Land reform process responsible for lack of confidence

Purchase said the uncertainty around the land reform process remained a primary investment inhibitor in the agriculture sector and needed to be resolved as fairly and quickly as possible. With this in mind, he went on to give an update on the implementation of the new Green Paper on land reform. He pointed out the Green Paper was drafted with the idea of creating a better co-ordinated land reform process, but time would tell whether a new approach would be more successful.

Land reform was necessary because the current situation of land ownership distribution “is not acceptable,” said Purchase.
Until now, though, land reform has not been implemented with much success – hence the changes introduced by the Green Paper. Minister of rural development and land reform Gugile Nkwinti has reassured Agbiz that “government will continue to carry out land reform and restitution within the ambit of the Constitution,” said Purchase.

Despite this, Agbiz and other representatives of agribusiness and organised agriculture remain strongly opposed to some of the suggestions in the Green Paper he said. “The clause referring to limited extent, which will impose caps on how much land a certain business entity will be allowed to hold, for example, poses a major threat to food security and, if implemented, will be a drastic intervention that could create havoc in the land market.”

According to Purchase, the policy relating to the Valuer-General (VG) had been finalised and the Department of Rural Development and Land Reform would soon establish the office of the VG as an autonomous statutory body and final authority on land and property valuation. “Representatives of agribusiness and organised agriculture played a key role in the negotiations around the office of the VG because we believe that the valuation of land directly affects the balance sheet of a farming business,” said Purchase.

“With the establishment of the office of the VG market value for agricultural land acquired for land reform or restitution purposes will no longer necessarily determine the purchase value, it will only be one consideration.” Purchase said that, on paper, the new policy seemed to be fair and in line with the Constitution, but – again – it remained to be seen whether or not implementation was fair.

Referring to concerns about the fair valuation of land in the future, Willie du Plessis, head of agribusiness at Standard Bank, said farming debt in South Africa amounted to R86 billion, most of which was in the form of long-term bond loans. “That’s why it’s vitally important that a new approach to land reform, especially in terms of the office of the VG, should not cause the devaluation of agricultural land – this would spell disaster for farmers and banks,” said Du Plessis.

During his state of the nation address earlier this year President Jacob Zuma announced government’s plans to speed up land reform and re-open claims to accommodate, among others, pre-June 1913 claims by the descendants of the Khoi and San. Purchase said if land claims were re-opened the process needed to be controlled according to strict guidelines, because no written records relating to land owned by the San and Khoi existed.

He also pointed out that it had been suggested that there be no cut-off date for the filing of land claims. “We cannot allow the filing of new land claims to continue indefinitely and have proposed that the deadline be set for within two or three years,” said Purchase. “The problem is we already have cases where there are two or three claims on a single parcel of land and if we open land claims up indefinitely there exists a good chance that multiple claims will be lodged for more parcels of land, further complicating the land reform process.”