MK MP Mngxitama demands audit into failed farm equity schemes amid corruption claims

The farm equity schemes programme, intended to improve the lives of farm workers, has been labelled as a corrupt “slush fund” that has compromised the workers and left many destitute.

The Umkhonto we Sizwe Party (MKP) claims that the long-established programme has become a slush fund looted by commercial farmers. The commercial agriculture sector has also claimed that the scheme has delivered far less than expected and is plagued by allegations of wrongdoing.

Equity schemes were meant to shift ownership patterns and embed transformation in commercial agriculture. The Bureau for Food and Agricultural Policy reports that over 70% of farmland is still owned by white individuals, while black ownership is below 10%.

Recently, Land Reform and Rural Development Minister Mzwanele Nyhontso disclosed that forensic audits into farm equity schemes are underway, with the department pursuing fund recovery and considering further investigations into corruption.

Farm equity schemes were introduced to broaden ownership in commercial agriculture by allocating shares to farm workers, often through trusts or joint ventures. The intention was to deliver dividends, representation, and eventual tenure security. However, allegations have surfaced that many schemes collapsed under weak governance.

Workers were excluded from management decisions, dividends were withheld, and equity was diluted or sold off under questionable circumstances. These failures undermine constitutional obligations under Section 25 of the Constitution to ensure equitable access to land and Section 23 to protect labour rights.

A report documented how farm workers in the Northern Cape were misled into selling their shares for as little as R20,000 each, losing multimillion-rand stakes in 22 commercial farms. It was also reported that in one project, the Ministry of Land Affairs and Rural Development is trying to recover close to R60 million after the project failed to deliver.

Andile Mngxitama of the MKP stated, “We are calling for a forensic audit into the farm equity scheme; these have become a slush fund for white farmers and have left the workers much worse off.

“We estimate that about R700 million of government money has been poured into this with no benefit for the farm workers. To date, we do not know of any farm workers that are doing well after this programme; if they are, they must be very few.”

Mngxitama further explained that under these programmes, the government paid money to buy a stake in the operations of the farm on behalf of the farm workers. However, it has become apparent that the workers are not benefiting; instead, some are losing not just their land but also their homes as a result of this programme, which was designed to benefit them.

“We are calling for a forensic investigation to be conducted on the programme and for the commercial white farmers that have illegally benefited from the programme to be prosecuted. We also suspect that the Department of Land Affairs staff is facilitating this corruption, and we are also calling on them to be prosecuted.”

Johann Kotze of Agrisa commented that farm schemes are supposed to set people up for success; some work, while others have failed dismally. “There is a lot of failure in that space; we need to have retrospection to see how it worked and how it did not. It is not good enough, and there is a great threat to agriculture.”

He mentioned concerns about fronting, incidents of paying dividends, and tricking workers into selling their stakes. “There is some truth to that; hence the minister has decided to conduct an investigation to find out what exactly is going on. The second part is to determine who is involved in this; are they farmers or officials? Will they continue when it is tough?”

When contacted, the department referred The Mercury to a previous report where the ministry had committed to recovering the funds and stated that investigations into equity schemes would be considered to determine whether corruption occurred and to provide remedial action. The minister added that justice for farm workers would be pursued where wrongdoing is found.

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