The Regulation of Agricultural Land Holdings Bill: Changing the Face of Farming in South Africa
The controversial Regulation of Agricultural Land Holdings Bill was published for comment on 17 March 2017. The deadline for commentary on the Bill has been extended to 17 May 2017.
This Bill is an interesting political statement with noteworthy timing. The land claims process has left many dissatisfied; the vision of emerging farmers benefiting from the claims process and making a meaningful contribution to SA’s food security still largely just a dream. Against this background, redistribution of farmland is one of the most emotive and highly politicised issues facing SA.
One of the express objectives of the Bill is to obtain accurate information about owners of farmland, including their race. The justifications in the explanatory memorandum to the Bill include the fact that a register is necessary because the State doesn’t actually know how much agricultural land it owns and has available for redistribution, however the State strangely seems to have numbers on foreign ownership as the explanatory memorandum states that it has increased substantially in recent years. The Bill requires every owner of farmland to register ownership. Both publicly and privately owned farmland has to be registered. The register is accessible to the public subject to the usual Promotion of Access to Information exclusions. Presumably, preparation of the register is the first step in the forced land redistribution process which is clearly the primary objective of the Bill. The next step is determining which land falls into the “redistribution agricultural land” category, that is agricultural land to which people defined as “Black” in terms of the Employment Equity Act have a right of first refusal. If Black people don’t use their right of first refusal, the land shall be bought by the State. If the parties cannot reach agreement on the price of the land, the State may expropriate it. It is impossible to calculate the full impact of the Bill until the ownership limits and restrictions are promulgated.
Foreign agricultural landowners
From the date it commences, the Bill prohibits foreigners from acquiring agricultural land. Foreign agricultural landowners wanting to sell their land must first offer to sell the land to the Minister of Rural Development and Land Reform (“the Minister”). If the Minister doesn’t agree to purchase the land then the owner may sell it to South African citizens. Foreigners may lease farmland (registered leases) for between 30 and 50 years.
Unlawful acquisition of land, offences and penalties
Sales of land that don’t comply with the Act are void. The Bill states: "Any acquisition of land in any manner which is inconsistent with or contrary to the provisions…is unlawful and a court may make an order for the forfeiture of such land to the State." Failure to comply with the Bill may also be a criminal offence resulting in a fine or imprisonment not exceeding three months, or both.
The Bill provides for the establishment of a Land Commission to be appointed by the Minister. The Commission is responsible for establishing the register and collecting information including the race, gender and nationality of each owner and the size and use of the agricultural land holding. According to the Bill, every owner of a private agricultural land holding must lodge a notification of ownership with the commission within 12 months of the commencement of the Act.
Anyone acquiring private agricultural land after the Bill commences must lodge a registration notice with the Commission within 90 days after acquiring the land. A Registrar of Deeds may not register the transfer unless the notification has been lodged with the Commission.
Excess land demarcated for land reform
“Redistribution agricultural land” is that which exceeds the ‘ceilings’ for land ownership to be prescribed in terms of the Bill. Owners of that “excess” land will have to make it available for redistribution and that process may end in expropriation. The State determines how many hectares each large, medium or small farmer can own and the Bill forces owners to sell any land exceeding the limit. The excess land will be sold to Black owners, failing which it must be acquired by the State presumably with a view to ultimately transferring the land to land reform beneficiaries, although what happens to the redistribution agricultural land after it is acquired by the State is not dealt with in the Bill.
By imposing the ‘ceilings’, the State may end up with a myriad of off-cuts from existing farms spread across regions. Disputes about the land identified by the owner as redistribution agricultural land are to be determined by arbitration. A concerning issue is the provision in the Bill for the State to permit compensation of arbitrators not in the full time employ of the State, meaning a person who is employed by the State on a part time basis can still be appointed. How can a State employee can be unbiased in a dispute to which the State is party? It is also difficult to see how the redistribution process will be reconciled with South Africa’s existing land registration processes. Will the redistribution land have to be subdivided? Who pays for that? The devil is in the detail.
This process may give rise to the same problems as earlier land reform attempts, including lack of farming training/education for new land reform owners, lack of access to capital for initial farming investment and most efficient and productive use of land (large pieces of farm land being used for small-scale subsistence farming). South Africa needs commercially viable farming enterprises and that means that each farmer has to have enough land. Equality of land ownership has to become a reality whilst keeping South Africa’s agricultural sector and economy functioning effectively since whatever food we don’t produce has to be imported. Redistributing land with the promise of running a viable farm without giving emerging farmers the skills and capital to do so sets the new land owners up for failure. Failed farms means that food becomes more scarce and costs more, and that affects everyone, especially the poor.
How much will it all cost?
The Bill states that it's expected to cost the State R21.3 million a year "for the operation of the Land Commission as well as the acquisition of redistribution agricultural land" but then states that "this excludes the cost of the acquisition of redistribution agricultural land that will be funded within the baseline of the relevant programmes of the department".
Make your submission
If you require assistance in providing commentary on the Bill, please contact David Warmback.