Zebediela Back Up?
Slow Eddy
redistributed state farms which had gone straight down the toilet after the
process. I forget the details (noseweek set it all out in detail), but do
recall a unit which went from 32million rand profit a year to a 30million
rand loss. (I think that was just Lisbon Estates, which doesn't look much
like it's recovered to me; lots of empty fields which were orchards not
long ago, lots of stumps, maybe a few less weeds, and the trees are perhaps
a bit less yellow than before, but that one still looks a mess).
I hope Zebediela has turned around. Giving more people a stake in the land
is a good thing, provided it's not done in a ham-fisted, wasteful way.
Strange, though; now they talk of the workers there owning a 15% stake.
That's hardly what you'd call handing over the land to them. What happened
to the other 85% ?
The next one to watch is Burgers Hall Research Farm. If it continues to be
productive, I'll rest a bit easier. It was recently handed over, with
assurances that everything would continue productively there. Maybe after
the Lisbon etc. disasters the land people are learning. Perhaps the chief's
family keeps 80% of the shares and hires professional managers?
--
Slow Eddy
jordan
> Last I heard of Zebediela Citrus Estate was as one of a group of
> redistributed state farms which had gone straight down the toilet after the
> process. I forget the details (noseweek set it all out in detail), but do
> recall a unit which went from 32million rand profit a year to a 30million
> rand loss. (I think that was just Lisbon Estates, which doesn't look much
> like it's recovered to me; lots of empty fields which were orchards not
> long ago, lots of stumps, maybe a few less weeds, and the trees are perhaps
> a bit less yellow than before, but that one still looks a mess).
>
Eddy the news is all bad. Here is what Noesweek said:
noseweek issue no 41
WHAT HAPPENED TO SA'S PROMISED LAND?
The government's land redistribution programme is simply creating rural
slums while destroying some of the country's most viable commercial farms.
Throughout Southern Africa - Zimbabwe, Namibia, Botswana and now also in
South Africa - the cry is "Give us our land back!". It's a serious
issue, worth serious attention.
But, in all those places it is also quickly identifiable as a convenient
panacea to be offered to a hungry, homeless and jobless populace by
modern democratic governments who have failed to deliver on their
election promises to the poor.
It could, as in Zimbabwe, be the ruin of us all, black and white (see
editorial).
Just how politically incorrect it is to raise questions about the
programme emerged when the Agricultural Employers' Association
(obviously white) wanted to present a paper raising their concerns at
the National Land Tenure Conference held in Durban in November last
year. Several weeks before the event, they were told by officials of the
Department of Agriculture that the conference programme was already "full".
Just how you can hold a national conference on land tenure without
involving organised agriculture in the programme would puzzle most
people - unless, of course, the real agenda is something entirely
different: not land reform, but political opportunism.
At the conference itself, the farming delegation was not given the
opportunity to raise the subject from the floor either.
So, several months ago, they sent a copy to Agriculture Minister Thoko
Didiza asking for her comment. So far the minister has not responded.
True to our mission to report what others would rather you didn't get to
know, here is just some of what the Agricultural Employers' Association
had to say in a paper drawn up by its director of legal services, Dr
Philip du Toit.
The report describes the government's land redistribution policy as 'an
abysmal and dangerous failure ... it is destroying farms, destroying
productive capacity and destroying confidence in the future. If events
are allowed to proceed as they are at present, South Africa will have to
import food within a few years."
Since the inception of the Restitution of Land Rights Act 22 of 1994,
the land reform program has precipitated insecurities within the broader
agricultural community, writes Du Toit.
The complexity of structures for establishing policy and implementing it
have made matters worse. Land redistribution and reform policy is
administered by the Department of Land Affairs (DLA), the Commission on
Restitution of Land Rights (CRLR), and the Land Claims Court (LCC).
Complicating the picture further is the role of various provincial
divisions of the Agricultural and Rural Development Corporation, a
parastatal body that inherited responsibility for various commercial
farming projects from various "homeland" governments.
