Farm scale and Viability: n Assessment of Black Economic Empowerment in Sugar Production in Mpumalanga Province, South Africa

1. Land Reform and Livelihoods in Sugarcane
Farming in Mpumalanga, South Africa.
Paul Dulais James
Presentation for The Impact Initiative
Pretoria
16-18 March 2016

2. Introduction
• ESRC/DFID Project – Farm Scale and Viability: An Assessment of
Black Economic Empowerment in Sugar Production in
Mpumalanga Province, South Africa.
• National discourse surrounding slow pace of land reform and
failure of post-transfer farming – a national story of failure?
• Mpumalanga sugar sector – a land reform “success story”.
• Question – What are the implications of successful land reform
in the Mpumalanga sugarcane sector?
• What are the policy implications of re-assessing land reform
success?

3. The South African Land Question I
• Apartheid – Consolidation of reserve system, creation of
Bantustans.
• Bantustans – 13% of the country’s land nominally home
to 80% of the population.
• 1994 - Land distribution in South Africa amongst the
most uneven in the world.
• Insecure livelihoods, land scarcity and degradation,
entrenched poverty.

4. The South African Land Question II
• South African government has pursued a three-pronged approach to
land reform:
• Market-led land reform – willing buyer/willing seller reform.
• Restitution – legal restoration of ownership to individuals and
communities displaced from land by racial laws since 1913.
• Tenure reform – embedding the property rights of labourers, farm tenants,
and residents of former reserves.
• Slow pace of reform:
• Initial target of 30% in 5 Years.
• By 1999 – 1.8% of land transferred.
• By 2012 – 8% of land transferred.
• Target has been twice delayed and still unachieved.
• Widespread failure of land reform farms – lack of post-transfer support
and finance.

5. The Mpumalanga Sugar Sector: A Land
Reform Success Story?
• Pro-active approach to Land Reform by sugarcane miller TSB.
• Site of the largest land restitution claim in South Africa.
• Outperforming national achievements in land transferred – 62% of
sugarcane farmland is black-owned.
• “Successful” post-transfer
sugarcane farming – TSB claim
99% of land is productive. Farm
productivity amongst the
highest in the sector.

6. Context: Mpumalanga Lowveld
• Subtropical region bordered by KNP, Mozambique and
Swaziland.
• Irrigated agriculture – sugarcane, banana and citrus fruits.

7. • Site of late settlement through European expansion –
early twentieth century.
• Tropical diseases (rinderpest, malaria, sleeping
sickness) as natural barriers.
• Development of irrigation as precursor to mass
displacement of African population.
• 1954 – Mass eviction of population from seven
“tribal communities”.
Settlement and Displacement in
Mpumalanga Lowveld

8. Lowveld Settlement Pre-1954

9. Displacement Post-1945.

10. Structure of Land Reform

11. The Greater Tenbosch Land Claim I
• A consolidated land restitution claim by seven claimant
communities.
• The largest (most valuable) land restitution claim in South
Africa.
• Settled in its entirety.

12. The Greater Tenbosch Land Claim II

13. Restitution Outcomes I

14. Restitution Outcomes II

15. Restitution Outcomes III
Joint Venture: IST
Joint Venture: STT

16. Land Reform & Livelihoods I
• Intended livelihood benefits of joint ventures –
• Direct financial transfers.
• Skills Development.
• Enterprise Development
• Community Investment – scholarships, school funding, sports funding
etc...
• Financial (lease & dividends) –
• 35m Rand per year.
• Poor/opaque governance has resulted in little of this money reaching
the beneficiaries.
• Real potential – approximately 2130 Rand per year per beneficiary.
• Insignificant profits generated by farms.

17. • Skills Development –
• Preferential hiring of beneficiaries.
• Wages paid close to national minimum wage for agriculture.
• Wages depressed by historic reliance on migrant labour.
• Some uptake of employment – 35% of workforce.
• Current employment of beneficiaries – 1.8%
• Full potential employment 3.8% of beneficiaries.
• Enterprise Development –
• Requirement that JV farms use contract services provided by
beneficiary-owned companies.
• Cane cutting, labour provision, fertiliser sales.
• Business access limited by “tribal identity”.
Land Reform & Livelihoods II

18. Land Reform: Whose Success Story?
• TSB –
• Despite ceding ownership of land, TSB have increased their control over
land through joint ventures and long term leases.
• Direct control of production mechanisms – increased productivity =
increased cane processing and value generated in the value chain.
• Political success – TSB have secured a reputation as a leader in land
reform and a socially transformative agribusiness corporation.
• Beneficiaries –
• A narrow group of beneficiaries, often already politically and/or
economically well connected, successful in capturing the gains of land
reform.
• For the vast majority of beneficiaries land reform has delivered little to
no benefit.

19. Policy Implications
• A need to reconsider the parameters for “success” and “failure” in
South Africa’s land reform programme.
• Focus on quantity of land transferred and productivity of post-
transfer farms is necessary but insufficient.
• Need to deepen an understanding of the livelihood implications of
land reform –
• Who is benefitting?
• How do these people benefit?
• Who is excluded from the process?
• Time to broaden the possibilities for land use post-restitution?