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Minister’s plan to split farms fails to pass muster

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br p2 agriculture

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Farming, everywhere else the darling of governments, doesn't feature under the ANC, says the writer.

Two weeks ago Rural Development and Land Reform Minister Gugile Nkwinti very prominently released a “final statement” on land reform.

The plan calls for commercial farmers to give up 50 percent of their farms, which will be acquired by farmworkers, with the government paying for the 50 percent, but not to the farmers.

It will be shared by the farm labourers in an investment and development fund to be jointly owned by the two parties, so constituting a new ownership regime.

Although one newspaper subsequently declared that “the ANC disowns the draft plan”, it described the minister as nonetheless forging ahead with his policy proposal. Interested parties are given until April next year to make their views known.

We have three comments to make on this “statement of policy”. The first relates to the content, the others to what this reveals of the deplorable state of governance in this country.

The farm-owning constituency and agriculture generally, as an economic sector in South Africa are not favourites of the ANC government, and it is also questionable whether the government fully appreciates the sector’s contribution to employment or its strategic importance from a food production point of view and the crisis this faces.

From being a net exporter of food we have become a food importer. The number of productive commercial farmers has declined from 100 000 15 years ago to 36 000. The reality is that farming, everywhere else the darling of governments, does not feature under the ANC. And young potential farmers are choosing other occupations.

Were it not for organisations like Agri SA, which represents the great majority of farmers in the country, and the Agricultural Business Chamber, which represents the interests of agribusiness, our farming sector and the challenges it faces would largely be ignored.

While both organisations have rejected Nkwinti’s “final policy proposals” as ill-considered and unacceptable, these are not unreasonable people. They are very conscious of the pressing need to involve black people productively in the agricultural economy and are themselves willing to work with the appropriate ministries in this regard.

Aside from that, there is no indication that Nkwinti has established that his policy proposals are constitutional (which our lawyer friends say they are not). The publication of this proposed policy (given that the minister sought maximum publicity for it) has undoubtedly had a damaging effect on potential investors in agriculture and generally – and we speak from experience.

Omega has been involved recently in the sale of a farm to an overseas international investor. The deal has been done and it brings with it enormous export benefits to the country. But we doubt whether our client would have bought the farm after Nkwinti’s pronouncement.

Can one imagine anyone being interested in buying a farm in the knowledge that 50 percent of the asset he is getting will not belong to him? And imagine the funding complexities, the bureaucracy and the business broking involved in this proposed scheme.

But we turn to what is possibly a more fundamental issue. A statement has been made that clearly has profoundly negative investor repercussions.

It’s already out there, incorporated in the analyses of local and international investment advisers, adding to the risk of doing business in South Africa. Yet we understand that this policy proposal does not enjoy the backing of the ANC or the government. It is Nkwinti’s and his advisers’ statement – which is not the way it should be.

Notwithstanding the fact that South Africa has a presidential system, it has a cabinet and parliamentary system. Although the constitution does not mention collective responsibility, one of the conventions of cabinet government, and some describe it as the cornerstone, is collective responsibility. Cabinet government is an intensely collective form of government.

Ministers are assumed to discuss policy, consider options and jointly take responsibility for all decisions under the convention of collective responsibility. Once the cabinet reaches a decision, all ministers are required to support that decision and defend it in public. This applies whether or not a minister was present when the decision was taken and regardless of their personal view on the merits.

Nkwinti’s proposal did not go before the cabinet, where my bet is that it would certainly have been challenged. There would have been objections by somebody, in all probability Deputy President Cyril Ramaphosa, because he is head of the National Development Plan (NDP) and would have been failing in his duty were he not to make the point that chapter 6 of the NDP deals comprehensively and thoughtfully with this specific issue. All ministers are not only expected to know the NDP but also to support because it is cabinet policy.

This is not the first time that the country is prejudiced in this way. Trade and Industry Minister Rob Davies’ quixotic bill requiring every business in South Africa to be registered with the municipality in which it is situated, is a case in point. It never went before cabinet.

Recently, the Minister of Tourism, Derek Hanekom, has publicly complained that the new visa regulations of the Home Affairs Minister, Malusi Gigaba, will cause serious damage to tourism - never mind already having done serious harm to the Cape Town Film Studio.

Again, this didn’t go before cabinet.

And we ask, as we have done so often before, where is the leadership?

* Denis Worrall is the chairman of Omega Investment Research, an investment advisory and strategic marketing consultancy. He has been an MP, chairman of the constitutional committee of the presidents’ council, and ambassador to Australia and to the UK.


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