Monday, August 9, 2010

DA Newsletter 9 August 2010

8 August 2010

Welcome to the latest edition of SA Today, the weekly newsletter from the Leader of the Democratic Alliance, Helen Zille.

SA Today
Helen Zille, DA Leader

Successful and productive land reform is possible in South Africa
The series of government “Summits” that have begun around the country, is the surest sign that the ANC has begun its 2011 local election campaign.

Government initiatives should have nothing to do with election campaigns. But, election after election, millions in state funding are used to promote the ANC.

The recent so-called “Farm Workers Summit” in the Western Cape is a clear example. It was a thinly-disguised political rally (which cost the taxpayer more than R10-million), complete with President Jacob Zuma dancing and singing Awuleth' Umshini Wami. Typically, it also involved the misrepresentation of DA policy for propaganda purposes.

I had been invited to open the “summit” and did so in good faith. I used the opportunity to convey a request from Western Cape farm workers to President Zuma and the Minister of Agriculture, to reinstate equity share ownership schemes.

These schemes generally worked well, for both farmers and workers in the Western Cape, until they were stopped through a ‘moratorium’ imposed by national government in August last year.

It is true that the Western Cape is the only province where these schemes worked (despite isolated problems). But, as usual, the national government is now punishing success to try to disguise its own failures. In doing so, it is destroying the only land reform programme that has shown results, while pressing ahead with those that have not.

Essentially the share ownership schemes that the DA supports, works as follows:

When a farmer wants to sell a farm, he has the option of doing so through a share ownership scheme. This scheme enables farm workers to buy a percentage of the farm. They pay for it by using the allocation of national government funds for land reform purposes. Equity share agreements can be negotiated in various proportions, but we have found that the scheme works best when there is a 50/50 sharing of risk and reward. We do not prescribe any fixed ratio, however. This must be determined, on the basis of the relevant circumstances, by the parties in each case. Through these schemes, farmers have bought a neighbouring farm, together with the farm workers, thus extending the farming operation and genuinely empowering the workers to become part owners of the farm. The result is that poor people, historically excluded from land ownership, gain access to high value agricultural land while retaining the involvement, commitment and shared risk of the commercial farmer – a crucial determinant of long-term viability in land reform initiatives. It means that land reform can happen in the high value sectors of our rural economy. It also means that land reform becomes the basis for new investment and value creation in the rural economy – rather than the cause of the collapse of farms and farming value chains, and the further alienation of the so-called ‘beneficiaries’ in the farcical cycle of decline that now characterizes land reform in SA.

The DA’s approach to land reform is one of genuine empowerment. It expands opportunity, and increases productivity. It protects property rights and the market principle of willing-seller-willing-buyer. It usually secures positive outcomes based on good management, and sound farming practice. It empowers the poor, not the politically-connected. It spreads success, not failure.

It is hardly surprising that our political opponents want to distort our model.

This happened at the Farm workers’ “summit”, when the ANC presented the DA’s plan as a confiscation scheme to divide all farms in half, and give 50% away. In propagating this lie, the ANC’s motive was to create a political fire storm.

But we will continue to tell the truth about the Western Cape’s schemes, because all rational people understand that we have to combine land reform with increasing productivity in our agricultural sector. So far there have been 83 equity share ventures in the Western Cape, benefiting 10,000 farm workers. One of the most successful examples of these schemes is at Langrivier near Ceres where 242 farm workers became co-owners of the joint venture company in 2008. In addition to a share of the company’s profits, the farm workers have a crèche, access to a fund for their children’s education and their own further training. As a result, many workers on the farm have risen to management positions. Some of them now sit on the company’s board.

This venture has been a success because it spreads ownership, shares risk and reward, and brings the expertise and experience of both the farmer and the workers together.

It is true that not every equity share scheme has succeeded. But their success rate has been far higher than farms redistributed to “emerging farmers” who do not benefit from partnering with a farmer experienced in running a successful agribusiness.

In fact, most farms wholly owned by emerging farmers are in dire straits. Just four months ago, Minister Gugile Nkwinti admitted in Parliament that 90% of the 5.9 million hectares of land the state bought for emerging farmers was not productive. And, last year, national government pledged to bail out 283 insolvent emerging farmers who owe the Land Bank R232m.

The ANC’s model is not land reform. It is destroying South Africa’s agricultural production and the rural communities that depend on it. It is not extending land ownership meaningfully, and certainly not empowering farm workers. It is destroying value together with the hopes and aspirations of poor people as surely as apartheid’s restrictions on economic ownership and opportunity did.

We entirely reject the ANC’s model of stripping farmers of their productive land or (in what amounts to the same thing) raising the risk and cost of agricultural investment and perpetuating uncertainty through open-ended moratoria of the kind imposed by the Minister on farm worker equity schemes. We want to extend good farming practice across as many farms as possible, while empowering farm workers through land ownership and establishing incentives for increasing agricultural output and food production.

This is why we support equity share schemes. The question is: why were they stopped?

We believe the answer is political. The ANC recognises the electoral cost of a DA government being associated with a successful programme of broad-based BEE and land reform that benefits everybody. In particular it could not tolerate this happening in the Western Cape, when the ANC’s model of land reform is failing in other provinces.

The DA will continue to push for equity share schemes on the basis that they are voluntary, that state subsidies are made available for farm workers to buy shares, and that safeguards exist to protect farm workers from being exploited. These schemes are and must remain a win-win solution for all. Whatever shortcomings may exist in terms of their original design can readily be addressed through measures which are well understood, affordable and practical.

I have therefore – in my capacity as Premier – initiated a study to be undertaken by the provincial Department of Agriculture into the performance of all 83 equity share schemes in the Western Cape. It will look at why successful schemes work, why some have not and what we can do to improve them. Our findings will be relayed to the national government once the research is complete.

My hope is that this engagement, in the spirit of co-operative governance, will lead to a mature and sustainable approach to land reform, with equity share schemes replicated across the country. We believe that the state can take the initiative by finding willing and successful farmers to get involved in joint venture projects instead of waiting for them to happen.

The ANC needs to understand that development is not a zero-sum game – one person’s opportunity does not have to be at the expense of another’s. On the contrary, as we saw from the example of the Langrivier equity share scheme, a well-used opportunity can multiply opportunity. That is the insight that holds the key to South Africa’s future success and prosperity.

But, when it comes to land reform, government prefers to blame the farmers instead of accepting responsibility for its own incompetence. The ANC knows that it is much easier to find a scapegoat than it is to win the support of rural people on the basis of successful land reform that benefits both farmers and workers, and serves as the basis for the future growth and well-being of rural communities.

This is what the DA wants to do. And this is why the ANC is determined to stop us.

Signed Helen Zille

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