The Good, Bad And Ugly In South Africa’s Land Seizure Without Compensation Plan
More than two decades after the end of apartheid in South Africa, the unequal distribution of land remains.
This is despite 23 years of government efforts to distribute land owned by white farmers. The whites own three-quarters of SA agricultural land, that is approximately 73 percent of the land. Partly to blame for the slow progress could be the fact that the government has set aside 0.3 percent of its budget for land reform purposes.
The unequal distribution of land has been so evident and for years, the blacks have raised their voice and asked the government to intervene in the matter.
The government has been attempted to do so and since the end of apartheid in 1994, it has employed the use of “willing-seller, willing-buyer” model.
It is estimated that as per now, only 10 percent of commercial farmland has been redistributed. The process has been slow prompting the government to revisit and rethink a different strategy.
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The government has now proposed an ambitious plan to tackle the issue. Most recently, an advisory report was released by a presidential panel of experts recommended that expropriation without compensation be applied under specific circumstances.
The controversial report proposed certain conditions for land expropriation without compensation. Some of the terms included:
⦁ Where the owner has abandoned the land
⦁ Where land is occupied or used by a labour tenant;
⦁ Where land is state-owned or owned by a state-owned entity;
⦁ Where land is held for speculative purposes; as well as
⦁ Where the market value of the land is equivalent to or less than the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land.
The report also suggested that land seizures without payment should apply in the following circumstances:
⦁ Hopelessly indebted land;
⦁ Land obtained through criminal activity;
⦁ Informal settlement areas;
⦁ Inner-city buildings with absentee landlords;
⦁ Land donations (as a form of EWC); and
⦁ Farm equity schemes.
Further to this, the report called for the speedy distribution of land that is government-owned and encouraged organizations like churches, commercial farmers to donate land voluntarily.
However, the aforementioned recommendations will only see the light of day if and when a two-thirds majority in the National Assembly and six out of nine provinces vote in favor of removing or amending section 25 of the Constitution.
Parliament is due to debate proposed changes to the land expropriation bill this October.
Since the publication of the report by the panel appointed by President Ramaphosa, the land issue has stirred a high-octane debate with different people airing their divergent opinions.
The debate has been so intense that the “Land expropriation without compensation” phrase was designated South Africa’s phrase of the year 2018 having been used 25 000 times in South African media.
The country termed as the most industrialized economy in Africa is in dire need of economic transformation, land expatriation could be a good thing since it will enable a more inclusive economic participation but the move could have more negative impacts on the already ailing economy.
Experts have argued that the move could seriously damage the agricultural sector’s competitive advantage and compromise national food security which ultimately leads to unemployment and poverty.
South Africa’s population is increasing rapidly and to sustain the growing population, more food has to be produced. By taking land owned by commercial farmers without compensation, food production, which is crucial, will be threatened. Eventually, food demand may exceed the supply which will mean that the government will rely on imports for survival.
Think tanks have argued that expropriation without compensation is a bigger threat to food production even compared to natural disasters like drought.
Currently, many farms which were previously productive lay bare due to unsuccessful land reform projects by state. And owing to the that over half of the land reform attempts initially failed, chances are that the latest strategy, if not properly tackled, may also not help in tackling the issue of land distribution.
Key to note also, the move may jeopardize farmers’ chance of getting loans from financial institutions. Banks count land as collateral when they are funding farmers and without confirmed land ownership, it is impossible for them to be given loans. The move thus will come as a big blow for farmers, who mostly rely on land ownership to access credits.
The agricultural sector is among the key sectors that keep South Africa’s economic engine running. It is estimated that some 8.5 million people are directly or indirectly dependent on agriculture for their employment and income. The sector is crucial more so because minor changes like production and prices have direct impacts on other sectors.
For an economy to record growth, the agricultural sector needs to be on the same line of growth because it is a key part of industrial development. For instance, China, now one of the world’s superpower, successfully moved close to 20 percent of its population out of poverty purely through agricultural development.
For South Africa to redeem its economy once more, agriculture ought to be a priority. The land seizure without compensation poses a threat to the agricultural sector which is already recording a decreased share in GDP.
Interestingly, South Africa’s move comes at a time when its fellow Southern African country is in the process of compensating commercial farmers for land that was seized close to 18 years ago. Zimbabwe is currently paying for taking private-owned land without compensation with its ailing economy.
Borrowing lessons from Zimbabwe’s case, land seizure without compensation does not exist in a quasi-capitalist economy.
In the event that the Cyril Ramaphosa-led state moves ahead to seize private property for free, some people will end up paying for it through the nose even if it is by losing a job, farm or the state could at the end lose money they could earn through agricultural exports.
On the flip side, the move could come as a huge sigh of relief for poor people who have not been able to own land. In the post-colonial world, land has been a measure of wealth especially in Africa. The landlessness has also contributed to poverty since the poor are not able to plant food for their consumption.
Featured Image Courtesy: Land Of Liquid
