Land redistribution in KwaZulu-Natal : an analysis of farmland transactions recorded in 1997 and 1998.

Abstract

This research has two objectives: Firstly, to examine the rate of land redistribution in the province of KwaZulu-Natal during the years 1997 and 1998 as well as the performance of different modes of land redistribution. Secondly, to study the relationship between mode of redistribution, security of tenure and access to agricultural credit on land redistributed to disadvantaged households in the province during 1997. To measure the rate of land redistribution, results from a census survey of farmland transactions recorded in the province in 1998 were compared with the results from a previous survey conducted in 1997. It was found that 18885 hectares of commercial farmland transferred to disadvantaged owners in KwaZuluNatal during 1998, which implies an overall rate of redistribution of 0,35 per cent, down from 0,43 per cent in 1997. There were marked differences in the quality, quantity and agricultural performance of farmland transferred by different modes of redistribution. Private transactions accounted for the majority of the total land wealth and total land area transferred in both years, with mortgage loan transactions making the most significant impact. Also, the mode of land redistribution was an important determinant of the level of tenure security and agricultural performance. Individual households purchasing land through private transactions tend to exhibit much higher tenure security than those households which purchased land collectively under the government land grant programme. A logit model was employed to determine the probability of household agricultural borrowing. Results of the logit model on data gathered in a sample survey of 129 disadvantaged households that purchased farmland in KwaZulu-Natal during 1997 show that those farmers purchasing land through subsidised mortgage loans were more likely to borrow credit for agricultural purposes. The probability of agricultural credit use increases with more secure tenure, higher levels of wealth and liquidity, and higher education levels. These factors provide greater incentives for lenders to supply credit and for borrowers to use credit for investments and complementary inputs. The issues of tenure security and access to credit must be considered if land redistribution to the landless poor is to be successful in the long-term. It was recommended that government should reallocate scarce public funds towards programmes which assist emerging farmers to gain access to credit for the purchase and development of agricultural farmland. However, attention must also be directed towards scrapping the Subdivision of Agricultural Land Act, 70 of 1970, which currently impedes land redistribution through regulations preventing large farms from being subdivided and sold as smaller properties to viable emerging farmers. In addition, attention should be focused on converting existing government land grant projects into non land-user group schemes whereby land is set aside and managed in an effort to create a viable joint enterprise for the community to realise a benefit (income) stream.