Business Report Economy

R35m investment in Letsoalo people pays off

Published

In February last year the Banareng ba ga Letsoalo people were granted 1 900ha of prime agricultural land in the Letsitele Valley, 30km south of Tzaneen in Limpopo province.

It was hailed as an historic land claim settlement and cost the government R35 million. What made it interesting was that the 1 500 families who were the legal claimants of the land had no intention of returning to live there.

Instead, they elected a 15-member executive committee to take over and manage the 13 commercial farms on the land they had reclaimed. These farms included banana, mango, citrus and timber farms with a combined workforce of 270 people and an annual turnover estimated at R15 million.

In her address to the Letsoalo people at the handing over ceremony in February last year, minister of agriculture and land affairs Thoko Didiza urged the Letsoalo clan to "administer these highly productive farms on a sound business basis to sustain their economic viability and prosperous future.

"These farms had been maintained as productive tropical fruit growing units earning valuable foreign exchange for South Africa on European export markets," she said. "We do not want to see these farms derelict and you roaming the streets of Tzaneen as beggars.

"As the new owners, you will have to work efficiently to disprove the perception of white critics that black people are lazy and incapable of managing farms."

One year later, it seems that both Didiza and the Letsoalos have reason to be upbeat.

"We didn't have a final business plan in place when we took over," admits Rathi Letsoalo, the public relations officer of the executive committee. "But that has since happened and we are feeling very optimistic indeed."

Letsoalo says the farms continue to be productive, despite the difficulties of the takeover.

"We were given a discretionary grant of R4.5 million by the government to buy tractors and other equipment," he says. "And we continue to employ all 270 people on the farms. This year, for instance, we hope to export some 80 percent of our total mango crop."

At the time of the takeover, says Letsoalo, the clan was criticised by white farmers for its refusal to enter into partnership deals with the former owners and accept their expertise.

"At first the white farmers were sceptical and antagonistic," agrees Elias Mathiba, the executive committee's treasurer. "We experienced some difficulty in dealing with certain banks and suppliers, but now people are beginning to recognise us. The local agricultural union, too, has softened its stance and become very helpful."

"One of the big problems in taking over these farms was that the previous owners tended to be managers as well," adds Ismael Letsoalo, the committee's general secretary. "That left a management gap we are starting to fill. Only one of the previous white farm managers has remained in our employ, but we have sent people to agricultural college to learn more about farming and are confident we can run these farms on our own."

Six members of the executive committee have moved into the houses previously occupied by white farmers, and they too, are finding the changes a challenge.

Rathi Letsoalo was a photocopier technician for 14 years. Ismael Letsoalo used to be a teacher and financial adviser. Now they find themselves at the helm of a massive agricultural operation, while their families are elsewhere.

"It is a sacrifice and a challenge," says Rathi Letsoalo, "but this committee has been meeting fortnightly since 1998 to manage both the land claim process and now the farming operations.

"Originally this land belonged to the Mathiba, Mtloutsi, Magoro and Magwela clans, under the kingdoms of the Letsoalos," he says. "The land was expropriated following the Boer-Makgoba wars in the late 1890s, and there were forced removals in 1937 and 1958.

"The Letsoalo people are now scattered as far afield as the Free State and North West," he adds. "Since it would have been impossible for everyone to return here, they decided to continue farming commercially and have set up a development fund to distribute profits to the communities concerned."

The only white farmers who attended the handing-over ceremony last year were Peter and Maggie Baleta, whose 500ha farm was one of those given back to the Letsoalos.

"Although it was disappointing to leave the farm on which we had lived and worked for 43 years, we felt the claims were valid and we accepted the settlement offer, whose price was independently evaluated and market-related," Maggie Baleta says.

"Interestingly enough," says Peter Baleta, "all the white farmers that sold their farms have bought new farms - none have emigrated."

Their former farm was a 500ha mango and citrus farm, with an atchar factory and an annual turnover of R5 million. Does he think the Letsoalos have successfully maintained it?

"I think they're managing well under the circumstances," he says, "and I think they can definitely make it work." Baleta says he was disappointed that their offers to assist were refused. He is critical of the settlement process, which "failed to consult and develop support" among the white farmers.

"But there is no reason the farm shouldn't continue to be a highly successful operation," says Baleta. "They received a substantial government grant, the farms have good water access, are debt free and productive."

The Letsoalos are confident that their successful management of these commercial farms could be a model for future economic development in the area.

"These farms represent one tenth of the total land area that the Letsoalo clan is claiming," says Rathi Letsoalo. They have lodged claims against about 90 percent of agricultural land stretching north from the Letsitele valley to the Letaba River, and west towards Politsi. "In five years' time, we hope that 50 percent of those claims will have been settled." - Tzaneen