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Date TimeJuly 29, 2019
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Land Panel Report Highlights Rifts That Divide South Africa
(Bloomberg) -- The release of a report by an advisory panel on land reform has highlighted the bitter divisions in South Africa over one of the ruling party’s signature policies.While the panel, set up by President Cyril Ramaphosa, recommended the development of a policy to provide for compensation for land seized for redistribution to black South Africans in some circumstances, two of its members, who represent commercial farming, produced a separate report to signal their disagreement.Expropriation of land without compensation has taken on enormous political importance for Ramaphosa. The implementation of the policy accepted by the ruling African National Congress in 2017 is seen by the president’s foes within the party as a test of his resolve to push through decisions unpopular with the business community.At the same time investors worry that pushing forward with the plan to change the constitution to allow for land be seized without payment will signal a disregard for property rights. Commercial farmers say it will damage food security and the economy.Given that the advisory panel’s terms of reference only allowed recommendations on the circumstances under which to expropriate land without compensation rather than whether to do so in the first place, the proposals in the report were “the best alternative option to take,” said Wandile Sihlobo, a member of the panel and the chief economist of the Agricultural Business Chamber of South Africa. “It’s a contribution to the debate, not a blueprint.”Emotional IssueEmotions over land run deep in South Africa where its seizure from black citizens was a key pillar of white-minority rule and at one time put 87% of the country’s land in the hands of the white minority.The panel recommended considering a limit on farm sizes, a tax on land that exceeds the maximum threshold for one owner and levies on underutilized land. In another dilemma for Ramaphosa, it proposed dissolving the Ingonyama Trust under which the king of South Africa’s most populous ethnic group, the Zulus, holds 2.8 million hectares (6.92 million acres) of land on behalf of his subjects. Ramaphosa has previously backed away from suggestions that the trust’s land would be affected and King Goodwill Zwelithini has warned of clashes if it should happen.The cabinet has directed all government ministers to study the panel’s report and recommendations and respond within two months. An 11-member parliamentary committee is meanwhile evaluating how changes to the constitution should be done, and has until March 2020 to report back to the National Assembly.AgriSA, the country’s largest farmers grouping, said the report’s recommendations could compromise food security and that they will challenge the proposals that land can be taken without compensation in court if it’s accepted.‘Change Direction’“This will be an infringement on free-market principles,” Executive Director Omri van Zyl said by phone. “We are in desperate need of economic growth and the last thing that is needed is to scare away scarce institutional lenders and investors through threatening property rights, particularly in a sector as important to the economy as this one.”AgriSA President Dan Kriek and Nick Serfontein, who were members of the panel, compiled an alternative report after “it became clear that there were fundamental differences in opinion and approach to land reform within the panel,” AgriSA said in a statement.“Our conclusion is that South Africa should change direction in terms of the implementation of land reform,” Serfontein and Kriek said in their report. They suggested the creation of a land reform fund.The Democratic Alliance, South Africa’s main opposition party, described the proposals as “untenable” and said they should be rejected.“The majority endorsement of land expropriation will further batter our ailing economy,” the party said in a statement, adding it was working on an alternative plan.\--With assistance from Paul Vecchiatto and Felix Njini.To contact the reporter on this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.netTo contact the editors responsible for this story: John McCorry at jmccorry@bloomberg.net, Rene Vollgraaff, Gordon BellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

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