The Association declares itself sympathetic to the needs and aspirations
of the landless and the poor, but says that current government policy is
doing very little to meet those needs while squandering the resources
needed to do so.
The problem is not, as many think, the resistance to land reform from
white farmers, says Du Toit. Last year a survey by Markinor showed that
63% of white farmers were ready to cooperate with land reform.
Nor is there a shortage of land for distribution. The state itself owns
millions of hectares which could easily be used, even excluding
so-called Trust Land [which the government would really rather no-one
discussed right now, but watch this space -Ed].
At any given time at least 25% of SA's farm land is up for sale, much of
it at fire-sale prices. Most commonly, either the farmers have run into
debt or their children don't wish to farm and have left for the cities.
(The Land Bank alone owns hundreds of farms it has bought in over the
years from farmers who could not repay their loans.)
The problem, in practical terms, is that current policy entails giving
productive farms to people with no experience, or even interest, in
farming.
The government's own statistics indicate that the overwhelming majority
of South Africa's disadvantaged black population do not aspire to
becoming subsistence farmers. When given the option, 70% of applicants
for restitution of land rights have opted to take cash compensation,
rather than land.
Du Toit acknowledges that land ownership is an emotional and contentious
issue. "But we need a rational not an emotional approach to the
problem", he says. "Where land has been doled out simply for the sake of
redistribution, disaster has frequently followed."
It is the examples which he then quotes which, presumably, made the
organisers of the conference so uncomfortable. Here are just some of them:
At the Zebediela Citrus Estate in Limpopo Province, more than 565 000
citrus trees grew on the estate when it was sold to the government in
1974 and became an asset of the Gazankulu homeland. It was reputed to be
the world's largest citrus estate - and one of the most profitable,
producing a harvest worth R30m a year. The irrigation scheme at the
project is one of the most sophisticated in the world.
With the dissolution of the homeland structures after 1994, Zebediela
was taken over by Limpopo Province's Agricultural and Rural Development
Corporation. Managers with up to 40 years' farming experience were
retrenched (at great expense) and replaced by people with none. It has
been reported in the press that not one of the new directors appointed
to the Zebediela and nearby Lisbon estates could read a financial statement.
Today the estate is rife with mismanagement, theft and corruption. The
original 2 260 planted hectares has diminished to 850 hectares. Because
no fertilisers and pesticides were used, more than half the trees have
died. Only 10% of yields have been marketable.
A loss of R35m last year followed a loss of R30m the year before.
Hundreds of thousands of cartons of oranges and lemons have not been
harvested. Workers have not been paid. A lemon yield worth R8m was last
year left to rot. Many of the fleet of 50 tractors are in disuse and
hundreds of employees have been retrenched.
The Lisbon Citrus and Mango Estate was once the largest producer of
mangoes in Africa and boasted an annual turnover of R24m. It exported
1.2 million cartons of mangoes and 800 000 cartons of oranges annually.
This estate is in Mpumalanga near Sabi-Sabi, but for reasons of
historical confusion belonged to the Gazankulu Fruit Company, and is now
also controlled by the ARDC.
By last year the estate was on the point of liquidation. The phones were
cut because the estate owed Telkom R23 000. While there was no money for
pesticides and fertilisers to save thousands of mango trees, a
consultant appointed by the province to do a "viability study" was paid
R300 000. Representatives of the Department of Agriculture did not
bother to attend a Lisbon Estate creditors' meeting.
The famous Gillemburg Citrus and Cattle Farm had an annual citrus
harvest worth R14m. The ARDC has bled this farm dry, using its cash
recources to fund creches and pre-schools. It sold livestock from the
farm to pay its own head office personnel and electricity bills (having
already used government funds intended for drought relief for the same
purpose). Now the Minister of Land Affairs has given the 25 000 hectare
estate to 724 black families. (A nearby white farmer bought the remnant
of the famous stud herd for a song.)
The government paid nearly R5m for a 2 750 ha Mpumalanga pig farm -
where 2 400 pigs were sustained by state-of-the-art feeding equipment.
