South Africa’s New Land Release Policy is Faulty

Yet again the government is failing to grasp an opportunity to redistribute state-owned land to landless black citizens on a full freehold title. Instead, it is “allowing” them to farm-state land on a 30-year lease, and only then, will an option to buy kick in. This perpetuates apartheid thinking that poor black people may not own land.

Last week, the Presidency and the Department of Agriculture, Land Reform, and Rural Development announced 896 farms owned by the government will be distributed for farming purposes. According to press reports, the government is offering a thirty-year leasehold.

Two weeks ago, FMF President Leon Louw expressed outrage following the announcement that Eskom had acquired 139 farms from the Matjhabeng Municipality in the Free State in lieu of debt thus exposing how much land is still in state hands despite 26 years since the end of apartheid.  Instead of looking in its own “backyard” for land to redistribute, the government has forged ahead with the Constitutional Amendment Bill to Section 25, which allows for expropriation without compensation (EWC) to address its own failings in land reform.

The 896 farms are a move in the right direction but why not the full title? Why is the government holding onto to ownership? Full title deeds are the first step on the economic prosperity ladder. A title deed is property security and enables the owner to become an economically active citizen by accessing finance and other forms of benefits that homeownership provides. Benefits include pride, dignity, and the ability to pass property to the next generation and other family members, something that has long been denied to poor black people.

Apartheid’s greatest crime against humanity was that it prohibited blacks, coloureds, and Indians from being owners of their own property, and where they were already owners, it seized their property. Apartheid’s denial of ownership must be redressed with the expansion and entrenchment of ownership. Leasehold is an insult to this important national objective.

Leasehold means no security. The networks of patronage and corruption that permeate the South African state means that there will always be a risk that a bona fide lessee’s lease will be ended, and the farm will be given or leased to someone more politically connected. Inevitably this means a bona fide lessee will not put as much effort and personal resources into the development of a farm business as a private owner who has full recourse to the police, lawyers, and courts to protect their property. The problem of “failed black farms” will continue through no fault of their own.

In a recent panel webcast, the consensus among panelists comprising Martin van Staden, FMF Head of Legal (Policy and Research), Temba A Nolutshungu, FMF Director, Business Leadership South Africa’s (BLSA) CEO Busi Mavuso, and Tebele Luthuli, BLSA’s Director of Policy and Legislation, was that EWC is not only a bad idea but also an unnecessary one, as the government already has the means to deliver substantive land reform.

Nolutshungu argued that the post-communist Czech model of redistributing state assets in the title, through vouchers, to ordinary citizens, should be adopted in South Africa, particularly for state-owned enterprises and state land. Van Staden emphasised that when properties are expropriated for land reform but is not transferred to beneficiaries as their own private property, no real land reform has taken place.

As the scandal of Eskom’s farms unfolded, FMF President, Leon Louw, asked: “If the Matjhabeng municipality’s 139 farms are indicative of the rest of the country, the government has ample land for redistribution, and there is no need for the amendment of section 25 of the Constitution EWC to ‘speed up’ land reform.”

The FMF urges the government to reconsider its approach to land reform. The goal is facilitating ownership. Currently, the government is a critical impediment to creating a property rights-respecting society.

The FMF is an independent, non-profit, public benefit organisation, created in 1975 by pro-free market business and civil society national bodies to work for a non-racial, free and prosperous South Africa. As a policy organisation it promotes sound economic policies and the principles of good law.

Photo by Raychel Sanner on Unsplash.