My comments submitted to parliament on the amendment of section 25 of the constitution – The Land Question Answered (full document)

Below is the summary of the full document.

The government released for public comment in December 2019 the controversial draft bill on the amendment of section 25 of the constitution. The amendment proposes to make expropriation without compensation part of the constitution. The main reason given is that the willing buyer/willing seller model has stalled progress in redistribution. It has done this in two main ways: Land available for distribution relies on the willingness of current landowners to sell their land; and secondly the affordability of the land makes it expensive even if it were possible to expropriate – compensation would still be necessary according to the constitution as it is. Therefore, EWC will ensure that these critical constraints are removed.

Land reform has three pillars:  (1) land restitution (2) land redistribution (3) security of tenure. Land restitution aims to redress historic wrongs directly and in a narrow sense by compensating victims who lost their land because of unjust laws and evictions. Land redistribution aims to change the current unequal ownership pattern and make access to land more accessible to black people. Security of tenure aims to provide security of long term tenure to individuals who are farm workers, dwellers as well as people living in the former homeland on land that is under some form of communal trust. All three elements are aiming at quite different things under the broad umbrella of land reform. Our concern currently is with land restitution and redistribution, which are concerned with the ownership and acquisition of land.

 I find the reasons given for amending the constitution to be unjustified; a point shared as well by the government’s own High Level Panel Report chaired by Kgalema Motlanthe says, “…the need to pay compensation has not been the most serious constraint on land reform in South Africa to date”. There are a number of assumptions underlying the rationale for EWC and none of them are able to survive close scrutiny.

1. The first assumption is that if EWC is implemented it would be apply to the majority of land or to a significant proportion of the land owned – however this cannot be the case. The law would firstly have to spell out the conditions for expropriation with just and equitable compensation (EWJEC). Those conditions, the High Level Panel Report suggests would be conditions such as whether the land is underutilized or unutilized, abandoned or held for speculative reasons. The law would then have to spell out specific conditions which would make EWC applicable. The presidential advisory panel suggested that EWC should apply to land that is abandoned, or held for speculative reasons amongst other reasons. The main point here is that these conditions would apply to a small amount of land available. EWC would not be the dominant and general mode of land acquisition and therefore the impact of EWC on land reform would be minimal. The presidential advisory panel sums it up well, “even if we were to adopt the view that zero compensation is permitted in certain circumstance, it is highly unlikely and improbable that there could be a plethora of circumstances that would lead to zero compensation”.

2. The major constraint assumed in Land Restitution is that the majority of current landowners are not willing to sell their land even when there are valid claims against the land. It is true that in principle, if the current landowners are not willing to sell their land then restitution would effectively be halted. However, what is true in principle, might not be true in practice and therefore evidence showing that current landowners are unwilling to sell their land for restitution is required if we intend on changing policy. Public policy with its far reaching consequences must be based on evidence. As things stand, there is no evidence from the numerous government reports commissioned to evaluate land restitution, which have found that unwillingness to sell land is a major constraint to land restitution progress.

Most of the rural claims have been settled with land and cash pay-outs which is the dominant settlement option in urban restitution claims. What proportion of the rural claims settled with land, is alternative land rather than the claimed land is not measured currently. However, if one looks at case studies and high profile settlement cases such as the Zebediela citrus farm in Limpopo; Bakwena ba Mare Phogolo in Klipat North West;  eMpangisweni in Kwazulu –Natal; Groenfontein-Ramohlakane claim in Middleburg to name a few – they were all settled with land claimed.

Another reason to be sceptical of claims that the unwillingness of landowners to sell is a constraint is because the High level Panel report found that at the current rate at which land restitution claims are finalised; a claim is finalised after agreement has been reached and it is implemented; it will take 42 years to finalise all restitution cases. Finalisation occurs after agreements with landowners and claimants has been reached, so even if all land restitution cases today were settled; it would still take 42 years to implement the settled claims. Clearly then, land acquisition is not the bottleneck in land restitution.

3.  When it comes to Land redistribution the two major reasons for EWC must be that (1) The requirement for compensation makes it expensive and the state cannot afford it. (2) Even if the state could afford it – there is a general unwillingness by current landowners to sell their land for redistribution. Both these reasons are false.  

