On 8 May 2015, the minister of Rural Development and Land Reform Gugile Nkwinti presented his 2015 budget policy speech in the National Assembly. According to a statement released by Grain SA, South Africa may face a food shortage if some of the proposed plans mentioned in the minister’s speech are put into effect.
These plans included the so called 50/50 Policy Framework, as well as the Landholdings Bill, which will see introduction of land ceilings and the prevention of land ownership by foreign nationals.
50/50 Policy Framework
According to Nkwinti, individuals and groups of farmers have come forward willing to participate in the 50/50 Policy Framework. Within this framework, government will provide 50% of the resources to the farmers, while Wildlife Ranching South Africa (WRSA) will provide the remaining 50% at a low interest rate of 2.5% per annum, with a forty year repayment for bank loans.
However, Nkwinti pointed out: “There are several other proposals which are being considered, including full land acquisition, followed by a joint venture company in which workers are the majority shareholder.”
Jannie de Villiers, CEO of Grain SA said that the 50/50 Policy Framework will be detrimental to the poor, as their primary need is food, and not owning land.
He explained: “More than 60% of the farmland is covered by debt. [Approximately] 83% of farmers produce food with productions loans. If the 50:50 proposal is implemented, 83% of farmers won’t have production loans to produce food on half the land. Our infrastructure cannot carry imports of the magnitude we would need.”
Land ceilings
According to Grain SA, Nkwinti announced the proposed land ceilings without consulting with farmers with regards to the ceiling levels or definitions around who can own land.
In his budget policy speech, Nkwinti presented the following land ceilings applicable “for both natural and juristic persons:”
· For small commercial farms Nkwinti stated that the ceiling for ownership should be 1 000 hectares.
· Medium scale farms for commercial purposes should have a ceiling of 2 500 hectares.
· Large scale farms should have a ceiling of 5 000 hectares in order to make them commercially viable, according to Nkwinti.
“Any excess land portions between each of these categories - small scale and medium scale; medium scale and large scale; and, above the 12 000ha maximum, shall be expropriated and redistributed; and compensation will be on the basis of the ‘just and equitable’ principle enshrined in section 25(3) of our Constitution,” said Nkwinti.
De Villiers also pointed out that with the aim of 70% urbanisation by 2030, food shortages will again be a problem, as with the scale of these farmers, not enough food will be produced to support the 70% of the population that will be living in the cities.
According to de Villiers, only if the government supports farmers and provides them with subsidies, will the farmers be able to support smaller sized farmers. “Without subsidies, scale is your only answer,” revealed de Villiers.
While Grain SA does not approve of these policies, it has stated that it does approve of “the guidelines for land reform in the National Development Plan – 20% land by 2030 on a district basis,” and that it will “assist in making this a reality.”