A critical appraisal of South Africa's market-based land reform policy

A critical appraisal of South Africa’s
market-based land reform policy
Vaalkop project in Chapter 6). Land prices
for the rest of the projects reveal that in the
other group project, Mankweng Integrated
(see Chapter 6), the land price was
R11 666 per hectare while the individual
beneficiaries got their land at an average
price of just R269 per hectare. Differences
in land prices could be explained by
objective factors such as the difference in
land quality and assets on the land, but
administrative practices also appear to
have been a factor.
Making direct contact with the
beneficiaries quickly revealed at least part
of the reason for some of the differences in
land prices noted above. Seventeen of the
18 individual projects approved are on two
blocks of state owned land, at Steilloop,
where there are five beneficiaries, and at
Manamead, where there are 12. It emerged
that in both of these areas the beneficiaries
had already been leasing the land in
question before the initiation of the LRAD
project. The state land they were on was
priced at production value rather than at
market value, yielding substantially lower
prices per hectare than could have been
obtained for land on the open market. The
private land to be acquired for the
Mankweng Integrated group project was
valued at market rates. DLA information
on projects approved identifies four
categories of planning grant expenses:
business planning, valuation, legal entity,
and other (Table 4). The largest amount of
planning grant money reported as spent is
allocated to ‘other’, giving little idea what
it was actually used for (Makharamedzha
2002). According to one DLA official, the
planning grant money listed under ‘other’
may be a provision and not money
actually spent, as he did not know what it
had been spent on (interview 33). The
Agricultural Research Council (ARC)
carried out the business planning for most
of the projects free of charge; other
planning required was done by DLA
officials, so there was little expenditure on
business plans. The Land Bank was paid to
do the land valuations on all the state land.
In addition to the DLA projects, 29
projects implemented by the Land Bank in
Limpopo involved the transfer of 8 144.81
hectares to 125 beneficiaries (Table 5).
A comparison with DLA-implemented
LRAD projects shows that the DLA
reached twice as many beneficiaries with
less than two thirds of the grant money.
Not surprisingly the loan component of the
DLA-implemented projects is far smaller
Table 4: Expenditure of planning grants on LRAD projects (R)
Business plans Valuations Legal entity Other Total
28 000 62 323 16 850 448 759 555 932
Source: Makharamedzha 2002.
Table 5: Land Bank-implemented LRAD projects
Number of Hectares Average Grants Average Loans (R) Average
beneficiaries hectares per (R) grant per loan per
person person (R) person (R)
Total 125 8 144.81 65.16 9 225 264 73 802 27 455 807 219 646
Men 92 6 960.92 75.66 6 373 293 69 275 16 581 692 180 236
Women 33 1 183.89 35.88 2 851 971 86 423 10 874 115 329 519
DLA-implemented LRAD projects (for comparison)
Total 251 14 147 56.4 5 977 307 23 814 4 623 251 18 419
Source: Land Bank, Polokwane Branch (Land Bank 2003).
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