Constitutional Review Committee - Submission on Expropriation without compensation - Land - Parliamentary Monitoring Group
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Land
Expropriation without compensation
Constitutional Review Committee
Submission on Expropriation without compensation
22 May 2018
Land
Expropriation without compensation
Outline
• Executive summary
• Information on Agri SA and its views on land
reform
• What are the reasons for the slow progress with
land reform?
• Insufficient and questionable data on land
ownership patterns and figures
• Agri SA’s attempt to bring some figures to the
table
• International and comparative law perspective
• Economic consequences should land be
expropriated without compensation for purposes
of land reform
• Food security
• Agri SA plans for sustainable land reform and
rural development
• Conclusion
Land
Expropriation without compensation
Executive Summary
Land
Expropriation without compensation
Executive Summary
Agri SA will set out:
• What it considers to be the impediments to land reform
• International best practice on compulsory acquisition and various
international human rights instruments that protect property rights
• Possible economic consequences
• Plans and proposals for speeding up land reform and ensuring its
sustainability
Agri SA’s stance is that the property
clause is not an impediment to land
reform and that no changes need to be
made to Section 25
Land
Expropriation without compensation
Executive Summary
Agri SA believes that no agrarian land reform process can hope to be
successful and sustainable unless:
- It is based upon relevant and accurate data
- The economic consequences of expropriation are fully understood
- Clear understanding of the circumstances under which the power to
expropriate land without compensation may be exercised
Finally:
- Section 25 of the Constitution should only be amended if it is absolutely clear that
land reform, properly executed, cannot be carried out without such amendment. A
general constitutional power to expropriate land without compensation would
render South Africa out of step with the vast majority of democratic countries
- Agri SA opposes constitutional amendments to Section 25 – we pledge our
support to workable solutions within the existing constitutional framework
Land
Expropriation without compensation
Who is Agri SA?
• Agri SA is a federation of
agricultural organisations
• Established in 1904 as the
Southern African Agricultural
Union
• Members include: 9 provincial
organisations, 25 commodity
organisations and 32 corporate
members
• Through its affiliated membership,
Agri SA represents a diverse
grouping of individual farmers
regardless of gender, colour or
creed
• Agri SA is a non-profit, a-political
organisation
Land Expropriation without compensation
Land Expropriation without compensation 32 Corporate Members
Land
Expropriation without compensation
Information on Agri SA and its views on land reform
Agri SA:
• is supportive of an orderly process of land
reform
• aims to ensure a sustainable and viable
agricultural sector
• acknowledges that the dispossession of land
caused deep emotional wounds, which have
not been healed, and that land dispossession
caused great physical hardship of an enduring
nature. We also recognise that we, as a
society, are faced with the triple challenges of
inequality, poverty and unemployment and
that these challenges are particularly
prevalent in rural areas
Land Information on Agri SA and its
Expropriation without compensation
views on land reform (cont)
• The sector:
• currently employs 847 000 people (Labour Force
survey, 1st quarter 2018, Stats SA)
• managed to keep our country food secure
• Still far too many households in rural and urban areas
that are food insecure
• Agri SA subscribes to the vision for our rural areas and
agricultural sector as set out in Chapter 6 of the NDP
• In 2014 Agri SA’s congress accepted a holistic land plan
and developed a funding model
• Agri SA’s affiliates and partners are investing millions of
Rands in developing, assisting and supporting emerging
farmers to ensure their sustainability and
competitiveness
• During 2017 Agri SA and its affiliates spent R331 million
on transformation and 109 059 new farmers in South
Africa benefitted from these programsLand
Expropriation without compensation
What are the reasons for the
slow progress with land
reform?
• The slow pace of land reform to
date, is, in Agri SA’s considered view,
a failure of implementation rather
than a failure of legal framework
• Lack of adequate budgeting, policy
uncertainty, the lack of a
comprehensive, integrated support
network, lack of or poor
communication with stakeholders,
corruption and poor settlement
support systems are the real reasons
why land reform has not happened at
a faster pace and in a more
sustainable manner
• Agri SA supports the findings and
recommendations of the High-Level
Panel on Key LegislationLand
Expropriation without compensation
What are the reasons for the
slow progress with land
reform? (cont)
• Apart from the authoritative High-Level Panel report, there
are many other reports that point to the same problems
• These include:
• The Fiscal and Financial Commission report of 2017 on
the spending by the DRDLR; and
• The Department of Planning, Monitoring and
Evaluation (DPME) report of 2017 on the
implementation of the NDP.
