Commercial Farmers' Vital Role In Rural Development

Largely failed land reform initiatives are leading to increased tension and uncertainty in the agriculture sector as a whole. Veteran rural development expert Jimmy Lonsdale believes commercial farmers have a key role to play in turning this situation around.

- Jimmy Lonsdale

Various state departments seem wary of making use of commercial farmers’ skills. In doing so, they are robbing young emerging farmers of a good source of mentorship and finance. This will cause more dependency on the state when what is needed is for people to become entrepreneurs.

The lack of skills transfer in South Africa’s land reform programme was exacerbated by the resignation of many mentors after the state stopped paying them for their services.

A possible solution to all of these problems is what I call ‘equity share’.

EQUITY PROMOTES PRODUCTIVITY

Equity share is a partnership where profits from a business are shared among partners in proportion to the equity contribution of each. In the case of land reform, the value of the land is included in the landowner’s equity contribution to the farming business.

Some successes were noted in the Western Cape where workers obtained equity in the farm, and labour and vineyard productivity improved. Lazy and destructive workers were forced to leave by their fellow employees, who now had part ownership and hence a vested interest in the ongoing success of these wine farms.

In KwaZulu-Natal, Hein Potgieter of Dundee sold two beef and irrigated crop farms to the state as part of the land reform programme. Potgieter then became a mentor to the beneficiaries of these farms. The state paid for inputs of the first crop, and Potgieter encouraged his mentees to save money for the next year’s farming inputs. These mentees can now borrow against their bank savings and establish a good credit rating. Although there have been some operational challenges on the two farms since the change of ownership, many successes have been achieved.