Disputes plague breakthrough land claim settlement
Multi-million rand farming operation on 2,425 hectares was expected to be a win-win for former owners and claimants
- The huge Manzini timber and sugar cane estate in KZN is being restored to the Emakhasaneni community.
- It has an annual turnover of R40 million and employs 400 people.
- An agreed ten-year skills and equipment transfer from the former owners is dogged by tensions with the community.
- The success of the land restitution may be in jeopardy.
As government prepares to hand over a multi-million rand farming estate outside Melmoth in KwaZulu-Natal to successful land claimants, tensions are rising between the community, the land claimants’ trust, and the white former farmers, who are staying on to manage the farm to mentor the new owners.
Members of the Emakhasaneni Committee Trust are unhappy with the way the former owners are managing the transition, while the farmers say the claimants are only in it for the money and have no interest or feel for agriculture.
“The painful memory of being forced to leave the land of my forefathers still lingers … No amount of money can make up for the pain and suffering I went through,” says 78-year-old Bekeni Bethwell Dludla.
A farm labourer at the age of ten in the 1950s, he is one of 99 land claimants in the Makhasaneni area, who lodged claims in December 1998. Their claim went through in May 2018 after the farm owners agreed to sell.
Government bought the 2,425 hectare Manzini Estate, owned by the Aitken family, on behalf of Dludla and the other claimants, and the Emakhasaneni Committee Trust was formed to take over operations of the estate on behalf of the claimants.
Dludla recalls his childhood: “It was our land, but they would not allow us to keep more than five cattle. If we exceeded five we had to either slaughter or sell the rest. He [the farmer] made us work for a food ration of milk from our own cows and mealie-meal. At the same time, we earned the right to stay on the land and our cattle were allowed to graze.”
Then in his 20s, he and his mother were thrown off the land.
In November 2019, he received R60,000 payment from the Makhasaneni Trust and there were promises of more to come. But today he feels once again deceived, and is disgruntled because other family members have received no payment and it is causing divisions.
“My forefathers died and were buried on the land; they lay in that land even today. My father’s dying words were that the land must come back … All we get is small payments. How does that make up for our lost land?” asks Dludla.
According to the Office of the Regional Land Claims Commissioner (RLC) the claim was lodged by Dumisane Cleapas Dludla on behalf of the Makhasaneni community. Landowners disputed the validity of the claim and it was referred to court for adjudication.
The agreement reached was to form the Manzini Timber and Sugar Estate (MTSE) to conduct timber and cane operations on the land, with a shareholder’s agreement in which Manzini Estate (former owners) holds 40% and Emakhasaneni Community Trust (the claimants) holds 60% of the issued share capital.
Management fees of R100,000 per month and R100,000 “rent to own fee” for equipment would be paid by Manzini Timber and Sugarcane Estate to the former owners. A lease agreement covers the land, standing crops, and water rights.
Some of the rental would be used to make payments to beneficiaries and depending on the success of the business it was agreed that annual dividends from profits would be added. But there are now tensions between community members vying for payments. The trust leaders say the payments made in the past two years are no longer sustainable and this has created tensions and suspicion in the community.
There also appear to be misunderstandings between the trust leadership and the former owners on the roles they are to play in managing business operations and mentoring through a ten-year skills transfer initiative.
“We are beginning to question whether forming a partnership with the former white owners was a good idea as none of our agreed terms are coming to fruition. We feel that the 40% stake we gave them in the company is too much as government paid them over R180 million for the land. It feels as if they are still controlling the land,” says Mandla Dludla, chairperson of the trust.
“The government agreed to buy the land on the basis that the farming project continues. It gave us no further funding on the basis that proceeds from the business would help pay the beneficiaries from the community. If people would go back on the land, they would practise subsistence farming removing the economic benefit of the business. We agreed to bring in former white owners because we did not have the know-how to run the project,” he explains.
But Dludla says they are unhappy about being excluded from decision making; that members of the community are not being employed in the numbers they anticipated, and that the management fees are too high.
He feels the former owners are neglecting the farm in comparison to when they were sole owners.
Philani Mkhize, a land activist from the organisation Justice and Peace Commission says, “With the tensions between the Trustees and the old farmers the ten-year partnership may not see its full course. Without proper mentorship the business may not survive if the old farm owners are no longer involved. We feel that the Department of Agriculture, Land Reform and Rural Development should lodge a full investigation into the partnership and provide enough support for claimants to carry on after the white farmers. As we have observed in the area many restituted farms have failed to survive.”