• These reports relate to inadequate budgeting, poor
implementation and irregular spending
• The fact that in many instances, beneficiaries do not receive
title to the land that is allocated to them, is, in Agri SA’s
experience, a huge impediment to the successful
establishment of new black commercial farmersLand
Expropriation without compensation
Insufficient and questionable data on land ownership patterns and figures
The 2017 audit puts white ownership
The DRDLR only released their at 72%. However, the research done
audit on private land ownership by Landbouweekblad showed that
in February 2018. This report more than 70% of commercial
has drawn serious criticism. The farmers are sole owners. Remember
report contains numerous errors that the audit only focussed on
in its texts and tables and the individual ownership. The audit
audit does not support many of clearly assumed that all owners of
the claims that have been made. land through trusts and companies
are white. This cannot be correct.
It is not clear what controls (if any) exists
to test the findings against. State, trust
and communal land was not included in
the 2017 state audit. The audits do not
differentiate between state land and state
administered land. There are no
definitions for farms and smallholdings.Land
Expropriation without compensation
Agri SA’s attempt to bring some figures to the table
• The ADS / Agri SA / Landbouweekblad used the data of 23 years of land ownership
patterns to compile a report of changing ownership patterns in agricultural land over
time. This was a very comprehensive audit, the methodology of which was subjected to
external auditing
• Some of the findings from the ADS / Agri SA/ Landbouweekblad audit are:
o The total area of agricultural land, according to the 1993 census was 97 036 986
hectares, of which commercial farmers owned 82 557 220 hectares and previously
disadvantaged persons 14,5 million hectares, or 14,9%. Since 1994 more than 3,6
million hectares (4%) of agricultural land has been lost to other uses such as mining,
residential and industrial development; The total area of land used for agriculture in
2016 was 93 453 558 hectares. 73.3% of this land is in the hands of white commercial
farmers and 26,7% in the hands of previously disadvantaged persons (PDIs)
(including land held by government on behalf of black beneficiaries)Land Provincial ownership
Expropriation without compensation
Agri SA’s attempt to bring some figures to the tableLand
Expropriation without compensation
Agri SA’s attempt to bring some
figures to the table (cont)
• Land transferred in 1994, which included
the former homelands, self-governing
territories and trust areas, amounted to
18 036 773 hectares, of which
approximately 14,5 million hectares was
agricultural land
• Government land and the former TBVC,
self-governing states and trust land
represents 31,85 million hectares and
25% of the land surface in South Africa
• Government programmes for the
purchasing of agricultural land yielded
2,2 million hectares, where private
purchases by PDIs amounted to 4,3
million hectaresLand
Expropriation without compensation
Analysis of landLand
Expropriation without compensation
Purchases by persons of colour: 1994-2016
Agri SA’s attempt to bring some Hectares Average price
figures to the table (cont)
Total Paid to
• The audit shows that 12,1 million hectares commercial
(12 141 780 hectares) has been redistributed to farmers
black people. This does not include land in the R/ha R/ha
former homelands or land transferred to trusts that Government for 2 208 031 6 297 6 324
used to form part of the old homelands. This is agriculture
made up as follows:
• 2,8 million hectares purchased by the government Government for 641 267 10 217 6 898
• 3,2 million hectares bought in the restitution non-agric use
programme
Total 2 849 298
• 4,2 million hectares bought by black people without
any government assistance Private:
• 1,9 million hectares bought with government • Self financed 4 222 472 8 881 8 408
assistance of some kind
• Private non- 18 152 14 542
• It is evident from the ADS / Agri SA/ agric use
Landbouweekblad audit that:
• Persons of colour bought twice as much land as the • Government 1 908 981
government support
• The land was acquired at market -related prices. In other
words, buyers of colour and government did not pay a Total 6 131 453
premiumLand
Expropriation without compensation
Economic consequences should land be expropriated without compensation
for purposes of land reform
Food production vs population
130,0 58000
• In 2035, South African
population is estimated to 120,0 56000
reach more than 66,9 million.
