INSTITUTIONAL ARRANGEMENTS FOR EQUITY-SHARE SCHEMES IN SOUTH AFRICAN AGRICULTURE

M. Lyne, S. Knight, M. Roth
Farm worker equity-share schemes were initiated in the Western Cape region of South Africa in the early 1990’s as a method of redistributing farm assets to land reform beneficiaries while maintaining the viability of commercial farming operations. This study sets out to identify the institutional characteristics of successful farm worker equity-share schemes in South Africa and to develop a set of best institutional practices that will promote the success of future equity-share schemes. A detailed study of 9 land reform projects intended to empower previously disadvantaged farm workers was undertaken in the Western Cape during November 2001 to explore relationships between their institutional arrangements, worker empowerment, management quality and performance. Cluster analysis of these 4 constructs revealed positive relationships between sound institutional arrangements, competent management, effective worker empowerment and good performance. Best institutional practices identified by the analysis suggest that farm worker equity-share schemes should be operated like a company with voting and benefit rights proportional to individual shareholdings, but with restrictions on certain share transactions to prevent free-riding by non-workers and the loss of credit-worthiness through sudden outflows of equity and managerial expertise. However, this positive relationship between best institutional practice and enterprise performance is dependent on effective worker empowerment, good governance and competent management.
Lyne, M., Knight, S. and Roth, M. (2006). INSTITUTIONAL ARRANGEMENTS FOR EQUITY-SHARE SCHEMES IN SOUTH AFRICAN AGRICULTURE. Acta Hortic. 699, 283-290
DOI: 10.17660/ActaHortic.2006.699.33
https://doi.org/10.17660/ActaHortic.2006.699.33
Land reform, worker empowerment, competent management, good governance, enterprise performance, best institutional practice
English

Acta Horticulturae