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Sunday Oct 10, 2010

Radical land reforms laid out in ANC green paper

A cap on land prices, a tax on individual owners of large tracts of land and no-go zones for foreign landowners are among radical changes being proposed by the government in its urgent bid to speed up land reform.

Also on the table is a proposed statutory discount on the price the government will pay for land bought for land reform.

Details are contained in the final draft of the green paper on land reform, a copy of which is in possession of Weekend Argus.

It is understood the ANC is far from unanimous on the proposals. A meeting of the party's top brass to discuss the green paper was planned for yesterday, but postponed.

The 129-page document makes "a case for radical change" in the way land in South Africa is bought, sold, used and managed.

Unsurprisingly, it endorses the ANC's 2007 Polokwane resolution (and pleas at the 2005 Land Summit) that the willing-buyer, willing-seller mechanism be scrapped if the government is to get anywhere near its target of redistributing 30 percent of white-owned land by 2014.

It goes further, suggesting that basing compensation for land redistribution and restitution on market-related prices amounts to a "veto right" that land owners wield over the landless.

The document tries to find a way around the constitutional protection of property rights, suggesting a raft of alternatives - some of them contradictory.

Even if the ruling party approves some of the far-reaching proposals, a long and arduous consultation process lies ahead before the cabinet puts it formally in the public domain. Draft timelines indicate, however, that Rural Development and Land Reform Minister Gugile Nkwinti hopes to usher in changes by 2012 through a white paper and new legislation on land tenure and land use, aimed mainly at "strict production discipline for guaranteed national food security".

Nkwinti last week gave commercial farmers assurances that the process would be orderly and within the law when he addressed Agri-SA's annual conference at Muldersdrift: he was responding to appeals from organised agriculture that the government move swiftly to end uncertainty over future property rights.

The green paper suggests a three-tier system of property rights.

This comprises leasehold tenure of government and public land, limiting freehold rights of existing land owners by giving the state more powers to determine property prices and limiting foreign land ownership with medium- to long-term leases.

Foreign ownership would be precarious, meaning that if their land was not "properly cultivated" it could be taken away - while ownership could also depend on compulsory partnerships with local workers.

Strict laws to ensure that foreign ownership is not masked through fronting are also mooted, as well as ceilings on the amount of land any one person may acquire - and giving the government first option in buying "surplus land".

To usher in the new system, the government proposes a multi-tier pricing regime - market-pricing for private deals, capped land prices as "fair and just" compensation for land for redistribution, a possible land tax on very large holdings and giving the government the right of first refusal in acquiring property.

Three options are being weighed up to effect this.

One is an expropriation act that would limit owners' compensation where sale of land is deemed to be in the public interest - the ANC has already said this would be the most likely vehicle.

The second is the use of a land reform discount, under which land bought by the state for redistribution would come at a reduced price.

A third option would be to use the productive rather than the market value of land to determine the amount of compensation to be paid.

While the green paper refers to a land tax it says this is "problematic" from an administrative point of view - but could be feasible, to prevent "very large holdings".

"Fair pricing" would be underpinned by a massive, nationwide, independent evaluation of property to ensure the state does not overpay and just compensation is awarded.

A major question running through the green paper is whether it will feasible, under the constitution, to use expropriation at a pegged level of compensation to allow the state to buy land at below-market prices - and whether this can be done without scaring off agricultural investment.

Market-related prices were not intended as the sole means of deciding compensation, the green paper says, and suggests that Constitutional Court judgments have pointed to interpreting "fair and just compensation" of land-owners in a way that would give the state leeway in its drive for equitable redistribution.

Sunday Argus

    
 

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