110,0 54000
• This means more food supply
will be required to sustain the 100,0 52000
growing population
‘000
Index
90,0 50000
• It is an internationally
recognized fact that there is a 80,0 48000
Population
correlation between the level
of government assistance to Food Production
70,0 46000
farmers in the form of Linear (Population)
subsidies and farm sizes 60,0 Linear (Food Production) 44000
50,0 42000
2004
2000
2001
2002
2003
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017*
2018*Land
Expropriation without compensation
Economic consequences should land be expropriated without compensation
for purposes of land reform (cont)
The Producer Support Estimate (PSE)
OECD Producer Support Estimate (PSE) for selected is shown as a % of gross farm
countries, 2016 receipts. The OECD defines
Ukraine -9,5 Agricultural support as “the annual
Vietnam -2,9 monetary value of gross transfers to
Australia 2
South Africa 2,3 agriculture from consumers and
New Zealand 0,9 taxpayers arising from government
Chile 2,8 policies that support agriculture,
Canada 10,7 regardless of their objectives and
Israel 17,1
United States 8,7 economic impacts.”
Mexico 8
OECD 18,8
Brazil 4,9
European Union 21
Norway 60,4
Russia 16,1
Japan 48 • South African farmers enjoy very
Costa Rica 10,4 low levels of government support
Kazakhstan -3,2
Iceland 59,6 compared to farmers in other
Switzerland 58,2 countries, which means that the
Colombia 13,3
Korea 49,2 economy of scale applies and
China 14,5 the only way to remain
Philippines 21,1
Turkey 27,9
competitive is to increase farm
Indonesia 29,1 size
-20 -10 0 10 20 30 40 50 60 70
Source: Agricultural Policy Monitoring and Evaluation, OECD (2017)Land
Expropriation without compensation
Who Farmers owe money to
Farming debt in 2017 – R158 billion
• Most farmers rely on creditors
Agricultural Credit such as the commercial banks,
Act R51,62 million
Value of Capital Assets
the Land Band, and
Other financial Land and fixed
agricultural cooperatives and
institutions R970,96 million improvements R252,5 billion agricultural businesses for
Other debt Implements, motor vehicles, production finance.
R1.77 billion tractors R69,2 billion
Ownership forms the basis of
Livestock R148,4 billion credit extension to farmers
Private persons R3.20 billion Total R470,1 billion
Agricultural co- • Agriculture is critical to the
operatives R11,26 billion development of the economy
as the sector that has strong
Land Bank R44,0 billion backward and forward
linkages with other sectors of
Commercial banks R97,1 billion the economy
Source: DAFF
Economic consequences should land be
expropriated without compensation for
purposes of land reform (cont)Land
Expropriation without compensation
Economic consequences should land be expropriated without
compensation for purposes of land reform (cont)
Agriculture’s linkages with the rest of the economy
Backward linkages Forward linkages
• Purchases of goods • Supply of raw materials
such as fertilizers, to industry and the food
chemicals and supply chain in general
implements
Approximately 70 percent of agricultural output is used as intermediary
products in other sectors
22Land
Expropriation without compensation
Food demand and consumptions index
Food security DEMAND CONSUMPTION
• The Food and Agriculture Organisation (FAO) clearly 2010 100 100,0
captures four fundamental aspects of food security. 2011 100,4 103,5
These are; affordability, availability, quality, and safety. 2012 101,0 105,4
Hence the official definition of food security according 2013 103,2 113,3
to the FAO is the following: 2014 110,5 120,9
“Food security exists when all people, at all times, 2015 108,6 123,9
have physical and economic access to sufficient, 2016 110,8 125,5
safe and nutritious food that meets their dietary 2017 114,0 145,3
needs and food preferences for an active and healthy
2018 116,1 144,5
life”.
