Fin24

New policy on land grabs, farm tax

2010-10-13 22:27

Cape Town - The costs of government’s land reform drive must be reduced through a multi-tier pricing regime that should include options like scrapping the willing-buyer-willing-seller concept, introducing a land tax as well as a new system of valuing land, according to the final draft of government’s green paper on land reform.

Fin24.com has seen a copy of the green paper, which blames the willing-buyer-willing-seller concept for the slow pace and increasing cost of land reform. It stresses that the current price of land makes government’s aim of redistributing 30% of all agricultural farmland by 2014 an impossible task.

“Given that approximately 7 million hectares has been transferred to date, over 14 million hectares would need to be delivered over three years...”

“In other words, delivery would need to leap from 1 million hectares per year to over 4.6 million hectares, which is not feasible given the current willing-buyer-willing-seller approach,” reads the document, which will be released for public comment if and when approved by cabinet.

“Supposedly willing sellers” are slated for their “latitude to determine the price of land that suits them regardless of the buyers’ ability”.

The green paper offers three options to ensure that a “below-market compensation standard” is achieved.

Firstly, a more forceful expropriation policy, which the paper says is being “actively discussed” in the department of rural development and land reform, is proposed.

A “land-reform discount” - an across-the-board discount of compensation for land acquired for land reform purposes – is also under consideration.

The third option would be the use of a “productive value” as opposed to “market value” to determine compensation.

“Whatever approach is taken would need to comply with the overriding “just and equitable” criteria stated up front in 25(3) (of the Constitution),” reads the document.

Progressive land tax


A land tax proposal is also highlighted as one of the “most direct ways of affecting (reducing) prices” because it would increase the cost of holding under-utilised and unutilised land.

“A progressive land tax would potentially push additional land onto the market, though how much of that land could be accessed for land reform purposes is unclear. It would of course also produce a new revenue stream for government.

“If possible, that stream should be legally tied to use in funding land reform. It is suggested that such a land tax should be levied only on very large holdings (the same holdings that might be affected by a ceilings provision), rather than subjecting all holdings to a land tax over and above existing rates.

“This would avoid incurring administrative costs of collecting small amounts on many small holdings. This targeting would also reduce any general negative impacts on tenure security and investor confidence,” states the document.

According to the paper, this would not make all agriculture less profitable, just agriculture on very large holdings (where productive land is unused).
 
The green paper, however, does concede that a land tax will be problematic.

“Any tax that is politically acceptable would have only a marginal downward impact on land prices; in order to compel land prices to drop by, say, 30%, it would have to be so large as to create uncertainty in the commercial farming sector.”

It is also conceded that there would be little appetite to introduce a land tax so soon after municipal property rates started applying to farmland as well.

Multi-tier pricing regime

When it comes to the new valuation regime, it is proposed that the state create a valuation body that would standardise land valuations.

“The creation of a proactive role for the state in relation to valuation in essence gives effect to a multi-tier pricing regime. This model of valuation is successfully used in countries such as Malaysia, Australia and New Zealand.

“The proposed intervention of the state will create an equal and market for both private land transactions and land reform transactions,” reads the document. This would require the creation of a Valuer General (similar to the Surveyor-General).

In his foreword to  the green paper, Rural Development and Land Reform Minister Gugile Nkwinti says that land reform and redressing the cruel consequences of apartheid need to be a collective effort if the “anger and bitterness” are to be “toned down”.

But, he also warns that the goodwill and patience that black South Africans have shown in this regard is not “inexhaustible”.

-    Fin24.com



 

Comments
  • Fail - 2010-10-13 22:55

    Epic FAIL! First make sure that the current transferred farms are up and running AND profitable before messing around with the rest of farms. Otherwise the future of agriculture in SA is grim.

  • david - 2010-10-14 01:48

    Great idea. Food is not all that important for a happy and healthy country...oh wait...

  • Marc - 2010-10-14 02:26

    One word - Zimbabwe!!

