SEEDING THE GROUND FOR SUCCESSFUL LAND REFORM

SEEDING THE GROUND FOR SUCCESSFUL LAND REFORM

It’s 6am on a warm November morning and Dudu Nkuna is up early to check on the irrigation schedule for the 45 hectares of sugarcane owned by Mhlaba Trust, a community-owned farm near the southern Kruger National Park. She also looks after the irrigation on the cane land that the farm leases out to its manager, TSGRO. Dudu is being groomed to take over the farm management in the future, and she is already proving she has what it takes.

This passionate young woman is one of the 1 000 beneficiaries from 250 households whose ancestral land was restored to them in 2007, following a lengthy land claim led by current chairperson Helen Masimela. Sadly, the process also drained their funds – and despite the trust’s best efforts, the farm eventually fell out of production. Not even a shot in the arm from the Recapitalisation and Development Programme (RADP) in 2012 was enough to sustain it in the long term.

Three years ago the trust decided to partner with TSGRO, a local farming services joint venture between local small-scale growers and RCL FOODS. That was the start of a turnaround which saw first Mhlaba Trust’s own canelands being revived, and then a further 125 hectares being planted by TSGRO on land leased from the trust. With a combined 170 hectares of land now yielding enough to cover the farming expenses and reinvest for the future, the future looks a great deal brighter for the trust and the beneficiaries it represents.

Not far away from Mhlaba Trust, George Sambo is already out in his sugar fields. He’s the leader of Nyubela & Sons Farming Agricultural Co-operative, which was also on the verge of collapse a decade ago. In 2012 the co-operative applied for assistance through the RADP, and RCL FOODS was appointed as a mentor to oversee the recapitalisation process. With the benefit of a R3,4 million RADP grant and a negotiated reduction in its Land Bank debt, the co-operative succeeded in re-establishing its farming activities. It now supplies around 5 000 tons of cane to RCL FOODS’ Malalane mill each year.    

Like “seed in the ground”, as George puts it, the partnership has given the farm a second chance to flourish. He is committed to stewarding it well, not just for the sake of his and his family’s future, but for the many small businesses it supports indirectly.

A much-needed investment

Agriculture, together with forestry and fisheries, currently makes up only 2% of South Africa’s gross domestic product and provides just 5% of total employment. Although there are more than 2,2 million small-scale farms, the vast majority of these are subsistence-oriented and provide little income or employment[1]. 

As government grapples with how to expand land access to address historically skewed ownership patterns and create a more inclusive economy, rising unemployment (worsened by the COVID-19 lockdown) has placed a renewed focus on agriculture as a key role player in South Africa’s economic reconstruction and recovery. In its July 2020 discussion document[2], the ANC called for the urgent implementation of the 2012 National Development Plan’s proposals to create a million additional jobs in the sector by 2030. Food security and agricultural job creation are also highlighted in the South African Economic Reconstruction and Recovery Plan, citing the private sector as a critical enabler.

Given the many challenges and opportunities this poses, it’s worth looking at how companies already involved in land transformation and community economic development have been making it work. One example is RCL FOODS, which has embraced land reform as an opportunity for positive transformation in its primary commodity value chains – resulting in a community partnership model that is now being emulated by others in the industry.

A collaborative journey 

Back in 2000, the former TSB Sugar (now part of RCL FOODS) began to diversify its supply base by entering supply agreements with around 1 200 small-scale growers in Mpumalanga’s Nkomazi region. These ‘outgrowers’ supply around 600 000 tons of cane per year from small parcels of communally-owned land, assisted by the two services companies, Akwandze Agricultural Finance (AAF) and TSGRO, in which they are 50/50 partners.  

Addressing small growers’ need for affordable working capital, AAF provides them with access to credit at reduced interest rates – with only their cane crop being required as security – and also helps them reinvest in their farms by managing retention savings scheme on their behalf. Meanwhile, TSGRO provides farming and business support services to help mainly smallholder farmers to maximise their production and returns, and also provided opportunities for them to become contractors. Mhlaba Trust and Nyubela & Sons are customers of both ventures, which have helped turn their businesses around.   

RCL FOODS has also established three large community-based joint ventures (CBJVs) with three land restitution communities in the Nkomazi area. The CBJVs lease this back from the communities at market rates, enabling the continued production of approximately a million tons of cane each year. Besides annual lease income, the partner communities benefit from employment, study and secondary business opportunities. 

It was the opportunity to start a business to uplift their community  that led sisters Kate and Carol Repinga – both B.Comm graduates living in Johannesburg – to return to their ancestral land over a decade ago to establish a cane cutting business. Persevering through the challenges of financing the new venture and establishing their credibility in a male-dominated space, they have built a thriving business which they see as a springboard to empower others in their community. 

Between its three CBJVs, the 1 200 small-scale growers and 12 land reform beneficiaries like George, some 1,7 million tons of cane – a third of RCL FOODS’ total supply – came from outside its farms in 2020.

For Stella Mthembu, Managing Executive for Agriculture in RCL FOODS’ Sugar business unit and CEO of the three CBJVs, “These partnerships have enabled communities who have traditionally been excluded from the sugar value chain to be brought into it as active participants, which is critical to sustainable economic transformation.”

In order to enable more people to participate meaningfully in the economy, while creating a more just and stable society, Mthembu believes there is a clear need for effective and sustainable land reform. Her 18 years of experience in this space (including as Deputy Director in the Department of Rural Development and Land Reform) have highlighted a number of critical factors for business seeking to contribute to land reform partnerships.

Critical success factors for sustainable land reform

“First and foremost you have to build trust between stakeholders by understanding each stakeholder’s needs and expectations through dialogue. Balancing these is an ongoing process requiring commitment and often difficult conversations – especially in a corporate/community business landscape where diverse cultures and ways of working have to come together for a common goal. But with long-term sustainability as the goal, it can be done,” says Mthembu. 

On the question of support for emerging farmers and land reform communities, Mthembu stresses the need for financial support in the form of affordable working capital, as well as financial and business mentorship.  Business can help by leveraging its balance sheet and skills, especially if properly incentivised. “With the Land Bank in crisis and the state focusing on COVID-19 imperatives, new funding models for the agricultural sector are an urgent priority and this is an opportunity to see and do things differently,” she says.

Technical advice and competitively priced farming services are also critical to ensure that new entrants are adequately supported.

According to Mthembu, land reform partnerships should also uplift the broader community – both by providing opportunities for enterprise development and by reaching out to vulnerable groups through collaborative social development initiatives.

Land reform is an emotive issue, with many failures often quoted. The stories of Dudu, George and the Repinga sisters show that through strong partnerships and mentorship, land reform can indeed work – creating a better future for rural communities and a more sustainable agricultural sector.

[1] Institute for Poverty, Land and Agrarian Studies (PLAAS). no date. Employment-intensive land reform in South Africa: Presenting key policy recommendations from a Capacity Building Programme for Employment Promotion (CBPEP) research study.

[2] African National Congress. 2020. Reconstruction, growth and transformation: Building a new, inclusive economy.