26/02/2018 16:05 SAST | Updated 27/02/2018 08:03 SAST

Lay Of The Land: Expropriation Without Consideration

Will land expropriation without compensation address the injustices of the past or will it undermine the capital base of the agricultural sector?

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Residents of an informal settlement near Cape Town demonstrate against poor housing conditions.

The ANC's promise to roll out land expropriation without compensation is a contested issue in the public discourse, on one hand serving as a machine to address the injustices of the past and on the other, an arguably populist move called prematurely to rally voters.

The issue will once again be in the spotlight on Tuesday, when the EFF leads a motion on land expropriation without compensation in Parliament.

The party will bring a draft resolution to Parliament and argue for an ad-hoc committee to be set up by the National Assembly to expedite the process. The debate should centre on the current land-reform programme, which the party argues has been "fraught with difficulties" since its inception in 1994. The EFF will also argue that Section 25 of the Constitution makes it impossible for "those dispossessed of their land" to get justice.

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Members of political party Black First Land First (BLF) demonstrate in front of the offices of financial audit, tax and advisory company KPMG in Johannesburg, South Africa, on September 28, 2017.

But many don't believe land expropriation without compensation is the right move for South Africa and its economy. Some say the ANC's resolution – announced when it met at its national conference in December – is premature and not guided by fact or proper preparation.

The agricultural sector is also in two minds, with some organisations calling for more clarity before taking sides.

What the industry says

AgriSA president Dan Kriek said the agricultural sector is still as unclear "on what it all means and entails" as it was when the announcement was made two months ago.

"If President Cyril Ramaphosa is to take the sector and South Africans into his confidence, he must say exactly what government envisages this decision to be, and how they plan to implement it. As of yet, nobody can ensure that. This is creating massive uncertainty in the sector," he said.

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Demonstrators demand land during a march outside the opening session of the World Conference Against Racism (WCAR) in Durban.

"We at AgriSA were highly supportive of Ramaphosa's state of the nation address, but his one fault was not providing clarity on this issue... He simply keeps repeating the ANC's resolution at conference and names the caveats of the decision – that it must not affect the economy or food production – but we would like to engage with him on why these two concepts [land expropriation without compensation and a robust economy] do not engage with each other."

In a statement in response to HuffPost, the African Farmers' Association of South Africa (Afasa) said it "understands the frustration" that government and black farmers have as far as the land reform is concerned.

"Afasa believes that the land-reform process has been very slow, and transformation within this sector is also frustrated by this slow pace. Black farmers are at the receiving end of this slow pace of land reform and transformation within the sector. It cannot be that 24 years down the line, only around 11 percent of the targeted 30 percent of agricultural land is transferred to black farmers," Afasa said.

"Afasa also appreciates the fact that although this resolution was taken as a last resort, following the failure of the willing-buyer-willing-seller[principle] and a few other policies put in place to try to fast-track the land reform process, the ANC remains cognisant of the dangers of a reckless implementation of this resolution."

Agbiz said it fully acknowledges the need to fulfil the constitutional objective of enabling equitable access to land.

"This must, however, be done in a manner that does not endanger food security or economic prosperity, and enables land-reform beneficiaries to enter into a viable, sustainable and internationally competitive agricultural sector. Against this backdrop, the recent proposals to amend Section 25 of the Constitution to allow for expropriation without compensation seem misplaced. [This section] already makes provision for the expropriation of land in the public interest, subject to just and equitable compensation," Agbiz said.

"An amendment could endanger food security and economic prosperity, while the expansion of property rights can unlock the potential of the former homelands and prospective land-reform beneficiaries."

In a statement, Transvaal Agricultural Union South Africa president Louis Meintjes said land expropriation without compensation is theft.

"Given acknowledgement by government that the productive utilisation of land which has been transferred in terms of the restitution process to beneficiaries, as well as providing aid comprising billions of rands to people who cannot or don't want to farm, has failed miserably, this new statement does not bode well for South Africa," he said.

"Where in the world has expropriation without compensation coupled to the waste of agricultural land, resulted in foreign confidence, economic growth and increased food production? No ideology, supported by superficial and populistic promises which are not supportive of sound economic principles, will ensure improvement... [Ramaphosa's] promise to expropriate land without compensation, sows the seed for revolution. Expropriation without compensation is theft."

The contesting land audits

The highly anticipated land audit report from the department of rural development and land reform found that black South Africans, who make up 79 percent of the population, only own 1.2 percent of the total rural land and 7 percent of formal property in cities.

But the report, which was released last year, did not make findings on agricultural land and its distribution.

However, AgriSA, in its own land audit, found black citizens own 26.7 percent of agricultural ground and control more than 46 percent of South Africa's agricultural potential. The report found that white farmers' ownership of agricultural ground declined from 85.1 percent in 1994 to 73.3 percent in December 2016.

What the experts say

Dr Mbongiseni Buthelezi said government could have done more to address the land issue since 1994.

"Section 25 allows for a lot more to be done. They have not made use of the instruments available to them, and there was a lack of political will to put land redistribution in motion. This inertia can also be a result of certain lobby groups, who are very vocal whenever attempts at something drastic are made," Buthelezi said.

"Black rural South Africans are much in the same place as they were in apartheid. The state has not taken land redistribution seriously. On one hand, as a political statement, land expropriation without compensation has a lot of resonance. It is a useful populist move. But on the other hand, it is not practical. If we have not yet exhausted the instruments available to us, then it is a premature move."

In a statement on Monday, the Institute for Race Relations (IRR) said the EFF's expected resolution in Parliament "rests on a flawed diagnosis of the problems facing South Africa's land reform efforts, and proposes reckless and counterproductive responses".

"While the land-reform programme is not performing well, the figures it purports to draw from the land audit – 'black people own less than 2 percent of rural land and less that 7 percent of urban land' ('black' refers to African) – are incorrect. These numbers refer only to those properties that are registered and held by individual owners. The audit was unable to assign racial identity to around two-thirds of South African land, a substantial portion being state or 'state trust' land," the IRR said.

The institute maintained that there is little credible evidence that the obligation to pay compensation has been a significant obstacle.

This suggestion was rejected by government's own commission into the impact of transformative legislation, chaired by former president Kgalema Motlanthe. It noted that "other constraints, including increasing evidence of corruption by officials, the diversion of the land reform budget to elites, lack of political will, and lack of training and capacity have proved more serious stumbling blocks to land reform".

"Attacking Section 25 would undermine property rights across the board. All property would be vulnerable to an intrusive state: mines, factories, houses, artworks. The poor could be especially hard hit – there are numerous examples across the world of poor people with weak property rights being deprived of their holdings in the name of development," the IRR said.

"Expropriation without compensation – as officials in the banking industry have warned – will undermine the capital base of agriculture. The heightened risks are likely to make financial institutions exit the sector. Government cannot match these financing requirements."

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