The budget for land reform over the passed 25 years has been between 0.15% and 0.45% of National Treasury’s budget.  The budget for land reform in 2019 was R7.8 billion (0.42% of the total budget which is R1.83 trillion). The land reform budget is a small amount compared to the budget for social grants (R207 billion) and education (R262 billion). How much would it cost to redistribute 30% of agricultural land? There are different cost estimates depending on your source of data. Data from the Department of Agriculture, Fishery and Foresty (DAFF) would give a cost of R66 billion to acquire 30% of the total value of land and fixed improvements. Government commissioned reports on land reform give cost estimates of R4902/hectare under the PLAS policy and R1500/hectare under the SLAG/LRAD policy which translate to between R88 billion and R27 billion. If the budget for land reform was just even a third of the budget for education – it would take a single year to acquire the remaining 30% of land. The government can afford land reform at market prices – it just has higher priorities which it allocates its money towards. Land reform over the past 25 years has not been a priority.

The other assumption is that there is an unwillingness to sell land by the current landowners. The problem we are told is that even if compensation at market prices is not a problem, there must be land made available for sale. It is true in principle that if there are no sellers of land, then progress will halt if you rely on the willing seller model. However, in practice that is not the case. The commissioned report on land redistribution found that up until 2009 the amount of land in hectares per year that has been acquired for both restitution and redistribution is 10 times smaller than the amount of land bought and sold on the land market each year. There is far more land available for purchase then what the government has been willing to purchase.

4.  A forth major reason given for EWC is that it is already implicitly allowed for in the constitution and the aim is to simply make it explicit. Two arguments are given in support of this view.

The first one is that Section 25 contains provisions, the most important being that of expropriation with just and equitable compensation. There is a clause,  section 25(8) that allows departure from these provisions  provided the rationale for the departure is consistent with section 36(1). Therefore the Constitution permits departing from compensation and allows expropriation without compensation provided the reasons and principles used are consistent with section 36(1).  This is  an erroneous interpretation . Firstly, because section 36(1) states general principles which should be applied to the whole constitution, including the provisions already stated in section 25. They are in fact, the same principles but under section 25 they are applied specifically to the right to property. Secondly, section 36(2) clearly states that any law must be consistent with section 36(1) and  any other provision in the whole constitution. Therefore, the provisions for expropriation with compensation cannot be set aside or departed from.

The second argument  given is that because the constitution allows expropriation with just and equitable compensation , it is possible for there to be circumstances when that just and equitable compensation is actually zero compensation. The problem here is that what those circumstances are that would make compensation to be zero are never spelled out. They are simply assumed to exist, but what exactly they are and how they would justify zero compensation is  never revealed.

5. The fifth reason for EWC is the purported benefits which will be realized when land reform is speeded up. A major motivation for land reform  besides addressing historical injustices is that it will improve the livelihoods of the poor majority ofbeneficiaries by lifting them out of poverty and improving food security.  The general  verdict of the  impact of land reform on beneficiaries’ lives is one of failure; there has been no significant impact on people’s lives.

Land reform has failed to make land access equitable in two ways. Firstly, the policy design for redistribution has over the last 25 years changed from targeting the poor majority earning below a certain threshold to one favoring commercial emerging black farmers with business plans and strategic partners. Secondly, research by the PLAAS institute into who has benefited in land redistribution projects found that elites; politically connected and  business people with interests and capital outside of agriculture; were benefitting disproportionately from land reform.

Land reform has failed to reduce poverty, improve food security for households and increase  employment. Failure can be attributed to poor post settlement support; poor planning prior to settlement, beneficiaries often lack skills and training, group tensions amongst beneficiaries which lead to a lack of agreement on what to do with the land.  The reasons for failure are many and will in no way be addressed by EWC.

It is obvious to see, once you move past the political rhetoric and dig into the real issues affecting land reform, that EWC will do very little to  speed up progress and bring any meaningful change in land reform. It is a political trick being used by the ANC to scapegoat current landowners for the failures in land reform over the past 25 years. The reality is  that land reform despite the political rhetoric has not been a major government priority judging by the amount of money that has been allocated towards it. The real problems in land reform have been well documented by the government’s own commissioned reports  and  if they are honestly concerned with making progress then they should start there.

Full document – The Land Question Answered