Agrilogics
  • At a land indaba on 3 October City Press and Rapport will bring decision-makers together in Johannesburg to critically evaluate land reform since 1994 and examine solutions to the political and economic challenges that we as a nation face.

  • In 1993, President Cyril Ramaphosa, who was then secretary-general of the ANC, spoke at the Land Redistribution Options Conference in Johannesburg, where a future plan for land reform was being thrashed out. He said in his opening remarks:

    "The massively unequal distribution of land is not merely an unfortunate legacy of apartheid; it is the totally unacceptable continuation of apartheid."

  • The ANC has asked a black farmers' association to assist the state identify deserving beneficiaries of land expropriation without compensation.

    The party met with the African Farmers' Association of SA (Afasa), which represents black farmers, on Wednesday in Kempton Park, Ekurhuleni.

  • Non-profit organisation, Vumelana Advisory Fund has facilitated the conclusion of a community private partnership (CPP) agreement between beneficiaries of the land reform programme Ebenhaeser Communal Private Association (CPA) and the largest producer of organic wine in South Africa Stellar Organics. 

    Stellar Organics is also the largest global producer of no-added-sulphur wines. The company  exports 80 percent of its wines to Europe, Asian, African and North American markets and 20 percent is for the local market. The Ebenhaeser Community Property Association (CPA) owns ± 18,283 hectares of land near Vredendal in the Western Cape along the N7 which runs from Cape Town to Namibia. The tiny settlement of Papendorp is located on its land. This CPA is one of the biggest land claims in South Africa. The government has allocated R233m for the purchase of the farms, which include vineyards. The CPA has more than 652 beneficiary households.

    The partnership between the Stellar Group and the Ebenhaeser CPA started informally in 2017 and was recently formalised through the Vumelana Advisory Fund, a non-profit organisation that helps beneficiaries of the land reform programme to develop their land in an effective and sustainable way, and is facilitated through community private partnerships.

    The community has entered into a 20-year agreement with Stellar Organics and has a management contract in place for the group to buy its entire vineyard production at competitive rates. The provisions of the agreement allow it to be terminated at any time.

    There were initially 44 farms up for restitution to the community. Thirteen have been transferred and are actively farmed; 9 are set to be transferred in April 2021 and the rest as soon as the present owners have harvested their final crop. This will make the Ebenhaeser CPA the biggest black-owned vineyard in the Olifants River area.

    The CPP model

    Community private partnerships (CPPs) are formations established between private parties and communities that acquire access to land under the land reform programme. Typically, the communities bring their land and labour and the private partner brings capital and skills to the partnership. CPP contracts are structured to ensure that the partners are able to meet their obligations and exercise their rights in a manner that supports the profitable operation of the business venture into which they enter.

    While in a typical CPP agreement the community brings land and the investor brings financial resources and skills, in this instance instead of the conventional approach, the investor will be supporting the community in acquiring the knowledge and skills to be able to eventually produce wine and juice of quality for local and international markets themselves. They will be establishing the local and international relationships needed to sustain themselves in this sector.

     Partnerships for land reform

    Speaking about the conclusion of the CPP agreement with Stellar Organics, Madelein van Niekerk, chairperson of the Ebenhaeser CPA stresses that Vumelana does not do the farming for them, but enabled them to do it themselves through the partnership. “When we got back our land, we had no knowledge of farming, nor the capacity to undertake any activities on the land. Through the partnership we have been able to learn more about farming and risk management and this has been a critical component in ensuring that we don’t end up as another failed land reform story.”

    The community currently produces grapes on 81 hectares of the land and 339 hectares are being used for seasonal vegetable farming by subsistence farmers. The community supplies the Stellar Group with grapes at competitive rates, which the group uses for its wines and fruit juices.

     “We employ 18 permanent employees and 50 seasonal workers and have plans to expand as more land becomes available; but we can already see the difference in the community, as we are much better off than we were  over the past five years before the investor support,” said Van Niekerk.

    Through its partnership with the Stellar Group, the CPA has secured a deal to export pumpkins for the Netherlands market. This will take effect from December – the harvest season. Cash crops, which include tomatoes and beans, are being produced for the local market. Plans are under way for the community to set up a juice production operation in conjunction with Stellar in the middle of October 2020.

     “A further boon this year is a planned R100 million water pipeline which will become operational in September to boost water security and enhance farm production,” Van Niekerk said. “Vegetable farming has enabled us to diversify and has been critical in assisting us in shouldering the current Covid-19 challenges with grape farming, especially the restrictions on wine supply – which is a hugely dependent on our produce.”

