Bill to further undermine South Africans’ private ownership rights – Solidarity 

10 April 2017

The trade union Solidarity is seriously concerned over the proposed Regulation of Agricultural Landholdings Bill. The Minister for Rural Development and Land Reform published the bill for comment on 17 March 2017. The bill bears ominous and harmful signs as far as the security of private ownership rights in South Africa is concerned.

“If ratified in this form, this legislation will amount to a de facto and automatic expropriation of agricultural land holdings marked for redistribution through bureaucratic processes. Present owners of portions of agricultural land holdings that fall outside certain designated ownership ceilings will have few options other than effectively agreeing to a coerced sale or to suffer expropriation,” Gerhard van Onselen, economics researcher at the Solidarity Research Institute (SRI), warned.

Van Onselen further said that categorising certain classes of economic assets for automatic expropriation and redistribution sets a dangerous and ill-advised precedent. “The end result is likely to be major uncertainty and serious undermining of investment in and expansion of agricultural capital, which in the end, will harm consumers. Even worse, this points to an opening of Pandora’s box by undermining private ownership rights in general,” Van Onselen said.

Van Onselen added that to propose such a large scale and crude intervention calls into serious question government’s demonstrated commitment to the private ownership rights of all South Africans. Moreover, the proposed deprivation of foreigners’ present agricultural land ownership rights is a concerning signal to foreign investors.

“Given the huge present political uncertainty, national budget, and weak private sector investment trends, implementing policies that are sure to depress foreign investment is a reckless and ill-advised stance to take,” Van Onselen said.

“Also troubling is government’s seeming march to establish numerous extrajudicial institutions with wide-ranging powers seeking to further curtail market freedom through increasing state-led bureaucracy. The proposed land commission is yet another bureaucratic institution that will beleaguer the economy with interference, red tape, higher transactions costs,” Van Onselen added.

Solidarity is of the opinion that the bill poses a threat to economic progress and should be carefully reconsidered. Solidarity will submit commentary along these lines to the Department of Rural Development and Land Reform.

Issued by Gerhard van Onselen, Senior researcher, Solidarity Research Institute, 10 April 2017