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Thursday Jul 30, 2015

'Farmer must get market value for land'

The amount of compensation farmers are paid for land expropriated by the state should be as close to the market value of their properties as possible, Agri SA argued yesterday.

Briefing Parliament's Public Works Committee during public hearings on the Expropriation Bill, which is meant to replace the 1975 Expropriation Act, Agri SA's Annelize Crosby praised government attempts at providing a clearer, more legally sound process of expropriation, but said they had serious concerns about how the compensation to farmers affected by expropriation would be calculated.

"We are a little bit worried about how this will be implemented and whether the compensation that is going to be paid is going to be as close as possible to market value..."

"We try and make the point that even though the Constitution allows for factors other than market value to be taken into account, and for less than market value to be paid, from an economic perspective that would not be a sensible thing to do because it would impact on the banks' kind of interest rates that they would charge, their appetite for risk in the sector."

Crosby said if banks were loath to invest in agriculture, it could have a serious effect on food security. In addition to compensation for financial loss, farmers should also be paid out in the form of "solatium" - compensation for the emotional trauma on losing one's land, and business.

"If you expropriate a farmer... he has to find new input suppliers, establish relationships, find new markets, he has to move his livestock at a substantial cost and that has to be compensated."

The Cape Chamber of Commerce and Industry opposed the bill, with Chamber President Janine Myburgh saying it was unconstitutional and "ill-conceived". Foreign direct investment would "be severely curtailed".

Cape Times

    
 

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