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Land reform and rural development are routinely presented as key components of the poverty reduction strategy driven by the State. The restitution programme occupies a particular place in the broader land reform programme as it specifically seeks to redress the land dispossession which took place since 1913 and to alleviate the impoverishment and suffering it caused. Restitution is a hugely challenging undertaking which involves much more than the verification of claimants and the restoration of land. We examine these challenges through the lens of Schmidtsdrift, a large restitution case in the Northern Cape which has diamonds, thousands of hectares of grazing land, irrigation rights on the Vaal and other resources. We review how a combination of oversimplified notions of ‘the community’, complex conflicts of interest and values, weak institutions, and the failure to conceptualise appropriate planning and support has come at a high cost and failed to unlock key assets for the benefit of the poor.