Parliament must reject the Expropriation Bill in its current form to prevent catastrophic consequences for the agricultural sector and economy

20 September 2022

Today, the Portfolio Committee on Public Works and Infrastructure adopted a report (including minority and majority views) on the Expropriation Bill which will now proceed, along with the Bill, to the National Assembly for further deliberations. The Bill in its current form will have negative consequences for the economy at large should it proceed to be promulgated by the President.

What is especially concerning about the Bill is its negative impact on our shared national commitment to build a more inclusive agricultural sector. If this Bill is passed in its current form, its weakening of the protections afforded to private property could see an exodus of capital from the agricultural sector and the broader economy, with a resulting loss of jobs and investments. This will adversely affect established, emerging and new entrant farmers alike, and undermine our efforts to build an inclusive and prosperous rural economy.

Some of the definitions contained in the Bill are problematic. One example is the definition of expropriation, which is narrow and may have unintended consequences if applied to land reform or other processes. This definitional problem will add to the policy uncertainty that threatens the sector and the broader economy.

The Bill’s provision for nil compensation will result in a future of policy uncertainty for the agricultural sector. South African farmers already operate under difficult conditions. Hence, the ongoing assault on any constitutional principle that protects property rights against any arbitrary action by government or by a court, fuels a climate of uncertainty that deters greater investment, job creation and inclusivity in the sector.

The Jakkelsdans ruling, delivered in the Land Claims Court on 11 February 2022, held that the State should offer landowners full market value for their land if no other factors as stipulated in Section 25(3) of the Constitution apply. In essence, it reaffirmed the principle of market related, just and equitable compensation. Given the existence of legitimate circumstances where nil compensation may be just and equitable, the Constitution sufficiently provides for these cases, negating the need for this potentially economically catastrophic Bill.

Agri SA believes in building an inclusive and growing farming sector to ensure food security for all. This can only be achieved with property rights that are secured and expanded. This will bring about greater access to capital. A legal framework that provides just and equitable compensation in cases of expropriation is central to maintaining the ability to attract capital investment in the South African economy and the agricultural sector. 

In terms of further development, there is a strong likelihood that the Bill and report will be scheduled for debate before the Nasional Assembly in the coming week as part of the next step in the legislative process.

Agri SA, therefore, appeals to parliament not to support the draft Expropriation Bill in its current form, but to rather work with the private sector to craft an economically sustainable and constitutionally sound way forward to bring about sustainable land reform and inclusive economic growth in South Africa.

Issued by Christo van der Rheede, Agri SA Executive Director, 20 September 2022