The great advantage that South Africa’s farmers historically enjoyed was access to cost-effective finance. To make land reform work, that same advantage must be extended to aspirant black farmers. This is how to make that work.

Offer loans at 0% interest to aspirant black farmers with bankable business plans. Those loans should be available from any commercial finance institution interested in agriculture, as well as from the state’s own Land Bank. White commercial farmers would continue to borrow at whatever rate they can negotiate with their bank.

However, in the event of a black-white partnership, the interest rate would be revised down by the extent of the partnership. For example, a 50/50 partnership would be financed at half the average commercial lending rate.

See The Common Sense’s Gabriel Makin and Presidential Agriculture Envoy Wandile Sihlobo discuss the idea here.

The effect would be instantaneous. Every serious commercial producer would rush to take advantage of the offer. Within months, the nature of the commercial farming landscape would begin to shift. Within a few short years, it would be wholly transformed.

The scheme would be an opt-in one. Black producers would have the choice of going it alone or joining up with established white producers. White producers would have the choice of going it alone or taking advantage of the capital injection the scheme would offer them in expanding their businesses, or continuing on their own terms. Banks would have the choice to opt in or stay out of the scheme, but given their loud and repeated statements in favour of land reform, a fair assumption is they’d all opt in. The scope for wastage is limited, and viable business plans would need to pass muster. Property rights would remain wholly intact, food security would increase, and the rural economy would get an immediate capital and jobs boost.

It’s a win-win, win-win-win, [The]Common Sense solution to what has become a divisive, and increasingly economically destructive, policy question, but one that might easily be turned on its head to demonstrate the kind of country that South Africa could become if sensible approaches to reform are pursued.