Assessing the feasibility of land reform farm equity schemes : a focus on capacity building and empowerment

Abstract

This research was undertaken to determine the extent to which share equity schemes have been successful. The research also investigated the possible causes of failure of the established share equity projects and sought to determine the feasibility requirements that may be put in place to ensure success and sustainability of the ventures in support of land reform. The methodology used involved comparing the data gathered from business plans, valuation reports and other project documents from the Department of Land Affairs (DLA) with the information gathered through interviews and observations. The results revealed causes of failure to include the fact that beneficiaries of the investigated equity schemes did not participate in business plan development or implementation and therefore had no sense of ownership in the intended joint ventures. It was also found that none of the business plans included any form of training for capacity building and therefore no mechanism for empowering beneficiaries existed to participate effectively at all levels of the farming enterprise. Furthermore, original farm owners as the majority shareholders tended to re-invest profits into farm assets rather than paying dividends. It was concluded that the inclusion of a training programme in every business plan is crucial to the success of farm share equity ventures as this may enable beneficiaries to be sufficiently empowered to participate effectively at all levels of the business.