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IOLProperty - South African Property For Sale
Thursday Sep 01, 2011

'Farm equity schemes ideal for land reform'

There are about 90 farm equity schemes in the Western Cape - and if they are properly structured and implemented they are the best way to bring about land reform in South Africa.

AgriWest Cape chief executive Carl Opperman said although it was the preferred method of land reform it could not be universally applied.

The government's land redistribution programme was behind target because of the willing-seller, willing-buyer principle, with officials claiming farmers were holding out for exorbitant prices.

"A wheat farm is not so capital intensive, and the (profit) margins are also much lower compared to a 60 hectare farm with deciduous fruit where just the equipment and everything else could cost R2050 million," said Opperman.

Instead of waiting for government approval and funds, some farmers have entered into share schemes with their workers using private funding while awaiting government funding.

"There are many more share equity schemes that are funded by private investors as opposed to the 90 identified by the government in the Western Cape," said Opperman.

Agriculture Department spokesman Wouter Kriel said around 90 percent of farms in the Western Cape which were part of the share equity scheme were relatively successful. The remaining 10 percent ran into problems due to a variety of reasons.

"It's a good model for land reform but there's no guarantee that beneficiaries will have a passion for farming," said Kriel.

Rieta Andreas, a beneficiary of a share equity scheme, said their project had worked out very well. "We started in 2007 when a local farmer approached the worker's committee to form a trust. After consulting with workers we agreed and started a process of applying for funding from the state to buy shares in the new company which would own the farms," said Andreas.

So successful has the Adama Apollo Trust been that they managed to pay a dividend to all of their 260 shareholders – most of them farmworkers.

Cape Times

 
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