The South African government is exploring ways to address historical disparities in land ownership and economic opportunities in the country’s agricultural sector through Black economic empowerment measures. As part of these plans, the government is contemplating export restrictions on farms not meeting specific Black economic empowerment targets, labelling them as “Too White.”
The new policy is expected to affect agricultural businesses with an annual turnover of 10 million rand ($534,000) or more. Affected products include milk, cream, butter, fruit, nuts, sugar, jam, fruit purée, fruit juices, yeast, table grapes, and wine. To obtain export permits, “too white” farms will need to demonstrate their commitment to promoting inclusivity and diversity in their operations. This is in line with broader initiatives aimed at rectifying imbalances in the agricultural sector and ensuring the fair distribution of export revenue.
Land distribution in South Africa
According to a 2017 report released by the South African government, individual ownership of farms and agricultural holdings totals 37,078,289 hectares. Breaking down this land ownership reveals that 26,663,144 hectares, constituting 72%, are in the possession of individuals classified as White. Coloured individuals closely follow, holding 5,371,383 hectares (15%), while Indians own 2,031,790 hectares (5%), and Africans own 1,314,873 hectares (4%). Co-owners collectively hold 425,537 hectares (1%), with others claiming ownership of 1,271,562 hectares (3%). These figures provide a comprehensive overview of the distribution of agricultural land among different demographic groups in South Africa.
The land reform policy in South Africa remains a source of controversy. In 1994, as the country transitioned to democracy, white farmers held 77.580 million hectares of farmland within a total surface area of 122 million hectares. The newly established government set a goal to redistribute 30% of this land within five years. This target date has undergone multiple revisions and is currently set for the year 2030.
South Africa has long been a major exporter of various agricultural products, with the Agricultural Business Chamber reporting $12.8 billion in export revenue in March 2022. Notable products exported include maize, wine, grapes, citrus, berries, nuts, apples and pears, sugar, avocados, and wool.
However, proposed changes may lead to a decline in exports, particularly for certain products. While some farmers and exporters may face challenges due to this adjustment, proponents argue that it is a necessary step towards creating a more inclusive and representative agricultural sector.
Furthermore, the government aims to encourage businesses to contribute to broader socio-economic transformation efforts by tying export permits to Black economic empowerment goals. Nevertheless, critics worry about the potential disruptions to established trade relationships and the economic impact on affected agricultural enterprises.
As the South African government continues discussions on these proposed changes, it remains to be seen how they will balance their economic transformation goals with maintaining the competitiveness of their agricultural sector on the global stage.