  • suky - 2010-10-14 03:48

    All very admirable but who is going to do the farming and supply the country with food if most of the land reform projects have failed? Training farmers cannot be achieved over a year or three, it takes many years. Good luck.

  • Joe - 2010-10-14 04:19

    And so it begins. How ironic that the ANC fails to heed the warning of 'don't bite the hand that feeds you', in this case, quite literally... And when the commercial farmers pack up and depart for less hostile governments elsewhere in Africa, and the ANC and its cronies rejoice at their success of total land redistribution, the food on their plates will dry up, but only after the food of the poor is long gone, and the UN will have yet another failed African state to feed, this whilst the international community has less and less wealth to share, and perhaps then, though unlikely, the ANC will scratch it's peppercorns and ask the prophetic question: Hey, what happened?

  • Edgar - 2010-10-14 05:52

    Oust this goverment and all it's clowns before they totally destroy our country.

  • domdom - 2010-10-14 06:15

    All well and good. We need land re-distribution. But why is there no programme to put black people through Agricultural Colleges and train them up to the same standard as present white farmers? I don't hear many success stories where land has been taken over and it's at least as productive as it was in the hands of it's former white owners.

  • critical thinker - 2010-10-14 06:33

    Another threat from the left, like nationalisation of healthcare and mining, this one , as all the others in the past, will be smashed by big business in SA. The Malemas of this world do not learn from past experience. Fighting big business in SA, is a battle that you will loose every time, all the time.

  • SA - 2010-10-14 06:34

    Yeah right! It's okay giving people agriculture land that supposedly their forefathers owned but the people who take over the land usually do nothing with it and it becomes useless land. Along with the land should come some kind of training to be a farmer and believe me a farmer is a calling not something everyone can do. With all the people in this country we need people who can farm the land properly so we can all eat!! Somebody somewhere needs to start looking at this problem not from a "my great grandfather owned land therefore so should I" to how are we going to feed everyone in 2015"??

  • Thabo - 2010-10-14 06:37

    The downward spiral is gaining momentum. Sad that they [anc] cannot buy land and make it work .The land price is small compared to the cost of production so it will never work.

  • Elsa - 2010-10-14 06:40

    So the minister is again turning the land issue into a threat. Tantrum, tantrum, either GIMME what I want, or else ......

  • gasguy - 2010-10-14 06:40

    We are nearly 15 years in democracy. Is it not time that all things be equal? Land reforms, actually land redistribution, affirmative action, actually racism, etc have had their chance. Now we are all "equal" and it is time for us all to be treated as such. This situation where one race gets "given" before another race is illeagal and not helping the country. Its time now to work for what you want and for the government to govern rather than worry about reverse apartheid. How much longer is this nonse going to continue - indefinitely?

  • Clive - 2010-10-14 06:52

    Very easy to put the blame on to the farm owners for slow land reform.The real blame sits with Land affairs,department of Agriculture.There are farms which have been signed up over 5 yrs ago with no progress.Corruption in the department,officials being suspended,files going missing.The government almost wants the system to fail,so land grabs take place and the government does not have to pay for farms.

  • I told u so - 2010-10-14 06:53

    This will bring destruction to the few farmers still trying to hold on - they already are battling to make a living - Food prices will soar as there simply won't be enough farmers left - NO Farmers NO Food - Feel it - Zim is here

  • TC - 2010-10-14 06:55

    The real reason for slow land-reform is theabsence if commitment from the department, political agendas, and corruption. The report and green paper (above) is once again an attempt to cover the truth with a bundle of lies!

  • D - 2010-10-14 07:04

    But, he also warns that the goodwill and patience that black South Africans have shown in this regard is not “inexhaustible”. Is that a threat? Sounds like it

  • Neels - 2010-10-14 07:08

    Ja nou toe! Let's bite the hand that feeds us! I just wish there was someone in gorment that could think. At the moment, we have a hand full of farmers feeding and employing millions, soon we will have millions with the opportunity, feeding no one and millions more without land.

