Six myths about land reform

Parliament’s plans to change the property clause in our Constitution to allow the state to expropriate land without compensation (EWC) have stalled. However, a freshly drafted Expropriation Bill has recently been distributed for public comment.

One of the more alarming features of the Bill is a section that would allow the government to confiscate land without compensation “where the land is not being used and the owner’s main purpose isn’t to develop the land or use it to generate income, but to benefit from appreciation of its market value”.

Government alleges that EWC is necessary to restore land that was stolen during apartheid; to redistribute land so that home ownership matches racial demographics; and to appease an electorate that’s crying out for land.

President Cyril Ramaphosa not only claims that EWC won’t hurt the economy, but that it will bring more people into the fold by helping beneficiaries to become farmers. Before adopting such a radical policy at a time when our economy has been devasted by the pandemic and lockdowns, we should do some much-needed myth busting.

Myth one: land hasn’t been given back to its rightful owners

South Africa has a dark history of land theft. Justice requires that the wrongs of the past are addressed by awarding compensation to the victims of land dispossession. Over the past 25 years, the Land Claims Court has resolved more than 95% of the claims that have arisen. More than 1.8 million individuals have received compensation either in the form of land or money, and fewer than 3 500 claims remain unresolved.

Myth two: home ownership is skewed along racial lines

Amidst the cry for land reform is the claim that we need to have a more equitable distribution of land based on the country’s racial demographics. We should be suspicious of racial-demographic thinking because it’s exactly what the apartheid government specialised in. However, for those who are sympathetic to it, home-ownership data demonstrates that racial groups own homes in almost perfect proportion to their numbers.

Myth three: people are crying out for land

When South Africans are asked about the country’s most serious unresolved problems, almost 40% identify unemployment, 33% raise lack of service delivery, while less than 1% are concerned about land distribution.

When people win their land-claim cases, they are given the choice of receiving land or financial compensation. In 92% of cases, people choose money over land. This shouldn’t come as much of a surprise because money translates into freedom. Beneficiaries can use that money to start businesses, pay off debts, or invest in the market. The facts show that land isn’t a burning issue for ordinary citizens. It’s an issue being capitalised on by a few radicals with big loudhailers.

Myth four: anyone can be a farmer

The government spent more than R1.4 billion buying farms in the Eastern Cape to redistribute to aspirant farmers. Of the 265 farms purchased, only 26 remain viable. In 90% of those cases, once thriving farms that produced food and employment are now in ruin. Being a farmer isn’t easy. It’s a technical job that requires an enormous amount of time, expertise, and money.

Myth five: the Constitution impedes land reform

Section 25 of the Constitution provides a roadmap for land reform while ensuring that no one is arbitrarily deprived of property. It empowers the state to expropriate property in the public interest, which includes land reform. A classic case would be the construction of the Gautrain project, which needed to run through privately owned land; or the acquisition of land to build RDP (Reconstruction and Development Programme) homes. The Constitution recognises that in such cases, private owners deserve compensation and the following test is used:

The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including:

(a) current use of the property;

(b) the history of the acquisition and use of the property;

(c) the market value of the property;

(d) the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and

(e) the purpose of the expropriation.

Myth six: EWC won’t damage the economy

This is akin to saying that a vow of celibacy won’t affect your sex life. Unfortunately, life involves trade-offs. You can’t remove property rights and have a flourishing economy. Foreign investors won’t risk having their land confiscated in South Africa when they can pick any number of other nations that will protect their investments.

One doesn’t have to look at Chairman Mao’s Cultural Revolution or the horrors of Joseph Stalin’s regime to know how bad this idea is. When Robert Mugabe implemented EWC in Zimbabwe, it led to the world’s worst case of hyperinflation. It wasn’t just the original land owners that were hurt, the average man on the street was left destitute after the economy was annihilated.

What this means

Once the above myths about land reform have been revealed, the following becomes apparent. Almost all victims of land dispossession have been compensated. Home ownership matches racial demographics. Barring a few opportunistic politicians, almost no one views land reform as a burning issue. The transfer of functioning farms to ill equipped beneficiaries has been a spectacular failure. EWC has been tried in communist regimes around the world, and it has wrought riches for a few elites and devastation for everyone else.

• Mark Oppenheimer is a practising advocate and member of the Johannesburg Bar.

*All statistics have been sourced from the Institute of Race Relations.