State ‘custodianship’ and control over all agricultural land – BizNews, 27 May 2015

By Anthea Jeffery 

Unbeknown to most people, the public has until 30th May 2015 (the end of this week) to comment on a bill that seeks to vest all agricultural land in the State as ‘custodian’ for the people of South Africa.

This provision echoes the Mineral and Petroleum Resources Development Act (MPRDA) of 2002, under which all mineral resources have effectively been expropriated without compensation.

The new measure is called the Preservation and Development of Agricultural Land Framework Bill of 2015 (the Bill). It was gazetted in mid-March this year for public comment by 30th May, and has generally passed unnoticed by the media.

This bill contains a key clause stating: ‘Agricultural land is the common heritage of all the people of South Africa and the Department [of Agriculture, Forestry and Fisheries] is the custodian thereof for the benefit of all South Africans.’

This provision is remarkably similar to a clause in the MPRDA, which says that ‘mineral resources are the common heritage of all the people of South Africa and the State is the custodian thereof for the benefit of all South Africans’.

The meaning of this MPRDA provision came before the courts in the Agri SA case. Here, the key question was whether expropriation had occurred when an unused old-order mining right ‘ceased to exist’ under the MPRDA and became vested in the State as the custodian of all mineral resources.

The North Gauteng High Court found that expropriation had indeed taken place, as the company which used to own the right had lost all the competencies of ownership, while the MPRDA had given the mining minister substantially similar rights. The State had therefore acquired ‘the substance of the property rights of the erstwhile holder’; and it made no difference that the State’s competencies were termed ‘custodianship’ rather than ‘ownership’.

Expropriation had thus occurred, for which compensation of R750 000 (against the R1m paid for the mining right) was payable.

However, when this decision went on appeal to the Constitutional Court, Chief Justice Mogoeng Mogoeng disagreed. He stressed that the State had not acquired ownership of the mining right, as the MPRDA had merely made it the ‘custodian’ of all mineral resources.

Since the company’s loss of ownership had not led to the State’s acquiring ownership, no expropriation had occurred and no compensation was payable.

The Bill says nothing about an uncompensated expropriation of agricultural land. But neither, of course, did the MPRDA speak about the uncompensated expropriation of mineral resources which the Constitutional Court seems nevertheless to have endorsed.

If the ruling party does not in fact intend to bring about a similar uncompensated taking by the State of all agricultural land, then this contentious clause should be deleted.

The Bill also diminishes ownership rights over agricultural land in various ways. Many of the powers that owners now have are effectively transferred to the minister of agriculture, forestry, and fisheries (the minister), acting in conjunction with a host of new bureaucratic bodies.

Under the Bill, for instance, high potential cropping land may be used solely for producing ‘food crops for human consumption’. Hence, it may not be converted to game farming, or to the production of bio-fuels, for instance. This prohibition is absolute.

In addition, if the owner of high potential cropping land wants to sell a portion of it, or lease it for ten years or more, the minister (acting on the recommendation of a new ‘national internal technical committee’ to be established under the Bill) must first give his written consent.

If the owner wants to rezone high potential cropping land from agricultural use to other uses, such as business, residential, or conservation purposes, approval is required under a complex process involving the provincial department of agriculture, the relevant municipality, a new ‘provincial internal technical committee’, and the national internal technical committee. In addition, the change may be approved only by a new ‘intergovernmental committee on the preservation and development of agricultural land’ – and then only if the rezoning is needed for ‘land reform purposes’ or if ‘exceptional circumstances exist’.

Essentially the same constraints apply to medium potential land, defined to include all agricultural land other than high potential cropping land. The main difference is that the relevant approvals must generally be provided by the provincial MEC for agriculture, acting in conjunction with a new ‘municipal internal technical committee’ and its provincial counterpart.

Various additional constraints apply to land of all kind, whether high or medium potential. In particular, agricultural land may not be sold to a foreign individual or company without the consent of the minister, acting on the recommendation of the national internal technical committee.

In addition, all farmers must use their land to ‘its optimum agricultural potential’ (in accordance with guidelines to be developed by the minister), failing which the minister may expropriate it ‘at a lower price’ than would be paid for land which is being optimally used.

In creating a plethora of committees (and other) structures, the Bill will generate many more jobs for the politically connected. It will also provide a foundation for ever more state meddling, and empower the minister to control the ‘right to farm’ by means of regulation.

The communist goal of vesting all land in the State so as to break the capitalist system will also come closer to being realised. This objective is doubtless close to the heart of the author of the Bill, Senzeni Zokwana, who is both the current agriculture minister and the chairman of the South African Communist Party.

*Anthea Jeffery is the Head of Policy Research for the Institute of Race Relations.