Bill will short-change land reform

Barren outlook: Theo Boshoff argues that the draft Regulation of Agricultural Land Holdings Bill does more to punish existing landowners than it does to enable sustainable land reform. (Gustav Butlex)

Barren outlook: Theo Boshoff argues that the draft Regulation of Agricultural Land Holdings Bill does more to punish existing landowners than it does to enable sustainable land reform. (Gustav Butlex)

COMMENT

Land reform in South Africa is not a “nice to have”; it is a fundamental constitutional right that aims to bring about restorative justice and create economic opportunities for those who were historically excluded from that opportunity.

The needs of the people intended to benefit should be at the forefront of the solution but the latest policy proposals emanating from the department of rural development and land reform seem to negate this crucial component.

Interested persons have until May  17 to submit written comments on the Regulation of Agricultural Land Holdings Bill, which seeks to prohibit prospective ownership of agricultural land by foreigners and to limit the maximum amount of land that any person can own.

The Bill aims to “make land available for redistribution” by setting upper limits to the amount of land that different “categories” of farmers can own in any district. It means the state will determine how many hectares a large, medium or small farmer can own and will force owners to sell any amount of land that is above the limit (commonly called a “ceiling”), which will be given to land reform beneficiaries.

But when you start thinking about the practical consequences of this Bill, you realise it will leave land reform beneficiaries short-changed once more.

With the imposition of land ceilings, the department will end up with a patchwork of off-cuts from existing farms haphazardly spread across a region or district. As there is no indication of what the actual ceilings will be, it is impossible to tell how many landowners in an area will be forced to sell off pieces and what size they will be.

This way of selecting land seems archaic and does not take the needs of the beneficiary into consideration. There is no guarantee that the off-cuts will have suitable soil, access to water, access to roads or access to municipal services, which are all crucial factors should the beneficiary be an aspirant farmer.

Furthermore, although the ­“parent” property may be an economically viable unit, there is no guarantee that the land deemed surplus will be a viable unit on its own.

Because of a reliance on imported fertilizers and agrichemicals, coupled with a fluctuating currency, South African farmers often have higher input costs than international competitors and one way to remain competitive is to increase the scale of operations. Variable costs rise proportionately but fixed costs such as permanent labour and administration do not. So fixed costs can be spread over more production units in larger operations, making them still profitable when smaller operations might not be.

If the off-cuts produced by this Bill are relatively small, the beneficiaries will be expected to compete in a globalised economy but denied the opportunity to benefit from economies of scale, which could just be setting them up for failure.

The interests of beneficiaries might be better served if the funds for land reform were used to buy existing farming enterprises on the open market for wholesale transfer.

Money is always a problem but the government does budget nearly R2.5-billion a year for it from the fiscus and the amount could be considerably more if mechanisms are developed to source private sector capital.

Ultimately, the draft Bill does more to punish existing landowners than it does to enable sustainable land reform.

Considering that land reform is a constitutional right, the interests of the beneficiaries deserve to be placed at the centre of it all.

Theo Boshoff is the manager of legal intelligence at Agbiz

 

Comments

blog comments powered by Disqus

Client Media Releases

NWU School of Business and Governance hosts ORCA workshop
Preparations set for VUT Annual Open Day
Fintech: disintermediating the industry
Transport dept issues Moloto Development Corridor statement