Blocking foreign ownership of farms a grave error, organisations state
If the government has its way, foreign nationals will be prohibited from buying farms in South Africa, a move Eastern Cape agricultural organisations believe will work directly against all efforts to attract capital from overseas.
Agri Eastern Cape, along with the Red Meat Producers’ Organisation (RPO), the Sundays River Citrus Company (SRCC) and the National Wool Growers’ Association (NWGA), say the government is contradicting itself – encouraging foreign investment on the one hand, but then scaring investors off by prohibiting land ownership.
The African Farmers’ Association of SA (AFASA), however, supports the government’s bid to prevent foreign ownership of agricultural land.
AFASA Eastern Cape president Joe Mnyengo said land should be given to emerging farmers and foreign investors should partner with them.
Last month, the Department of Rural Development and Land Reform published a draft of the Regulation of Agricultural Land Holdings Bill of 2017 in the Government Gazette for public comment.
While the bill makes provision for a number of regulations regarding land ownership, one – “to provide for the prohibition on the acquisition of agricultural land by a foreign person” – drew the most attention from agricultural organisations.
The period for public comment expired earlier this month and the government is still processing them.
Agri EC president Doug Stern said the organisation would fight the bill.
“This is nothing more than a political tool – trying to gain votes in rural areas by using the very emotive issue of land reform and ownership,” Stern said.
He said a law such as the one proposed would go directly against the constitution and restrict a person’s right to own assets.
“What is most baffling about this bill is the glaring contradiction – the government invites foreign investment, then prevents foreign nationals from owning land,” Stern said.
“We are scaring off the foreign investors we have been fighting to attract.”
SRCC managing director Hannes de Waal said while the bill might not have a direct impact on the company’s business as the majority of its farm owners were South African, it could damage the fruit industry as a whole.
“The fruit industry across the country has a lot of foreign investment and partnerships,” De Waal said.
“Our fruit is exported across the world and I fear passing a law like this could damage business relationships cultivated over many years.”
He said foreign investors would be reluctant to send their money to South Africa if there was no prospect of owning the assets they invested in.
The bill was expected to be blocked by legal action.
RPO Eastern Cape chairman Francois du Toit said: “This bill has left us with too many unanswered questions.
“We will be following this matter very closely.”
NWGA general manager Leon de Beer said the bill might not have a major impact on the wool industry, but it could have major knock-on effects for business and foreign investment as a whole.
“A free market should remain free,” De Beer said.
“Once you want to prevent certain activities, like the bill stipulates, it is no longer a free market.
“This could cause major problems for the economy.”
Mnyengo, on the other hand, said foreign investors should pump their money into ventures run by South African land owners.
“As AFASA, we are completely against foreign land ownership,” he said.
“Just because foreigners have more money, it does not give them the right to own land in South Africa. We support this bill.”
Mnyengo said land reform should be expedited, putting more land into the hands of black farmers, who could then negotiate partnerships with foreign investors.
“The Eastern Cape is already negotiating deals with Argentina for major crop production enterprises across the province,” he said.