SYMPTOMS OF POVERTY WITHIN A GROUP OF LAND REFORM BENEFICIARIES IN THE MIDLANDS OF KWAZULU-NATAL: ANALYSIS AND POLICY RECOMMENDATIONS

Abstract

This study identifies different dimensions of poverty affecting the current and future well-being of households within a community of land reform beneficiaries in the Midlands of KwaZulu-Natal. A census survey of the beneficiary households was conducted in May 2002 to gather data on poverty indicators. Principal Component Analysis was used to construct an index of the standard of housing, which was then combined with variables measuring other symptoms of poverty (income, wealth and health) in a Cluster Analysis of the households. The analysis revealed five clusters representing four distinct groups of poverty; households relatively income and asset rich, households relatively income rich but asset poor, households relatively asset rich but income poor and households with the lowest incomes and assets. While income is an important indicator of current poverty, household wealth (measured in terms of saleable assets) indicates ability to cope with adverse shocks—a key issue as life expectancy is declining and old-age pensioners account for a large share of household income in the survey group. It is concluded that child welfare grants could be increased as pension earnings become less effective in combating the symptoms of poverty in this area. In addition, land reform grants may address poverty more effectively when used to purchase equity in joint ventures with commercial farmers than when used to purchase land that many of the beneficiaries cannot use or transact.