The elections are around the corner and there is a general consensus that some kind of land reform is important. However, South Africans’ uncertainty about land expropriation without compensation will have to wait until after the election on 8 May to see whether the amendment to the constitution will be passed.
Land reform policy in South Africa is based on three pillars: restitution, redistribution and tenure reform.
The issue of radical land reform is dependent on the amendment of Section 25 of the Constitution to allow for expropriation of land without compensation. “The expropriation bill won’t be passed before the election because the government is following a legal route.
“It can also be seen as the ANC taking charge of the discourse started by the EFF,” says Dr Donna Hornby from the Institute for Poverty, Land and Agrarian Studies (PLAAS) at University of the Western Cape.
Hornby says that land reform has not delivered on a range of indicators that most of the policy drafters in 1994/1995 expected to have done: “not on the speed of land reform, not on the transfer of land from whites to blacks and not on productivity and improvement of lives”.
“South Africans’ understanding of what land reform is tends to resonate either through their fears on the one hand or their desires on the other, without ever understanding what the policy means itself,” says Hornby.
Nolundi Luwaya, director of Land and Accountability Research Centre at the University of Cape Town, says “South Africans do not have a full picture of what our land reform program and process looks like.”
“As a result, it makes it difficult for them to make an informed decision in terms of land reform at the polls, it becomes an unfair competition because anything the EFF and DA put forward is all speculative, as it hasn’t ever been tried or tested.”
According to Constance Mogale, director of Land Action Movement of South Africa, an organisation fighting for land rights, “The affected communities understand the issue of land because they are the ones who bear the brunt of poverty and inequality as a result of landlessness but they have a lesser understanding of the real causes of their fate.”
Agri-businesses and farmers are uncertain about what will happend after the elections.PHOTO:Dominique Jeftha
“Not only the general public struggle to grapple with the issue but also businesses and farmers,” says Hornby.
Both Hornby and Mogale are in agreement when it comes to whether or not agribusinesses and farmers should be worried about expropriation without compensation. “The constitution provided for expropriation since 1994 to date. Has big business suffered any losses or been prejudiced by the slow pace of land reform?” asks Mogale.
“The state has favoured market-led reforms thus far so it’s disingenuous to imply that agribusiness and commercial farmers are the real victims of land reform when in fact they appear to have been the biggest beneficiaries,” says Mogale.
Hornby says that businesses and commercial farmers are misreading it and they misread it intentionally.
“I engage with many farmers and some agricultural organisations and there are a lot of views out there and somehow the view that gets put out there as the dominant view is a very narrow interpretation.”
Wandile Sihlobo, an agricultural economist at the Agricultural Business Chamber of South Africa (Agbiz) and Johann Kirsten, Professor in the Department of Agricultural Economics at Stellenbosch University oppose the view that agri-businesses and farmers do not and will not suffer because of expropriation without compensation.
Sihlobo and Kirsten say: “In terms of Section 8 of the current Expropriation Act, an expropriation will cancel a mortgage bond, but not the debt. Simply put, if the land is expropriated, the owner still owes the bank, but it becomes a personal loan with higher interest.”
“Considering these components, the question then becomes, should a property owner continue paying their loan when they no longer own the property or a component thereof.
“Furthermore, should financial institutions simply write off their assets on their balance sheet?” asks Sihlobo and Kirsten.
They further add,“The blanket approach toward expropriation of land without compensation (as the EFF put it forward) could therefore likely trigger a major devaluation of financial institutions’ assets, and ultimately their balance sheets”.
“The negative consequences of expropriation without compensation could be rather far-reaching and would not produce any value to potential beneficiaries of the process anyway, but it does not mean we should not urgently deal with the inequality in land ownership,” says Sihlobo and Kirsten.
Many South Africans still do not have access to land. PHOTO: Dominique Jeftha
When it comes to who should be the beneficiaries, Luwaya says that it depends on which program is used.
“In terms of restitution, it is community beneficiaries, the people who were removed and who did have land taken from them that must be the beneficiaries.
“In the redistribution project, beneficiaries should be the small scale farmers and people should be given the adequate support and access to state resources that enable them to sustainably benefit from redistribution,” says Luwaya.
According to Hornby, “People on farms who do not own it, particularly those farm dwellers who have earned part of their living from farming and that know how to farm and with support they could be really productive beneficiaries, their lives would improve and they would be able to make a contribution to the economy.”
“I don’t think land expropriation without compensation is the key to suddenly solve all our issues with the land reform program, it is a quick fix and if hastily implemented it can do more damage than good,” says Luwaya.