South African Land Policy: The Legacy of History and Current Options¶
Hans P. Binswanger; Klaus Deininger (1993). South African Land Policy: The Legacy of History and Current Options. World Development, Vol. 21, No. 9. Pergamon Press.
| Type | journal article |
| Scope | Economics and economic history of apartheid |
| Method | policy analysis |
| Period studied | 1866–1993 |
| Regions | South Africa, Natal, Transvaal, Ciskei reserves/homelands, Kenya, Zimbabwe, Latin America |
| Themes | agriculture land, origins segregation, bantustans removals influx, labour markets wages, comparative theory, transition post apartheid, inequality poverty unemployment |
| Citation key | binswanger1993a |
Argument¶
South Africa's dualistic farm structure and the low productivity of African farmers resulted from systematic state distortions in land, labour, output markets, credit and infrastructure, not from genuine economies of scale in large commercial farming. The authors survey international evidence on economies of scale, the formation of large estates, land reform paths and the social cost of delayed reform. They then trace South African history from the 19th-century squatter and tenant system through the Glen Grey and Native Lands Acts to the subsidised, mechanised white sector. They compare South Africa with Kenya and Zimbabwe, and argue for rapid, large-scale, market-assisted land reform with a grant element (vouchers) and a level playing field. The alternative, they warn, is decades of peasant insurrection, capital flight and economic decline.
Evidence and method¶
Secondary literature (Bundy, Wilson, Houghton, Lipton, Simkins, Christodoulou and Vink, Davenport), a wide comparative literature on farm size, land reform and peasant revolt across about 20 countries, and some historical statistics on tenancy, reserve output, farm wages, subsidies and farm debt. There is no new primary archival or survey work.
Place in the debates¶
- Economies of scale in agriculture and the efficiency of large vs family farms (see Agricultural policy, productivity, farm size and land reform). Holds that economies of scale are rare beyond what a family with a medium tractor can manage, and that large wage-labour farms persist only because of state support. Rejects the efficiency case for the commercial sector.
- Role of the state and mining capital in suppressing African peasant agriculture (cheap labour thesis) (see Agrarian transition to capitalism and the fate of the African peasantry). Follows Bundy, Wilson and Davenport. The land laws served mining labour needs and white farmers, and African farmers' competitiveness was deliberately destroyed to produce wage labour.
- Market-based vs expropriative land reform for post-apartheid South Africa (see Agricultural policy, productivity, farm size and land reform). Favours market-assisted reform with grants or vouchers to the poor, willing sellers, removal of subsidies, and a judicial route for black-spot restitution. The pure land market alone cannot redistribute land.
- Causes of farm mechanisation and labour shedding (see Farm labour: mechanisation, labour shedding, wages and labour control). Argues that mechanisation of large farms was induced by subsidised capital and cheap credit, tenancy restrictions and the threat of reform, not by labour scarcity.
Findings¶
-
The dualistic structure is not an efficiency outcome of scale economies but the product of policy distortions. (p. 1)
The dualistic structure did not emerge because of genuine economies of scale in the large commercial sector.
-
A free land market cannot redistribute land to poor farmers without a grant element. (p. 4)
First, a free land market alone will not be able to transfer land to smaller and poorer farmers, unless they are provided with grant financing
-
The Native Lands Act forced independent African farmers and sharecroppers into wage labour. (p. 11)
The immediate effect of the law was to force African families who were formerly independent farmers on sharecropped land to accept wage labor and give up their equipment.
