Johannesburg - Agri SA says the Agricultural Landholdings Bill has not been well thought through.

In a statement issued on Thursday, the association said land ceilings will have very many negative effects.

Government recently proposed Government has proposed a new law banning foreigners from directly buying agricultural land in South Africa.

Concerns have been raised that this may harm investor sentiment.

Non-residents will be allowed to take long leases on the properties, or the land should be majority-owned by a black South African, according to the Regulation of Agricultural Land Holdings Bill, published in the Government Gazette last Friday.

Foreigners considering selling land must give the Minister of Rural Development and Land Reform first option on the property, according to the bill, Bloomberg reported at the time.

The government would have 90 days to take up the offer, after which it can be sold to a citizen.

Read also: Ban on direct land-ownership by foreigners

The minister will also impose limits on the size of farms that people can own, depending on the region and following consultation, according to the document, the wire service reported.

On Thursday, Agri SA said the Bill, published on March 17, only allows 30 days for comment, and it will seek an extension.

The association notes, “ever since 2011, the concept of land ceilings has been hotly debated”. It adds numerous studies have found this concept to be ill founded.

Ernest Pringle, chairman of Agri SA’s Policy Committee on Agricultural Development, says that international experience with ceilings demonstrated that land ceilings had very many negative impacts, including:

·         The fragmentation of agricultural land;

·         Affecting productivity adversely;

·         That it has contributed towards agricultural being a low-profit venture in several parts of the world;

·         Neutral or negative effects on poverty;

·         Unsatisfied levels of equity and efficiency; 

·         That it had to large extent; failed to change agrarian structures- large inequalities continue to exist;

·         A negative impact on functional land rental markets;

·         It has proved costly and difficult to administrate;

·         It has been characterised by circumvention, contestation, corruption and litigation;

·         It led to tenure insecurity; and

·         It discouraged land-related investment.

Pringle adds that the proposed system would be costly, and that the huge administration cost would outweigh any potential benefits government is punting.

“Also, the proposed scheme will make planning extremely difficult if bits and pieces of agricultural land were to be excised from farms all over the place.  This would likely leave farmers and beneficiaries with uneconomical units.

“Provision of services to far-flung beneficiaries will also be a huge challenge. This policy would deliver fragmented pieces of land spread across the furthest reaches of a district. Small parcels may end up being ‘sliced-off’ larger landholdings with little or no access to natural resources, infrastructure or services,” it argues.

Agri SA is of the view that the Bill also faces constitutional challenges and is in the process of getting senior counsel opinion on that, says Pringle.

BUSINESS REPORT ONLINE