South Africa Land Claims a Damper on Agricultural Investment

South Africa Land ClaimsIt is becoming a matter of great public concern that agricultural investment is potentially set to suffer once more, as the land claims issue in South Africa rears its ugly head again. Before 1998, a total of 79,000 land claims were filed and more than 8,000 land claims have not been addressed, while the remainder have not been finalized. Over 39,000 commercial farmers have not come to terms with the handling of these claims.

The Department of Rural Development (DRD) wants to tackle more than 400,000 land claims when the system is reopened. The farms are not unlisted, and in the case where the government bought and transferred 42 of the 715 farms, the farmers remain unsure of what will transpire. Some involved have taken this as an indication of how they believe that allegedly corrupt land officials will add these to the list, resulting in thousands of farms remaining to deal with unresolved claims. No indication is given when this issue will be finalized.

The number of outstanding claims is unknown currently, and although the DRD reported that they had received 63000 claims to parliament, the number grows annually. There is no indication when the list will be made available.

When a claim against a farm is made, this is gazetted, and the owner is forced to prevent any development or investment in the land. The farmers comply, unable or unwilling to continue to improve the land knowing the government’s decision to use the new expropriation bill more aggressively and not pay market prices for goods produced.

The restitution practice in South Africa shows signs of being a failure, impacting the agricultural sector internationally. Recently at an investment conference in Hanover, Germany, European agricultural business leaders verbally attacked the South African government’s unilateral cancellation of investments. They referenced the proposed expropriation of foreign-held property in exchange for long-term lease agreements as “madness.” There is an indication that they fear their investments are not safe and are taking precautionary measures.

The land claims have placed a heavy burden on production, and in some areas, this has declined significantly. Farmers remain skeptical, and believe there is no quick solution to settle this matter. Although the government has issued a statement that it would not allow further reduction in productivity and that farmers would not lose their investment, there appears to be waning confidence in the integrity of the promises being offered.

Minister Nkwinti of the ANC said, during consultations with rural communities regarding the land reform issue, that people did not know they could claim prior to 1998. The accuracy of that statement has been called into question. Many believe that people knew they could claim, but did not understand that the validity of the claim would be tested. It was a widely held belief that any farmer willing to sell would result in claimants getting a farm for free. The minister said that he believed that many more claims would have been filed. In parliament, he said that the vast majority of claimants wanted financial compensation as well.  The claims, which were settled with financial compensation have not been unlisted since 2000. This has caused farmers to face difficulties in accessing financing or selling their farms on the open market.

Recently, a special investigation unit uncovered two large farm acquisitions, which benefited officials in KwaZulu-Natal (KZN). This investigation revealed alleged links to government officials in less-than-legal deals. While submission, complaints and alternative methods of processing the land claims issues were presented for resolution, there remains no commitment from government officials. Across the nation, many are challenging the allegedly corrupt actions, along with what is being described as a smug and uncaring attitude, on the part of many officials. There is a growing perception that there is no danger to those involved in these activities being called out for doing a shady deal. When they are discovered, there is a history of those involved being simply deployed to another government department rather than facing any real consequences. There is a growing sense of futility, and a perception that corruption within governmental departments is growing rather than decreasing.

South Africa’s bordering neighbor, Namibia, addressed the land restitution in a more effective manner, according to some, when they decided against it.  Namibia gave preference to people who lost their land because of colonization or apartheid in the redistribution process. Many suggest that a similar process might resolve many of the land issues facing South Africa, though there are many theories about how to resolve the conflicts.

The land restitution process had not worked as intended in South Africa. It has not worked for the government, who continue to face challenges and criticism for their administration of the program.  It has not even worked well for the beneficiaries, many of whom have left the land they received. It has been a universally criticized failure in the agricultural sector.

The government, in order to turn the tide and reverse the failures to date, may need to expend considerable money and effort. The second round of land claims may well remain a disaster for the agricultural sector if the process does not see significant reforms. With the perception of corruption and iniquity currently attached to the process, implementing reforms that those involved will  buy into may not be an easy prospect.