The farm was a going concern, with ample water, fertile ground and
modern sheep and cattle feeding pens. The state handed it over to the
stewardship of a local traditional leader. Nelson Mandela presided at
the handover, where he predicted the farm would be the "breadbasket of
the community".
Today it is in total disarray. Squatters have moved in and community
cattle roam to graze, infecting the soil with diseases that will make
commercial cattle ranching impossible for years. The sheep and cattle
pens have fallen into disrepair. There were 500 pigs left alive but they
were in such a state of starvation, they had begun to eat each other.
(The other pigs had clearly been eaten by someone else). A local farmer
was called by the SPCA. The chief was happy to sell him all the
surviving pigs for a modest sum of cash.
Another 285 projects managed by the ARDC have not shown a profit for the
past five years. Last year the Development Bank of SA was threatening to
cancel R62m in agricultural loans to nine of these projects, potentially
devastating the lives of 5 300 emerging farmers in Mpumalanga.
"These examples alone should awaken this country to the potential for
destruction of SA's commercial farming activity through government
policy," says Du Toit, "but there are many more."
Even the restitution process is frequently carried out in an illogical
fashion says Du Toit.
A Putfontein community received compensation at the time of
dispossession of their land, in the form of land elswhere and monetary
compensation. The community is well settled on the land it received as
compensation (from the apartheid government). By means of an agreement
between the claimants and the state, the state paid millions to buy back
their original land in order to restore it to the community. Now the
community has their original land back - as well as the land received as
compensation. This while many thousands have received no compensation at
all, and squatters who invade state land are evicted.
At Mabaalstat the tribe owned 7 000 ha. Upon removal by the apartheid
government it received 17 000 ha of prime agricultural land elsewhere,
says Du Toit. Now the tribe is claiming back the original 7 000 ha,
although the chief has testified in court that he will not relinquish a
centimetre of the 17 000 ha.
All the calamities described, along with the severe implications for
agriculture and justice in South Africa, says Du Toit, are due to a
fundamental misconception at the heart of the land reform policy.
Demands for land are often in reality demands for a place to live and
make a home. It is this need that the government should be trying to
address. At present in the majority of cases those to whom farmland is
given aren't farmers, and have no intention of farming. For example, in
Kuruman the state bought six 1500 ha dairy farms for occupation by black
families - as many as 600 families to a farm. Each family received a
R6000 startup allowance from the government. But none has made any
attempt to farm. Instead all farming equipment has been sold and the
farms have been rented to neighbouring white farmers.
Black farmers who do try to farm are not given follow-up help. Six black
farmers bought a farm at Steynsburg at the specific suggestion of the
Eastern Cape department of land affairs - only to find there was no
water on the farm. Within two months the families had returned to town.
All their subsidy grants have been lost. What the state lost we don't know.
There are success stories, but they are few.
Often enough failures are made to look like success stories. A
Lusikisiki project was recently trumpeted as having produced its first
harvest, which it indeed did. But the government had pumped R1.5bn into
the community's projects, while the harvest brought in only R127 000 -
less than one-tenth of a percent return on its investment!
A redistribution of farmland can never achieve a significant
redistribution of wealth in South Africa, given agriculture's modest
contribution to GDP (only 4% and shrinking), says Du Toit. What it can
achieve, however, is the destruction of commercial farming.
True, without land you cannot farm, but the main asset value of farming
is not locked up in the land, but in the skill and enterprise of the
farmer who manages the land. n
Slow Eddy
> Slow Eddy wrote:
>
>> Last I heard of Zebediela Citrus Estate was as one of a group of
>> redistributed state farms which had gone straight down the toilet after
>> the process. I forget the details (noseweek set it all out in detail),
>> but do recall a unit which went from 32million rand profit a year to a
>> 30million rand loss. (I think that was just Lisbon Estates, which doesn't
>> look much like it's recovered to me; lots of empty fields which were
>> orchards not long ago, lots of stumps, maybe a few less weeds, and the
>> trees are perhaps a bit less yellow than before, but that one still looks
>> a mess).
