SA grain farmers: Land-ownership cap should be scrapped

Land reform in South Africa is a controversial issue, the latest developments in land reform not being precluded from the controversy are unpacked below as the consequences of potential caps to land deeds are discussed. The biggest concerns that arise from capping the amount of deeds that each farmer is allowed to hold to two are expected to hit hardest on the country’s viable production of grain if implemented, resulting in dire knock-on effects for all in the chain. – Lucienne Ferreira

Farmers in South Africa, the continent’s biggest corn producer, are concerned about the proposed backward-looking limit on title deeds, because some create their areas under cultivation by collating as many as 10 smaller deeds/ REUTERS/Siphiwe Sibeko
Farmers in South Africa, the continent’s biggest corn producer, are concerned about the proposed backward-looking limit on title deeds, because some create their areas under cultivation by collating as many as 10 smaller deeds. REUTERS/Siphiwe Sibeko

By Andre Janse van Vuuren and Tshepiso Mokhema

(Bloomberg) — South Africa’s proposal to cap the amount of land deeds an individual may hold will affect food production and it should consider alternative ways to remedy racial inequality in ownership, the biggest grains lobby said.

President Jacob Zuma in February introduced the Regulation of Land Holdings Bill as a way to redress economic disparities between whites and blacks that were created under apartheid rule. It proposes to limit the area of land anyone can hold to 12,000 hectares (29,652 acres), or two title deeds. Excess land will be bought and redistributed and the limit will be applied retrospectively.

Farmers in South Africa, the continent’s biggest corn producer, are concerned about the proposed backward-looking limit on title deeds, because some create their areas under cultivation by collating as many as 10 smaller deeds, Grain SA Chief Executive Officer Jannie de Villiers said in a March 18 interview in Bloomberg’s Johannesburg office. Very few grain farmers would exceed holdings of 12,000 hectares, he said.

“If they are going to have a cutoff on something like that, it’s going to be unmanageable in terms of producing food for the country,” he said. Having a monetary threshold, where farmers with turnover exceeding a certain amount can only expand through collaboration with newcomers, “is a lot more practical — you’re going to maintain production. A joint venture has got a better chance than a new guy starting fresh with no experience.”

New Proposals

The ruling African National Congress, which came into power after winning the first all-race elections in 1994, has been struggling to reassure the country’s majority black population of economic redress, with land a critical factor to resolve when addressing South Africa’s past wrongs, Zuma said in a Feb. 12 speech. The party has been under pressure since winning a reduced majority of 62.2 percent in the national elections in May last year.

The Agri-sector Unity Forum, which represents the four main growers’ associations, will deliver comment and new proposals for the redistribution of land to the government by the end of March, De Villiers said.

Land redistribution shouldn’t compromise food production and the cap on land holdings isn’t “cast in stone” and more debate is needed, Agriculture Minister Senzeni Zokwana said March 4.

The country is the world’s largest fresh-citrus exporter behind Spain and Egypt, data from the United Nations’ Food and Agricultural Organization shows. While South Africa is the sub- Saharan region’s biggest producer of wheat after Ethiopia, it is a net importer of the cereal.

The bill “not only caps land ownership, it caps investment and caps job creation,” Thomas Walters, the shadow minister of rural development and land reform for the main opposition party, the Democratic Alliance, said by e-mail Monday. Effectively, when farms grow beyond the proposed cap, the “government will expropriate them. This will preclude investment across the sector, including in black-owned agri-businesses that have grown beyond a certain point.”

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