OF LAND REFORM IN South Africa Presented by: Mr Thozi Gwanya: Acting Director General, Department of Land Affairs, South Africa World Bank Conference 14 – 15 February 2008 Washington DC, USA

2. Greetings • Programme Director, • Klaus Deininger together with other WB Colleagues who put this conference together • Various Participants coming from different parts of the world.

3. Introduction • Let me express my heart felt appreciation for WB inviting me to participate at this conference. • South Africa has a long association with the WB, dating even before the advent of our democracy in 1994. • Between 1951 & 1966 the WB funded the expansion of the rail & harbour systems in SA. • WB resumed activities in SA in 1991, with economic policy advice & capacity building. Some of the WB supported projects include the ff; • Industrial Competitiveness & Job Creation Project • Municipal Financial Management Technical Assistance Project • SA – Lesotho Highlands Water Project • Institutional Development Fund and Information for Development Program • Global Environmental Facility

4. Introduction cont…. • Since 1999 SA an WB have agreed on a country Assistance Strategy (CAS) focusing on Knowledge Sharing, rather than Lending. The review of CAS has led to the Country Partnership Strategy (CPS) whose objective is : • Supporting national growth and development programme • knowledge and technical support for the regional development agenda. • Key projects are currently municipal development and land reform. • The WB made an input in the development of our current land policy. WB continues to interact with us as we implement and review our policy. We agree on some of the issues but we also strongly disagree on some.

5. Introduction cont… • In 1994, the Government of South Africa inherited one of the worst racially skewed land distributions in the world: whites owned 87 percent and blacks 13 percent of agricultural land, this despite the fact that Blacks constitute about 80% of the population. • The new democratic government responded proactively to the cry of the 6 million victims of racial land dispossession by coming up with the South African Land Policy which has three land reform programmes, namely, Restitution, Redistribution and Land Tenure Reform. • The new Constitution; among others, recognised that; “ public interest includes the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources

6. APARTHEID LEGACY:LAND DISPOSSESSION The Land Act of 1913 • Foundation for racial segregation of land ownership • Erosion of rights to land for blacks, evictions South African Native Trust and Land Act of 1936 • De-scheduling of land reserved • Implementation of segregationist thinking • SADT created to purchase and administer farm land • Expropriate blacks living outside reserves, basis for the creation of “bantustans” / homelands, Xhosa, Zulu, Venda, Tswana etc Bantu Authorities Act of 1951 • Apartheid Govt created new illegitimate leaders for tribal authorities • Co option and manipulation of tradition & culture. • Betterment: villagisation & apartheid control to headmen

7. RURAL REMOVALS • 1960’s - 1980’s: era of legalised forced removals • “Black spot” removals for blacks who had title / indigenous title/ beneficial occupation. • “Whitening” of rural areas and fragmentation of communities, thus farm land owned by “Whites only” • Expropriation & displacement of rural black people in the name of development thru: • Forestry Act • Irrigation Acts • Parks Board Acts • Transkei Constitution and Development Act • Proclamation 302 of 1928 (PTO to commonages) • Proclamation 117 of 1931 • Proclamation 31 of 1939 • Proclamation 116 of 1949 (Betterment)

8. URBAN REMOVALS • Group Areas Act 36 of 1966 • Racial suburbs for whites • Townships for Blacks,Coloureds and Indians • “Qualified” and “disqualified persons” • Magistrates ordered evictions (S46.2) and official harassment • Criminal prosecution of disqualified persons (S26) • Selling of unlawfully held properties

9. RACIALLY DISCRIMINATORY LAWS EXAMPLES: • Black Administrative Act (38/1927 ,Native Trust and Land Act (18/1936) • Blacks (Urban Areas) Consolidated Act (25/1945) • Blacks Resettlement Act (19/1954), • Black Laws Amendment Act (42/1964) • Community Development Act (31/1966) • National States Constitutions Act (21/1977) ( TBVC Homelands) • Borders of Particular States Extension Act (2/1980) • Group Areas Act (36/1966), Racial Practices (Slums Act of 1959) • Prevention of Illegal Squatting Act 52 of 1951 • Nature Conservation Legislation

