Limitation of land ownership is an economic disaster – Agri SA

Organisation says a land ceiling will cut property values

Limitation of land ownership is an economic disaster 

15 August 2018

Agri SA is deeply concerned by the recent comments made by the ANC Chairperson, Gwede Mantashe. Mantashe reportedly suggested that a limitation on land ownership should be implemented on white farmers owning more than 12 000-hectares. He further suggested that these farmers should hand over the remainder of their land to the government without compensation. South African property rights must be protected in full for the economy to grow; a limitation of property sizes will only halt job creation.

“This statement is irrational and not carefully considered,” said Dan Kriek, President of Agri SA. “A one-size-fits-all approach goes against established agriculture principle as commodities and farming practices differ in land use. Different crops or animals require different size farms to be financially feasible. A 12 000-hectare farm in the Karoo would barely be sustainable.”

“Agri SA’s agrarian reform plan is in line with the National Development Plan and will expedite transformation in the sector.”

Broad proposals aimed toward expropriating property without compensation will have a negative impact on food security and increase food inflation. Farmers need property rights to secure production credit, and that uncertainty over these rights will stifle food production.

“A land ceiling will cut property values,” said Omri van Zyl, Executive Director of Agri SA. “When land prices drop significantly, production credit will become prohibitively expensive. Banks will have to write off billions of Rands; agriculture has an estimated R160 billion loan book.”

Land ceilings has been in discussion since 2011 when the Green Paper on Land Reform was published.

“Various experts produced reports on the negative implications of land ceilings,” said Annelize Crosby, Agri SA Head of Centre of Excellence: Land. “It will not alleviate poverty.”

Agri SA will contest any form of undue infringement on property rights for all farmers and South Africans.

Issued by Thea Liebenberg, Media liaison, Agri SA, 15 August 2018