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South African Body Calls for Comprehensive Policy on Land

Paul Vecchiatto and Felix Njini

(Bloomberg) -- South Africa’s government should consider developing a policy that provides for compensation as well as expropriation without payment for land to be redistributed to the nation’s landless black majority, an advisory panel said.

The policy could consider zero compensation, minimal payments as well as market-related payments for targeted land, the panel headed by public policy expert Vuyokazi Mahlati said in a report released Sunday in Pretoria, the capital.

“It should provide a typology of situations and indicate how compensation should be approached in each,” the report said. “For instance, property owners who bought land since 1994 should not be treated the same as those who inherited property. Big institutional owners who have large property portfolios should not be treated the same as families whose land is their primary livelihood asset.”

The cabinet has directed all government ministers to study the panel’s report and recommendations and respond within two months. An 11-member parliamentary committee is meanwhile evaluating how changes to the constitution should be effected, and has until March 2020 to report back to the National Assembly.

The panel proposes that a proposed Expropriation Bill along with its regulations be referred to the Constitutional Court for confirmation that they’re consistent with the constitution, the panel said.

The ruling African National Congress decided in 2017 to amend the constitution to make it easier to take land without paying for it, a change it said was needed to address racially skewed ownership patterns. While the party said the economy wouldn’t be harmed, the move spooked investors and farmers who feared property rights may be eroded, prompting President Cyril Ramaphosa to appoint a committee to advise the government on land reform.

Read more: Why Land Seizure Is Back in the News in South Africa: QuickTake

AgriSA, the country’s largest farmers grouping, said the report’s recommendations could compromise food security. “Investor and business confidence are already low, and the last thing we need is further strain on the economy and the agricultural sector,” Executive Director Omri van Zyl said in an emailed statement.

AgriSA President Dan Kriek and Nick Serfontein, who were members of the panel, compiled an alternative report after “it became clear that there were fundamental differences in opinion and approach to land reform within the panel,” AgriSA said.

The Democratic Alliance, South Africa’s main opposition party, described the proposals as “untenable” and should be rejected. “The majority endorsement of land expropriation will further batter our ailing economy,” the party said in a statement, adding it was working on an alternative plan.

Key proposals by the advisory panel

The government should encourage donations of land, with donors exempt from donations tax and conveyancing costs. Mining companies, financial institutions, churches and agribusinesses should audit their land holdings and identify land they can donate.The panel proposes a “proactive approach” in identifying land for acquisition, as needed. Identifying and acquiring land may done at local-government level and should seek to cater for communities with urgent needs.The government should consider creating a fund in collaboration with private financiers to acquire land and support black farmers. The fund may require that the Land Bank be restructured.The Land Claims Court should be restructured, renamed and have an expanded mandate with broader oversight on all land-reform matters.Land reform should be extended to urban areas after an official audit and vacant, underutilized or inefficiently used urban land and buildings should be redistributed.

(Updates with bullet points on advisory panel’s proposals and comment.)

--With assistance from Mike Cohen.

To contact the reporters on this story: Paul Vecchiatto in Cape Town at pvecchiatto@bloomberg.net;Felix Njini in Johannesburg at fnjini@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Hilton Shone

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