South Africas Fin24.com news website, which has seen a copy of the green paper, reported last week that the document that will be made public once approved by President Jacob Zumas Cabinet blames the willing-buyer-willing-seller concept for the slow pace and increasing cost of land reform.
The green paper stresses that the current price of land makes governments aim of redistributing 30 percent of all agricultural farmland by 2014 an impossible task, Fin24 reported. Given that approximately 7 million hectares has been transferred to date, over 14 million hectares would need to be delivered over three years…
In other words, delivery would need to leap from one million hectares per year to over 4.6 million hectares, which is not feasible given the current willing-buyer-willing-seller approach, the website quoted the document as saying. The green paper offers three options to ensure that a below-market compensation standard is achieved. Firstly, a more forceful expropriation policy, which the paper says is being actively discussed in the department of rural development and land reform, is proposed.
A land-reform discount – an across-the-board discount of compensation for land acquired for land reform purposes is also under consideration. The third option would be the use of a productive value as opposed to market value to determine compensation. A land tax proposal is also highlighted as one of the most direct ways of affecting (reducing) prices because it would increase the cost of holding under-utilised and unutilised land.
The green paper, however, does concede that a land tax will be problematic. Any tax that is politically acceptable would have only a marginal downward impact on land prices; in order to compel land prices to drop by, say, 30%, it would have to be so large as to create uncertainty in the commercial farming sector. The paper proposes setting up a state valuation body that would standardise land valuations.
South Africa just like Zimbabwe inherited an unjust land tenure system from previous white-controlled governments under which the bulk of the best arable land was reserved for whites while blacks were forced to crowd on mostly semi-arid and infertile soils. But South Africa, which has one of Africas biggest farming sectors and its biggest economy, has repeatedly said it will not follow the example of Zimbabwe where President Robert Mugabe seized most of the farms owned by that countrys about 4 500 white commercial farmers and gave them over to blacks destroying commercial agriculture.
Post published in: News