Speech by the Minister of Rural Development and Land Reform, Mr G Nkwinti, (MP) Opening Address to the Farm Equity Scheme Workshop - International Convention Centre, Cape Town, 13 November 2010

Programme Director
Honourable MECs
Members of Parliament
Directors-General
Heads of Department
Senior Managers
Ladies and Gentlemen

I extend a special welcome to the Share Equity partners present today, and thank them for accepting our invitation to attend this very important workshop. I am aware that some of you have had to travel long distances to get here, we thank you for taking the time out to be here.

The workshop is important for the following reasons. Since the inception of the new administration in May last year, we agreed as government that we want to do things differently. Government has adopted the Outcomes Based Approach, which has 12 outcomes. The Ministry of Rural Development and Land Reform is responsible for Outcome 7, namely, ‘vibrant, equitable and sustainable rural communities and food security for all'.

Linked to Outcome 7 are five outputs which are contained in a Delivery Agreement signed by contributing Ministers. The significance of signing these agreements is to ensure better accountability and co-ordination of commitments made by government departments.

The aim of this workshop is to assess whether the current Farm Equity Scheme policy has achieved the intended objectives, and if not, what needs to be done differently.

The objective of the FES was the acquisition of equity by farm dwellers and farm workers through shares or co-ownership. It was initially proposed as a means of redistributive land reform in the deciduous fruit and high value agricultural sectors where orchards and vineyards were believed to be indivisible. Furthermore, this was seen as a means of transforming the agricultural economy through ownership by workers of a share in the means of production and opportunities for worker participation in operational and strategic management.

Several reviews of the FES projects implemented since its inception, have indicated that the policy is not achieving the desired outcomes. The summary of the findings will be presented to you later.

The first question we must answer over the next two days is whether the FES, which we have concluded is a good policy, but was badly implemented, could help us achieve the objectives of agrarian transformation, such as sustainable agrarian reform, de-racialisation of the rural economy for shared and sustained growth; democratic and equitable land allocation and use across gender, race and class; and, strict production discipline for guaranteed national food security?

A further critical question we must answer is, given your experiences with the FES, whether we should lift the moratorium which is currently in place. If we come to the conclusion that the moratorium should be lifted, we should agree on the mechanisms that need to be put in place to enhance the implementation of the current Farm Equity Scheme policy.

In the words of the President "what will we do better, faster and smarter?"

Government has invested R500 million in supporting qualifying farm workers acquire equity in farms or going concerns. Despite the few successful projects, we are not convinced that many of these Enterprises are profitable, neither are they paying dividends, nor have they contributed to improved livelihoods.

In many instances, the former owners continue to retain their dominant positions as if nothing had changed. The FES as was implemented ran the risk of becoming a ‘rescue package' for unsustainable farming operations.

In addition, many of you, as farm workers still do not have secure tenure and may not even be aware that you are no longer only farm workers but also shareholders in the business in which you work.

The draft Land Tenure Security Bill, which will replace the ESTA and LTA, is currently before Cabinet, and introduces a Land Rights Management Board to support and sustain agri-villages, which are intended to deal with tenure security, sustainable human settlements and food production.

This Bill will be informed by the following objectives:

• to protect relative rights of farm workers; farm dwellers and landowners;
• to enhance the tenure rights of farm dwellers; and,
• to ensure food security through sustained production discipline.

The draft Green Paper contains new proposals on land reform. One such proposal is that of strategic partnerships: based on co-management, mentorship and share equity. This workshop should thus serve to enhance the discussion on these policy proposals.

To respond to the challenges of the collapsing land reform projects and defunct irrigation schemes in the former homelands, we have introduced a new programme called "Recapitalisation and Development". The objectives of this programme are to increase production; to guarantee food security; to graduate small farmers into commercial farmers; and, to create employment opportunities within the agricultural sector.

It is accessible primarily to farmers and communities that had received land from the state, but had not received the necessary support to sustain production; and, for the revitalization of irrigation schemes in the former homeland areas.

The September 2010 Framework for the Recapitalisation and Development Programme (RADP) for land reform farms, identifies FES as one of the types of Strategic Partnerships that will ensure successful implementation.

These schemes should achieve risk-sharing through unencumbered capital investment, sharing and user agreements between farm workers, landowners and commodity organizations.

This workshop is tasked with the duty of devising mechanisms of how best we can utilize the FES to benefit our farm workers and their families while ensuring optimal production discipline on the farms.

It is imperative that during the course of this week-end we work together, engaging in vigorous debate and discussion to craft a new way of transforming the rural economy, through improved partnership and ownership models that empower farm workers and dwellers.

Your future and those of generations to follow depend on the outcome of this workshop. As such, it is imperative that at the end of it, we should walk away having developed lasting solutions.

I thank you.

Issued by the Department of Rural Development and Land Reform, November 15 2010

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