>>
>
>
> Eddy the news is all bad. Here is what Noesweek said:
>
Ah! You found it! That's the one. Although the TV news piece comes a bit
later, so it's possible (probable?) that somehow they've since turned
around from the annual R30m-plus losses ... let me look a bit more
carefully at the facts as they were then, and take a guess as to the
likelihood that the SABC story is not just misinformation.
> noseweek issue no 41
> WHAT HAPPENED TO SA'S PROMISED LAND?
>
>
> The government's land redistribution programme is simply creating rural
> slums while destroying some of the country's most viable commercial farms.
>
>
> Just how politically incorrect it is to raise questions about the
> programme emerged when the Agricultural Employers' Association
> (obviously white) wanted to present a paper raising their concerns at
> the National Land Tenure Conference held in Durban in November last
> year. Several weeks before the event, they were told by officials of the
> Department of Agriculture that the conference programme was already
> "full".
>
> Just how you can hold a national conference on land tenure without
> involving organised agriculture in the programme would puzzle most
> people - unless, of course, the real agenda is something entirely
> different: not land reform, but political opportunism.
>
> At the conference itself, the farming delegation was not given the
> opportunity to raise the subject from the floor either.
>
I'd forgotten about that little bit of transparency, as redefined (like the
wreck on silly something that was meant to have happened some time ago).
Looks like the conference was about as interested in finding facts as the
SABC is on changing its ways.
> The problem, in practical terms, is that current policy entails giving
> productive farms to people with no experience, or even interest, in
> farming.
>
> The government's own statistics indicate that the overwhelming majority
> of South Africa's disadvantaged black population do not aspire to
> becoming subsistence farmers. When given the option, 70% of applicants
> for restitution of land rights have opted to take cash compensation,
> rather than land.
>
A more business-savvy choice than the idiots who risk farming the land make.
(I mean it's not as if you can milk a subsidy cow any more)... as will
become apparent if and when (memory permitting), I add my sixpence-worth
down below.
>
> At the Zebediela Citrus Estate in Limpopo Province, more than 565 000
> citrus trees grew on the estate when it was sold to the government in
> 1974 and became an asset of the Gazankulu homeland. It was reputed to be
> the world's largest citrus estate - and one of the most profitable,
> producing a harvest worth R30m a year. The irrigation scheme at the
> project is one of the most sophisticated in the world.
>
As you say, jordan, it's *worse*. I didn't read this thing properly the
first time. Looks like they were not making R30m *profit* per annum. They
were just turning something of that order around. Which makes me wonder how
on earth they managed those stupendous losses quoted later. Presumably
during the profitable years, costs were well below the current *losses*. So
where did they get the extra money to spend? Am I right? They would've
needed to have put in *more* money than when the thing was a running
concern, in order to make that kind of a loss.
> With the dissolution of the homeland structures after 1994, Zebediela
> was taken over by Limpopo Province's Agricultural and Rural Development
> Corporation. Managers with up to 40 years' farming experience were
> retrenched (at great expense) and replaced by people with none. It has
> been reported in the press that not one of the new directors appointed
> to the Zebediela and nearby Lisbon estates could read a financial
> statement.
>
> Today the estate is rife with mismanagement, theft and corruption. The
> original 2 260 planted hectares has diminished to 850 hectares. Because
> no fertilisers and pesticides were used, more than half the trees have
> died. Only 10% of yields have been marketable.
>
2 260 ha reduced to 850, as of last year ... and as a rule of thumb, it
takes about 5 years to stop making annual losses, and begin to make
whatever profits the changed market conditions five years down the line are
going to bring. (Or bravely bear your losses and make another plan)... So
it's basically impossible that things have really turned around on
Zebediela. The news story is therefore false, and we have to ask why the
impartial national broadcaster would want to propagate falsehoods like
that.
