Rates valuations highlight administrative flaws in Limpopo

In Tzaneen, Polokwane and Lephalale farmers and municipalities have reached agreement on the way in which the Municipal Property Rates Act will be implemented. In the agreement takes the form of an approved policy document detailing how tax will be struct

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In Tzaneen, Polokwane and Lephalale farmers and municipalities have reached agreement on the way in which the Municipal Property Rates Act will be implemented. In the agreement takes the form of an approved policy document detailing how tax will be structured and levied.

But for other districts in Limpopo the picture is less rosy. Farmers in the Makopane district say the municipal council ignored their input and valued agricultural land at R2 000/ha, while land on the open market is hard to come by at less than R6 000/ha.

Both Agri SA and TAU SA leaders in the Lephalale district warned their members against such a situation. “Landowners must remember that the valuations roll can have a huge impact on other transactions such as insurance and purchases by the state,” said Jannie Pretorius of the Ellisras District Agricultural Union.

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His Agri SA counterpart at district level, Francois van den Bergh, also cited government threats to do away with the willing-buyer, willing-seller model and the new expropriation bill as factors that make correct valuation necessary.
But farmers in the Louis Trichardt area have taken a different approach.

They have accepted valuations below market price, but drafted a legal letter to the municipality indicating that the valuation would only be valid for tax purposes.
The letter reads that it is confirmed that the valuation roll is for purposes of property rates only and the valuation roll is accepted under protest, without conceding to or admitting that an administratively fair and just procedure had been followed in the implementation of the Local Government Municipal Property Rates Act 6 of 2004.

Tzaneen farmers have negotiated certain benefits for the rural community to ensure they get sufficient value for their tax money. The municipality has agreed in principle to an arrangement whereby third of all low-cost housing developed
the local authority will be made available to farmworkers and farm dwellers.

The municipality is also to become involved invasive plant control, and provide fire-fighting equipment for farmers in the hile farmers in Polokwane are happy with the agreement they’ve reached with the municipality, TAU SA north president Dries Joubert expressed concern over vast differences in valuations reflected
different municipalities in the province, saying that some farmers may have to consider withholding tax payments until a more acceptable administrative system was in place. – Jasper Raats

Agricultural skills shortages: a looming national crisis

The National Scarce Skill for 2007 lists a critical shortage of over 900 000 skilled workers in the economy. Nearly two-thirds are in the agricultural sector. The list estimates there is a shortage of over 200 000 farm managers.AgriVAS, a horticulture and agribusiness recruitment specialist based in Pietermaritzburg, reported “huge difficulty” finding skilled recruits to fill posts. “We find a high turnover of skilled managers – people with diplomas or university degrees,” said AgriVAS recruitment specialist Joe Rawlins. “A lot of staff are poached by corporate companies such as banks before they even settle into new jobs. Black guys in particular are in huge demand.”

Rawlins said there is a shortage of graduates of BSc Agri-Economics, or technical degrees such as BSc Horticulture and BSc Crop Production. “There is a wealth of agricultural or technical college graduates with diplomas or higher certificates in agriculture, but there aren’t enough opportunities for them at lower-management level to gain sufficient experience to move on to senior-management posts. Their salary expectations are also too high.” Dr Stuart Ferrer, agricultural economics lecturer at the School of Agricultural Sciences and Agribusiness (SASA) at the University of KZN, said “It would be fair to describe the increasing scarcity of skills and capacity in the agricultural sector as a looming national crisis”.

Ferrer blamed several factors. “Agrarian reform such as the land reform process has created new skills vacancies, for example for professionals who can devise suitable business structures and formulate business plans for new farm businesses, as well as mentors for land reform beneficiaries,” he explained.
Ferrer said students leaving school are often poorly informed about the range of professions within the agricultural sector.

“Many are not aware that only a small proportion of agricultural science graduates pursue careers as farmers or farm managers,” he said. “At university level, agricultural training programmes are competing for a relatively small proportion of school leavers who meet university entrance requirements. “Worldwide the agricultural sector has been characterised by a trend of declining inflation-adjusted commodity prices for the past few decades. This has reduced the relative attractiveness of careers in agriculture,” added Ferrer.

Another contributing factor is the perception that the commercial agricultural sector carries high levels of policy risk. “Farmers are concerned about legislative changes that may impact on land rights, water rights, property taxes, and employment of farm labour,” Ferrer explained. “This discourages investment in agriculture, including investment in human capital.”

Addressing the skills shortage in agriculture is important for both economic efficiency and equity. Ferrer said agricultural and rural development specialists have a critical role to play in successful agrarian reform in SA and southern Africa, helping to promote the competitiveness of the commercial agricultural sector. – Robyn Joubert