AgriSA wants clarity on ‘nil compensation’

The success of the Expropriation Bill relies on government clarifying the “nil compensation” provision as it could have a potentially negative effect on investor confidence, say economists.

Parliament was deliberating the recently gazetted Expropriation Bill which had the primary purpose of making specific provisions of when expropriation of land without compensation could take place.

The Bill incorporates a new clause which deals with instances where it will be just and equitable to pay “nil compensation” for expropriation of property with authority given to local, provincial and national governments to expropriate in the interests of the public. It also provides that the amount of compensation will be determined by the courts.

But while the Expropriation Bill presents an opportunity to redress the imbalances of apartheid and allow for the transformation in the sector, “nil compensation” has to be clarified, said AgriSA agricultural economist Kulani Siweya.

“The success thereof will lie, in part, on the clarification of the ‘nil compensation’ provision, which holds potential negative effects on investor confidence,” he said.

“Furthermore, a decentralised process that is coupled with coordination both provincially and locally in terms of planning and subsequent implementation is critical to achieve this.”

From an economic point, the Bill should ensure reform in an equitable and sustainable manner, which leverages on current expertise while upskilling emerging farmers into commercial farming, he added.

While government looked to address and implement land reform through the Bill, the industry continued to work through the Banking Association of SA on such matters, said senior agricultural economist at FNB, Paul Makube.

“The South African government has assured the country that the implementation of land reform will consider the impact on the economy, property rights, job and food security,” he said.

“The broader industry continues to work through the Banking Association of South Africa on matters relating to land reform.” But the biggest risk of the Bill is that the property owner would have to rely on litigation to get compensation.

According to a joint essay by agricultural experts Theo Boschoff, Wandile Sihlobo and Professor Johann Kirsten, this was due to the courts having the final say on compensation.

“To date, the courts have only sanctioned nil compensation where there is no impact on the owner… or where the proceeds of crime are forfeited to the state,” they wrote.

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