The Expropriation Bill in its current form will have negative consequences for the economy at large should it proceed to be promulgated by South Africa, agricultural organisation Agri SA said yesterday.
Yesterday the Portfolio Committee on Public Works and Infrastructure adopted a report on the Expropriation Bill, which will now proceed, along with the Bill, to the National Assembly for further deliberations.
In a statement by Agri SA executive director Christo van der Rheede and Willem De Chavonnes Vrugt, the chairperson of Agri SA’s Centre of Excellence on Land, said what was especially concerning about the Bill was its negative impact on the shared national commitment to build a more inclusive agricultural sector.
“If this Bill is passed in its current form, its weakening of the protections afforded to private property could see an exodus of capital from the agricultural sector and the broader economy, with a resulting loss of jobs and investments. This will adversely affect established, emerging and new entrant farmers alike, and undermine our efforts to build an inclusive and prosperous rural economy,” they said.
They added that some of the definitions contained in the Bill were problematic. One example was the definition of expropriation, which the organisation said was narrow and may have unintended consequences if applied to land reform or other processes.
It said this definitional problem would add to the policy uncertainty that threatened the sector and the broader economy.
Agri SA said the Bill’s provision for nil compensation would result in a future of policy uncertainty for the agricultural sector. It said South African farmers already operate under difficult conditions.
“Hence, the ongoing assault on any constitutional principle that protects property rights against any arbitrary action by government or by a court, fuels a climate of uncertainty that deters greater investment, job creation and inclusivity in the sector.”
The pair said the Jakkelsdans ruling, delivered in the Land Claims Court in February this year, held that the State should offer landowners full market value for their land if no other factors as stipulated in Section 25(3) of the Constitution apply. In essence, it reaffirmed the principle of market related, just and equitable compensation.
“Given the existence of legitimate circumstances where nil compensation may be just and equitable, the Constitution sufficiently provides for these cases, negating the need for this potentially economically catastrophic Bill.”
Agri SA said it believed in building an inclusive and growing farming sector to ensure food security for all. This can only be achieved with property rights that were secured and expanded.
“This will bring about greater access to capital. A legal framework that provides just and equitable compensation in cases of expropriation is central to maintaining the ability to attract capital investment in the South African economy and the agricultural sector. In terms of further development, there is a strong likelihood that the Bill and report will be scheduled for debate before the National Assembly in the coming week as part of the next step in the legislative process,” it said.
Agri SA said it therefore appealed to parliament not to support the draft Expropriation Bill in its current form, but to rather work with the private sector to craft an economically sustainable and constitutionally sound way forward to bring about sustainable land reform and inclusive economic growth in South Africa.
The government has policy objectives that it intended to reach by 2030.
However, the initial time frame has been moved to 2035. Some of those objectives include increasing the percentage of economically active women and decreasing unemployment among women, doubling the number of small formal businesses, including farms, increasing black ownership of commercial farmland and increasing the percentage of black-owned formal business.
The National Development Plan argued that agriculture was the primary economic activity in rural areas and it had the potential to create 1 million new jobs by 2030. It said this could be achieved by, among other things, reviving defunct irrigation schemes in the former homelands and expanding the agricultural area under irrigation.
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