"There's nothing stopping them from doing this. They're the owners of the land, they are obviously entitled to do that," said department spokesperson Alie van Jaarsveld.
However, he said the government would not be enthusiastic about approving any changes in land use for the property for the new owners and that high potential agricultural land would not be rezoned.
Van Jaarsveld was commenting on a report in The Herald that a group of 54 emergent farmers on the 30ha farm Groothoek, in Hansmoeskraal near George, were considering selling out to developers.
He said the department was still investigating the report.
Van Jaarsveld said the department spent "hundreds of thousands of rands" setting up a mechanised centre on the farm earlier this year.
"The department has actually walked quite an expensive and long road with this project."
Against the spirit of land reform
He said while the farmers, as the owners, were entitled to sell, it went against the spirit of land reform.
The group were given the land by the government five years ago and farm vegetables and rose geranium for essential oils.
The Herald reported that George councillor Freddie Arries said he had been given a mandate by the farmers' association to negotiate with developers on their behalf.
In a prime position overlooking the sea, with views of Mossel Bay and Wilderness, the land is on a par geographically with Greg Norman's Le Grand golf development nearby, and Ernie Els's Ou Baai golf development in Herolds Bay.
Asking prices for property in Hansmoeskraal are about R500 000 a hectare and there is speculation that developers have offered as much as R100m for Groothoek.
One of the farmers, Klaasie Prins, confirmed that they were going to use some of the land for development.
"We have plans to develop some of the land for accommodation."