What’s Really Happening With South Africa’s Farms
(Bloomberg) -- More than two decades after white-minority rule ended in South Africa, most of its profitable farms and estates are still owned by white people, and about 95 percent of the country’s wealth is in the hands of 10 percent of the population. The ruling African National Congress has vowed to step up wealth distribution, including constitutional changes to allow the government to expropriate land without paying for it. While the amendments are still a work in progress and the state hasn’t taken any property yet, the controversy has caught the attention of U.S. President Donald Trump, who tweeted that South Africa’s government “is now seizing the land of white farmers” and he’d asked Secretary of State Mike Pompeo to closely study the expropriation issue.
1. Why is land ownership an issue?
Under the rule of European colonists, South Africa’s Natives Land Act of 1913 stripped most black people of their right to own property, a policy reinforced decades later by the National Party and its system of apartheid, or apartness. A government land audit released in February showed that whites own 72 percent of the 37 million hectares of agricultural land. This tallies with the results of a separate audit released Nov. 1 by Agri Development Solutions and farm-lobby group Agri SA, which found non-whites own 27 percent of the nation’s farmland compared with 14 percent in 1994.
2. What’s been done until now?
Since 1994, when the ANC became the nation’s dominant post-apartheid party, the state has bought 4.9 million hectares -- about 4 percent of the country’s total territory -- for land redistribution, with about 3.4 million hectares assigned to new owners, according to former Land Reform Minister Gugile Nkwinti. Those who didn’t want the land allocated to them opted for money instead, with 11.6 billion rand ($807 million) paid out from 1994 until January 2017. A separate initiative known as the 50-50 program, meant to encourage joint black-white land management, uses government funds to buy half a farmer’s land and give it to laborers working there. It started in 2016.
3. What changes are on the table?
Parliament had proposed legislation that would allow the government to pay “just and equitable” compensation -- meaning, less than market prices -- for land it expropriates. Former President Jacob Zuma sent the bill back to lawmakers, saying it wouldn’t pass constitutional muster. Another bill, offered for public comment in March 2017 by the Department of Rural Development and Land Reform, would ban foreigners from buying agricultural land and require them instead to enter into long-term leases. It also calls for creating a commission that will set up a register of land ownership that will include race and the size of the holding. On Dec. 20, the ANC, under newly elected party President Cyril Ramaphosa, said expropriating land without compensation should be among mechanisms to effect land reform, as long as it doesn’t undermine the economy, agricultural production and food security. On July 31, the ANC said it would push for a proposed amendment to the constitution to make it clearer under which conditions land can be expropriated without compensation. That’s a shift from May, when it said the government should test the nation’s current laws because they may not need to change to allow for taking land without pay.
4. What is the party’s plan?
On Feb. 27, lawmakers agreed to the principle of land expropriation without compensation. Parliament’s Constitutional Review Committee will report back to lawmakers on required changes to section 25 of the constitution by the end of August, following nationwide public hearings. The committee has received about 450,000 written submissions, and an analysis of a third of those showed 59 percent of respondents favored leaving the constitution unchanged, while 40 percent wanted it to be amended.
5. Is taking land without compensation legal?
Not according to Agri SA, the biggest organization representing the country’s farmers, which argues that the constitution doesn’t provide for expropriation without “just and equitable” compensation and that deprivation of property without compensation “constitutes a very serious breach of an individual’s rights.” Ramaphosa says the constitution already allows the state to take land, but more clarity is needed on the circumstances under which this can be done. Seizing land could result in South Africa violating conditions needed to retain its preferential access to U.S. markets under the African Growth & Opportunity Act. The act grants 1,800 products from sub-Saharan Africa duty-free entry into the U.S. and the list of eligible countries is reviewed annually.
6. Why is the ANC doing this now?
The party was initially reticent to allow expropriation without paying. Under Zuma, it came under pressure as economic growth stagnated, and there were calls for his resignation from the opposition, civic leaders and senior officials in his own party, following a series of scandals and an unpopular cabinet reshuffle. He was forced to quit as the nation’s president in February and was replaced by Ramaphosa. The ANC shed support in 2016 local elections and Zuma’s reputation eroded the party’s standing to such an extent that it was at risk of losing its national majority in 2019 elections. The party needs policies that will gain traction among the nation’s poor, who make up the majority of the electorate.
7. What’s the outlook in parliament?
Two-thirds of lawmakers would have to assent to change the constitution. The ANC holds 62 percent of the seats. The Economic Freedom Fights, South Africa’s third-biggest political party which supports land seizures, has 6.4 percent.
The Reference Shelf
- ANC statement on adopting expropriation without compensation.
- Agri SA’s take on the constitutionality of expropriation without compensation.
- The Department of Rural Development and Land Reform’s 2017 land audit, released in February 2018, and its 2013 land audit.
- The University of the Western Cape’s Institute for Poverty, Land and Agrarian Studies overview of the distribution of land.
- Ramaphosa’s take on how expropriation should work.
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