  • Johnny Cash - 2010-10-14 07:08

    and when they have it, what will they do with it ? sounds like a dog chasing a bus !

  • DH - 2010-10-14 07:14

    Whateva....! Let's not go the Zim route please...

  • BBB - 2010-10-14 07:21

    The government has created its own problem by appointing people to positions of power and the first words they utter are "we are going to take the land"and up goes the price.This in turn has created an expectation of "my neighbour got R6m I can get R10m" no more homework is done ie.what can the land produce and what profit can it make therefore it is worth X.The greedy have created their own and massive problems for this country.

  • And the Reality is - 2010-10-14 07:26

    If the goverment want this to happen they need to do stats how many newly aquired black farmers are producing what was produced by the previous owner. If they are producing 75% of the last years than it is still reasonable but what about those that are not producing how are they going to pay back their loans...The land bank will not just keep on giving and giving they want their money back. How are they going to pay the wages of the workers if they are not productive, this will just compound the problem of poverty. Or maybe if we nantionalise Malema's assests than this can assist with the poverty crisis. I think that the Govt needs to get real and think twice about their Land Reforms look @ Zims that has not been succesfull and we are heading the same way.

  • Down The Drain - 2010-10-14 07:28

    ............is it true that the Rt Hon Robber Mugabe is their advisor! Viva ANC, Viva! I am off to pack my bags!

  • Fools! - 2010-10-14 07:31

    You just can't argue with fools. Will the previously disadvantaged farmers also be taxed on unutilized land? The last remark regarding "...the goodwill and patience that black South Africans..." is just another threat. Well, the opposite is also very true. The currently oppressed is also running out of patience. Just think for a change, who will feed the fat cats with their shiny beer bellies, and their children? What a circus.

  • Paige Cronje - 2010-10-14 07:35

    New policy on land grabs, farm tax

  • Pothole - 2010-10-14 07:37

    Government admit that 90% of farms already redistributed is total failures. This means ninety percent of the 30% redistubution goal will be failures also. And they still want to continue. There is a very big problem in the thinking department.

  • Mark - 2010-10-14 07:38

    Goodbye to SA agriculture.....

  • JLC - 2010-10-14 07:38

    It is the corrupt goverments fault that landreform is not up to date. Instead of spending the money wisely, the waste it on partiess, overseas trips and stealing. Blaming the willing buyer- willng seller concept, is like blaming Hitler for the poor form of the Springsboks this year. It is time the goverment stop making excuses for everything and just admit they are not able to do the things they want to do and start learning how to do it. We have the potential to become the greatest country in the world, but we have idiots running the country. just like we had idiots running the country during apartheid.

  • Lizx Osborn - 2010-10-14 07:40

    Needs to be read

  • xtupie - 2010-10-14 08:14

    Okay, guys and what haapens to this land, is it a waiste like most of the other 7 million hect. of land? Do you want to cause a famine? Look what happend to Zimbabwe, those people are dying of starvation or do our fat cat goverment officals really think this will work? Wake up aNC, stop trying to buy votes and work for them.

  • @Gugile Nkwinti - 2010-10-14 08:20

    Beware the man who loses everything he has worked for all his life!!!Don't go about threatening whites who stand to lose and gain nothing!!!Do you think that the white mans patience is inexhaustible??We've been watching how you've managed to destroy more infrustructure in 16yrs than you've built,Squandered billions through your corruption and theft of the coffers which we whites continue to refill as the majority tax paying population in SA.We will soon withhold our taxes-what are you going to imprison 3,5 million whites??? Don't threaten us with expropriation of viable working farmland to be rendered uninhabitable due to ignorance and mismangement??

  • J - 2010-10-14 08:25

    Yes MINISTER NKWINTI - blame everything on apartheid. Much easier than being a responsible, mature, accountable adult isn't it. How many of the farms that have been sold since 1994 to black owners are as productive as under their previous ownership? How many of those farm houses are even habitable? You are so short sighted - what happens in 2050 when the land is no longer arable and the stupid, greedy ANC can no longer afford to feed themselves! You idiot!

