‘It doesn’t do much for new farmers’

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File photo: Mujahid Safodien

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Land redistribution versus the fundamental building block of ownership of property are crucial dichotomies within the South African land reform discussion.

The general consensus on the ANC’s position at its policy conference in Midrand last week was embraced with optimism by some experts, sprinkled with a bit of uncertainty by others due to the complex nature of the debate.

The ANC proposed an intriguing paradigm shift to the land reform process where it resolved to ditch the willing- buyer, willing-seller model for a more robust constitutional approach that entails “expropriation with fair compensation”.

The ANC stuck to constitutional guidelines, turning to Section 25 of the constitution, which allows for expropriation to take place within the confines of the law and in the interest of the public. Expropriation will be subject to compensation where the value of the property expropriated may be determined by both parties or a court of law.

The constitution states that the “amount of compensation and the time and manner of payment must be just and equitable, reflecting a balance between the public interest and the interests of those affected”.

This could be a decisive move to silence the rumblings of land grabs and expropriation without compensation that has proved disastrous in Zimbabwe.

It appears as though in reaching this compromise, the ruling party used Zimbabwe style land grabs as a worst case scenario and realised that its catalyst – the willing-buyer, willing-seller approach – adopted at the Lancaster House Agreement, would not have worked in the long run.

Gugile Nkwinti, the Minister of Rural Development and Land Reform, said that government intervention was not appropriate in a land redistribution programme based on a willing-buyer, willing-seller approach because when the government entered the fray, it caused a disconnection in the market that resulted in land being inappropriately priced.

The next big question in the land reform debate is quantifying land ownership in the country to establish how far the land reform process has come since the advent of majority rule in 1994. However, the implications of ditching the willing-buyer, willing-seller model for expropriation with fair compensation are still being explored.

Nick Vink, a professor of agricultural economics at the University of Stellenbosch, believes that there will not be massive implications because the previous model was not working. He said the policy resolutions, which were also welcomed by the ANC Youth League, were reassuring as these had moved away from nationalisation, which would not have worked.

“It is reassuring for existing farmers, but it doesn’t do much for new farmers because they still don’t have access to ownership of land,” he said.

The draft Green Paper on land reform produced late last year came in for criticism when it was gazetted. Among the problems cited were a lack of clarity on property rights – as it proposed that emerging farmers would have to lease property instead of acquiring full ownership – and the proposal of a ceiling on how much land farmers could own.

Since its proposal, the government has engaged with many players in the agricultural sector, particularly in the formation of the National Reference Group earlier this year. The group includes traditional leadership representatives, organised agriculture and emerging farmers.

Interpreting the outcome of the conference, Vink believed that as soon as there was a perception in the department that the price they were paying for land was too high, they would invoke Section 25.

He added that the government had always had the power to expropriate land with fair compensation, which in this case translated as the market price of the property. He said it also meant that the government could invoke land reform as a matter of public interest, which the courts could also rule in favour of.

In addition, Vink believes that difficulties in the land reform process could be attributed to agricultural policy, which did not provide support to farmers. “The neglect of farmer support (particularly of smaller players) is fatal and it seems like there was no acknowledgment of this issue at the ANC policy conference,” he said.

In media reports last week, Frans Cronjé, the deputy chief executive of the South African Institute of Race Relations, appears to have downplayed the significance of land reform versus economic prosperity and poverty alleviation, as well as the significance of the agriculture’s contribution towards the mainstream economy.

He said more than 50 percent of commercial farms in the country made a turnover of less than R300 000, while 10 percent have a turnover of more than R2 million, making it “a relatively small and brittle industry”. He also claimed that “threatened expropriation could cause severe damage to (the commercial agricultural) sector and worsen poverty and raise unemployment rates”.

An official at the Department of Rural Development and Land Reform who spoke on condition of anonymity said one of the snags was that the land audit had not been concluded yet. The land audit was supposed to have been completed in June this year. However, the department decided that other departments, such as public works, and municipalities should also be involved in the audit. It was now projected to be completed in December.

“The land audit will tell us how much is in the hands of both the government and private sector,” he said.

He said that the government was looking at the current property value, as well as how the land was acquired historically, how much had been invested in the property over the years and how it had been used and maintained. - Business Report