Meanwhile a beneficiary such as Zwide Nxumalo, living in Makhasaneni Village, points towards the mountains in the north and says, “Although we won the land, we were told we could not go back, that we would get money every year instead. But now there is no communication about money, and it worries me.”
Nxumalo has received one payment, last year. He is waiting for another payment to help him cover his son’s college fees. “If there are flaws in the payment process, they will force us to go and claim our land back,” he says.
Brian Aitken, Managing Director of Manzini Timber and Sugar Estate, whose family were the former owners of the land, says, “The problem is that we are dealing with a disorganised group of claimants who have no feel for agriculture. They are in it for the money. The reason why we stayed on was out of love for farming. I personally want to be remembered after ten years as a white farmer who helped to start a successful farming project for black farmers.”.
“At first we disputed the claim before agreeing to sell four years ago. Selling the land and leaving our home was not an easy decision. I cried because l was very emotional. I was born and brought up in the area. I had worked my whole life paying loans to build the farming estate,” he says.
“Eventually, we agreed to sell at R186 million. We agreed to stay on for ten years and groom the beneficiaries to eventually run the business going forward. At first, we asked for 60% shares in the business, but the government got us to settle for 40%.
“Government did not buy equipment for the claimants. How did government expect a community which is being restituted to run a farming operation without equipment? Our equipment was revalued at R17 million by external valuers, but we agreed for it to be paid off at R15 million over ten years. That is the sacrifice we made for the business to keep going,” he says.
“Currently, we have planted 2,000 hectares of timber, 400 hectares of sugarcane and we have just started on a 25-hectare plantation of macadamia,” says Aitken.
Aitken said he had received letters from the trustee lawyers accusing him of meddling with the affairs of the trustees. This arose after some of the beneficiaries had approached him with complaints about the payments.
“This is a multimillion-dollar project with a yearly turnover of R40 million, employing 400 employees. We have ploughed R50 million worth of timber, it is no child’s play, and we cannot afford to mess things up.”
“Out of a long list which came from the community it was only practical to bring in four interns who have potential to be mentored into the business.”
“My concern is to see the success of the project, and my hope is for the community to reunite.”
“I have asked that one day my ashes should be spread on a hill adjacent to my home in Melmoth because that place will always hold a special place in my heart,” said Aitken.
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1. We note the publication of the article “Disputes plague breakthrough land claim settlement” by GroundUp on 5 November 2020. On behalf of the four Aitken brothers who have jointly owned and operated Manzini Estate for many years, I would like to respond to the issues raised by this article. I would be grateful if you would publish this response on your website.
2. The origins of Manzini lie in the acquisition of the initial farm in 1929 by Charles W Biggs. All four brothers were raised on the farm (Richard, the eldest, is 70 years old). The original CW Biggs farm was expanded by a number of farm acquisitions over the years funded by Standard Bank loans. The late CW Biggs was an uncle of the Aitken brothers and who in the 1920/30’s was the managing director of The Natal Tanning Extract Co (Pty) Ltd. This company was largely responsible for the development of the wattle (acacia mearnsii) industry in SA and Manzini was initially a wattle farm. We are a Melmoth family, through and through. Our family history is of Melmoth, and many of our children have grown up in the area. We are proud of the fact that our Manzini business has never needed to retrench any person nor seek government subsidies during its history because we have created and sustained a good and profitable farming business.
Settlement of the Emakhasaneni Community land claim
3. As your article notes, Manzini as part of the Melmoth community contested the validity of the Emakhasaneni land. However, in or about 2015 we decided to avoid adversarial confrontation both with the State and the claimant community in favour of a negotiated settlement of our land claim.
4. As a family, we decided to revise our approach, and instead invest our energy into creating a successful, community-owned farming business.
5. The Land Claims Commission worked with Vumelana Advisory Fund NPO to provide a team of transaction advisors to advise and work with the Emakhasaneni Community representatives.
6. This team included a senior agricultural economist, an experienced chartered accountant, a community and governance expert and an auditor who provided independent verification of the quality and value of all moveable assets and equipment. This team was briefed and paid for by the State and worked as independent advisors to the Emakhasaneni Community.
7. This aspect was not covered at all in your article, and is a factor that we think is important – that the Emakhasaneni Community had access to high-quality, independent, professional advisors throughout the negotiation process, that were paid for and facilitated by the State and a highly credible Non-Profit Organisation.
