Expropriation Bill and Economic Reconstruction and Recovery Plan not aligned
[{“type”:”text”,”content”:”Agri SA has at the highest level continuously been involved in the development of the Bill through the submission of comments and input concerning its legal and economic impact and highlighting the potential adverse consequences for the economy and the agricultural sector. nnShould the Bill in its current form be enacted, it might have implications for the South African economy and would lead to less investment, less growth, and fewer jobs. It is fanciful to imagine that current or aspiring farmers will continue to invest in agriculture with no guarantee that they will continue to hold their land or that they will be compensated fairly if that land is expropriated. The continued inclusion of the zero-compensation clause also has the added problem of being at odds with the Constitution of South Africa u2013 a fatal flaw. Moreover, the failure to properly define central terms like expropriation will only contribute to a climate of policy uncertainty that is not serving the country well. This Bill is placed under scrutiny since the failed attempt to amend section 25 of the Constitution at Parliament on 7 December 2021.nnAt a time when we should be talking about economic reforms that will encourage investment and job creation, we simply cannot afford the policy uncertainty this Bill will add to an already investor-unfriendly environment. South Africa needs a sustained economic recovery plan after the dire impacts of Covid-19 and the derailing of government entities. The current Bill will only create further investment uncertainty and further deteriorate our Gini coefficient ranking. nnProperty rights have been the cornerstone of modern economies for centuries. To implement this policy after we have recently seen the devastating effects in countries like Zimbabwe and Venezuela would be an unconscionable act of economic self-sabotage. nnMore importantly, the Bill will undermine a fundamental government objective u2013 economic transformation. Land is a crucial asset against which both established and new farmers can obtain capital to start new businesses and operate existing ones. In a cyclical sector like agriculture, access to working capital at the bottom of the cycle is a matter of survival. Without a secure asset like land, farmers simply cannot access this capital. This is the foundational asset class the Bill undermines by the uncertainty it introduces. The perverse consequence of this situation is that emerging farmers u2013 even the beneficiaries of the contemplated expropriation u2013 cannot successfully establish agricultural operations in this environment. nnAgainst all reasons, then, the National Assembly will pass a bill that will only make it harder for new entrants in the sector to thrive. Should the National Council of Provinces also approve this bill, it will be left to the president to show a degree of pragmatism to save the South African agricultural sector and safeguard our ability to continue to sustainably produce food locally as we make the sector more inclusive.”,”position”:0,”id”:”9GU08BAH2RfSrwWn”}]