Change in constitution disastrous, not needed for reform, says Agri EC

Agri Eastern Cape’s view is that the property clause is not obstructing land reform, and no changes are required to section 25 of the constitution to achieve just and equitable land redistribution.

Agri Eastern Cape understands there is an urgent need to deracialise land ownership in SA, as well as increase the number of active farmers.

We cannot understand how increasing the amount of land owned by the state will achieve this, especially for the majority of active farmers – who are black – and who live in areas where either the state or statecontrolled trusts own the land.

These farmers have no prospect of owning land in these areas, and therefore are effectively excluded from becoming commercial farmers.

We believe all governmentowned and government-controlled agricultural land should be privatised, and made available to emergent black commercial farmers. This can be done without having to change the constitution, and would have the effect of making land available in areas where the demand for land is highest.

We do not believe amending the constitution to permit expropriation without compensation is either necessary or desirable to transform agricultural land within commercial farming areas.

It is not necessary because compensation for loss of assets would easily be affordable for the government, provided it was adequately budgeted for.

The present levels of 0.2% of gross national expenditure are ludicrous, and are completely eclipsed by wasteful expenditure on state-owned enterprises such as SAA, Eskom, the Post Office, Transnet, and others.

The wastage caused by government corruption, estimated at R60-billion per annum, also dwarfs this figure.

Land reform should never be accelerated simply to satisfy racial agendas. If this is done at the cost of dismantling the commercial farming sector, it would unleash horrific consequences for a rapidly urbanising population, who would face rampant food prices and starving communities.

Amending the constitution is not desirable because of the economic consequences to the country. As we all know, the president is putting considerable effort into attracting foreign direct investment to SA.

This is because foreign direct investment, which reached a peak inflow of 24% of gross domestic product (GDP) in 2005, turned into an outflow of -31% of GDP during 2017.

Put simply, this means that more South Africans are investing elsewhere than foreigners are investing here.

The World Bank Doing Business Index has seen SA drop from 28th to 82nd place over the past decade. Surveys have shown that low economic growth, crime, corruption and bad attitudes, and policies towards business by government are the direct causes of this.

Economic growth is the key to alleviating poverty: this is not disputed by the present government.

Threatening to change the constitution by interfering with property rights will not only serve as a real deterrent to foreign direct investment, but is likely to cause a substantial outflow of capital from SA.

This will probably cause the exchange rate to fall sharply, and result in negative growth rates. Junk status will inevitably follow, with all its implications.

We urge the select committee of our parliament to put our country first, and not recommend amending section 25 of our constitution in any way.

● This is an edited version of Agri Eastern Cape’s submitted comments on land expropriation without compensation.