8. The deal we struck with the Emakhasanani Community had the following material points which were not included in your article:
8.1. Manzini is obliged to sell its 40% (forty percent) shareholding in the joint venture company Manzini Timber & Sugar Estate (“MTSE”) to the Emakhasaneni Community for R1 (one Rand) at the end of a 10-year period (i.e. 2028). Simply put, our shares in MTSE have no economic value and cannot be transacted upon, except to the Emakhasaneni Community.
8.2. Our management and equipment rental agreements come to an end in 2028. At this point, the youngest of us brothers will be 70 years old – hardly an age to carry on farming!
8.3. Manzini is contractually obliged to provide working capital for the new joint venture company. We have also stood surety for new vehicles and equipment that have been bought for MTSE and funded by Standard Bank. Our obligation is to ensure that MTSE remains appropriately capitalised and with adequate working capital during this 10-year period.
8.4. The governance of MTSE is done in accordance with best farming and business practice. We have a non-executive independent chairperson, and the remaining board seats are filled equally by Manzini and Emakhasaneni members. We publish board packs and management accounts for each meeting, along with a comprehensive farm report. Our financials are audited each year. All of these documents are circulated in hard copy and electronically to the Emakhasaneni Community. Had your journalist asked, we would have gladly made copies of these documents available to her.
8.5. We were able to secure preferential market access pricing for our timber and sugar crops for MTSE, including a long-term timber supply agreement.
Benefits and benefit circulation
9. Since inception in late 2018, MTSE has paid to ECT rental of some R9 million of which R4,5 million has been distributed directly to beneficiaries of the Emakhasaneni Community. A further substantial distribution is to be made soon when the trustees agree to authorise this. As far as we know, our direct payment to beneficiary approach is a South African land reform first.
10. Direct payment puts money into the pockets of “ordinary” beneficiaries twice per year. This is in contrast to many, many other land reform projects where benefits appear to be ring-fenced by the elite. We stand by this approach, as we are firmly of the view that if land reform is to succeed at commercial scale, cash benefits need to be circulated at a family level within communities.
11. We also understand and acknowledge that there is an inherent tension between balancing a beneficiary’s need to optimise cash benefits and maintaining a sustainable business. This is not a new tension and is one that exists in every community-farmer partnership. This is something that we imagine will need to be managed indefinitely but is made easier with clear dividend policies and rules.
Skills transfer, mentorship & handover
12. Given our ages, the question of “what comes next” is important for us. This is not simply a case of making sure that the Emakhasaneni Community has the appropriate skills for the future, but also to ensure that MTSE is a well-capitalised business with a good credit and trade record, and which is actively re-investing in its asset base.
13. Our specific actions around “what comes next” are as follows:
13.1. MTSE has made an investment into converting existing crop land into new macadamia orchards. These will take 6-7 years to be fully viable (at which stage we will have less than 2 years left with the business) but promise to provide a “future proof” crop for MTSE. At this moment, we are also exploring the viability of avocado plantings for the same purpose.
13.2. Our first 4 interns (all drawn from our community) have commenced service and will be job-shadowing our senior managers. As and when universities and tertiary institutions reopen after COVID, we will be sending this group for practical industry training courses and ultimately for degrees in forestry at Saasveld.
13.3. We have actively sought to replace Manzini plant and equipment with new MTSE owned plant and equipment. This helps us to build the balance sheet of the new company and to ensure that the fleet remains young and maintenance-free.
13.4. We have hosted a comprehensive on-farm field visit for all Emakhasaneni representatives. During this workshop, we walked through each and every activity that takes place across the operation. We intended to follow this up with a visit to our major markets, but COVID has ensured that this has not been possible.
13.5. Andrew Aitken, a retired practicing chartered accountant of many years has conducted a financial literacy and financial management workshop with Emakhasaneni representatives and is aiming to repeat this every year. This workshop covers all of the key requirements of acting as a director and trustee, as well as financial management aspects.
14. From our perspective we believe that we are on the right track to ensure that when we exit MTSE, the business will be left on a solid footing. We remain open to new ideas and approaches and are constantly looking around the country for different models and ways of working.
15. As the above hopefully demonstrates, there is more to the Manzini story than your newspaper published. There are inevitably always going to be tensions within large scale land reform projects. However, we do not believe that the sentiments expressed within your article represent those of the broader community or even of a majority of the community representatives.
16. MTSE has thus far proved to be a huge success and it is our view that our model is one that should be replicated in land reform generally. We remain committed to developing a sustainable, commercially successful farming operation in Melmoth in partnership with the Emakhasaneni Community.
17. We invite you, the author of the article Ms. Kimberley Mutandiro or for that matter anyone from GroundUp to visit Manzini and see first-hand what is going on.
Yours in land reform.