KZN farmers sold land at 'inflated prices'

Organised agriculture has condemned the actions of farmers selling their farms to the government at highly inflated prices, saying the deals could put neighbouring landowners out of business.

Earlier this year, Ron Jenkinson sold his 250ha farm Jengro Estates, near Kwambonambi, to the Rural Development and Land Reform Department for R24 million, double the going rate for land in the district. The farm had been on the market for some years.

Jenkinson said the government had asked him how much he wanted for the farm.

"I wrote a figure on a piece of paper and pushed it across the table. They agreed."

Sandy la Marque, CEO of agricultural union Kwanalu, said the sale had had far reaching consequences.

She said Kwanalu would not condone such behaviour by farmers.

"It's not in the spirit of transformation of the sector either," she said.

Theo de Jager, of AgriSA, said such sales, which were rife across the country, should not be driven by what farmers' demanded but by professional valuations.

Bonginkosi Zulu, spokesman for the Rural Development and Land Reform Department, said a registered valuator had been appointed in the Jengro Estates sale, but he declined to give the valuator's name.

Zulu said the department had paid R74 000 a hectare for land under cane, R62 000 for land with four-year-old timber in the ground, R5 000 a hectare for grazing land and R5.2m for fixed improvements.

A professional and independent valuator, Mick Butcher, said the price paid to Jenkinson was "ridiculous".

"Based on my general experience and knowledge of the market and the area, I consider a reasonable, current market value... to be R50 000 a hectare, including equipment and buildings."

Farmers in the Kwambonambi area, who asked not to be named for fear of damaging relationships, blamed the government, saying it could have spent the money more wisely. They said such deals were driving up the price of neighbouring land, which some needed to extend their own operations.

"Land prices, at about R105 000 a hectare, are now unaffordable," they said.

However, Noah Nyawo, 23, head of the Ikusasa Lethu Youth in Agriculture Project, which has taken over Jengro Estates through the Proactive Land Acquisition Strategy, and is leasing it from the government for R167 000 a year, disagreed.

"The department told us to look for a farm and we wanted this one. The farmer did his own valuation first and then the department did their own valuation. It's like selling two cars; yours has 50 000km and mine has 1km on the clock."

Nyawo said R55 000 a hectare was a more "realistic" price for the farm, but there were considerations.

"There are five compounds, a smart house and equipment; lots of things are included in that price."

Kathy Hurley, of the SA Sugar Association, said cane farms were being sold for more than R50 000 a hectare, but had been valued at no more than R40 000 a hectare "at a push".

The Mercury

Posted at 07:03AM Jun 08, 2011 by Editor in Agricultural  |  Comments[1]