A Game Theoretic Framework for Cooperative Benefits in South Africa’s Land Redistribution Process: A Case of Northern Kwa-Zulu Natal Sugarcane Farmland Transfers

A good indicator of successful farm redistribution cases has to be the continuation of viable productivity rates in their post transfer periods. Continued productivity benefits all the stakeholders that are involved in the process. Unfortunately negative productivity levels have been reported in numerous South African land redistribution transfers in recent years. A game theoretic perspective is adopted to argue that cooperation among key stakeholders, which could be enforced through long term contracts between a land buyer, sellers and new owners, would lead to higher productivity levels and other benefits. Additional benefits would, for example, include market related prices paid by a buyer. Sugarcane farm transfer cases from two municipality districts in KwaZulu Natal province are used to show that the productivity rates in post transfer periods of cooperative land sales were more than 10% higher than the rates observed before such transfers. At the opposite end of the scale, the productivity rates in noncooperative land sales dropped by 16% after land takeovers. Furthermore, the prices paid for farms that became less productive after transfers were higher by more than 40% compared to those paid for productive farms. The cases illustrate the values of cooperative strategies in economic transactions.