A legal solution to land

The Constitutional Property Clause is sufficient to achieve land reform

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In a statement released earlier this year, Agri SA took issue with the ruling part’s announcement at its National Conference in December 2017 that it was going to adopt expropriation without compensation in order to accelerate land reform, and proposed a constitutional approach instead.

According to Agri SA, “The land question in South Africa is generally known to be a highly sensitive matter. Characterised by a history of dispossessions, discrimination and oppression, discussions and debates around the land issue have to be approached with much caution, striking a balance between the need for land reform and equitable access to land, and the recognition and protection of existing land rights. Public perception that not enough has been done to achieve land reform under the current legal and constitutional prescripts fuels tensions even further. With the current high unemployment and poverty rates, access to land is seen as a solution to these and many other socio-economic challenges.”

Of course, newly elected ANC President Cyril Ramaphosa also emphasised that “expropriation without compensation will be implemented in a manner that does not threaten food security or damage the economy” but did not spell out how this would be achieved. Agri SA objected: “Implementation of this resolution will require amending section 25 of the Constitution. The procedure for such an amendment is set out in section 74 of the Constitution. At present, we know that the ANC resolution enjoys the support of at least two other political parties. Although this may be the case, what may seem to make sense politically, does not necessarily always make sense economically, legally or constitutionally. Whilst there can be general agreement that the wheels of transformation in as far as land reform is concerned have been turning slow, the proposed resolution cannot be a reasonable solution.”

Agri SA further asserted that “the property clause in its current provisions is sufficient to achieve sustainable land reform.”

We asked Agri SA’s Omri van Zyl to elaborate on these findings.

Is the property clause really sufficient to achieve sustainable land reform?

Agri SA is of the view that the property clause is a finely balanced clause that protects existing property rights, but also gives a strong mandate for the three programmes of land reform, namely restitution, redistribution and tenure reform. In terms of the clause, Government has the power to expropriate land for land reform purposes. Land may, however, only be expropriated with just and equitable compensation. This is in line with international best practice. The authoritative report by the High-Level Panel on Assessment of Key Legislation and Acceleration of Fundamental Change, headed by former President Kgalema Mothlante, released in November last year, found amongst other things: “The Panel is reporting at a time that some are proposing that the Constitution be amended to allow for expropriation without compensation to address the slow and ineffective pace of land reform. This is at a time when the budget for land reform is at an all-time low of less than 0.4% of the national budget, with less than 0.1% set aside for land redistribution. Moreover, those who do receive redistribution land are made tenants of the state, rather than owners of the land. Experts advise that the need to pay compensation has not been the most serious constraint on land reform in South Africa to date – other constraints, including increasing evidence of corruption by officials, the diversion of the land reform budget to elites, lack of political will, and lack of training and capacity have proved more serious stumbling blocks to land reform.“

The report also quoted Albie Sachs as follows: “Far from being a barrier to radical land redistribution, the Constitution in fact requires and facilitates extensive and progressive programmes of land reform. It provides for constitutional and judicial control to ensure equitable access and prevent abuse. It contains no willing seller, willing buyer principle, the application of which could make expropriation unaffordable”.

Agri SA supports this finding, as our experience is very much that the major stumbling blocks to land reform are poor implementation, inadequate budgeting and corruption.

Could expropriation without compensation backfire and actually slow down the process of land reform?

It needs to be recognised that there are different land needs – land is required for housing, for subsistence farming, for small farming, for commercial farming, for industry, nature conservation and many other needs. Not all land reform is for farming purposes. Land reform should be demand-driven rather than supply driven. Housing and smallholder needs can best be catered for close to existing farms and cities. Commercial farming land should be retained as far as possible for farming purposes as we have little good agricultural land in South Africa – particular land for cultivation. The correct kind of financing instruments and subsidised interest rates can create opportunities for many more people to get access to land.

Expropriation without compensation will backfire. Not only will it lead to a lot of litigation and resistance from current landowners, but it will impact our economy and food security in a negative way, having the biggest impact on poor people as food prices will rise and peoples’ per capita income will likely decline. The market can be very effective is speeding up redistribution if the right financing instruments are available.

There have been very few cases before our courts that required them to interpret and give content to the requirement of just and equitable compensation in our Constitution. The more cases that come before the court, the more clarity we will get on how section 25 should be understood. This will bring greater legal certainty and assist in future policy development.

Finally, there needs to be a shift from settlement models which predominantly focus on land acquisition towards focusing on post settlement support as well. Cases of farms which were productive pre-settlement to being unproductive and inactive currently is reflective of the fact that acquisition and access to land are not the major challenge, but support is. Therefore, expropriation without compensation may be seen as a viable option to expedite land reform and equitable access to land; without effective post settlement support, it will plunge the country into food insecurity.

What are the minimum forms of post-settlement support required for redistributed land to be productive?

What is required is access to affordable production finance, training – not only in practical farming, but in financial management, access to markets and the value chain. Extension services which is commodity specific.

Government has limited capacity to do this. There is a lot of capacity within the private sector, but the funding is inadequate. Much more can be done if more funding was available.

Functional public-private partnerships is the answer.

Affordable insurance for emerging farmers against natural disasters is also needed.

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