Expropriation without compensation would do ‘very little’ for SA, says expert

One of the coutnry’s foremost agricultural economists has said land expropriation without compensation would see more black farmers participating in the agricultural sector, but there would be “very little” other positive aspects from an economic perspective.

Wandile Sihlobo, agricultural economist at the Agricultural Business Chamber of South Africa (Agbiz), said land expropriation without compensation would negatively impact South Africa’s economy.

Sihlobo was on Wednesday addressing the topic of the economic impact of the Covid-19 pandemic on local agriculture and food security during a virtual briefing hosted by the Cape Town Press Club.

He said it was important to acknowledge the country’s history on the land issue and how South Africans are “emotionally invested” on the topic of land and expropriation without compensation.

“But I think when you are judging it from an economic perspective, given that we are a highly capital intensive sector in South Africa, if you were to go ahead with the widespread expropriation without compensation, I see very little upsides to it,” Sihlobo said.

He further said it was important to be cognisant of the different political views on the matter. These include the one espoused by the EFF in their policy which is for widespread expropriation without compensation, and that of the governing ANC in its 54th annual congress report following the 2017 Nasrec conference, which speaks of expropriation without compensation of underutilised land.

“But the bottom line is that expropriation would have a negative impact,” Sihlobo said, adding that its implementation would have “very little upsides”.

These upsides would be seeing more black farmers participate meaningfully in the agricultural sector, with their “economic opportunities and fortunes growing”, he said, adding that access to land and not being able to “derive value” from it “could be somewhat limiting”.

“We need to look at some of the workable models … to see if these can accelerate land reform … and also deal with some institutional reform of some of the tools that we do have into this without actually going through the legal route of changing constitutions and all of those things,” Sihlobo said.

In December 2019, parliament invited the public to provide written comment by 29 February on a draft amendment to the constitution to allow for land expropriation without compensation.

Once the public hearings have been concluded, the ad hoc committee will return the Bill to the National Assembly after considering all public input. The members of the National Assembly will then vote on the Eighteenth Amendment Bill. If passed, the Bill will then be brought before the National Council of Provinces (NCOP). Once passed, the law will allow for the expropriation of land and property without compensation.

Responding to questions, Sihlobo pointed out that there is potential to expand the agricultural sector in areas with high levels of poverty, such as the Eastern Cape, KwaZulu-Natal and parts of the Limpopo and North West provinces.

Sihlobo said the east coast of South Africa running from the Eastern Cape and KwaZulu-Natal, including parts of Mpumalanga, has underutilized land that can be developed and used to assist in the alleviation of poverty.

The state and the private sector would have to work together on issues, such as land reform and the “growth agenda” within the agricultural sector, Sihlobo suggested.

He also said the sector needs to be more inclusive, with black farmers producing only 4.7% of the country’s maize and 1.3% of its wheat.

Sihlobo said knowledge sharing platforms are key to uplifting developing farmers.

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