SA Land Focus is Misdirection – Part 1

Feb 14, 12 SA Land Focus is Misdirection – Part 1

South Africa has become obsessed with land reform, as yesterday’s State of the National Address showed yet again. The argument is deceptively simple – the economy can never achieve any sort of equitable distribution of wealth or economic empowerment while a minority own the majority of the land. This seemingly logical and wonderfully emotive argument masks two fundamentally flawed assumptions. This is the first of two articles discussing these assumptions.

Land is not the problem 

The first assumption is that wealth and land are synonymous. This is a bizarre hangover from the long-gone era when land-owners controlled the world (or at least the bits of it situated in ‘civilized’ Europe). We live in a commodities economy. Wealthy lies in minerals, manufacturing and, crucially, trade. Land is highly valuable in urban areas and where mining rights are in question. On it’s own, however, land in rural, farming areas is not worth very much. It certainly doesn’t guarantee economic success or stability. Someone with the resources and skills to do something with it will probably be able to make a living from the land. But it’s a high-risk proposition, particularly given the variable rainfall, water-quality deterioration and highly unstable prices faced by modern agricultural producers. This is not to suggest that those disadvantaged by Apartheid should not be given a hand-up, simply that large-scale farming may not be a hand-up.

One way in which farm-land can be a life-changing asset for previously disadvantaged, and particularly previously dispossessed people, is where the can choose to capitalise on that asset by selling the land. This provides cash that can be safely invested to produce income for many years to come, in agriculture or in other (lower-risk) sectors. Yet, this is the one use of redistributed land that is vilified across the board – as if there is something wrong with recipients of redistributed land making a rational choice to use the land to their own maximum benefit.

Our obsession with who owns the land – based on archaic ideas of ‘landed overlords’ and the misconceptions that commercial farming is an easy way to make big bucks – is clouding out any rational analysis of who has all the rest of the wealth. Primary agriculture last year contributed 2-3% of GDP. Even if all the land were redistributed and all that land continued to be productive (at some of the highest productivity levels in Africa), redistributing commercial farm land would have the potential to address less than 5% of inequality.

Land Reform in South Africa is mostly clever misdirection. In a largely urbanised country, where the rural poor are poorly organised and so lack voice, it is easy to shift the impetus for economic transformation away from cities and focus on farming land. The days when land was the indicator of wealth and the source of financial security are gone. Farming is high-risk. The drive to “reverse the impact of the 1913 Land Act” is going to take far more than land reform. It is going to take, among other things, a recognition that the Land Act wasn’t just about land – it was about removing people’s independence and ability to use their assets as they chose to further their own interests. South Africa is a modern economy, wealth is much, much more than land – redistributing farm land won’t come close to fixing inequality because land is not the problem.

Image by Kevin Dooley