10. POLICY CONTEXT FOR LAND REFORM

11. STRATEGIC GOALS AND VISION OF LAND POLICY • Deal with injustices of racially-based land dispossession; • inequitable distribution of land ownership; need for security of tenure for all; • need for sustainable use of land; • need for rapid release use of land for development; • need to record and register all rights in property; and • administer public land in an effective manner

12. LAND REFORM PROGRAMMES Redistribution aims to provide the disadvantaged and the poor with access to land for residential and productive purposes. Its scope includes the urban and rural very poor, labour tenants, farm workers as well as new entrants to agriculture (87:13% the White: Black land ownership ratio debate). Target is to redistribute 30% of agricultural land by 2014. Land Restitution covers cases of forced removals which took place after 1913. They are being dealt with by a Land Claims Court and Commission on Restitution of Land Rights established under the Restitution of Land Rights Act, 22 of 1994 (redress).79 696 land claim forms were lodged by the cut off date of 31 Dec 1998. Land Tenure reform is being addressed through a review of present land policy, administration and legislation to improve the tenure security of all South Africans and to accommodate diverse forms of land tenure, including types of communal tenure (ownership).

13. LAND REFORM TARGET • Total land surface 122 million hectares • 86 million agricultural land • 24.3 million State Land • 16 million is other land (cities, rocks, rivers, dams) • 30% of 86 200 000 ha/ agric land = 25.86 million hectares to be redistributed by 2014

14. Estimated 30% Agric Land in SA

15. Land use patterns

16. LAND PRICES • Urban residential • smallest proportions of land use (1.1%) but significant number of landowners. • segment of the market have increased at a rate below the average inflation rate while prices at the high end of the market increased more or less in line with inflation. Residential property prices of the middle-market have recorded substantial increases in real terms. • FACTORS that have contributed to the significant increases in property prices of middle-category houses are: • relatively low interest rates, higher disposable income of middle-income earners partly due to tax relief, increased • demand by an expanding black middle class, and • increased demand by foreign buyers partly due the weakening of the Rand in 2000 and 2001. • Commercial and industrial properties (0.2%) • Price increases in commercial and industrial properties have been around 10 per cent per annum. • Agriculture • Price increases in agriculture properties have been between 10 and 25 per cent per in 2002 and 2003.

17. LAND DELIVERED SINCE 1994 • Land delivered since 1994 is about 4.3 million ha, thus 21.5 million ha still to be delivered by 2014 to meet 30% target. • This includes land delivered through the restitution, redistribution and state land. • The total number of household/individuals that have benefited from land reform is over one million ( 1 028 887).

18. POLICY DIRECTIVES LAND SUMMIT 2005: http://land.pwv.gov.za/Land-Summit • taking stock of progress made in meeting the land reform imperatives of the: • Freedom Charter, 1955; “The land shall be shared among those who live on and work it”. • the Rural Development Programme (RDP) policy framework document, 1994; underlined the importance of land reform. • the White Paper on South African Land Policy, 1997, argued for a just, equitable and fair land reform programme • the Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996)., chapter 25, protects property rights, accepts land rights as human rights included in the bill of rights, confirms that land reform is in the public interest. Allows expropriation for land reform purposes as in the public interest.

19. Compensation at Expropriation {s25 (3) } • “The amount of the compensation, time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, consider: • the current use of the property; • the history of the acquisition and use of the property; • the market value of the property; • the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and • the purpose of expropriation” Thus no “land grabs”

20. Directives of the Land Summit • Review of the willing buyer-willing seller (WBWS) principle • the market-driven approach to land reform was singled out as the major obstacle to accelerated land delivery for land reform purposes • A new trajectory towards 2014 • focus on the poor, women, disabled, youth, workers on commercial farms • Restructure the dominant models of land use and agricultural production • Decentralization of land and agrarian reform, participatory and people-centred methods which are area based and included in the Integrated and development plans of local and district municipalities • Promote sustainable development

