President Thabo Mbeki's State of the Nation announcement of greater state involvement in land reform was met with mixed reaction on Friday.

It was received with caution by the country's largest farming organisation, while a leading land NGO said it hoped the announcement heralded a broader land reform package.

Mbeki told Parliament land reform and restitution were critical to transforming South African society, and the state would play "a more central role" in the land reform programme.

"The Minister of Agriculture and Land Affairs (Thoko Didiza) will, during 2006, review the willing-buyer, willing-seller policy," he said.

"(She will also) review land acquisition models and possible manipulation of land prices, and regulate conditions under which foreigners buy land.

"This will be done in line with international norms and practices," he said.

South Africa's largest farmers' union, Agri SA, said that the willing buyer, willing seller policy came as no surprise.

Agri SA president Lourie Bosman said the possibility had been mentioned at last year's land summit.

"It is important to Agri SA however that the market approach, as it is applied at present, should remain a determining factor in the pricing of land... irrespective of the state's objectives for acquiring land," he said in a statement.

Agri SA attached a "specific meaning" to Mbeki's remark, namely that the manipulation of land prices should receive attention.

"The manipulation of the market price of any asset is unacceptable in terms of generally applicable economic and legal norms.

"We therefore regard this remark as confirmation of Mr Mbeki's support for transparency and adherence to market principles where the state acquires land."

He said the way land reform was implemented, including regulations on foreign ownership of land and investment in agriculture, would certainly influence investor confidence as well as the contribution agriculture made to economic growth.

The Surplus People Project, an NGO involved in land reform, said it welcomed Mbeki's initiative because it was precisely what communities had asked for at last year's land summit.

"We welcome that and we will work with the state to resolve the land and agrarian question which is imperative to address poverty and underdevelopment," said SPP spokesperson Ricado Jacobs.

"However we are a bit disappointed that he didn't pronounce on the tenure aspect and the eviction of farm dwellers."

Democratic Alliance leader Tony Leon said Mbeki had sounded "some very curious warning shots" on property rights.

"The potential abandonment of the willing-seller, willing-buyer principle, I think, is a very dangerous move," Leon said.

"(This is) in the sense that at the same time we're quite commendably trying to drive up our growth rate, but we're sending out such a mixed signal, never mind foreign property buyers, even domestic people in this country, that we're left in a situation of wondering how does it all join up."

Freedom Front Plus leader Pieter Mulder said the prospect of a review of the willing buyer, willing seller principle sent a negative message to the agricultural community.

"Despite the government's assurances that they do not wish to repeat the Zimbabwe-land reform failures in South Africa, it will still be creating great uncertainty because there is no clarity on the way in which the government intends to implement it," he said.

Didiza said one of the concerns that was raised in the summit "was that government is the only buyer, and therefore the market is not balanced".

"There are so many sellers, but unfortunately in terms of where the demand is, government is the only one who has to procure on behalf of the beneficiaries. And that sometime has a distorting effect on how the market operates."

The Alliance of Land and Agrarian Reform Movements (Alarm) said it was pleased with the intention of government to review the willing-buyer, willing-seller principle.

It would strengthen the leading role of the state in land reform.

"These are in line with the demands made by landless communities at the Land and Agrarian Reform Summit last year," co-ordinator Mazibuko K Jara said in a statement.

Jara said Mbeki had not said enough about rural poverty and underdevelopment.

"The current Integrated and Sustainable Rural Development Strategy falls short in this regard," he said. - Sapa