2019 118,1 148,0
• As long as South Africa is in a position to export food, 2020 120,2 149,9
our food prices tend to lean towards export parity. 2021 122,2 153,7
• Should we however start importing more and more 2022 124,3 157,0
food, the food prices would go towards import parity 2023 126,4 159,1
which would make it much more expensive for our 2024 128,4 160,6
local consumers
2025 130,5 164,0
• South African harbours are not geared to import large 2026 132,5 167,0
amounts of food. 2027 134,6 168,6
• According to the Global Food Security Index, South 2028 136,7 170,0
Africa comes in at number 47 of 113 countries and is 2029 138,7 173,1
the most food secure country in Africa 2030 140,8 174,4Land
Expropriation without compensation
International and comparative law perspective
• Section 25 cites a fundamental human right, which is protected in terms of international human rights
instruments such as the United Nations’ Universal Declaration of Human Rights, the European Convention on
Human Rights and the African Convention on Human Rights
• No attempt has ever been made in South Africa to scrap or amend a fundamental human right
• The modern approach to compensation is based on the principle of equality in the bearing of public burdens.
Equitability in respect of a public liability is a principle adopted by French, German and American law. According
to this approach, “where one or more individuals has to bear a sacrifice (being the loss of property) for the
common good, their individual and excessive burden should be compensated by the community (thus the
State)
• If South Africa were to scrap the equitability principle, we will be out of step with most African
countries
• Food and Agricultural Organization (FAO) of the United Nations published a guide on international best
practice for expropriation
• The guide requires, among other things, clear and transparent procedures for forced acquisition of
property, and compensation that will ensure that the affected persons are not worse off after
expropriation than they were before. It further states that affected persons must not only be compensated for
the loss of land but also for improvements made and for the disruption that accompanies expropriationLand
Expropriation without compensation
International and comparative law perspective
• Denmark, • USA, Poland,
Norway, Japan, Egypt,
Russia, Kenya, Namibia, the
the Seychelles Congo and
and Lesotho Fair Mozambique
compensation
Full
where a
compensation
balancing test
applies
Adequate Equitable
compensation compensation
• Botswana, • France,
Malta, Uganda Rwanda,
and Zambia Madagascar
and TanzaniaAgri SA’s land plan is set out in a holistic
Land plan and a financing plan. These two plans
are closely aligned to the land audit and
Expropriation without compensation
related strategy.
The holistic plan contains the following
elements:
• Sustainable restitution models
• Support for farmers in communal areas
• A social compact
• Promotion of a partnership approach
between commercial farmers, farm
workers, communities and emerging
farmers
• A public-private sector partnership for
implementation (special purpose vehicle)
• Right of first refusal (subject to certain
conditions)
• Viable, affordable finance for new
farmers
• A Special Purpose vehicle for
implementation
Agri SA plans for sustainable land
reform and rural developmentLand
Expropriation without compensation
Agri SA plans for sustainable land reform and rural development (cont)
Agri SA would also like to make the following specific proposals:
• Finalize the Expropriation Bill
• Test the expropriation powers contained in the Constitution
• Get consensus on land audit figures and create a comprehensive land database that is continuously
updated
• Implement the High-Level Panel recommendations
• Well-situated state-owned land needs to be made available for housing for the poor
• A Land Framework law should be passed, as proposed by the High-Level Panel
• Create an office for an Ombudsman for land reform
• Proper monitoring and evaluation of all programs and projects
• Address the communal land issue – enable the capitalization of land in those areas
In summary: Agri SA believes that the solutions are already catered for in the
framework provided for in the Constitution, the NDP, Operation Phakisa and various
private sector plansLand
Expropriation without compensation
ConclusionLand
Expropriation without compensation
CONCLUSION
• Agri SA is firmly of the view that:
• The property clause in the Constitution
is not an impediment to land reform;
• The real reasons for the slow pace of
land reform must be addressed. These
reasons do not justify an amendment to
section 25 of the Constitution;
• The public debate must be based on
credible and relevant information on
land ownership, with particular
reference to state owned land available
for land reform;
• The economic consequences of
expropriation without compensation
must be properly and fully considered;
• The principle of legality must be
honoredLand
Expropriation without compensation
Everything has been done to ensure
the accuracy of this information,
however, AGRI SA takes no
Disclaimer
responsibility for any loss or damage
incurred due to the usage of this
information.Land
Expropriation without compensation
Contact Details
Annelize Crosby
Head: Agricultural Development
T I +27 (0) 21 554 5642
C I +27 (0) 82 388 0017
E I annelize@agrisa.co.zaYou can also read
