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Cape Town - The entry of buyers of farm properties with a view to lifestyle use instead of the customary production of food, has implications not only for food security.
It also affects land prices, making it difficult for bona fide farmers to acquire land, and it plays havoc with government's plans to have 30% of the agricultural land in black hands by 2014.
During the recent Agricultural Economics Association of SA conference Dr LL Reed of the Council for Scientific & Industrial Research (CSIR) and Professor TE Kleynhans of the University of Stellenbosch published research on the profiles of buyers of agricultural land in intensive (irrigated) and extensive (natural rainfall) agricultural areas in the Western Cape.
They found that from January 2005 to October 2007 more than half of the ground that had changed hands in that region had been acquired for lifestyle purposes and not with a view to traditional farming.
The lifestyle acquisitions were done cheaply by buyers whose income did not come from the farming sector and who had made the purchases with a view to the recreational value that the farm would offer the new owner, as well as its scenic beauty.
The researchers reckon this is a global phenomenon - that the demand for agricultural land is no longer solely for agricultural purposes but also for other reasons.
They say the entrance of lifestyle buyers to the agricultural land market has important consequences for those markets, as well as for the broader commercial and subsistence agricultural sectors.
Valuation of the agricultural land is becoming uncertain and complex, because additional factors have to be brought into reckoning the valuation of a farm.
More than half of the lifestyle buyers have annual incomes above R600 000, while only 36% of those farmers buying have an annual income exceeding this figure.
South Africans made up 87% of the lifestyle buyers in intensive areas, and 76% of the agricultural buyers in the intensive area.
In the extensive area 93% of the lifestyle buyers were South Africans, as were all those who bought farms for the purpose of farming.
"Foreign buyers come mainly from Britain, the US, Germany and the Netherlands. The numbers belie the perception that foreigners are responsible for most farm purchases, driving land prices up," the report declares.
For more business news in Afrikaans, go to Sake24.com
- Sake24