    Commenting on this milestone, Peter Setou, Chief Executive of Vumelana said “This is proof that properly structured partnerships between private sector players and land owning communities can not only ensure productive use of restored land, but also address critical challenges facing communities such as skills, jobs and poverty.”

    The private partner’s perspective of community private partnerships

    The relationships with the Stellar Group were initially established in 2017, and formalised recently through the support of the Vumelana Advisory Fund. The Stellar Group has been supporting the community for the past two seasons; and has assisted in putting in place structures and policies for the community to farm their land; and in setting up governance structures to ensure that it follows proper legal procedures in its work.

    On inception of the agreement, the Group invested R800 000 in supporting the community to get the harvest in, to pay electricity bills that had accumulated over time and to cover other operational costs. Out of that investment, the community was able to yield R2.3 million worth of harvest in its first harvest season.

    “Our view is that the government has given the people back their land, and that’s critical, especially within the context of the country’s history,” said Willem Rossouw, managing director of Stellar Organics. “The community has water rights, and are now expected to work and create a life for themselves. However, if they do not have the skills and the knowledge to farm, they will fail. It’s not the sole responsibility of the government to give the people knowledge, it’s also the responsibility of those who have been farming that land to support and make sure that communities succeed, because if communities fail, we all fail. These partnerships should be driven through a non-greed approach, where we share skills and resources and knowledge to enable communities to stand on their feet and eventually be able to do what they need to do on their own.”

    He pointed out that the businesses that benefit from the produce that farmers provide need to also play their part.

    “Big businesses in the wine, food and beverage industries have a critical role to play in these CPP partnerships and within the entire value system, and if they are not doing anything, we need to call them out. We cannot have black farmers fail because of a lack of knowledge or resources, when we have other farmers and businesses in this country who possess those skills. Everyone needs to come to the party and make sure land reform succeeds. Put aside selfish agendas and be selfless in doing what needs to be done to get new land holders on the farms to succeed!” Rossouw said.

     About Vumelana Advisory Fund 

    The Vumelana Advisory Fund (Vumelana) is a non-profit organisation that helps beneficiaries of land reform programmes to put their land to profitable use by establishing commercially viable partnerships between communities and investors. Vumelana was established in 2012 to support the establishment of commercially viable partnerships between investors and local community landowners to create jobs, income and skills. It aims, among other things, to demonstrate the value of Community Private Partnerships (CPPs) as a contributor to successful land reform. To date, Vumelana has facilitated 20 partnerships, putting approximately 68 800 hectares of land to productive use; assisting over 15 000 beneficiary households across the country.

     

    Vumelana means to agree with one another, make a contract with one another, support one another.

  • This morning President Cyril Ramaphosa tabled the government’s economic stimulus and recovery plan. The plan entails a range of measures covering a number of sectors, which will be implemented immediately. This is aimed at igniting economic activity, restoring investor confidence, preventing further job losses and creating new jobs.

  • "The advisory panel appointed by the president, mr Cyril Ramaphosa, to support and advise the Interministerial Committee on Land Reform has a very difficult task to provide, on the one hand, certain perspectives and models of land policy to the Committee within the context of the sustained inequality in land ownership in the country and in the light of unsatisfactory land and agricultural reform in recent years. 

  • In the State of the Nation Address in February, we announced a range of measures that we would initiate to set the country on a new path of growth, employment and transformation. 

  • The Institute of Race Relations has published the findings of its latest survey,looking specifically at what the voting population thinks about the government’s plans for land redistribution without compensation, and what it means for private land ownership in South Africa.

  • Banks in South Africa have lent farmers about R 150 billion and have in excess of R 1.3 trillion outstanding on property loans overall.

    This is according to Banking Association of South Africa head Cas Coovadia.

  • Land reform remains one of South Africa’s most pressing unresolved issues. Attempts to address skewed ownership and economic participation patterns, the result of many years of exclusion and dispossession of black South Africans, have been unsuccessful since 1994. The present government has now turned to possible changes to the Constitution to deal with these failures. 

  • South Africa's shifting budget priorities will provide roughly half of the R50-billion ($3.5-billion) in stimulus spending it plans to make by the end of its fiscal year in March, Finance Minister Nhlanhla Nene told Reuters.

  • South Africans will have to wait another two months before they know whether the Constitution should be amended to allow for land to be expropriated without compensation. 

