Presidential land reform panel’s report is fundamentally coercive - Daily Maverick

Nov 25, 2019
25 November 2019 - The IRR’s warnings against the panel’s “130-page formula to destroy the economy” are still more salient now that the National Treasury’s October mini-budget has put the 2019 growth rate at 0.5% of GDP, the budget deficit at more than 6%, and the ratio of public debt to GDP at 60% already – and it’s set to climb to 71% within a scant three years.

Anthea Jeffery

In ‘Five months and counting’ (Daily Maverick, 22 November 2019), Dr Rosalie Kingwill brushes over the many contentious issues in the June 2019 report of the Presidential Advisory Panel on Land Reform and Agriculture. These issues extend far beyond the panel’s recommendations on expropriation without compensation, which are also far from “constructively pragmatic”, as Dr Kingwill claims.

The report from the Presidential Advisory Panel on Land Reform and Agriculture is correct to caution that the “unconditional” and “wholescale” (sic) use of expropriation without compensation will “collapse the core underlying values of our Constitution”. But it nevertheless urges that Section 25 of the Constitution should be amended to allow expropriation without compensation. This contradicts the recommendation of the High-Level Panel of Parliament, which (as Dr Kingwill acknowledges), had far more capacity to identify the real barriers to successful land reform.

The presidential panel goes on to suggest how Section 25 should be amended, depicting its proposed new clause as limited in scope and essentially benign. But its wording would open the way for the government to take custodianship of all land through the simple, expedient of enacting by a 51% majority, a new statute providing for this.

In addition, the panel puts forward an open (ie, expandable) list of 10 instances in which compensation on expropriation should be “nil”. It also seeks a new compensation policy under which compensation on expropriation would range from “zero” to “minimal” to “substantial” to “market-related” – but would rarely, if ever, be set at market value.

The panel further wants all municipalities, both rural and urban, to be able to identify land that is “well-located” and “appropriately serviced” and thus suitable for redistribution. The owners of such land, it says, should then “offer their land as donations, or enter into negotiations with the state, failing which the state may proceed to expropriate”.

This approach is fundamentally coercive. Coupled with the compensation policy, the panel recommends it will guarantee that expropriation becomes the favoured means of land acquisition. It will also make it difficult for banks to accept land as collateral for loans, as virtually any land could be targeted for redistribution in this way and then expropriated at well below market value.

The panel favours land ceilings on farms, so that “surplus” land can be “compulsorily acquired” by the state or “punitively taxed”. It also wants to change the 1913 cut-off date for land restitution claims and to introduce a moratorium on all farm evictions – irrespective of how merited a court-sanctioned eviction might be.

The report also seeks “an end to the criminalisation of unlawful occupations by the poor” and a “re-orientation” of the police role in evictions. It states that “unlawful occupation is not, in and of itself a crime” and suggests that “the authorities”, including the Red Ants, should in future start “protecting the rights of … occupiers”.

Though the panel does not spell this out, the implication is that trespass laws should be repealed, land invasions should become lawful and the role of the Red Ants should be to protect land invaders, rather than evict them. But this would signal the collapse of the rule of law. Land would then increasingly pass to those most able and willing to use violence to expand their holdings. Ordinary people, and especially the poor, would suffer the most in this situation.

As regards agrarian reform, the panel recognises that “commercial operations on privately owned land are the most successful” in global experience. This, it says, is also “the model of the large-scale commercial farming sector in South Africa, which has been a high performing sector in the past 20 years”, despite the removal of the subsidies that previously helped support it.

The panel nevertheless goes on to recommend that redistributed land be allocated primarily to “farm dwellers, labour tenants, and subsistence farmers”, as well as “smallholder farmers producing for local markets”. To reinforce the primacy of small-scale production over current commercial production, it recommends that water rights should be “re-allocated to smallholder farmers”, and queries why the water sector, which is already “constitutionally enabled to expropriate”, has taken so “very little action” of this kind.

The panel assumes that the government has the financial and technical capacity to “support household and smallholder farmers”, even though it has failed to do so in the past. It also brushes over the key question of whether inexperienced smallholder farmers will be able to feed an expanding and urbanising population, or maintain the country’s valuable agricultural exports.

Dr Kingwill claims the Institute of Race Relations (IRR), is wrong to warn against the ANC’s national democratic revolution, which overtly aims to take South Africa by incremental steps from a capitalist economy to a socialist (and ultimately a communist) future.

Yet both the expropriation without compensation demand – and many of the panel’s recommendations – can be traced to at least as far back as 1955, when the Freedom Charter called for the “re-division of the land among those who work it”, and for “the state to help the peasants … to save the soil and assist the tillers”.

Both expropriation without compensation and the panel’s findings are also very much in keeping with ANC resolutions taken at the Morogoro conference in 1969, calling for farmers to be “prevented from holding land in excess of a given area” and urging that much of the country’s land be confiscated and “divided among small farmers and peasants”.

When the panel’s report was released in July 2019, the IRR warned that many of its recommendations “risked triggering devastating consequences for investment and economic growth”. They were “economically suicidal”, and especially so when “the South African economy was in dire straits” and “significant capital and skills exodus was occurring”.

The IRR’s warnings against the panel’s “130-page formula to destroy the economy” are still more salient now that the National Treasury’s October mini-budget has put the 2019 growth rate at 0.5% of GDP, the budget deficit at more than 6%, and the ratio of public debt to GDP at 60% already – and it’s set to climb to 71% within a scant three years.

Dr Anthea Jeffery is head of policy research at the Institute of Race Relations.

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