"Willing buyer, willing seller" not the reason for high land prices
24 May 2012
"The "willing buyer, willing seller" dispensation is often misunderstood and wrongly targeted as the reason for excessive prices in some instances being paid for land by government", says Johannes Möller, president of Agri SA. He responded to recent debates in Parliament and accusations by political office bearers that government is paying excessive prices for land due to owners of land demanding prices of this magnitude.
Agri SA agrees that the system/process of acquiring land should be questioned if higher than market related prices are/were paid but welcomed Minister Nkwinti's view expressed in Parliament that role-players between farmers and the state should be blamed for excessive prices, rather than farmers.
Möller said that the "willing buyer, willing seller" is a well known concept used for taxation and accounting purposes depicting transactions taking place on an arm-length basis between unrelated parties. "Willing buyer, willing seller" is thus a notional concept of how transactions in a market related economy should take place.
"Any deviation from this can, therefore, not be regarded as an integral characteristic of the concept but should be attributed to factors like fraud, excessive market power by certain parties, the market for land not being transparent, valuations not properly done or an artificial demand having been created by e.g. government involvement. The fact that the Minister Nkwinti concurs with this conclusion gives us confidence that remedies for the real problems will be sought and implemented", said Möller.