An Agricultural Disaster looming?

Country A

A former British colony, governed by the same power-mad despot since independence in 1980, decides that all the land should belong to “indigenous blacks”. The motives are threefold. Firstly, punish the pesky whites and teach them who’s boss. Secondly, buy votes by doling out farms and equipment to peasants. Thirdly, reward the party faithful, thus ensuring unwavering loyalty, by allocating the very best farms to them.

The constitution is amended, the farms are confiscated and the farmers are chased off of their farms by “war veterans” and their title deeds become worthless pieces of paper.

The productive farms, which fed the country as well as a lot of the region and earned valuable foreign currency from exports, fall into inevitable disrepair and become totally unproductive, farm labourers lose their jobs, foreign currency dries up, food supply slows to a trickle and the economy goes into freefall.

Country B

Also a former British colony and later governed by a racist government, decides that most of the land should belong to “indigenous blacks” The motives are threefold. Firstly, punish the pesky whites and teach them who’s boss. Secondly, buy votes by doling out farms and equipment to peasants. Thirdly, reward the party faithfull, thus ensuring unwavering loyalty, by allocating the very best farms to them.

The existing Expropriation law is amended to allow farms to be expropriated (ie. stolen with minimum compensation given) from the farmers if it is in the “public interest”, and their title deeds become worthless pieces of paper.

The productive farms, which fed the country as well as a lot of the region and earned valuable foreign currency from exports, fall into inevitable disrepair and become totally unproductive, farm labourers lose their jobs, foreign currency dries up, food supply slows to a trickle and the economy goes into freefall.

What is going on here? Which countries could we possibly be talking about? Are they really that similar?

SA’s new Expropriation Law has been amended to make it easier for the state to pay farmers less than market value for a forced farm sale.” reports Farmers Weekly(9 May 2008).

In another article, Mondi claims that 48% of their plantation title deeds are subject to land claims, so there goes our timber industry as well.

Am I being unduly negative here? I don’t think so. Here’s why. When a land claim is lodged, everything stops. The farmer is loath to invest any further cash in the land or plant crops, banks will not provide funding for improvements as the collateral is worthless, and the farmer is now tied up in costly and time consuming negotiations and possible legal action instead of being out there farming and producing food. Farming companies like Mondi’s balance sheets need to be amended to reflect this contingent liability and billions of rands in value are stripped from share values.

Our (alleged) alcoholic Health Minister calls for a cap on food price increases, but ignores one of the fundamental reasons for local food prices escalating, that is, that many previously productive farms are now standing idle while land claims are sorted out, and even if settled, the new “previously disadvantaged” owners don’t have the experience, capital or mindset to achieve anything like the productivity that the previous farmer did.

From 1652 to 1994 the white man accumulated land in this country, worked it, built it up and ended up owning 80% of the productive land. Was this fair? Probably not, but this was a period of 342 years! This inequality CANNOT be undone in 10 years without causing major economic upheaval. But the quick fix, “Lotto” mentality will prevail and trust me, disaster is looming in the agricultural sector in South Africa.

Be Good

Synaptoman

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