Expropriation without compensation is an economic time bomb

Agri SA takes note with dismay of the ANC’s decision to amend Section 25 of the Constitution to allow for expropriation without compensation.

As the relevant section stands now there are strict conditions justifying expropriation. There is no rational basis for this decision by the ANC. The High Level Panel on the Assessment of Key Legislation and the Acceleration of Fundamental Change, led by Kgalema Motlanthe, recently found that the biggest challenge standing in the way of land reform is not the property rights clause, but the implementation of land reform policies, procedures and extended entrenched corruption in the system.

If this section is amended to allow expropriation without compensation, it would amount to no less than economic suicide. Financial markets will undoubtedly divest in South Africa and investor confidence will be shattered.

Agriculture was the best performer across the first three quarters of 2017 and was the largest contributor to our 2% GDP growth in the third quarter.

Securing property rights for all South Africans will be the greatest exercise of empowerment the country has ever seen. Dan Kriek, Agri SA’s president, says the organisation has already developed a strategy that includes funding models and agricultural realities that would enable successful transformation in the agricultural sector.

“We have consistently been asking for security of tenure and property rights for rural communities and emerging farmers and it is time that the ANC sees this as an opportunity to empower new entrants to the agricultural sector and unlock funding mechanisms,” says Kriek.

From a strategic point of view the whole land reform programme was unsuccessful and destroying current production is a poor strategy. We challenge the ANC to explain to South Africans how the proposed amendment of the Constitution would enhance production or successful development of new farmers.

Agriculture has the largest growth potential of any sector in the economy and we should work together to explore and capitalise on this opportunity. We would like to discuss the ANC’s decision with their newly elected president, Cyril Ramaphosa, and top leadership.

We want to expand investor confidence and investment in the agricultural sector to reach our goal of creating jobs as defined in the National Development Plan (NDP).

Agri SA’s existing strategies and recently released land audit has already shown that market forces drive economies – and it is the same for the agricultural economy in South Africa.

Statement issued by Dan Kriek, President, Agri SA, 21 December 2017