A FINANCIAL MODEL TO FUND LAND REDISTRIBUTION IN THE SUGAR INDUSTRY OF KWAZULU-NATAL

Abstract

This article examines the requirements for successful redistribution of land to emerging commercial farmers. It outlines a model used to successfully finance emerging commercial farmers in the sugar industry. The model uses a capital sacrifice by the seller to subsidise the interest rate on the bond on a declining, inflation linked basis, this overcomes the initial cash flow problems associated with agricultural land purchases. The article proposes this as a method which could finance other land transactions with very limited impact on the fiscus, land and capital markets.