-
In a typical Ciskei reserve village, marketed agricultural output collapsed between 1875 and 1925 as the reserve became a labour dormitory. (p. 11)
sales per family in 1925 were only a quarter of what they had been in 1875
-
Reserve agriculture covered less than half of subsistence needs by 1918, and its share fell sharply once relocation intensified after 1955. (p. 11)
the food requirements that could be met from reserve production declined to about 20%
-
Farm labour was overwhelmingly African because of racial job reservation outside agriculture. (p. 12)
98.5% of the agricultural labor force in South Africa was nonwhite
-
Farm wages were extremely low relative to industry. (p. 13)
The ratio of average wages for blacks in agriculture and industry in 1975/76 was about one to three
-
Post-war mechanisation was heavily subsidised through credit and tax breaks. (p. 13)
With mechanization subsidized through credits and tax breaks after WWII, the number of tractors purchased increased almost sixfold
-
Despite subsidies, commercial farm debt by 1988 exceeded agriculture's contribution to GDP, raising doubts about viability. (p. 13)
large-scale farms from accumulating debts by 1988 totaling R13.6 billion
-
State spending was heavily skewed towards white farmers (marketing board support) relative to black education. (p. 13)
In 1967, the amount spent by marketing boards to subsidize about 100,000 white farmers was almost double the amount spent to educate more than 10 million blacks
-
South Africa faces a choice between rapid redistribution and prolonged rural conflict and decline. (p. 16)
South Africa seems to have two options: rapid and massive redistribution of land to black and colored groups
-
The proposed reform is market-assisted, with no state expropriation. (p. 17)
The government would not buy or expropriate any land, but land would be transferred from willing sellers to groups of eligible beneficiaries.
Evidence ledger¶
Sources used¶
| Source | Kind | Period | How used |
|---|---|---|---|
| Bundy, The Rise and Fall of the South African Peasantry, tenure and land-area data for Natal, Transvaal and Ciskei (e.g. Victoria East 1875-1925) | secondary literature compilation | 1860s-1925 | Supplies the figures on African tenancy shares, the growth of white farmed area, and the decline of Victoria East farm sales and expenditure used to show suppression of African agriculture. |
| Wilson (1971), 'Farming 1866-1967', Oxford History of South Africa Vol. II, including 100-year farm wage time series | secondary literature compilation | 1866-1967 | Source for the long-run decline in farm laborer wages and non-monetary benefits, prison labor use, and marketing board versus education spending in 1967. |
| Houghton, The South African Economy (3rd ed. 1973) | secondary literature compilation | 1931-1966 | Used for the racial composition of the agricultural labor force in 1964, the number of marketing boards by 1960, and marketing transfers to agriculture (R15m in 1931; R31m a year 1948-66). |
| Christodoulou and Vink (1990), Development Bank of Southern Africa mimeo on black smallholder participation (farm debt, farm labor numbers) | secondary literature compilation | 1985-1988 | Provides figures on 1.2 million farm laborers on 70,000 white farms and the R13.6 billion commercial farm debt in 1988 exceeding agriculture's GDP contribution. |
| Lipton (1985), Capitalism and Apartheid: South Africa 1910-84 | secondary literature compilation | 1975-76 and pass law period | Source for sectoral and racial wage ratios in 1975/76 and for the role of pass laws in allocating labor. |
| Simkins (1981), 'Agricultural production in the African reserves of South Africa, 1918-1969' | secondary literature compilation | 1918-1969 | Shows reserve production covered only 45% of subsistence food requirements by 1918 and about 20% after 1955 relocations. |
| Agricultural Census for the Union, 1918 | agricultural census | 1918 | Cited in a note as the data underlying the claim that reserve production met only 45% of subsistence needs in 1918. |
| Legislation: Glen Grey Act 1894, Native Lands Act 1913, Agricultural Development Acts 1904/1907, Masters and Servants Laws, Mines and Works Act, pass laws, Land Subdivision Act 1970, and 1890s tenant registration/licence laws | legislation gazette | 1866-1970 | Statutes are described as the instruments of land and labor market distortion against black farmers and in favor of white farmers. |
| Commissions on the land question in the 1950s (South Africa, Kenya, Zimbabwe) | commission or official report | 1950s | Cited for the conclusion that lasting solutions required removing constraints on African access to markets and land outside reserves. |
| Kenya Ministry of Agriculture (1978), Integrated Rural Survey 1974, Large Farm Sector Study | household or labour survey microdata | 1974 | Shows small holdings in resettled areas marketed over six times the per hectare produce of 5-8 ha farms, supporting smallholder efficiency. |
| Kenyan settlement studies: Nottidge and Goldsack (1971) Million-acre settlement scheme; Scott, MacArthur and Newbery (1976) Little-Mirrlees appraisal; Ruthenberg (1966) | secondary literature compilation | 1955-1970 | Evidence on productivity gains, partial productivities and net present values of Kenyan settlement farms used to show smallholder potential. |
| Jarvis (1989) and Brown (1989) Chilean agricultural output and land reform data | secondary literature compilation | 1964-1986 | Output growth rates and sell-out rates of reform beneficiaries are used to illustrate the role of macroeconomic environment in land reform outcomes. |
| Deininger and Binswanger (forthcoming) and Binswanger, Deininger and Feder (forthcoming): 23 historical cases and Kenya-Zimbabwe settlement data | secondary literature compilation | 4th century BC to 1990 | Unpublished companion work supplies the 23 cases on distortion mechanisms and the data for Kenya/Zimbabwe settlement comparisons. |
Inference¶
Quantification: Illustrative figures.
