How the land redistribution budget is being diverted to elites*

The government says land redistribution is at the top of its agenda. Its actions say otherwise.

The Department of Rural Development and Land Reform’s only funding initiative for land reform beneficiaries, the Recapitalisation and Development Programme (RECAP), is diverting funds away from land reform and towards a small group of commercial farmers and preferred “strategic partners”.

Instead of using the RECAP programme to help new farmers, these strategic partners are farming state subsidies.

A report commissioned by the Department of Monitoring and Evaluation (DPME) in the Presidency makes some alarming findings on RECAP:

  • The average spend per beneficiary in Free State is R1.02 million, but RECAP has not created a single full-time job in the province;
  • RECAP swallows at least a quarter of the DRDLR’s annual budget;
  • The national average spend is R2.9 million per project and R463 284 per beneficiary;
  • The average cost per job created by RECAP R588 284.

This led to outcry at a recent meeting (February 4-5) of the parliamentary committee on Rural development and land reform. “Action needs to be taken. This is wasteful and fruitless expenditure,” said one MP. “Budget is flowing but the services are not coming,” said another.

The RECAP programme was launched to support people who were given land under the restitution or redistribution policies after 1994 but did not get adequate follow up capital and support to farm productively. The DPME report shows, however, that only 29 grants in its sample went to restitution projects and 16 to land redistribution beneficiaries. In the same period, 564 grants went to new commercial ventures, most of them on land owned by the state and leased to ‘beneficiaries’.

Grain SA told MPs that only 32 of its 600 black emerging farmer members had received RECAP grants. Their 3,500 members in communal areas were told the policy did not apply to them.

The Presidency’s DPME report said there were no clear selection criteria for projects, beneficiaries or the strategic partners funded to mentor emerging farmers. A number of people told MPs last week that officials constantly shifted the funding criteria and then rejected applications on the basis of new specifications that were arbitrary and unclear.

The Legal Resources Centre described how the Stellenbosch Small Farm Holdings Trust applied for a commonage infrastructure grant in 2006, only to be told five years later that a different business plan would now be required. The DRDLR invested R500 000 in helping the group develop this plan. When they submitted it, they were told they needed a strategic partner and should develop another plan. The group is still in the process of trying to secure funding.

Many of the bigger grants are going to a few people with political connections. Farmers who were already financially strong “by-passed provincial government officials and contacted senior politicians to have their farms prioritised for recapitalisation,” the DPME said in its report.

The way that RECAP is being implemented fits the broader picture of elite capture across all aspects of land reform. Far from the land reform budget supporting redistribution to the poor, it entrenches inequality between the rich and poor. As the DPME report notes, it is the job of the Department of Agriculture, not the Department of Rural Development Land and Reform, to develop the industry.

Land reform programmes should be geared towards redressing the terrible legacies of the dispossession of black South Africans and the persistent unequal distribution of land and resources. But RECAP, like other land reform policies such as the new Communal Land Tenure Policy, denies the substantive land rights of people living in rural areas by making their ability to use their land conditional on their ability to draw up a commercial business plan and the actions of imposed strategic partners.

“I guess elite capture is part of the process,” DRDLR Director General Mdu Shabane conceded at last week’s meeting with MPs. “We’ve seen people coming from nothing and becoming so powerful. They have a vision of saying they want to make a billion. I think that’s exactly what we want them to do. We need to restore the class of black commercial farmers destroyed by the 1913 land act.”

With the Department hell-bent on following the path Mr Shabane describes, it seems they will not heed the warnings of land reform beneficiaries and the DPME report to move away from conditional funding systems with vague selection criteria and towards a comprehensive support system for a range of land reform beneficiaries, not just those on a path to commercial agriculture.

*This article was first published in The Star on February 13, 2015.

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