The land question in smallholder development in South Africa - Institutional Constraints to Small Farmer Development in Southern Africa - page 196

Kwazulu-Natal, the actual production is about one-sixth the proven potential. While as
much as 38% of the national beef herd is kept in the communal areas where crop production
remains an adjunct to livestock production, extremely low animal off-take denies both
farmers and consumers the benefits of this important sub-sector.
Some of the factors contributing to the poor production performance in communal areas
have been identified and summarized as:
1. Continuous shallow ploughing of the same land creates an impermeable layer of soil
which hampers the flow of moisture to crops grown under rain-fed conditions.
2. Forced fallowing of large tracts of land as a result of inadequate supply of labour, inputs
and equipment.
3. Sub-optimal resource use as a result of over- or under-investment of resources which
leads to low productivity.
4. The use of community-based models of empowerment which lead to serious internal
conflicts that consume an inordinate amount of resources and time and contribute to
low production and productivity.
For any tenure reform programmes to lead to agricultural development, including the
integration of the black population to the country's agricultural economy, it is imperative
to take a holistic view of the problem. Some of the issues highlighted above will certainly
be crucial, but further detailed studies to ascertain the problems and what strategies are
needed to contain them, will be necessary.
9.4 Agricultural taxation and the rural land tax debate
Some of the longest running debates in the land market of South Africa concern the issues
of taxation of agricultural land. In the era of land reform in the post-apartheid South Africa,
the main concern has been on how the mechanism of taxation can be used for increasing the
availability of land in the market to increase the volume of land transactions by encouraging
land owners not to hold on to unproductive land. The next few subsections examine some
of the salient issues related to the debate.
9.4.1 General considerations on taxes
It is necessary for a more informed view, to present the wider evidence on the importance
of taxes in general as reflected in the economics literature. A number of researchers have
worked on the broad subject, notable among them being Stiglitz (1986), Stallman and
Jones (1997), Mankiw (1998), etc. It generally considered that taxation is good from the
point of view of generating resources to finance national development and redistribute the
national wealth in a more equitable manner. A tax system is therefore evaluated on the basis
of its capacity to carry out these functions while not imposing corresponding hardships on