  • JR - 2010-10-14 08:37

    You would think that in a developing country that has a growing middle income population that need to be increasingly fed, the government would protect those assets that actually feed. Ie the Farms. But no, higher taxes on farms and redistribution of the land to the unproductive masses. Cue higher agricultural imports and the slow demise of SA agric land.

  • Rob C - 2010-10-14 08:38

    This green paper sounds like all it's suggestions go completely against the "just and equitable" clause in the constitution. They want to tax large holdings - I wonder how the tribal ground in the old Transkei and Zululand, which by the way is some of the richest farming land in the Southern Hemisphere, will fare? It is completely unutilised - besides for a couple of villages and some subsistence farming. The tax is aimed at the percieved "rich white farmers," who incidently are the ones who produce all the food. So go on and bankrupt them - all that the land tax will achieve - and starve the already poor masses. Hark, I hear Mugabe land a-calling!

  • hmm - 2010-10-14 08:40

    White people purchased their land from the previous governments, they worked off the debt and became the rightful owners. Since we are all equal, I expect black people to do the same.

  • Kenny - 2010-10-14 08:44

    It's a discussion document - not law yet. So all of you who are shouting "here comes Zimbabwe" should take a deep breath and strategise what counter-proposals to put on the table so that we can make land reform work. It is easy to b*tch and moan on the sideline but far more difficult to come up with solutions. Thispolicy proposal will be introduce this year, but there will be plenty of time next year to really have go at it through the parliamentary processes.

  • Enough now - 2010-10-14 08:44

    We must live in La-La land. The government by way of Minister Nkwinti admitted on several occasions that one of the major reasons why land reform is failing, is as a result of the "lack of capacity" within his department. This means the lack of sutiable expertise to see land reform programmes through, the lack of extension officers and post-settlement financial and other assistance. Add to this the internal fraud, corruption, plain defensive stubbornness and outright misrepresentation and ineptitude within the dept and you know where the real problem lies. Instead of fixing that problem and procuring farms on the open market (more than 6% of all farm land in SA is on the open market at any given time) for black farmers who WANT to farm, the government now rather seeks to shift the problem over to the farming community. How many times must the government be told that you cannot multiply wealth by dividing it? We need to wake up in this country. Our water rights were nationalised with the new water act, then the minerals went the same way, then attempts were made / are being made to take disarm us with the new fire arms act, now the govt seeks to disposess farmers at below market value. We are on a slippery slope and it happens so incrementally that nobody takes real notice. This is how you boil a frog! The dept must stop shifting the blame! Rather clean up their act and then we won't need punitive measures to solve the problem. This green paper is tantamount to the dept of education saying that since all kids can't read, books are now banned from school! This is also like Zimbabwe ignoring the SADEC Tribunal's orders regarding its land seizures. The rest of the community (including SA!) refused to do anything about Mugabe ignorign their own tribunal. Luckily they then had a bright spark to solve the problem the African way: they dissolved the Tribunal!

  • Madiba - 2010-10-14 08:46

    Land reform is the eay forward. These people don't want to share our land with us they want it all. ANC should force them to give it back to the rightfull owners. Nationalise all the land and let people pay land rent/tax, that way they will be forced to surrender some of the land they are not using finish and klaar

  • Twakkie - 2010-10-14 08:48

    How can the transgressions of my "ancestors", whom by the way bought the farm long before apartheid was implemented, be addressed by land grabbing? All they are doing is calming one racial groups "anger and bitterness" by inflaming anothers "anger and bitterness". Our farm was not bought from any "natives" since dingaan killed all of them in the area when my ancestors arrived. This is a proven historical fact but still we are also in the long list of land transformation. This would not be a problem if they would pay us what the farm is worth. Now they want to implement a new law which gives them the right to take the land which was worked and made a success by the sweat of our brow for a bag of peanuts? Why? How can they justify this as being democratic? (Retorical) They wont stop until they have reached the end of the rabbit hole, and I am not sure they will like what they find. Truely this is another low of lows for our government...