The bits of Lisbon Estates you can see from the road when heading to Paul
Kruger Gate, Kruger Park, would lead me to conclude that something very
similar happened there. (These days the missing orchards are less visible,
having reverted to grazing).
> A loss of R35m last year followed a loss of R30m the year before.
> Hundreds of thousands of cartons of oranges and lemons have not been
> harvested. Workers have not been paid. A lemon yield worth R8m was last
> year left to rot. Many of the fleet of 50 tractors are in disuse and
> hundreds of employees have been retrenched.
>
Ah! The workers who now own 15% were not claimants, obviously. So the chief
who got the farm must've tried some shared ownership to motivate the people
who work the place, and only have a change of baas out of the whole deal.
> The Lisbon Citrus and Mango Estate was once the largest producer of
> mangoes in Africa and boasted an annual turnover of R24m. It exported
> 1.2 million cartons of mangoes and 800 000 cartons of oranges annually.
> This estate is in Mpumalanga near Sabi-Sabi, but for reasons of
> historical confusion belonged to the Gazankulu Fruit Company, and is now
> also controlled by the ARDC.
>
Lisbon was once one of those experimental farms left to posterity by
successful farmers who felt the land had been good to them, so left their
land to us fellow citizens. The idea of its founder was that the tropical
fruit industry in the country as a whole would benefit from his work.
To be fair to the new owners, if I had a farm full of mangoes, I'd be
inclined to rip them out and replace them with something profitable. The
mango is a finicky fruit, sold to finicky customers (unless you just sell
them green to the atchar makers). It's a very expensive fruit, even to keep
up to local market standards.
For a short while, mangos were a profitable export crop. Farmers bust their
butts keeping them beautiful enough to sell to Europeans, and skipped
Christmas to harvest the things. The export prices made all those sprays
worth while. (Not a spraying program you'd leave in the hands of someone
without at least a basic education, though).
Then someone in Brazil planted more mangos on one farm than there are mangos
in the whole of South Africa. Bang went the export market. Just like that.
You'll see a lot of stumps on private mango farms these days, too. Some
still make something on their mangos, but the big money is gone. And this
is the way the government wants to redistribute wealth?
> By last year the estate was on the point of liquidation. The phones were
> cut because the estate owed Telkom R23 000. While there was no money for
> pesticides and fertilisers to save thousands of mango trees, a
> consultant appointed by the province to do a "viability study" was paid
> R300 000. Representatives of the Department of Agriculture did not
> bother to attend a Lisbon Estate creditors' meeting.
>
How does a farm run up a R23 000 phone account? I can understand a
phone-intensive business like an insurance company running up that kind of
account, but how does a farm manage it? Long international calls, I
suppose.
> The famous Gillemburg Citrus and Cattle Farm had an annual citrus
> harvest worth R14m. The ARDC has bled this farm dry, using its cash
> recources to fund creches and pre-schools. It sold livestock from the
> farm to pay its own head office personnel and electricity bills (having
> already used government funds intended for drought relief for the same
> purpose). Now the Minister of Land Affairs has given the 25 000 hectare
> estate to 724 black families. (A nearby white farmer bought the remnant
> of the famous stud herd for a song.)
>
That works out at nearly 35ha apiece, and assuming even only half of that is
useable, that would probably mean a potential household income of anywhere
between 100 000 and 500 000 a year (depending on luck, and pretending that
farmers never end up paying in more than they take out). On paper, that's
potentially a lot of social upliftment. If only it were so. Honestly! If
only it were so. More prosperous people means more prosperity for everyone.
It means less crime. It means more peace, more contentment, more lekker
lewe. And with the remains of 35ha of once-productive land, you can do a
lot. Presumably the ground is broken; presumably there's some kind of
irrigation system in place - or adequate rainfall. But I just know that the
half-arsed way this is being done means that that farm will just provide a
new bit of space for poverty to happen on.
> The government paid nearly R5m for a 2 750 ha Mpumalanga pig farm -
> where 2 400 pigs were sustained by state-of-the-art feeding equipment.