21. Leading role of the state • Conduct land audit • Scrap restrictions on sub-division of agricultural land • Use of expropriation of targeted land in line with the rule of law • Technical and financial support to Smaller producers. • Greater regulation of land market to control rapid increase to land prices. • Land tax for those who own too much land • Regulating ownership of land by foreigners • Regulating land use management to optimize social benefit • Better co-ordination across government to support land reform. • Greater investment and better co-ordination of settlement support

22. Partnerships and decentralized reform • Local government to factor land and agrarian reform into economic development priorities • Partnerships at all levels to adress unequal relationships (empowerment, capacity & financial resources) • Security of tenure and rights of people living and working on commercial farms • Deal with illegal evictions & continued displacement of people living on farms • Deal with illegal occupations and ‘squatter farming”

23. PROGRESS: POLICY DIRECTIVES • WILLING BUYER WILLING SELLER PRINCIPLE –Review • there should be State intervention in the land markets to stabilise land prices and speed up land reform. • towards a MENU of land acquisition measures to accelerate land delivery: • Affirmation and Continued Use of the Willing Buyer-Willing Seller Principle as contemplated in the White Paper on South African Land Policy • Affirmation and Continued Use of the Current Expropriation Measures and the Design of the New Expropriation Mechanisms • Use of the Pro-Active Acquisition of Land Strategy (PLAS) • Better Articulation of the Land Demand via the Area Based Planning (ABP) • The Design and Implementation of a Land Tax Regime • The Imposition of Land Ceilings • The State’s Right of First Refusal • Review completed –report submitted to Minister then Cabinet for approval and publishing for public comment

24. POLICY ON LAND OWNERSHIP BY FOREIGNERS (PLOF) • Report and recommendations by a panel of experts and consultation with various stakeholders • Some recommendations: • Compulsory Disclosure of Nationality, Race and Gender and other information • Special Ministerial Approval-be introduced for certain changes in land use in general and for disposal of certain categories of land • shortcomings in the registration of deeds justify an amendment to the statutory requirements regarding nationality and citizenship not only for foreign individual owners, but also for corporate owners • Regulate ownership of land by foreigners, in line with international practice. • Final inputs received by 14 December 2007 from public consultation process and currently consolidating the inputs

25. Economic Growth & Stability Job Creation Poverty Alleviation Transformation Rapid growth Basic services (water, energy) Employment Social inequalities, focus on people & not things/ places Access and participation Human capital development Infrastructural development Beneficiation Sustainability Priorities for New Dispensation

26. The Land and Agrarian Reform Project (LARP)

27. The Land and Agrarian Reform Project (LARP) • LARP was submitted and accepted by the Presidency, as no 7 of the 24 Presidential Apex of Priorities LARP Objectives are: • Redistribute 5 million hectares of white-owned agricultural land to 10 000 new agricultural producers. • Increase Black entrepreneurs in the agribusiness industry by 10 %. • Provide universal access to agricultural support services to the above target groups. • Increase agricultural production by 10-15% for the target groups, under the LETSEMA-ILIMA Campaign Increase agricultural trade by 10-15% for the target groups. • will directly contribute to the overall goals of the Agricultural Sector Plan, namely participation, global competitiveness and sustainability, and the White Paper on South African Land Policy

28. The Land and Agrarian Reform Project (LARP) • LARPkey principles to fast-track land and agrarian reform: • Focus areas to concentrate service delivery in order to better exploit synergies between land redistribution, agricultural production and agri-business development; • Aligned comprehensive support package to cater for the inherently multi-sectoral requirements to make sustainable agricultural production and agri-business development a success; • Cooperative government by establishing joint planning, budgeting, approval and implementation procedures between various government departments and programmes; • Subsidiarity: Thedecentralisation of decision-making and implementation to the lowest possible level depending on the specific program activity; and • Utilisation of partnershipsin order to exploit the relative strengths and capacities of the key non-governmental stakeholders; and • Individual project success and sustainabilitywill be the measure of success.

