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Paper short abstract:

The paper argues that the joint ventures that constitute the backbone of land reform policy in post-apartheid South Africa perpetuate elite capture and policy-makers need to move beyond the pragmatic approach of joint ventures and to rethink alternative inclusive growth models.

Paper long abstract:

This paper presents findings from research on elite capture in South Africa’s redistributive land reform. It aims to contribute to the broader debates around inclusive economic growth in land reform and corruption. Inclusive business models (joint ventures) are promoted as viable avenues for the inclusion of the rural poor into profitable value chains. However, Oya (2012), Lahiff (2014) and Hall and Kepe (2017) show that inclusive businesses are exploitative and have excluded the rural poor. The Pro-active Land Acquisition Strategy (PLAS), the current South African Land Redistribution policy shifted agricultural farming into individualised economic activity. The policy is a market-led model embracing an ideological rhetoric of commercialisation. It presents emerging black commercial farmers to convey a prescriptive trajectory for commercialisation done in the context of inclusive business. As part of the State’s extensive Broad-Based Black Economic Empowerment (BBBEE) programme implemented across the economy, farm beneficiaries’ partner with the strategic partner/mentor, as means to empower previously marginalised groups and to transform the dualistic unequal agricultural economy inherited from the apartheid regime. Joint ventures are to provide beneficiaries access to mainstream agricultural markets, move up the agricultural value chains, capacitate beneficiaries through training and skills transferral to deal with and; adapt to the continuously evolving markets and to promote employment creation. While the state funds the land transfer and also provides recapitalisation and post-settlement support to farm beneficiaries. The strategic partnership/mentorship model of land reform opened up opportunities for agribusiness and individuals to cash in on land reform through illicit benefit and in some instances later withdraw. Beneficiaries have not entirely benefited from the model. The paper presents South African cases where commercial partners and individuals remain in joint ventures through fronting, subsidy farming and farm flipping in order to continue to benefit from public funds. This experience presents a case that the renewed interest in inclusive business models in agriculture often excludes poor people and favours agribusiness at the expense of farm beneficiaries. The paper posits that, joint ventures not the appropriate way to approach land reform as they perpetuate elite capture. Policy-makers need to move beyond the pragmatic approach of joint ventures and to rethink alternative inclusive growth models.