Land reform in South Africa can be smart public policy

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By Michael R. Carter and Julian May

 Mahmood Mamdani’s recent article about land reform in South Africa correctly states the importance of righting historical wrongs and creating a vibrant economy that works for its population. In contrast to what some writers have argued, including US President Donald Trump, the government of South Africa has not been seizing land from white farmers, nor is there a programme of genocide against the white farming community. But the article by Mamdani glosses over an important and complex issue, one that we have studied for the past 25 years.

Since the advent of colonisation, black South Africans have been subjected to discriminatory laws that dispossessed them of their property – without compensation – solely because of the colour of their skin. The intent was clear: landownership by the black population did not serve the economic interests of the ruling powers.

The 1913 Native Lands Act was the codification of land theft that started in 1657 when the first “free burgher”, Jan Hendrik Boom, began farming a plot of land previously used for grazing by the indigenous Khoi Khoi population. The act further established a policy of forced removals that prevented the emergence of a class of black landowners who had been able to successfully compete with those who were white.

The policy worked, and the economic successes of emergent black smallholders were stifled. The later racism that typified apartheid’s consolidation of these laws, with the introduction of the Group Areas Act of 1950, further entrenched the gross inequalities in wealth triggered by the expropriation of land and resettlement of black South Africans. By the 1980s, between seven to eight-million black people were displaced as a result. It is hard to overstate the social and economic damage and deep psychological scars left in the wake of this destruction.

The South Africa that was inherited by the democratically elected government of Nelson Mandela in 1994 had become a nation of deep economic inequality borne from decades of systemic discrimination. A nationally representative survey in 1993/1994 showed that some 40% of South Africa’s black populations were desperately poor by any measure. The equivalent figure for the white population, which on average enjoyed a standard of living equivalent to a developed European country, hovered near zero. As with Mandela, black South Africans faced a long walk to economic freedom.

Nelson Mandela’s successor Thabo Mbeki hearkened back to Rosa Parks’ brave refusal to go to the back of the bus in 1955 Montgomery Alabama when he worried that the South African economy operated like a double-decker bus with no stairwell between the lower and upper levels. Those born on the bottom level had no avenue of mobility to the top. Our own research conducted in the first decade of South African’s political transition confirmed this to be true. We found that families who had fallen too far into poverty had no chance of getting out even in the post-apartheid South African economy. Repeated shocks drove them back into poverty even as they were just getting ahead.

The South African government began to cautiously pursue policies designed to rectify the taking of land in the past by creating mechanisms to peacefully transfer land to poor and disposed families to give them a viable new start. The Restitution of Land Rights Act of 1994 was the first piece of legislation passed by the new democratically elected government.

Land reform and redistribution, once upon a time the poster-child rural intervention in developing countries, is a complex business. Land rights are complex, especially in a country in which traditional rights under communal tenure intersect with those of private property. But international evidence shows that redistribution can be a powerful force for change when done right.

Over the last decade, we have studied one such programme in South Africa that had starkly positive effects. The Land Redistribution for Agricultural Development Programme involved the voluntary sale of land from wealthy white landowners to poor black farmers who required more land to farm. Government co-investment grants allowed rural farmers to buy land and create a viable foundation for their own economic advancement.

In a study we learned that this programme raised the living standards of poor families by almost 50% during just a few years. Impacts of this magnitude took place because the transfer positioned families where they could learn, co-invest and do better with the resources and opportunities they had. Land redistribution can work for individuals and a nation.

Not surprisingly, this kind of programme has much more bang for the buck than money invested in programmes that transfer only cash. Per-government dollar spent, land reform generated six times more long-term poverty reduction than welfare programmes. While it is not an adequate instrument to address all facets of South Africa’s poverty and inequality, this shows that land reform can be smart public policy.

While the best way to implement redistribution of wealth and assets is a difficult and politically charged question, our past research shows that moving the land reform agenda forward can generate a triple win: rectifying historical wrongs, cost-effectively reducing poverty and spawning broadly based economic growth.

However, Mamdani does not go far enough in his proposed triple reform. Much more will be needed, including a redistribution of commercial farmland and broad-based access to urban land for housing. – Daily Maverick.

  • Michael R. Carter is a professor of agricultural and resource economics at the University of California, Davis. Carter is a fellow of the National Bureau of Economic Research (NBER), and the American Agricultural Economics Association.

Julian May is a professor of development studies and the Director of the NRF-DST Centre of Excellence in Food Security at the University of the Western Cape, South Africa. He is the Unesco Chair in African Food Systems and a member of the Academy of Science of South Africa.

Michael and Julian started their collaboration on the topic of land reform in 1995.

 

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