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Friday Feb 20, 2015

'Limiting farm sizes will only do harm'

The ceiling of land ownership proposed by the president during the State of the Nation address last week is being questioned by industry experts, who feel it will do more harm than good to land reform.

Last Thursday, Jacob Zuma stated that in terms of the new proposed laws, a ceiling of land ownership will be set at 12 000 hectares.

Ruth Hall, professor at UWC's Institute for Poverty, Land and Agrarian Studies, said the government had to look at a more equitable solution to address the landless issue in the country. "Agriculture varies in different regions and this 12 000hectare condition would not likely be applicable for farms in the Northern Cape winelands," she said.

Addressing the land reform issue would need more than the stipulated amount of land you are allowed to own, and Hall said should the government plan to expropriate the extra property, the demand for that land and how useful the land would be to the people who would live on it would have to be considered.

She added that the proposal ponders strongly on a "populism relating to a nationalist and xenophobic sentiment" rather than looking at addressing the land distribution problem.

AfriBusiness CEO Cornelius Jansen said the ceiling proposal was bad for the country's economy and his organisation would oppose any effort to limit property ownership.

He said the organisation's campaign would use legal action and by encouraging financial and other pressure on government.

"When citizens cannot enjoy full ownership with regard to property and assets, no economic development plan will succeed.

"What is the rationality behind the 12 000ha restriction? It wouldn't make practical sense to impose the same restriction for farmland in Gauteng as you would in the Northern Cape, where a typical viable farm unit is more than 20 000 hectares. With this type of restriction, many farms will be put out of business, leading to mass job losses for farmworkers," he said.

Besides the economic factor related to potential job losses, he said it doesn't bode well for local investment. "It sets a dangerous precedent (because) what stops them from imposing this restriction on residential property as well?"

Agri Western Cape chief executive Carl Opperman said it was virtually impossible to link the economic value and production of a farm to its physical size.

"Factors such as geography, climate, intensiveness of farming systems, infrastructure and distances from suppliers or markets should also be considered. In practice, there could be farms of 50 hectares that are much bigger and more stable businesses than an extensive livestock farm of 20 000 hectares.

"The placing of limitations on farm sizes will, therefore, be a naive return to a central planning approach that will constrain a complex industry such as agriculture."

DA spokesman for rural development and land reform Tsepo Mhlongo also questioned how effectively the proposal would address the real problem to develop successful and sustainable black farmers.

"Even if land prices are driven down, that in itself is not going to translate into successful farms. Past experience shows that even with access to land, the ANC government has largely failed to produce successful farms and farmers," he said.

He added that the proposal also does not consider the negative impacts driving off investment will have on job creation.

"Any economic sector depends on investment to drive its expansion and sustainability and this proposal not only caps land ownership, but in the process caps investment and caps job creation. This includes preventing investment in black-owned agribusinesses that have grown beyond a certain point," he said.

However, Linda Page, spokesperson for the national Department of Rural Development and land reform, said ceilings would in fact ensure equitable land redistribution.

"The land ceiling is aimed at creating job opportunities and to promote equity in the agricultural sector. In addition, it seeks to facilitate the entry and participation of small-scale farmers into mainstream agriculture," she said.

She added the government did not expect the proposal to have a negative impact on foreign business investment. "The regulation of foreign land acquisition and ownership has been undertaken in many countries throughout the world.

"It is important to note that the policy refers to arable agricultural land, not to residential property."

Cape Times


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