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South Africa grapples with a ticking ‘time bomb’: land ownership

Is it possible to respect constitutional property rights and provide justice for those whose land was taken – while not destroying part of an already fragile economy?

A maize plant is seen among other dried maize at a field in Hoopstad, a maize-producing district in the Free State province, South Africa, in 2016.
REUTERS/Siphiwe Sibeko

Who owns a country’s farmland? If it was forcibly taken from previous owners sometime in the past, who should have it now? Is it even possible to set things right without causing so much disruption that it destroys the entire agricultural sector?

The questions have huge emotional and symbolic impact, particularly in societies struggling to emerge from decades of repressive government. They bedeviled formerly Communist countries of Europe after the end of forced collectivization. In Africa, land transfers plagued by corruption, greed and violence largely destroyed Zimbabwe’s agricultural economy.

Now it is South Africa’s turn to deal with the problem.

During the country’s apartheid era, land was seized from the black majority, and by the time the system came to an end in 1994, about 50,000 white commercial farmers formed the backbone of the agricultural economy. Instead of evicting them, Nelson Mandela’s African National Congress settled on a policy of “willing seller — willing buyer,” apparently hoping the magic of the market would solve the problem. It set a goal of having 30 percent of the land transferred within five years. South Africa’s new leaders didn’t want to scare away investors, so they also enshrined the right to property ownership in the constitution.

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Nearly a quarter-century later, however, there haven’t been all that many willing buyers or sellers. No more than 10 percent of the land has been transferred — and most of it has subsequently gone out of production. Still, in a country where nearly two-thirds of blacks are considered poor and unemployment is close to 40 percent, the issue rouses powerful passions. One South African expert calls land ownership a “time bomb.”

Facing populist pressure, the ANC in December endorsed a policy of expropriating land without compensation. In late February, parliament launched a process that could lead to amending the constitution and letting the process proceed. A parliamentary committee is studying the issue now and will report back at the end of summer.

It’s ironic that the move has taken place even as the ANC forced out populist, scandal-plagued President Jacob Zuma and replaced him with Cyril Ramaphosa, a party stalwart with a strong pro-business reputation. But even Ramaphosa quickly got behind the idea.

A second irony is that South Africa is starting down this path at the same time Zimbabwe is trying to walk it back. President Robert Mugabe launched a chaotic program in 2000 that led to eviction of all but a few hundred of Zimbabwe’s 4,500 white commercial farmers. The failure of the farm economy was part of an overall collapse that contributed to Mugabe’s resignation, under military pressure, in November. The new government is offering the remaining white farmers 99-year leases on the land – and says others are welcome to apply for leases, as well. With international assistance, Zimbabwe also is looking at ways to compensate farmers whose land was seized.

So does South Africa stand any chance of success? Is it even possible to respect constitutional property rights and provide justice for those whose land was taken – while not destroying part of an already fragile economy?

Chances are that South Africa’s policy won’t be as extreme as Zimbabwe’s. Its political system is far from perfect, but it works much better. It must deal with that constitutional guarantee, and all the legal challenges that will ensue if it tries to seize property without compensation. John Campbell of the Council on Foreign Relations notes that Ramaphosa has declared that commercial agriculture and food security must be protected, and that he is committed to growing the economy to fight poverty. That requires affirming property rights to reassure investors.

As the Economist reports, South Africa’s limited effort so far has proven to be full of problems. Many new owners simply don’t know how to run a large, commercial farm, so much of the land has gone fallow. The government itself has bought several thousand farms, but is not transferring ownership because it fears new owners will simply sell the land back to whites. It has taken to leasing land to black farmers, but lacking collateral, those farmers find it hard to finance their operations.

If there is a solution, it probably lies in creative cooperation. Two possible examples are partnerships between investors and communities of new owners, and 50-50 partnerships in which the government retains ownership but leases the land back to a company formed by the farmer and farm workers. Those are unlikely to satisfy the radicals, and it’s not clear they can be replicated often enough to form the basis of a new model, particularly if South Africa does start to expropriate land.

But after years of kicking the problem down the road, the ANC’s move amounts to recognition that something has to be done. The further apartheid recedes into the past, the more untenable the situation becomes. And if Ramaphosa can find a way to finesse this sticky problem, he will have shown himself to be a very formidable politician.