Business Day (Johannesburg)

9 October 2009

South Africa: Expropriation Bill Revived As Land Reform Drive Stalls

Johannesburg — THE government planned to revive a bill to make it easier to seize land from white farmers who refused to sell their properties for redistribution to blacks, a senior land reform official said at an agricultural congress in Johannesburg yesterday.

The controversial expropriation bill was shelved a year ago after critics warned it was unconstitutional as it would give officials rather than the courts the power to decide on compensation.

While the move is an attempt by the government to speed up land reform, for which it ran out of money this year, it might not achieve this as cases could drag on in court for years.

But officials could be banking on the threat of expropriation to put farmers off holding out for more than market-related prices.

Land reform director-general Thozi Gwanya told Business Day his minister, Gugile Nkwinti, and Public Works Minister Geoff Doidge were considering input from a government task team set up to amend the bill and resubmit it to Parliament.

"The two ministers are in the process of reviving discussion of the bill," he said on the sidelines of AgriSA's annual congress yesterday. This would include public hearings in Parliament, he said.

The bill was to enable the state to expropriate farms in the public interest, including for land reform. It was to replace legislation that catered only for expropriation for public purposes, such as building roads. It would also make it easier to pay farmers less than market value, and was expected to help the state buy land more cheaply amid huge budget shortfalls.

Gwanya declined to be drawn on whether officials would still have the power to determine compensation. "All these issues are still under discussion."

His department admitted this year it would not meet the target of transferring 30% of white farmland to blacks by 2014 because it had run out of money and was concerned about declining production on redistributed farms.

Only 5% had been transferred to date.

Gwanya said at the congress the state's decision to revive the bill was in response to mounting calls "to review the willing buyer, willing seller model and investigate less costly alternatives".

The Land Claims Commission, which processes claims by victims of forced removals, ran out of money this year while facing a R3bn shortfall for claims already approved. It needs another R16bn over the next three years at today's market prices, but has been allocated only R5,2bn.

"We have been paying very high prices for land precisely because we are paying for the emotional value, not market value. Clearly the state cannot afford this," said Gwanya.

Property law expert Gerrit Grobler said at the congress the government was naive to think it could acquire 30% of white-owned farms from willing sellers at market value.

"If their farms aren't on the market and government wants to buy, farmers will inflate prices. We know of cases where farms were sold at three or four times their market value. I say expropriate, or pay through your nose," he said.

But he cautioned that the courts -- and not officials -- had to decide on just and equitable compensation, including for emotional distress and loss of future earnings. "No democracy in the world allows officials to decide compensation."

AgriSA spokesman Theo de Jager conceded that the government had "paid too much for some farms", but said many had been paid as much as 50% below market value. "We expect to take this issue to the Sadc tribunal."

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