If South Africa blindly expropriates land without compensation it will become a net importer of food products rather than an exporter.
In 2017 alone the sector had generated over R100 billion for the South African economy, making up 9% of the country’s total exports, AgriSA chief economist Hamlet Hlomendlini told FTW.
“South Africa recorded an unexpected 1.2% growth last year because of the robust and strong performance of the agri sector,” he said. “It is of extreme importance to our economy and ensuring this sector remains stable and productive must be a top priority.”
Hlomendlini said this did not mean the government should not expropriate.
“There is a very real need for land reform in South Africa. There has also been frustration with the apparent slow progress,” he said. “But we need to remain rational regarding the possible implications that expropriation without compensation may hold for the agricultural sector and the broader economy.”
He said there was still uncertainty around the details of land expropriation with no one knowing what land would be expropriated or who the beneficiaries would be. But the ANC was open to discussion and AgriSA was actively participating in consultations, he added.
“We must listen to the language they are using,” he said. “While some political parties have very destructive rhetoric, the approach and the language from the ANC is very different and quite constructive. There is a willingness to engage.”
But, he said, government was irrational if they thought that talk of expropriation without compensation would not cause panic.
“There is no doubt that farmers are worried,” he said. “The agricultural sector has seen a lot of challenges in recent years, including the drought, and the recovery last year was very positive. The uncertain political environment, however, is not helping. Farming is a business that is guided by the very same principles that guide businesses all over the world. Risk and uncertainty will result in farmers being more conservative with their investments.”
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The approach and the language from the ANC is quite constructive. There is a willingness to engage. – Hamlet Hlomendlini
