Part 6 of 8 · Part IV
Land Reform: The Three Programmes and What They Mean for Finance
Land reform is a funding question as much as a political one, because the form of your land right determines what you can borrow against it.
| Programme | What it does | What you end up holding |
|---|---|---|
| Restitution | Restores land or provides compensation to people and communities dispossessed by racially discriminatory laws after 19 June 1913, under the Restitution of Land Rights Act | Restored land, often held communally through a communal property association or trust, or a financial settlement |
| Redistribution | Broadens access to agricultural land, historically through the Settlement/Land Acquisition Grant, then LRAD, and currently mainly through the Proactive Land Acquisition Strategy | Under PLAS, a state lease rather than title: the state buys and holds the land and leases it to selected beneficiaries |
| Tenure reform | Secures the rights of people with insecure tenure — labour tenants, farm dwellers, occupants of communal land | Strengthened occupation and use rights rather than ownership |
Shares of commercial farmland, based on consolidated figures for 2016/17 that remain the most commonly cited series. Definitions differ between sources — particularly on land held by the state versus transferred to beneficiaries — so treat these as orders of magnitude.
Section 4.1The shift from title to lease, and why it matters financially
The evolution of redistribution policy has direct consequences for your ability to raise money. Under LRAD, beneficiaries received title deeds, and many then used bank loans to fund their own contribution — with the result that a significant number lost their farms when they defaulted. PLAS was introduced partly in response: the state acquires and holds the land, leasing it to beneficiaries, commonly with a probationary period after which a longer lease may follow and, in principle, an eventual route to acquisition.
The trade-off is stark. A leaseholder cannot be repossessed by a bank, but also cannot register a mortgage bond — which removes the single most important form of security in South African agriculture.
Section 4.2Where the law currently stands
Land reform law is contested and actively litigated, and any farmer or lender operating in this space should track it rather than rely on a snapshot. What follows is a factual account of the position as at the time of writing; it is not a prediction and not a legal opinion.
The Expropriation Act
- The Expropriation Act 13 of 2024 was signed by the President in January 2025 and published in the Government Gazette on 24 January 2025. It repeals and replaces the apartheid-era Expropriation Act 63 of 1975 and provides a single framework for expropriation by national, provincial and local government.
- It distinguishes expropriation for a public purpose — infrastructure, public services, conservation — from expropriation in the public interest, which includes land reform and equitable access to resources.
- It sets out procedural requirements including prior negotiation, notice and access to judicial review, and criteria for just and equitable compensation with reference to factors such as market value, the history of acquisition and state investment in the property.
- It provides that nil compensation may be just and equitable in specified circumstances relating to expropriation in the public interest — for example land held purely for speculation, abandoned land, unused state-held land, or land whose value derives principally from state investment.
- Section 31 provides that the Act comes into operation on a date determined by the President by proclamation. Legal commentators have noted that the commencement proclamation had not been issued well into 2026, meaning the Act had not yet taken effect and the courts had not yet had occasion to interpret it.
- The Act is the subject of litigation, including a constitutional challenge filed by AfriForum in 2025 and a challenge brought by the Democratic Alliance raising procedural objections and consistency with international investment obligations. It has additionally featured in diplomatic friction with the United States.
The Equitable Access to Land Bill
Separately from the Expropriation Act, an Equitable Access to Land Bill has been under development to deal with expropriation in the public interest for land reform purposes. As reported to the parliamentary portfolio committee in early 2026, the policy and the Bill had been developed and the Bill submitted for a pre-certification opinion from the Chief State Law Adviser, after which it would be processed toward publication for public comment. It had not been enacted.
Section 4.3Partnership models and post-settlement support
Land access without capital, skills and markets has been the central failure mode of South African land reform. A significant portion of transferred land has underperformed, which is why post-settlement support and partnership structures now receive as much policy attention as land transfer itself.
- Strategic partner and joint venture models. A commercial operator partners with a land reform entity, bringing capital, management and market access in exchange for a share of returns. Where the Blended Finance Scheme contemplates joint ventures, it has provided for the non-black partner to hold a minority stake within a defined band. These structures work when the community or beneficiary entity has genuine governance capacity and independent advice; they fail when the partner controls the books.
- Community-investor partnership models. Facilitated arrangements in which a community landowner leases to a commercial operator on commercial terms with independent oversight and a clear exit. The lesson from the record is that the quality of the facilitation and the transparency of the lease determine the outcome more than the identity of the partner.
- Mentorship and commodity programmes. Grain, sugar, citrus, red meat, poultry and wine industry bodies run structured development and mentorship programmes combining technical support with market access. Frequently the most practical form of support available, and notably under-subscribed.
- Communal property associations and trusts. Where land is held communally, the governance of the CPA or trust is the single largest determinant of whether the land can be financed. Lenders look for a properly constituted entity, current registration, functioning meetings, reconciled accounts and clear authority to sign. A dysfunctional CPA is a funding obstacle before it is anything else.
