South African Institute of Race Relations NPC
Submission to the Department of Rural Development and Land Reform
regarding the
Restitution of Land Rights Amendment Bill of 2013
Johannesburg, 21st June 2013
SYNOPSIS
The South African Institute of Race Relations (the Institute) has always condemned the race discrimination which unjustly restricted African land ownership prior to 1991 and underpinned the forced removal some 2m black people to the so-called ‘homelands’. However, remedial measures serve little purpose unless they are appropriate and effective.
Land restitution to date has met neither of these key criteria. The process has been dogged by a host of problems, including the inflation of claims and the lodging of false ones, coupled with corruption and ineptitude on the part of officials.
More seriously still, between 50% and 90% of land reform projects have failed, formerly productive farms ceasing to produce any marketable surplus. The Government has thus spent billions in taxpayers’ money to take between 3.5m and 6.3m hectares of farm land out of production, costing thousands of jobs and billions more in lost revenue.
Reasons for the failure of transferred farms range from a lack of agricultural, managerial and financial skills among land reform beneficiaries, to soaring input costs, limited markets, inadequate infrastructure, high crime rates, and the difficulty of raising working capital. Attempts at recapitalisation have thus borne little fruit and are unlikely to succeed unless the agricultural extension officer system is restored and all other problems are overcome.
Until this has been done, more land transfers under the Restitution of Land Rights Amendment Bill of 2013 (the Restitution Bill) are likely to result in still more ‘assets dying in the hands of the poor’, as the then director general of land affairs, Tozi Gwanya, warned in 2007. This will benefit neither apartheid’s victims nor the country as a whole.
There is also little demand for land to farm. Some claim that 45% of South Africans want farming land, but this is belied by the outcome of the restitution process to date. As Gugile Nkwinti, minister of rural development and land reform, acknowledged in April 2013, almost all land claimants (92%), among those whose claims have been resolved, have opted for cash instead. Said Mr Nkwinti: ‘We thought everybody when they got a chance to get land, they would jump for it. Now only 5 856 have opted for land restoration.’ People wanted money because of poverty and unemployment, but they had also become ‘urbanised’ and ‘de-culturised’ in terms of tilling land. ‘We no longer have a peasantry; we have wage earners now.’
Re-opening land claims could nevertheless generate thousands of new claims, some of which may be fraudulent, by beneficiaries who may well be seeking cash instead of land. It also means that land which has already been transferred to black South Africans could be claimed again, stirring up ‘a hornet’s nest’ (as Mr Nkwinti’s department in fact foresees).
The lodging of thousands of new claims will cast doubt on the property rights of both commercial farmers and the 1.9m beneficiaries to whom land has already been transferred. This uncertainty is also likely to persist for at least two decades: for an initial five years (until the new claims deadline expires in December 2018) and thereafter, based on experience with the current restitution process, for at least another 15 years.
Where beneficiaries opt for land rather than cash, as Mr Nkwinti is already urging them to do, transferred farms are likely to cease production, terminating many existing farming jobs and undermining South Africa’s food security. The Government may believe it can import whatever food is needed, but a falling rand will push up costs while few nations have food surpluses to sell. The impact of rising food inflation will also fall most heavily upon the rural poor.
Re-opening the land claims process will put increased pressure on the fiscus at a time when the Government is battling to reduce its budget deficit. It will also make it harder – and still more time-consuming – for Mr Nkwinti’s department to deal with its backlog of existing claims.
In addition, re-opening the land claims process could also result in much more land being targeted for expropriation under the Expropriation Bill of 2013 and at values decided by a state official (the new ‘valuer general’) under the Property Valuation Bill of 2013. Since these Bills apply to property of all kinds, this will unsettle the property rights of all South Africans.
In generating prolonged uncertainty over title to land, the Restitution Bill conflicts with the National Development Plan (NDP), which emphasises the need for tenure security for both commercial farmers and emergent ones. Yet the NDP is supposed to be the Government’s ‘overriding policy blueprint’ from now until 2030, and President Jacob Zuma has recently called on the ruling party and the nation to rally behind the plan.
The conflict between the Restitution Bill and the NDP is reason enough to withdraw the Bill in its entirety. Better and more effective means can and should be found to overcome historical injustices and meet the NDP’s goals of increased growth, employment, and prosperity.
South African Institute of Race Relations NPC 21st June 2013
