PRESENTATION TO: THE PORTFOLIO COMMITTEE ON PUBLIC WORKS On The Expropriation Bill JUNE 2008

INTRODUCTION Agri SA technical submission submitted to Portfolio Committee on 14 May 2008. Deals with objections to the Bill clause by clause. Focus of the submission will be more on economic, investment and food security issues. Agri SA and its members support the Constitution and fully supports government’s land reform program.

INTRODUCTION (continued) Agri SA and its affiliates have been involved with supporting emerging black farmers for a number of years now. Acceptance in principle that expropriation is a necessary tool in the hands of the state. Acceptance also that it may also be used for land reform purposes, but as a measure of last resort and subject to fairness, transparancy and the rule of law.

INTRODUCTION (continued) Stated objective of government is to replace current Expropriation Act with a new Act which is more in line with the Constitution and will help speed up land reform. Agri SA view: New Bill will do neither. It is in fact inconsistent with the Constitution in a number of respects.

POSSIBLE CONSEQUENCES OF BILL Because the Bill grants very wide powers to the expropriating authority, limits the role of the courts and leans towards compensation which from a landowners perspective will not necessarity be fair, we believe that it may have a number of negative consequences on investment in the sector and food production.

POSSIBLE CONSEQUENCES OF BILL (continued) The positive impact of tenure security on agricultural investment has been well documented. (e.g. Low, Currie). Investment in agriculture is necessary for growth. Land reform program has not so far resulted in growth in output by the sector.

POSSIBLE CONSEQUENCES OF BILL (continued) Neither commercial nor emerging farmers will have any incentive to invest in the sector if there is no tenure security. Current global food price crisis require increased production, which will not take place in a climate of low investor confidence due to uncertainty.

POSSIBLE CONSEQUENCES OF BILL (continued) Recent report by Harvard group of economists: stressed the importance of growth in the agricultural sector for sustained growth in the economy as a whole. Growth in the sector will also stimulate more job opportunities and off-farm activity in poverty stricken rural areas.

Spesific objections to the Bill We believe certain sections of the Bill are not in line with the Constitution: Particularly the sections dealing with the determination of compensation and The right of access to the courts. The concept of “the public interest” is very wide and vague.

Objections to the Bill (cont) Fact that power to expropriate may be exercised by junior officials and municipalities is problematic. Definition of a “juristic person” is too wide – it includes all legal persons such as companies, closed corporations and non-profit organisations. These legal persons may request expropriation in the public interest.

Objections to the Bill (Cont) Determination of compensation – market value should be the starting point. Property owners should also be compensated for actual financial loss and the fact that this is a forced “transaction”. Affected individual right of access to courts (section 34 of the Constitution) is severly limited.

Objections to Bill (cont) Review by a court is not equal to a court determining an issue and looking into the merits of the case. Mere approval of a court of the compensation and time and manner of

Objections to Bill (cont) payment is not acceptable and not constitutional.

Proposal Bill to be withdrawn and replaced with an amended Expropriation Act, which simply brings in the concept of the “public interest” and the additional factors in section 25(3) of the Constitution to be taken into consideration in determining just and equitable compensation.

Proposal Focus on public private partnerships to deliver sustainable land reform at faster pace as envisaged by LARP (Land and Agrarian Reform Programme). Effectively implement strategic Plan for Agricultural Sector. Organised agriculture willing, able and ready to enter into partnerships with government in this regard.

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