Land Watch

Land reform could slay egg-laying goose

Don’t slay the goose
goose.jpg

The South African government’s plans to regulate land ownership fit in with a global trend, but require careful handling if a valuable egg-laying goose is not to be slain in the process.

Next to the ugly scenes of confrontation in parliament during last week’s State of the Nation Address (SONA) by President Jacob Zuma, his announcement during the address to turn plans for land property regulation into legislation received the most international news coverage.

From the internationally viewed SkyNews to papers in Zimbabwe, Nigeria, Europe – the world over – the media carried news agency reports about the plans to slap restrictions on land ownership in the country. This includes restrictions on foreign ownership and on the size of individual farming units.

In the present highly confrontational, radicalised and distrustful South African party-political scene land ownership has become a very emotive and politically charged subject, with the broader picture often getting lost.

It is probably regrettable, at best, that the South African government saw its way clear to launch its plans in such a charged atmosphere and that not more had been done first to build some consensus around the issue among all stakeholders.

International backdrop

The fact is that some restrictions on land ownership, and particularly foreign ownership in most countries of the world is the rule rather than the exception.

In a list prepared by the international real estate organisation International Living under the headline “To Have or to Lease: A Global Guide to Property Ownership Rules and Restrictions,” only France, Italy and Spain out of the 26 countries listed have no restrictions on foreign fixed property ownership.

Among the countries with some restrictions listed are Australia, Canada and New Zealand. Often these restrictions are coupled to the size of properties, in some instances as small as one to five acres or in the case of commercial property 50% domestic shareholding.

In May last year the international NGO ActionAid, with a branch in South Africa, published a report under the title “The Great Land Heist: How the world is paving the way for corporate land grabs”, describing what it calls a “wave of land grabs” across the world. This “wave” is driven by factors like the growing global population in the face of finite agricultural resources and global warming.

The report writes: “The current wave of land grabs is not simply an opportunistic response by investors looking to cash in on the rising value of land and agricultural resources since the 2007-08 food crisis, but is rather acceleration of a longer term process via which corporations, assisted by governments, have been trying to assert control over all stages of the farming and food system, often at the expense of smallholder farmers.

“This battle over not just land, but over the future model of agriculture itself, poses an immediate threat to the future of smallholder farming.”

South African challenge and opportunity

It is against this background that South Africa should be very careful to allow short term political goals, dominated by vote-catching strategies, to cloud its plans to reform land ownership and the agricultural industry rooted in it.

It is, for instance, lamentable that there was nothing in the SONA and subsequent statements about turning around the dismal record of assistance to smallholder farmers, many of whom have been beneficiaries of land redistribution programmes.

Fact is, considering that due to aridity only 13.5% of the country’s available land is suitable for crop production, its agricultural industry has performed a near miracle.

Not only is the country self-sufficient in virtually all major agricultural products, but also a food exporter of note.

According to FAOSTAT, South Africa is one of world's largest producers of: chicory roots (4th); grapefruit (4th); cereals (5th); green maize and maize (7th); castor oil seed (9th); pears (9th); sisal (10th); fibre crops (10th). The dairy industry consists of around 4 300 milk producers providing employment for 60 000 farm workers and contributing to the livelihoods of around 40 000 others.

As pointed out in another article, and considering that Europe is the main destination of the country’s agricultural products, this position constitutes a huge strategic advantage in ever more complicated international trade conditions.

Besides this it should be kept in mind that agriculture not only contributes handsomely to foreign currency earnings, but employs in the order of a million people, with another close to eight million people directly or indirectly dependent on agriculture for their employment and income.

Important national asset

All of this makes the industry a hugely important and valuable national asset. It is, however, an asset that does not only depend on the land. More important, are the skills and knowledge of local conditions that have been build in the industry over generations.

To lose those skills could come at the expense of breaking the back of the industry. It would amount to slaying the goose that lays some very handy and essential golden eggs.

It is to be hoped that the government will proceed with great caution and a truly inclusive process in the implementation of its plans to reform land ownership and the agricultural industry that goes with it.

by Piet Coetzer

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