29. The Land and Agrarian Reform Project (LARP) • LARP Focus areas: • Agricultural development corridors Location of large concentrations of farm dwellers • Areas of high farm dweller eviction rates. Farm dwellers ( +/-3 million) are a first priority, given the urgent need for them to fully realise their constitutional rights • Comprehensive individual project plans including support, identified markets and monitoring Development of agricultural villages in response to identified accommodation needs and opportunities for farm dwellers.

30. Settlement and Implementation Support (SIS) Strategy

31. Key Pillars of SIS Strategy • Livelihood and Enterprise Development • Sustainable Human Settlements • Integrated Natural Resource Management • Social Institutional and Capacity Development • Spatial and functional integration

32. IMPACT OF LAND REFORM • Research : • REVIEW OF THE LAND REDISTRIBUTION FOR AGRICULTURAL DEVELOPMENT (LRAD) 2003, current review in process • MONITORING AND EVALUATING THE QUALITY OF LIFE OF LAND REFORM BENEFICIARIES: 2005/2006 (4th study since 1994) • ASSESSMENT OF STATUS QUO OF SETTLED LAND CLAIMS WITH A DEVELOPMENTAL COMPONENT 2005 • SETTLEMENT SUPPORT INFORMATION MANAGEMENT –RESTITUTION ONGOING

33. LRAD REVIEW • Highlights for DLA • progress in terms of delivery (more flexible grant system and decentralization of project approval to the Provincial level) • Reaching an appropriate mix of beneficiaries: majority of grants goes to the poor, • Significant share of the grants is now reaching emerging farmers. And women and youth receive 35 and 22 percent of grants, respectively.

34. THE QUALITY OF LIFE • Highlights for DLA • Improvement in performance and impact • The rate of delivery has increased; • targeting of the most poor has taken place; • both agricultural and non-agricultural production is occurring; • services delivery to land reform beneficiaries seems better than to the rural population as a whole; and • less evidence of institutional problems.

35. STATUS QUO OF SETTLED LAND CLAIMS • Highlights for DLA • positive relationship between the level of involvement of government departments and other agencies in projects and the level of attainment of developmental aims • Strategic partnerships enhance the projects to attain sustainability.

36. RESTITUTION SETTLEMENT SUPPORT • Highlights for DLA • On 90% of the projects other government departments are involved in project support • 1 108 permanent jobs created, 2 725 temporary jobs and 475 people who are currently benefiting in terms of training.

37. IMPROVING THE IMPACT OF LAND REFORM • POLICY • Review on the relative importance of land reform for “livelihoods” as compared to productive projects • economic success is not the only objective currently pursued under the land reform programme • Reduce procedures, adapting them to the specific target and integrating them into a decentralised and participatory process

38. more flexibility policy framework • project characteristics appear to be more important determinants of success than beneficiary attributes, suggests that policy has an important impact on whether or not land reform in South Africa can realise its economic potential. • approach that links asset redistribution to improved economic opportunities. • Align the land market with the Government’s land reform strategy. • policy guidelines to substantially increase the rate of sub-divisions within and outside the land reform programme. South Africa’s land market needs to cease biasing against smallholdings.

39. Governance • integrated delivery, both with regard to the various land reform programmes (Restitution, LTA, ESTA and LRAD) as well as the provision of the non-land components and services (e.g. agricultural support services, housing etc). • link more explicitly to the other programmes initiated under the RDP; pensions and housing, Provincial and Local level planning, Integrated Development Planning • further decentralize and strengthen integration with other departments and key stakeholders outside of Government • Enhanced monitoring and evaluation

40. Training – Capacity Building • Beneficiaries: appropriate training; managing projects, technical training in terms of project specifics, mentors and strategic partners to build capacity, conflict resolution, resource mobilization, marketing etc. • Government Department: training and capacity building activities pertaining to land reform in the various departments and municipalities

