| dc.description.abstract | Recent years have witnessed renewed interest in ‘inclusive business models’ in
agriculture, as part of wider discussions about growing agricultural investment in
lower income countries. Inclusive models aim to include poor people into value
chains as producers, employees or consumers, in ways that are both equitable and
sustainable. Joint ventures between companies and local communities have
received considerable attention in these debates.
This report presents findings from research on joint ventures in South Africa’s
agricultural sector. The South African experience presents major specificities linked
to its history and its recent land reform programme, within which experience with joint
ventures has emerged. But it also provides a case where joint ventures have been
implemented for some time, and some of the lessons learned may prove valuable for
different contexts where discussions about joint ventures are more recent.
Under South Africa’s land reform programme, since 1994, previously dispossessed
communities have had large areas of agricultural land restored to them and, under
pressure from the state, have entered into a range of joint enterprises with
commercial partners. Early evidence suggests that these enterprises face multiple
difficulties, and the report provides a cautionary tale for international discussions
about inclusive business models.
This report is based on two case studies of land reform in Limpopo province, Levubu
and Moletele. In these sites, large areas of high-value irrigated land have been
restored to relatively poor communities. In order to maintain the productivity of
commercial farming enterprises, and to maximise long-term benefits for their
members, these communities have entered into contractual arrangements with socalled
‘strategic partners’, most of which take the form of joint ventures. While the
state funds the land transfer and provides certain start-up grants, the strategic
partner is expected to provide technical and managerial expertise and arrange
access to commercial sources of credit. In return, the strategic partners expect to
benefit from a share of profits, a management fee and opportunities for additional
upstream and downstream activities. Communities stand to benefit from land rentals
and a share of operating profits, as well as jobs and training opportunities for their
members | en_US |
