New South African farmers team up with predecessors

Fri Apr 19, 2013 5:20am EDT

(Repeats item filed earlier as column)

* Land reform beneficiaries lack farming experience

* Previous land owners seen as suitable partners

* Land reform policy under review to speed up programme

By Olivia Kumwenda

MALELANE, South Africa, April 19 (Reuters) - Reclaiming land seized during white minority rule was a dream come true for black families in the South African farming town of Malelane.

But the community had no farming experience, equipment, money or market access. In search of a plan for its 3,300 hectares (8,150 acres) of sugarcane land, it agreed a joint venture with the whites who had owned the land before.

Land reform is a sensitive issue in South Africa, where some politicians are demanding a forced redistribution of white-owned farms along the lines of neighbouring Zimbabwe and twice as many white farmers are murdered as other South Africans.

The post-apartheid African National Congress (ANC) government's policy is to buy land seized by whites, if they want to sell, and return it to blacks who claim it.

But it has fallen far short of its targets, and many of those who do get land back find it hard to compete in a highly developed sector; some have sold the land back to the previous white owners after struggling to make it productive.

In a new trend, three groups with sugar cane land have formed joint ventures with TSB Sugar company, which says it hopes they will become a model for others.

Petros Silinda, a former teacher turned farmer, was one of the beneficiaries of the Malelane land. "It was challenging for us as a community because we didn't have the expertise," he said. "We had to look for a partner with experience."

In 2007, three years after they got back the land, the Malelane families formed a 50-50 joint venture with TSB Sugar, a subsidiary of holding company Remgro, that previously held the rights.

The families still own the land, while TSB has the expertise. The company owns sugar mills, a packaging plant and transport fleet but 85 percent of the cane area it uses in South Africa is in the hands of communities.

The joint venture known as Mgubho now produces 260,000 tonnes of sugar per year. It declined to detail exactly how the deal is structured, but said it had annual revenue of 135 million rand, with 43 million rand ($4.68 million) in dividends has been paid to the community since 2007.

"We didn't want a situation where today you benefit and tomorrow the farms are gone," said Theo Chiyoka, the chief executive of Mgubho.

Chiyoka and four other black farmers are on the board of Mgubho, making decisions in its air-conditioned boardroom. Outside, irrigation systems that the community could not afford spray water over the green rows of sugarcane.

Other beneficiaries get jobs in the fields after training.

Two other joint ventures between the communities and TSB follow similar patterns in this fertile and steamy region about 400 km (240 miles) east of Johannesburg.

TSB said the main aim of the partnerships with communities was to facilitate the transfer of skills in what it said was "a successful land reform model".

Critics of the joint venture idea, which has yet to spread, say it means white farmers continue to reap the benefits of apartheid-era policies, first by making money from the sale of the land, then by partnering with communities for profit.

"White farmers are only too happy to sell up the ownership of the land but still be able to be involved in making profits out of agriculture," said Ruth Hall of the Institute for Poverty, Land and Agrarian Studies.

"These are some of the bizarre formulations of land reform in South Africa."

President Jacob Zuma, however, said in February there was "need to provide better incentives for commercial farmers willing to mentor smallholder farmers".

A CENTURY OF ENTRENCHED INEQUALITY

In the two decades since the ANC came to power, about 4 million hectares of commercial farmland have been transferred out of a target of 24.5 million hectares or 30 percent, creating about 230,000 new black farmers.

Commercial farming is very diverse, ranging from maize and sugar to citrus and cattle. It accounts for only around four percent of GDP, but crops such as maize and grapefruit bring in export revenues and South Africa is the regional breadbasket.

"As far as land reform is concerned, we need new models on how to go forward. We cannot let land just lie idle," said Johannes Moller, president of farmers group Agri SA.

The need for reform has been brought into focus by the crop decline in neighbouring Zimbabwe, where white-owned farms were seized by President Robert Mugabe's government.

More than a decade after the chaotic and violent seizures in Zimbabwe, food production is believed to be returning to 1990s levels.

South Africa typically grows between 2 and 2.3 mln tonnes of sugar a year and consumes around 1.6 mln tonnes, with the rest exported. Getting the raw product to mills and then finding customers requires capital and infrastructure.

The South African government has acknowledged the lack of adequate support for new black farmers to compete at the commercial level and has invested 1.8 billion rand ($195.78 million) since 2010 to help them improve productivity.

Land reform has also proved costly as demand lifts land prices. The government is reviewing matters to speed transfers and undo the skewed ownership ratios entrenched a century ago when the Native Land act reserved 87 percent of land for whites, with more land seized during apartheid rule from 1948 to 1994.

Among the changes sought are limiting the sale of land to foreigners and setting up an office of valuer-general to provide "fair and consistent" land values.

Mtobeli Mxotwa, a spokesman for the land reform department, said the aim was to make the changes law by the end of the year.

New farmers still have to come to terms with the fact that owning a piece of land does not mean instant wealth.

"One of the problems with restitution is that when the people got the land, no one told them that they cannot drive a Mercedes Benz like Mr Du Plessis used to drive when he owned the farm," Chiyoka said.

($1 = 9.1941 South African rand) (Editing by Ed Stoddard and Philippa Fletcher)

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