Hidden land expropriation risks that farmers can’t ignore: Ian Cox

Key topics.Ministers' assurances are unreliable; policies depend on presidential favour.Land valuations and compensation often disadvantage current landowners.Farmers face financial ruin from flawed processes and community disputes..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Ian Cox.Don't worry, says Dean Macpherson of the DA. I am the responsible minister [Minister of Public Works and Infrastructure], and government will never expropriate land without compensation on my watch..His assurance misses the point to a degree that I think makes him guilty of misleading the public..First, he serves at the President's pleasure and can be replaced at any time..Second, its not just nil compensation you have to worry about. The other major problems include when your land can be expropriated, how compensation is determined and when you will be paid..Say, for example, your grandfather bought your farm in the 1950s with a Land Bank loan and that over the ensuing years he and your father have improved that farm, making full use of the various subsidies that were made available to enable farmers to farm..Let's also say that the farm, while not the subject of any forced removals since 1913 was nonetheless part of the swathes of communal land that were depopulated in the early 1800s as a result of the Mfecane..You are also close to a small farming village with its attendant township from which you draw labour to farm your croplands. The balance of your land which comprises the majority of your land is lightly grazed as it is ecologically fragile..Communal cattle-farming scheme.In these circumstances government in its infinite wisdom decides that residents in the township should be empowered by a communal cattle-farming scheme to be conducted on the lands in the district. The trouble is, there isn't any available land other than your land and that of your neighbours which has all been acquired and farmed under similar circumstances to yours..Read more: How will Biden respond to the SA Land Expropriation bill?.Government decides that the solution to this problem is to acquire the use your grazing land which its experts decide is being grossly underutilised. Notices go out to the community about the proposed scheme and the fact that government is contemplating acquiring a portion of your non-arable lands and would like to enter into negotiations with you for its acquisition..Anyone who has been involved in a land claim will tell you that that is when the community regards the land as theirs, unless of course you take active, expensive, and often dangerous steps to stop them..Government-appointed valuers visit your property and demand screeds of information about how and why you have farmed your farm over the years. Thy conclude that while your croplands and adjacent infrastructure have value, the largely unfarmed part of your land is worth much less. Moreover, you and your forbears enjoyed the benefit of a number of government subsidies over the years without which your family could never have acquired the farm or built it into the asset it is today..The time has come, they conclude, to pass a similar benefit to the community who live nearby who never had the benefit of this largesse but nonetheless contributed to your current wealth through the provision of cheap labour. They point out that they are entitled to take all of this into account in valuing your property..Unimproved land.Negotiations ensue, with government telling you by way of an opening to negotiations that 40% of your farm is affected and the value they have arrived at is based on a heavily discounted unimproved land value that itself is less than farms are selling for in the district. They decline to buy your whole farm, telling you that they have ascertained that there is no reason why you cannot continue farming the remaining portion as before..You tell them to get stuffed and you are so far apart that a mutually agreed valuation is unlikely..So, government issues a formal expropriation notice at that value, with an expropriation date one month later. That is when title passes to government and is the date upon which you must vacate the expropriated land and on which government, and its invitees, may occupy it as owner. At the same time, you are told that government will withdraw that notice if you agree to a slight increase on the original offer. They go on to say that while they don't really want all your farm, they will buy it for what you owe the bank..Read more: New land expropriation laws are worrying.No regard has been had in the process to the fact that the lands they speak of have not been fenced off, and are not likely to be unless you do so, or the catastrophic decline in value in your property as a result of having a new neighbour who does not respect boundaries, and a local constabulary who agrees with them..What is more you are told on the QT that while government should pay you this expropriation valuation on the expropriation date, it is not in fact going to do so but will pay interest when they do get around to paying you the applicable rate, presently 10.5% simple. In the meantime, your bank tells you that your credit limit has been slashed as a result of your diminished asset base. The bank, of course, applies a vastly different basis of valuation when determining this..You could fight but that will involve a lengthy and expensive process which will probably include an appeal. But you don't have the resources to do so and are quickly going broke. In the meantime, the local community has moved onto the farm and is robbing you blind. You go into liquidation. The community takes over the rest of the farm, which government buys for a song at the fire sale, it being the only interested buyer..Already happened.You think this could not happen? But I am told it has already happened and is happening with land claims. This Act will make it so much easier to do so much worse. Believe you me, while this may be an extreme example, it will happen. But what is more likely is that farmers will agree to sell their farms at greatly discounted prices because they cannot afford to do otherwise..And, sure, there will be cases where farmers will fight and maybe even win. But they will be in the minority and government will do as the Department of Environmental Affairs has been doing for years. They will ignore that precedent and carry on as before..And, yes, the above scenario also presumes a great deal of bad faith if not downright contempt for the rule of law, but again in the twelve or so years I fought government regarding its implementation of the Biodiversity Act, bad faith was the order the day. I do not expect anything different..And bear in mind, none of this involves invoking the emergency nil compensation clause that has been in the news lately..Read also:.EFF vs ANC on land expropriation without compensation: Who will prevail? IRR's Terence CorriganSouth African farmers embrace nuclear solution amid blackout crisis – Francois Rossouw (SAAI)🔒 Zimbabwe government fails to pay white farmers who had land expropriated.*Ian Cox is an attorney in Durban, specialising in commercial law. .This article was first published by the Daily Friend and is republished with permission

Hidden land expropriation risks that farmers can’t ignore: Ian Cox

Related Stories

"BEE pits black against white": The trailblazer who says empowerment got it wrong — Sam Montši

How Leon Kluge, SA’s unofficial ambassador for Cape flora, struck gold at Chelsea for the third time

Trump's US health aid overhaul meets reality in Mozambique

Viv Vermaak: Phala Phala, games of steal and plunder