Landholdings Bill not well thought through – AgriSA

Land ceilings will have very negative effects

AgriSA is of the view that the bill also faces constitutional challenges

THE Agricultural Landholdings Bill has not been properly considered, according to AgriSA.

In a statement issued yesterday, the association said land ceilings would have many negative effects. The government has proposed a new law banning foreigners from directly buying agricultural land in South Africa.

Concerns have been raised that this may harm investor sentiment. Non-residents will be allowed to take long leases on the properties, or the land should be majority-owned by a black South African, according to the Regulation of Agricultural Land Holdings Bill, published in the Government Gazette last Friday.

First option

Foreigners considering selling land must give the minister of rural development and land reform first option on the property, according to the bill. The government would have 90 days to take up the offer, after which it could be sold to a citizen.

The minister would also impose limits on the size of farms that people can own, depending on the region and following consultation, according to the document.

Yesterday, AgriSA said the bill, published on March 17, allowed only 30 days for comment, and it would seek an extension.

The association noted: “Ever since 2011, the concept of land ceilings has been hotly debated.” It added that numerous studies had found this concept to be ill-founded.

Ernest Pringle, the chairperson of AgriSA’s policy committee on agricultural development, said international experience with ceilings demonstrated that land ceilings had very many negative impacts, including:

The fragmentation of agricultural land.

Affecting productivity adversely.

It had contributed towards agriculture being a low-profit venture in several parts of the world.

Neutral or negative effects on poverty.

Unsatisfied levels of equity and efficiency.

It had to a large extent failed to change agrarian structures – large inequalities continued to exist.

A negative impact on functional land rental markets.

It had proved costly and difficult to administrate.

It had been characterised by circumvention, contestation, corruption and litigation. It led to tenure insecurity. It discouraged land-related investment.

Pringle added that the proposed system would be costly, and that the huge administration cost would outweigh any potential benefits the government was punting.

Difficult planning

“Also, the proposed scheme will make planning extremely difficult if bits and pieces of agricultural land were to be excised from farms all over the place. This would likely leave farmers and beneficiaries with uneconomical units.

“Provision of services to far-flung beneficiaries will also be a huge challenge. This policy would deliver fragmented pieces of land spread across the furthest reaches of a district. Small parcels may end up being ‘sliced-off’ larger landholdings with little or no access to natural resources, infrastructure or services,” it argued.

AgriSA believed the bill also faced constitutional challenges and was in the process of getting senior counsel opinion on that, said Pringle. – Business Report Online