Green Paper does not propose real Land Reform

The Green Paper on Land Reform does not reveal a complete grasp of land-use realities. It fails to address current problems properly. The green paper (issued by the Minister of rural development and land reform in late August) proposes more bureaucracy, administrative invalidations of land titles, and various restrictions on land ownership for all.

If the green paper’s suggestions are adopted, there will be a Land Management Commission, subservient to government and with advisory, co-ordinating and auditing functions. The document hints that this body would also make policy: the commission would issue ‘guidelines’ to state departments dealing with land.

This commission would have power to invalidate title deeds and confiscate land obtained through fraud or corruption. This may be well-meaning. Instances have been reported of fraudulent transfers of land being executed and possible corruption in deeds registries. But stripping registered owners of land titles administratively is drastic and unnecessary. Frauds and land disputes should be left to be decided under common law as at present. The Constitution gives the right to have disputes decided by courts or independent tribunals, not a commission such as this answerable to government.

Another of the green paper’s suggested additions to officialdom is a Land Valuer-General, to ‘determine’ financial compensation ‘in compliance with the constitution’ when land is expropriated. If the aim is that this functionary would make final determinations of compensation payable, this would be unconstitutional. Perhaps the benefit of the doubt should be given to the Minister, in that the green paper says that the Valuer-General would provide specialist valuation advice, so perhaps the intention is that this official be a mere resource to government when offering compensation amounts; if parties cannot agree, then the amount would be decided by a court as the Constitution requires.

There would also be a Land Rights Management Board to provide institutional capacity for state institutions and enforce land rights laws, and with power to appoint committees in rural localities.
None of all these new bureaucratic institutions is necessary.
Also of concern in the green paper is that freehold would be ‘with limited extent’, implying a maximum hectarage.

Foreigners would own land under ‘precarious tenure’ subject to obligations and conditions, with tenure for resident non-citizens ‘engaged in appropriate investments which enhance food sovereignty and livelihood security, and improved agro-industrial development’. This would seemingly not apply to, say, a retired couple in Britain who buy a flat in Cape Town’s Camps Bay to stay in during the European winter. The document is concerned with rural land. It reflects an obsession with land owned by the few white farmers with their handful of black residents. It ignores residential land, which is of far greater importance and value and where almost all South Africans live.

The green paper says that state and public land would be ‘leasehold’. It is already state policy to give to reform beneficiaries merely lessee’s rights. The Department of Rural Development and Land Reform’s 2010-11 annual report refers to 288 land reform projects which provided access to land to 3,089 beneficiaries through leases or caretaker agreements. This shows an intent to keep firm government control of redistribution land and beneficiaries.

The Minister has disclosed, as if an admission of failure, that some 30 per cent of land bought by government since the end of apartheid for redistribution to black farmers has been resold by the beneficiaries, often to the original owners. This is no failure. As Austrian economist Ludwig von Mises has observed, ownership and private property exists only where the individual can deal with and dispose of his property in the way he or she considers most advantageous, and society as a whole benefits. The government now seeks to prevent this by tying land beneficiaries to onerous lease obligations to farm the land or lose the rights, making them serfs beholden to the state.

The government applies the same sort of controls to residential housing allocated under the Reconstruction and Development Programme (RDP). These properties are subject to restrictive, commonly an eight-year prohibition on selling or letting, and a condition that there be only one dwelling per property. Occupants are in the invidious position of not being able to realise their equity. Many sell or let the house ‘informally’ at heavily discounted prices since they have no freely-tradable title. New occupiers live in fear that they might be caught and summarily evicted. Many of these houses have illicit second-dwelling shacks in the yard.

Officials repossess properties from land reform recipients who are not using them to their satisfaction, or who are not in personal occupation. It is assumed that blacks act irresponsibly if they dispose of the property, even though all people who sell or let their most valuable asset do so after careful consideration. They might need the money more than the property for legitimate reasons such as moving elsewhere with better job prospects, starting a small business, educating children, or health care. Blacks continue to get racially inferior land tenure or toxic title on farms and houses, not wealth-creating full ownership title. This prolongs the Verwoerdian legacy and perpetuates and exacerbates the problem of poverty in the new South Africa.

Land reform has been led astray by myths. One is the error that land reform should involve restitution or redistribution of ‘rural’ land; however, land reform should be concerned with access to land and housing in urban areas, and the obsession with rural land should be abandoned. Another misapprehension is that access to land is important for black liberation yet most people in advanced countries, including many of the wealthiest, do not own land, but live as tenants in someone else’s apartment blocks or on other property.

It is generally believed that under apartheid blacks owned 13 per cent of the land, whereas the government’s native land trust and then homeland governments, and now their successor the South African government owns most of that land. It is a myth that land ownership should be measured by how much land blacks own as a proportion of total land area; what matters is what they own as a proportion of land value, and higher-value land is urban.

Most people believe that the government delivers when it gives blacks benefits at the expense of whites, rather than by creating an environment in which black South Africans become land- and home-owners and enjoy such benefits through their own efforts and a liberated market. The government believes that the success of low-income housing policy is measured by the number of RDP houses it provides and overlooks the substantial proportion of low-income housing acquired by black people themselves in the post-apartheid deregulated housing development market. The urban land owned by blacks has never been reliably estimated.

The best prospect for land redistribution is for government, which owns some five to fifteen million parcels of land (estimates vary) in historically black areas, urban and rural, to immediately redistribute them all to existing occupiers at little cost, which would result in millions of new landowners.

All land parcels lawfully or permanently held by black South Africans on government- or municipal-owned land should be summarily converted to full unambiguous freely-tradable ownership at zero cost to beneficiaries. All other government land not needed for public purposes should also be privatised. A small proportion of superfluous government land will suffice to provide free to all landless and homeless South Africans the full unambiguous freely-tradable ownership of a plot of urban residential land or viable agricultural land. Community, traditional and tribal land should be unambiguously and democratically owned and controlled by the people concerned, who should be allowed to give to each lawful occupant, if they wish, the plot they hold in full unambiguous freely-tradable ownership.

And the government should allow private owners with informal settlements on their land to convert that land, through private contracts with occupiers, to full unambiguous freely-tradable ownership, with nominal red tape and cost.

As to foreigners, xenophobia is counter-productive. Land is an economic resource like any other. The national interest is served by allowing land to be used and traded freely so that it gets spontaneously into the hands of optimal users. It would make no difference whether people who own land are local or foreign. The fact that foreigners are willing to invest in our country and land should be welcomed.

A common misapprehension is that land reform has failed. Land reform has not yet really begun.

AUTHOR Gary Moore practised law for three decades and has authored articles and monographs with the Free Market Foundation advocating deregulation, and worked with the FMF and the Law Review Project on law reforms which helped free black business activities from apartheid restrictions. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.

FMF Feature Article / 11 October 2011