41. CATA Story Uplifting : Eastern Cape • 420 household became victims of “betterment planning” • Became successful claimants & decided to use their restitution award for their own development • Projects included : Agriculture, infrastructure, forestry, education and rural livelihoods (local economic development) • Outputs: Community centre, School Classrooms, Wattle plantation, water for food project, irrigation scheme, museum, Heritage trail • Results included: • Households without income dropped from 43% to 4% • Employment rates increased from 4% to 26% (2001 to 2007) • People with education less than G7 dropped fro 50% to 35% • Use of Electricty increased from 3% to 51% • 99% of community have two meals a day. • For further details contact ; Mr Ashley Westaway, Border Rural Committee (Land NGO) East London South Africa. Phone +27437420173 Email: ashley@brc21.co.za

42. CHALLENGES IN LAND REFORM • Group/Collective Production does not yield the desired results as often groups have to deal with group dynamics and conflicts. Decline in agricultural production may have a negative effect on economic growth • The spatial planning of apartheid left the victims of land dispossession in homeland rural towns where they are locked up in less than a quarter of a hectare per rural homesteads, consequently the interest and commitment to agriculture was heavily eroded, Agricultural skills have been lost, urban life promises jobs and better opportunities hence a growing trend of urbanisation. • National Spatial Development Plan supports existing urban development centres at the expense of rural areas

43. Challenges Cont…. • The dichotomy of community vs. private ownership, social vs. economic practices of land use and subsistence vs. commercial farming are all a challenge to the implementation of land reform. Most financial institutions including the commercial banks, the Land Bank, Industrial Development Corporation (IDC), etc are focusing on privately owned land with individual land use. Their support and after-care to clients does not adopt a developmental approach (to cover needs of the new Landowners).

44. Sector Challenges • BusinessEnvironment • Supply-Side • Demand-Side • Lack of shared vision across role players • Limited water • Scarcity of arable land • Soil degradation • Climate change • Rising input costs • Inadequate access to market information All farmers • Inadequate focus on new markets • Limited product innovation • Negative impact on competitiveness • Cost of compliance to standards • High cost of compliance to labour legislation • Limited innovation in risk management 1st economy farmers • Limited access to markets • Limited access to financial services • Limited supporting institutions • Globalisation • Limited settlement support 2nd economy farming challenges • Poor infrastructure • Inadequate basic services • Ltd Access to capital • Technical & management skills • Slow Pace of Land Reform • Limited access to local markets

45. Challenges cont… • The issue of exorbitant land prices is a serious challenge affecting not only restitution but also other land reform programmes. Land prices have varied between US$ 64/ha to US$ 7142 /ha, the average price being US$ 471 /ha. This is making land reform quite expensive. The aggravating factors include the purchase of strategic tracks of land by foreigners, especially in the coastal areas of KZN, Eastern Cape and Western Cape as well as in Mpumalanga and Limpopo. Most of such land is used for game parks, golf courses, eco-tourism and private homes.

46. Challenges Cont… • Protracted negotiations and Disputes with land owners (validity of land claims and/ or land prices) • Unavailability of land in urban areas • Traditional leader conflict ito jurisdiction and boundaries and between CPA and Traditional Leaders, issues about who is the rightful traditional leader, given the apartheid distortions of chieftainship • Family disputes and disputes amongst community members • The issue of funding land reform in the country is critical, particularly in the light of increasing land prices, under-utilized farm land , absentee land lordism, increasing demand for land.

47. Funding in the past five years 99.9% 73% 98% 97% 99%

48. Fixed approach (linear) +budget(US$ 1=ZAR 7.03)

49. CASP model Agricultural macro- system within consumer economic environment Farm & Business level activity Household food security & Subsistence The Hungry & Vulnerable Agriculture support 6 pillars Technical & advisory assistance Marketing & Business Development Training & Capacity building Information & Knowledge Management On & off farm infrastructure Financial assistance

50. Critical Issues • United & prosperous agricultural sector • Equitable access & participation • Global competitiveness and profitability • Sustainable resource management • Good governance • Integrated & sustainable rural development • Knowledge management & innovation • International Cooperation • Safety & security