> The farm was a going concern, with ample water, fertile ground and
> modern sheep and cattle feeding pens. The state handed it over to the
> stewardship of a local traditional leader. Nelson Mandela presided at
> the handover, where he predicted the farm would be the "breadbasket of
> the community".
>
> Today it is in total disarray. Squatters have moved in and community
> cattle roam to graze, infecting the soil with diseases that will make
> commercial cattle ranching impossible for years. The sheep and cattle
> pens have fallen into disrepair. There were 500 pigs left alive but they
> were in such a state of starvation, they had begun to eat each other.
> (The other pigs had clearly been eaten by someone else). A local farmer
> was called by the SPCA. The chief was happy to sell him all the
> surviving pigs for a modest sum of cash.
>
I know a man who did all his research on pigs. He read the American
literature (often the best), he asked around, he did all his sums, and then
he built his piggery the way it was meant to be built, bought the right
kind of stock, looked after them properly... he did everything the right
way. Even mixed his own foods following expert recommendations. He didn't
spend a cent more on the pigs than needed to be spent, and not a cent less,
either. Result? Healthy pigs, breeding well, growing well, etc.
Then the market did one of those random little turns it tends to take. Could
be interest rates went up a fraction of a percent or someone found some
cheap dumped pork from one of the pork mountains of the developed world.
The short story is that the pig farmer cut his losses. He sold the pigs and
the removable bits of equipment for what he could get for them. The pig
pens are still standing there. That's farming. Good plans, well executed
still go wrong. Make a big harvest at the right time, and you're rich, but
most of the time it's a case of just missing the bullet.
I know a guy who has farmed the same land for twenty years or more. He
started with nothing, and slowly built up enough to be able to educate his
kids. Then for two years in a row he had a misoes. Nothing to do with his
farming methods. The rain clouds just bypassed his farm at the critical
part of the season. Now he's employed as the manager on his old farm.
Sounds a bit like the Zebediela success story on the news, doesn't it?
> A redistribution of farmland can never achieve a significant
> redistribution of wealth in South Africa, given agriculture's modest
> contribution to GDP (only 4% and shrinking), says Du Toit. What it can
> achieve, however, is the destruction of commercial farming.
>
> True, without land you cannot farm, but the main asset value of farming
> is not locked up in the land, but in the skill and enterprise of the
> farmer who manages the land. n
Not to mention the stubborn, persistent stupidity of the farmer. That's what
matters, a combination of skill and stupidity. Somebody who in another time
would've walked all over the place hitting himself repeatedly on the head
with a plank. Someone like my brother's neighbour, a very clever, but
incredibly stupid man. Nice guy. First it was the strawberries. Cost him a
fortune to put them in, and in year one they paid him quite well. The first
year wasn't the year of the big harvest, though. From year 2, onwards the
cash was meant to flow. But in year 2 we had freak rains. It just stayed
wet, and the fungi took over. There's a point at which it becomes
uneconomical to spray fungicide on strawberries, he reached it, and wisely
left the strawberries to rot in the lands while he made another survival
plan. So he learnt his lesson then? No. Now it's flowers. Only this time
the market has crashed. Someone in Brazil again, I think...
You'd be amazed at how many cash crops are planted and then not harvested.
My brother put in chillis, and they did brilliantly. Prices crashed. By
harvest time it would've cost more to reap and transport them than he could
sell them for. So he ploughed them in, and tried the next thing.
You can't *make* farmers. Some people just *are* farmers, and they're the
ones we need trying to get by on the land. And being a farmer is not just
keeping a few cows and liking the countryside. There are some black
*farmers* in this area. The land bank should help these get themselves
established in more exciting ways of losing everything you own. Not very
vote-grabbing, but economically sound. Go down the road, and on one of the
earliest resettlement farms is a really nice contoured field of healthy
cabbages. Someone's farming down there. Probably has some chilli scheme on
the spreadsheet, too. Probably also makes the bank manager prematurely old.
--
Slow Eddy