EWC is still very much on the agenda

John Kane-Berman says the Land panel did not actually "affirm property rights"

"Land panel affirms property rights," declared Business Day last week on its story about the Final Report of the Presidential Advisory Panel on Land Reform and Agriculture. This positive spin was echoed by other newspapers, among them the London Financial Times. Is their interpretation justified?

The panel's report, made public last week, does indeed argue that expropriation without compensation (EWC) should take place only in "exceptional circumstances". It lists ten instances where "nil" compensation would be justified. These include abandoned land, land obtained through criminal activity, and inner-city buildings with absentee landlords.

But the panel also states that "nil" compensation is not limited to this list. Elsewhere in the report, it states that owners of properties needed for "redistribution" may offer their land as donations or enter into negotiations with the state, "failing which the state may proceed to expropriate". Each municipality should identify which land should be redistributed.

Restoration of land to its "aboriginal owners must be speeded up and not complicated by placing obstacles on the way". Nor is it "fair" on society when individual property owners seek the protection of the Constitution without understanding their land reform responsibilities.

Among those expected to donate land are churches, whose missionaries played a "covert" and strategic role in the "dispossession and impoverishment of the African people". The panel also favours the imposition of "land ceilings". Agricultural land in excess of these ceilings should be "compulsorily" acquired by the state or "punitively taxed".

Without citing evidence for its assertion, the panel states that the Office of the Valuer-General (OVG) has "narrowly" determined value in terms of market value alone. This, the panel says, defeats the very purpose for which that office was established. To bring the functions of the OVG into line with its proposed compensation policy, the panel wants its role to be reviewed so that expropriation for land reform is "just and equitable" rather than "purely market value-based".

The panel also advocates a drive to mobilise commercial banks, asset managers, and pension funds to finance land reform, mainly via land reform bonds. No mention is made of what steps might be taken if the funds are not forthcoming on the scale required, but the African National Congress (ANC) has recently reiterated its long-standing policy of introducing "prescribed asset" requirements.

Mobilisation of private capital in this way would be in line with the implementation of the second phase of the national democratic revolution to which the ANC and its communist and trade union allies have long been committed.  

How much land will be subject to redistribution via donations or expropriation? Although the panel notes that 14% of land is held by the state, and 14% in terms of customary law, it says that "the focus needs to vest on the 72% of land held by whites" (a questionable figure – and one inconsistent with the panel's own statement elsewhere in the report that information about who owns what land in South Africa is "incomplete").

The government, the panel says, should "embrace the notion of having to redistribute the country's 72% of land which is in private ownership". This too would be in line with the ideology of the national democratic revolution (although the panel does not mention this ideology). That high figure suggests that redistribution will apply to urban properties as well as to agricultural land.

Also in line with revolutionary ideology is the panel's further statement that "land ownership must approximate the demographic of the country". This suggests that the ultimate goal is to reduce white ownership from 72% to less than 10%. If this goal is implemented, vast quantities of land will have to be donated, failing which expropriation will take place.

The panel is even more ambitious. It declares that "agrarian reform" is needed to change the size [and] distribution of land holdings, land uses, and types of crops and livestock. "Intervention" is required to make South Africa's agricultural system "more diverse and demographically representative of the national population". More people should be "deployed" on to land.

In what may be a reference to surveys by the Institute of Race Relations (IRR) showing that land reform is a far less important issue for most South Africans than sky-high unemployment, the panel says that demand for land is not "self-evident". It therefore wants citizens to be "encouraged and supported to articulate their land demands". This confirms that "land reform" is driven by ideology rather than demand. It is also tantamount to an invitation to the Economic Freedom Fighters to pump up demand for land.

Since food production and trade have "continued to perpetuate racial inequalities", one of the panel's recommendations is for the establishment of a public-private "food systems committee" to cover food production and distribution systems.      

Contrary to the bulk of media opinion so far, the panel's proposals prepare the way for steady erosion of the protections of property rights contained in the Constitution, whether urban or rural. They also envisage much more government intervention in the food and agricultural sector. Food shortages are a predictable result.

* John Kane-Berman is a policy fellow at the IRR, a think-tank that promotes political and economic freedom. Readers are invited to take a stand with the IRR by clicking here or sending an SMS with your name to 32823. Each SMS costs R1. Ts and Cs apply.