  • Mlu - 2010-10-14 08:49

    Has a survey ever been done to establish how many people want land for commercial purposes? Amongst those, how many can be trained or willing to be trained on the use of land. South Africa is experiencing one of the highest rates of urbanization. Farmland should therefore remain with those willing to farm and not with people who will keep the land and then run to the cities.

  • Jim - 2010-10-14 08:52

    We have always said we were on the road to Zimbabwe every day there is more proof of that. Not long before there is no food produced in this country, so start your veggie patch now.

  • OB1 - 2010-10-14 08:55

    the Zimbos poured over the border into RSA when there was no food, no jobs, no security, no opportunity left in Zim...where will we go when the same happens here (which is exactly where these sorts of policies will get us)?? Why not focus rather on making the already transferred land productive, by empowering those blacks to whom it was given through training and subsidies?

  • Think about it - 2010-10-14 08:55

    We drop interest rates to assist the poor to afford food. We lower tax on all of the “primary” food items and then it is decided that something as stupid as distributing land to unproductive and untrained farmers will assist in making this a better place for the poor? Maybe the idiots running this country should start talking to each other… With one hand we make it easier on the poor on other hand we tax the hell out of the people producing the food. How can we lower on the output but increase on the input… Surely it cannot become cheaper if it cost more to make it? If a normal citizen is able to fathom this surely those idiots should be able to see this too? Maybe the problem is not the government but rather the idealistic stupidity of the individuals that keep choosing the same failing government. Instead of worrying about what was maybe we it’s more important to look at what is…

  • JFK - 2010-10-14 08:56

    It must be miserable to go through life wanting to break down in order to equilise. Probably because this tactic is so much easier than rather building up those that show potential.....and so this tactic is applied all over in schools, municipalities, hospitals, farming, mining, in fact - the whole of South Africa

  • HERE COMES - 2010-10-14 09:04

    THE LONG AWAITED SOUTH AFRICAN CIVIL WAR. RATHER CARRY ON WITH WILLING BUYER WILLING SELLER, AND JUST EMPLOY 4 TIMES MORE STAFF TO GET THE JOB DONE QUICKLY. DID ANYBODY SUGGEST THAT IN THE WHITE PAPER?

  • Liat - 2010-10-14 09:08

    A severe threat to our food security!!!!!!!!!This kind of thinking belongs to the DARK AGES!!!!!!!

  • LInda - 2010-10-14 09:12

    The govt had better introduct a breeding tax at the same time, so that the decreasing food production can feed a decreasing population.

  • peter - 2010-10-14 09:19

    I trust that the land tax is goimg to be imposed on all the idle Govt. controled land and the mismanaged tribal land. Give title deeds to the peolple living in these tribal areas and then see if any more land is neede.

  • George - 2010-10-14 09:20

    Most are missing the point. The government's scorecard measures NUMBER of their voters who have been given land - nothing to do with land productively used. Losing votes for now is the first threat for the ruling party. Getting enough food from the land is a future problem which is of no real relevance now. Most policies that don't make sense at first hand should be viewed similarly, ie what does the scorecard measure? There is logic in what at first appears irrational.

  • Outward bound - 2010-10-14 09:28

    And when this country cannot feed itself, with our history of killing our neighbours in xenophobic attacks, which neighbour would we like to move to ?

  • Barbara - 2010-10-14 10:09

    Let's make transparency rule of law: publish the maps of all land Government wants to expropriate, whether it's for new Utilities, highways, or redistribution of land.....at least then nobody with any sense will buy that land at real market value anymore only to lose it to a landgrab. Who is going to decide whether land is used productively? And does this mean that EVERYBODY who owns such unproductive land is going to lose it, including Cabinet Ministers, "new redistributed-to" owners, the poor who cannot afford to farm the land as they have neither money for seeds, equipment or the knowledge? Really???

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