The government would need to proceed cautiously on how the process of land distribution is done. Having commercial farms unused and causing food shortages would be disastrous. In the past, there have been several claims where property, especially productive farms that were distributed to claimants, were left unused by those to whom the land was given. Farms are now barren wastelands, filling up with squatter camps, where they had been prosperous and productive before. What has been seen as a large problem for South Africa is the education and motivation of the new landowners. In many cases, it is not about owning the property, it is about making the land productive,creating employment, and contributing to the growth of the country.

With the upcoming national elections a few months off, the ANC is in an electioneering mode. Many who have watched the alleged abuses and the decline of conditions in the agricultural sector, have expressed concern over the campaign promises of free land and free money. They are accusing the ANC of promising whatever it will take to win the vote, while doing little to secure a different outcome in the next five years. Despite some significant support for the issuing of land deeds to a tribal land trust, the ANC has shown little support for it. This one issue has been presented by some opponents as an example of the ANC ignoring a possible solution which would benefit the people of South Africa in favor of empty promises.

The ANC government recently announced in its annual budget that a total of R8.7 billion would be set aside for land restitution claims over the next three years. This is a decrease from the previous amount set aside in the last three years, which most have deemed insufficient in light of the current issues surfacing. There is a lot of confusion on the issue, as the ANC is currently pushing through the Restitution of Land Rights Amendment Bill, which will require more funding for the land claims, while setting aside the lower amount in the budget. Opponents have been quick to point out that this does not appear to make sense.

The confirmation of reopening the land claims saga, as directed in this Bill, is being pointed to as an election ploy designed to divide the people rather than demonstrate a commitment to justice. Critics are pointing to it as evidence of a lack of sincerity to the promises being made.

The Department of Rural Development and Land Reform have always maintained that there is not sufficient funding to deal with current claims. With the decrease, many are wondering where the funding for new claims will be found. The Government would require an estimated R179 billion to resolve the remaining claims and new claims if the Bill is passed.

The Democratic Alliance (DA) has stated that people who were deprived of being able to lodge verifiable land claims before 1998 window period closed should not be penalized due to the government’s inefficiency. The DA, suggesting amendments to the bill, said that they would support a reopening of the window for a limited period once the conditions for a successful restitution were in place.

The ANC party rejected the DA amendments to the bill, stating that they were not in favor of their contribution, as it created false opportunities and showed no real growth. The battle between the sides is heated, and the DA have claimed that the ANC do not want to generate a successful development strategy, citing the rejection of the DA amendments as confirming that assessment. The DA assert that they believe they have set out clear and feasible alternatives for people to make gains, and stand on the platform that the well-managed land restoration would strengthen the rural economy, promote justice and preserve food security for the country.

The DA, in its election manifesto, claimed a priority that land reform would be properly funded, as well as efficiently and transparently managed. They are direct in their challenges to the ANC government. DA leaders claim that they are compiling a workable plan to implement change, create real jobs and restore the past injustices, while suggesting that the ANC president Jacob Zuma is making promises he cannot deliver on. Both sides of the issue are engaging in the escalating rhetoric as the elections approach.

The proposed Investment Bill is a new expropriation measure that will apply to all property owners in South Africa, both local and foreign. The language provides for the possible result of people receiving no compensation on the loss of their property should the state exercises it right as custodian to the disadvantaged. The State will have the power to take property away for land reform without any compensation to former owners. Under this Bill, expropriated owners will receive less than market value and will have no claim to damages for losses incurred, according to opponents to the legislation. One other issue with the language which has some angry is that the State will be given vague timeframes for paying out money. The decision would lie with them over what a “timely manner” for payment would be. Some fear that it could mean never.

The new Investment Protection Bill is connected to the land claims process, and has become a matter of contention for the upcoming elections. Opponents believe it an attempt by the ANC to create loopholes that will enable the government to take custody of land and other property without compensation. They believe that the Bill would avoid the inherent expropriation of land by allowing the government to become the custodian while the process of land allocation is underway, and fear that the ANC will treat the claim process as a means to stake its claim as custodian. While the debate continues, the potential disaster of another round of land claim looms over those involved in the process. The decision on the fate of the bill is being watched closely, and many closest to the issue fear that, as it drags on, there has been a real damper put on agricultural investment in South Africa.

By Laura Oneale

Sources

Politicsweb 1

Politicsweb 2

BDO

Post

Leave a Reply

Your email address will not be published.