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Broadening access to land markets: Financing emerging farmers in South Africa

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  • MC Lyne
  • MAG Darroch

Abstract

This article reports on a pilot survey of commercial farms acquired by disadvantaged people in the province of Kwazulu-Natal, and describes a recent financial strategy to improve access to land. The survey tested a sampling technique to gather information about the rate of land redistribution, the source of terms and conditions of loans used to finance land, and the nature of property rights, managerial arrangements and land use patterns on farms acquired by disadvantaged people. It was estimated that only 0,09 per cent of the farmland available for redistribution was transferred to disadvantaged people during 1995. This low rate of transfer was attributed largely to legislation regulating the subdivision of farmland, and liquidity problems created by traditional mortgage loans. Recent experiments involving mortgage loans with graduated repayment schedules have helped to address the cashflow problem. However, these financial innovations, funded largely by the private sector, are not widely available and their impact is constrained by the Subdivision of Agricultural Land Act. It is recommended that the government amend or scrap this Act, and include financial strategies used by the private sector in its own range of land redistribution programmes.

Suggested Citation

  • MC Lyne & MAG Darroch, 1997. "Broadening access to land markets: Financing emerging farmers in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 14(4), pages 561-568.
  • Handle: RePEc:taf:deveza:v:14:y:1997:i:4:p:561-568
    DOI: 10.1080/03768359708439987
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    References listed on IDEAS

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    1. Pasour, E. C., Jr., 1990. "Agriculture And The State: Market Processes And Bureaucracy," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 29(4), December.
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    Cited by:

    1. Mashatola, M.C. & Darroch, Mark A.G., 2003. "Factors affecting the loan status of sugarcane farmers using a graduated mortgage loan repayment scheme in KwaZulu-Natal," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 42(4), pages 1-13, December.
    2. Darroch, Mark A.G. & Mashatola, M.C., 2003. "Sugarcane Growers' Perceptions Of A Graduated Mortgage Loan Repayment Scheme To Buy Farmland In Kwazulu-Natal, South Africa," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 5(4), pages 1-10.

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