Comparative historical and theoretical argument: microeconomic theory of farm-size efficiency and land markets, plus international comparison of land reform paths (Asia, Latin America, Kenya, Zimbabwe), applied to a narrative of South African land and labor legislation and selected statistics; policy conclusions are drawn by analogy and prediction rather than from tested South African data.
Key claims¶
| Claim | Basis | Strength |
|---|---|---|
| South Africa's dualistic farm structure and low black productivity resulted from systematic legal and policy distortions, not from economies of scale. (p. 1462) | Narrative of statutes (Glen Grey, Native Lands Act, Masters and Servants, subsidies) with Bundy and Wilson secondary data, plus theory on absence of scale economies. | Partial data |
| The Native Lands Act and related laws ended independent African farming above subsistence and turned reserves into labor dormitories, as shown for Victoria East 1875-1925. (p. 1461) | Bundy's Victoria East village data (sales per family, food deficit), Simkins on reserve production, and 1918 Agricultural Census. | Partial data |
| White farmers were consistently subsidized through cheap labor, credit, tax breaks, mechanization subsidies and marketing boards, yet accumulated debt exceeding agriculture's GDP contribution. (p. 1463) | Houghton and Wilson for transfers and tractor numbers; Christodoulou and Vink for 1988 debt. | Partial data |
| Farm labor market interventions (pass laws, convict labor, job bar exemption) depressed black farm wages, which fell relative to industry and to white workers. (p. 1463) | Wilson's 100-year wage series and Lipton's 1975/76 wage ratios. | Partial data |
| Land markets alone cannot redistribute land to the poor; a grant element and removal of subsidies are required. (p. 1454) | Theoretical argument on collateral premia and capitalized subsidies, plus cases (Venezuela, Philippines, Brazil, Kenya, Chile). | Asserted |
| South Africa faces a choice between rapid, massive redistribution and decades of peasant insurrection and economic decline. (p. 1466) | Extrapolation from international cases of unreformed dualism (Latin America, Mozambique, Zimbabwe); no South African data. | Asserted |
The author's caveats¶
The authors note that evidence on African farm productivity in the 1890s is anecdotal, that quantitative estimates of efficiency losses are scarce, that losses from conflict are elusive to measure, and that few productivity comparisons between small and large farms exist.
Gaps in the evidence¶
The paper lacks South African farm-level productivity data (census or survey) comparing black and white holdings or testing returns to scale directly. It relies on secondary summaries and does not use primary data such as the agricultural censuses, Land Bank records or marketing board accounts to quantify subsidy flows. Such sources existed and have since been digitised or accessible, and would permit tests of subsidy capitalization into land prices and of efficiency claims. The predictions on insurrection and reform feasibility rest on cross-country analogy with no systematic comparative dataset.
Replicability: Data poorly documented.