More than R683 million has been approved across 89 farmworker equity schemes, but many beneficiaries have seen little of the economic benefit the programme was meant to create.
The Portfolio Committee on Land Reform and Rural Development called for urgent action last week after examining problems affecting the schemes and adopting its report on a petition concerning farmworker equity beneficiaries. The committee found that despite substantial public investment, many schemes had failed to provide meaningful ownership, sustainable benefits and effective control to the people they were established to support.
The committee identified weak state oversight, fragmented accountability, poor enforcement, limited access to financial information and limited beneficiary participation as major problems. It also found that beneficiaries in some schemes were vulnerable to insecure tenure, the loss or dilution of shares, unclear inheritance rights and unequal bargaining power.
Farmer and land reform beneficiary Vuyani Zigana says he has experienced some of these problems while trying to secure land and build a farming business.
Zigana’s difficulties began after a farm was allocated to another beneficiary. He approached the Department of Land Reform and Rural Development to ask what would happen to him and says several engagements followed.
He says a meeting eventually agreed that the person already occupying the farm, who had a lease, would remain there while a decision was made about his own situation.
Within days, Zigana says the situation became difficult and he returned to the government official involved and asked him to intervene.
“I’m not going to waste my time. You don’t have a lease agreement. That chef has got a lease agreement. So move your animal out there,” Zigana recalls being told.
Zigana says the department later gave him a farm where he could continue farming. He also had a letter from former Land Reform Minister Thoko Didiza advising him to remain on the farm. He says the letter instructed the department to train him so that he could obtain a long-term lease.
“I stayed there for four years under that letter,” he says.
The long-term lease never materialised, according to Zigana. After applying for one, he says he later received an eviction letter from the department stating that he was occupying the farm illegally.
The uncertainty affected his ability to make decisions about the farm. Zigana says he wanted to plant crops and make improvements but did not know how long he would be allowed to remain on the land.
Agriculture requires investment that can take years to recover. Farmers spend money on livestock, fencing, water infrastructure, seed, fertiliser and equipment while relying on continued access to the land to earn that money back.
Zigana says he still made some improvements despite the uncertainty. He put up a boundary fence between his farm and a neighbouring property and cleared dams that had become filled with silt.
His experience with land access has also affected his livestock operation.
Zigana previously bought a farm in 2012 and started building his herd. He says he eventually had between 102 and 108 cattle and about 40 sheep.
When the farm was later advertised and allocated to another beneficiary, Zigana says his animals were taken to a pound. Some died and he had to sell others.
He says he was eventually left with about 60 cattle and five sheep.
The loss of livestock also affected his household income. Zigana says money from farming had helped him support his daughter at university, but after the loss of his livestock and income she could not continue with her honours studies.
After an intervention involving Minister Didiza, Zigana says arrangements were made for him to move his animals to another farm.
He went to the property in February 2021 but says he found two people already occupying it. He continued engaging with provincial officials and was later called to a meeting in Port Shepstone, where he was asked to provide registration documents linked to his application.
He submitted the documents but says the process later went quiet.
Zigana alleges that people with connections to government officials received preferential treatment in land allocation. Those allegations have not been independently established.
Despite the difficulties, he says he wants to continue farming and believes a long-term lease would give him the security needed to expand his operation, make a profit and create jobs.
“I can farm better, make a profit and create employment,” he says.
How the equity schemes were supposed to work
Farm Workers Equity Schemes were introduced during the 1990s as part of government’s land reform programme.
The idea was to give farmworkers a greater economic stake in commercial farming rather than leaving them solely as employees on agricultural properties.
Under the model, farmworkers could receive shares in farming enterprises and participate in the ownership of the businesses. The shares were intended to give beneficiaries access to the economic value created by the farming operation, including dividends where the business generated profits.
The programme covered about 24,000 hectares of agricultural land, with government investing more than R700 million to establish the schemes, according to information previously presented to Parliament.
This model depends on beneficiaries having meaningful access to information and being able to participate in decisions affecting their ownership. A beneficiary who holds shares in a farming business needs to understand the company’s financial position, how the business is performing, what assets and liabilities it has and whether profits are being distributed.
The committee found that many beneficiaries have struggled to exercise those rights. Its inquiry identified insecure tenure, the loss or dilution of shares, unclear inheritance rights, unequal bargaining power and insufficient independent legal and financial advice as concerns affecting beneficiaries.
Weak oversight has also made it difficult to ensure that schemes continue operating as intended. The committee said fragmented accountability and poor enforcement allowed governance problems to continue, while beneficiaries often had limited access to financial information and limited influence over decisions.
What happened to the schemes?
An earlier departmental assessment gives an indication of the condition of some of the schemes.
The department visited 65 schemes and found 18 that were fully functional. Another 16 had limited functionality, with limited or no meaningful worker participation.
Nineteen schemes had workers who had sold their shares and no longer had ownership interests. Six schemes had collapsed, while four were experiencing serious financial difficulties. Two schemes were in business rescue.
In another 24 cases, the department could not find sufficient documentation to establish the status of the schemes.
The figures show why the committee is now calling for a more detailed assessment of the programme. The question is not only whether government money was spent, but whether that investment created lasting ownership and economic benefits among the people who were supposed to receive them.
The committee has previously heard concerns from beneficiaries about receiving little or no financial benefit despite the public money invested in the schemes. Beneficiaries have also raised concerns about access to financial records and their ability to influence decisions affecting their interests.
Four organisations, including the Surplus People Project, Corruption Watch, the Legal Resources Centre and the Support Centre for Land Change, engaged with the committee during its inquiry.
The problems identified by the committee also have a long history. A 2013 Zalo Capital review made recommendations aimed at addressing problems within the schemes, but the committee found that previous recommendations had not been adequately implemented.
What happens next?
The committee now wants an independent assessment of all government-funded Farm Workers Equity Schemes within three months of the adoption of its report.
The assessment will look at the legal and operational status of each scheme, beneficiary ownership, governance, financial performance and any harm suffered by beneficiaries. It will also have to identify remedies that can be applied to individual schemes.
The committee wants a National Corrective and Remedial Action Plan centred on beneficiaries, with measurable targets, assigned responsibilities and regular progress reports.
The Minister of Land Reform and Rural Development has also been asked to provide a comprehensive report within 12 months covering government investment, ownership structures, beneficiary outcomes, governance risks and corrective action.
Another recommendation is that the minister seek a presidential proclamation allowing the Special Investigating Unit to investigate public funds used in the schemes, financial performance, governance failures, alleged misconduct, asset disposals, share dilution and possible erosion of beneficiary rights.
The committee has also called for a review of the laws, policies and regulations governing the schemes within 12 months. The review is expected to look at ownership and inheritance rights, financial transparency, governance, government oversight, beneficiary participation and the regulation of strategic partnerships.
The committee also wants affected beneficiaries to receive practical support, including tenure protection, legal assistance, governance and financial literacy, skills development, economic empowerment, housing access and social support.
The latest intervention puts the future of the schemes under closer scrutiny, but it also raises a wider question about what land reform is expected to achieve once land or shares have been transferred.
Zigana says he wants the opportunity to use the land productively and build a farming business that can support his family and create employment.
“I know how to farm,” he says. “I grew up farming.”
The committee’s recommendations now place responsibility on government to establish what happened within the schemes, determine whether beneficiaries received the ownership and economic benefits promised to them and identify what needs to change where those rights were not protected.
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