  • This is the question on everyone’s lips as the ANC government appears to be moving ahead with its proposal to expropriate land without compensation (EWC). During TAU SA’s recent annual Congress, Adv. Roelof du Plessis SC set out the legal ramifications of the government’s various statements about EWC.

  • Land reform remains one of South Africa’s most pressing unresolved issues. Attempts to address skewed ownership and economic participation patterns, the result of many years of exclusion and dispossession of black South Africans, have been unsuccessful since 1994. The present government has now turned to possible changes to the Constitution to deal with these failures.

  • South Africa's land reforms will include issuing title deeds to small-scale farmers living on tribal lands, a senior ANC official said on Friday. This is a comment that will rile the traditional chiefs.

  • Namibia President Hage Geingob vowed Monday to push ahead with land redistribution, echoing the government of neighbouring South Africa, where the issue has become a fierce political battleground. 

  • Farm prices in South Africa have plunged by a third since the ruling party decided to seek a change to the constitution to make it easier to expropriate land without compensation, and as commodity prices fell due to bumper harvests following a drought.

  • At the City Press & Rapport Land Indaba, a day-long discussion on land, politicians and stakeholders were privy to the many policy differences that exsisted on the land matter.

  • Processing of current land claims could take 200 years and cost more than R600 billion.

  • For ten years I have been doing ‘state of the nation’ breakfast presentations with Justice Malala in Johannesburg and Cape Town. We do them twice a year in each city.

    I would like to put my latest observations on South Africa’s future, which I shared with audiences last week, in the context of the ‘High Road/Low Road’ chart shown below. It was produced by the Anglo American scenario team in 1986.

    In retrospect, South Africa managed to take the High Road of negotiation in 1990 with the release of Nelson Mandela, and with the subsequent adoption of a new constitution which led to the general election in 1994. In the ensuing years of Nelson Mandela and Thabo Mbeki as leaders of the country, we continued along the same path at the top of the chart with fairly high economic growth rates.

    However, more recently, our economy has not performed for all the reasons we know about. We have followed the dotted line of descent entitled ‘Failure of Growth’ and have moved to the left with deep divisions among competing groups once again dominating our society.

    We are now approaching the very critical crossroads shown in the lower section of the chart. We either get out of trouble with strong leadership bordering on ‘authoritarian’ to revive the economy and promote unity of purpose; or we descend even further into outright conflict and possibly a ‘Waste Land’ devastated by civil war. It is as simple as that.

    Thus, Cyril Ramaphosa’s ascent to the presidency comes at a tipping point in the nation’s destiny. If he shows the positive qualities which I know he has from frequent meetings with him when he was the leader of the NUM, we have a chance of moving back once more to the High Road trajectory. If he is overwhelmed by internal divisions inside his own party, or by outside forces which render him powerless, the Low Road beckons with an extreme ending not to be dismissed.

    There are six flags to watch. The first is around corruption: will past perpetrators be pursued to ensure justice is seen to be done and will it be eliminated in future? Such has been the level of corruption that South Africa is now in danger of running out of money in addition to receiving junk status.

    The second flag is around improving the quality of our education system, health care and general infrastructure. No economy can grow fast without all three. The management of state owned enterprises has to be transformed for the better.

    The third flag is around style of leadership because winning nations are like winning soccer teams. People must feel they are on the same side even though they have differences of opinion. Nobody must feel excluded.

    The fourth flag is about pockets of excellence. South Africa has many and we should be replicating them instead of dumbing them down. Like soccer stars are essential to win championships, pockets of excellence ensure that a nation remains in the premier league of the global economy.

    The fifth flag which to me is the most important one of all is whether we open up our economy to achieve genuine economic freedom for all. We need an effective platform for the next generation of young entrepreneurs to launch themselves everywhere in the country. They are the ones who will be providing the millions of jobs required to get our unemployment rate down to single figures.

    The sixth and last flag is the one which in a worst case scenario can ignite a civil war and that is land reform. Reform has to happen but it must happen in a way that encourages enough goodwill on all sides to rule any form of conflict out.

    So what are the probabilities for the different paths represented on the chart? With the possibility of a new dawn arising from the new leadership, a return to the High Road with an economic growth rate of 5% per annum has increased to a 60% probability. The scenario of being stuck on the Low Road, depicted by the circle of economic stagnation in the middle of the chart and representing distribution without growth, is now assigned a 30% probability. That leaves a 10% probability of the wheels coming off altogether as we descend into the chaos of a failed state. Clem Sunter- 

    Watch the flags. They must turn green for a positive outcome. Otherwise prepare for the worst.

Agrilogics

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