'Beware of rent seekers during land reform' | Fin24
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'Beware of rent seekers during land reform'

Nov 28 2018 21:58
Carin Smith

Beware of rent seekers in the land reform process, Cora Fernandez, director of Mila Yarona Holdings - a diversified, majority women-owned and controlled investment house - said on Wednesday.

Rent-seeking is defined by Investopedia as "an individual's or entity's use of company, organisational or individual resources to obtain economic gain without reciprocating any benefits to society through wealth creation".

"We saw these rent seekers in the first round of the land reform process and are watching out for them in the next round," she said during a panel discussion at the African Agri Investment Indaba in Cape Town.

About 80% of land reform issues in SA are down to people not having shelter and only 20% of the problem is really about agriculture, in her view.

"I think if people had decent shelter, the land reform debate would be less emotive - though still emotive."she said.
"As a venture capitalist I think the number one thing in land reform is to diagnose the problem properly. The whole value chain should be involved. Currently people are just focusing on the farming component, which I think is a small part of the agriculture value chain in SA."

For her it boils down to financing at the end of the day.

"Whether you are talking about commercial development or rural development - you don't need land to farm. We should look at land reform in a multi-dimensional way. A lot of people just want to have shelter first," she said.

"Draw a distinction between shareholding in a farm, working on a farm and being a landlord. You can any be one of these in the land reform process. Let's dissect the farming operations and the value chain in this way."

She said it was important to learn lessons from what other countries are doing on land reform. She likes the approach in Zimbabwe to tax unused land, for instance. She would also like to see success stories in land reform shared rather than just the failures.

"It does not have to take three decades to create a commercially successful farm. These days technology can help a lot in the process," she said.

At the end of the panel discussion, the moderator, Andrew Bembridge of ENSafrica, said the sooner there could be certainty of what the playing field on land reform would look like in SA, the better.

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