The news that a privately-owned farm in Hilton in KwaZulu-Natal was recently invaded by people claiming that the land belonged to ANC Youth League (ANCYL) leader Julius Malema, highlights one of the biggest problems facing South African farmers. Figuring out who owns what - or who is entitled to agricultural land - has to be one of the biggest challenges currently facing the government. How they compensate farmers or redistribute the land is of enormous concern to those in the agricultural sector. Many people believe that handing over prime agricultural land to someone who has little or no concept of large scale farming is, as has been witnessed in South Africa on a number of occasions in the past, a recipe for disaster.
One would think that we would learn from the mistakes of others. Zimbabwe is a case in point. Once regarded as the ‘bread basket of Africa’, the country's rich agricultural land has virtually been transformed into a desert by land invaders and the country is now forced to import a large majority of its foodstuff.
Farms are not just arbitrary tracts of land; they are well-run business entities. Knowing how to farm and knowing how to run a business go hand in hand and although there may be people who wish to farm - and who have the knowledge to do so - it seems fewer and fewer are willing to take the risk.
Statistics released by Lightstone indicate that although farms are still being bought and sold, sales volumes are significantly lower than they were in the past. Whether this is due to the ever increasing threat of land invasions or just the state of the property market in general remains unclear, but the figures make for some frightening reading.
In the Western Cape for example, 2 078 farms, with a collective value of approximately R2.4-billion, were sold during 2002. In 2006 this figure rose, with 2 180 farms changing hands, valued at around R7-billion. In 2010 the numbers dropped drastically and only 1 046 farms were sold for a total value in the region of R4.5-billion. Although the statistics only list transfers which have taken place up to the end of September this year, the figures have dropped even further with only 292 transfers, totalling just over R1.5-billion, having taken place. Although the data for 2011 is obviously incomplete, the figures reflect a sharp drop in farm sales. The picture is worryingly similar in other provinces.
In the Free State a total of 2 624 farms were sold in 2002, for an approximate value of R2.2-billion. By 2010 sales had declined to 1 105. That said, the overall value of the sales had increased to just under R3-billion. The landscape changed somewhat in 2011 - only 452 transfers had taken place by the end of September - but what is perhaps more concerning is that unlike previous years, the value also dropped significantly to approximately R1.4-billion.
KwaZulu-Natal, the province which is renowned for its production of sugar, has also seen a drop in the number of farms being bought and sold. In 2002, a total of 2 020 farms were sold for just under R1.7-billion. In 2006 this figure dipped slightly to 1 910. As in the Free State, although numbers were down, the overall value increased to almost R4.7-billion. By 2010 sales dropped to 981, however, given the marked decrease in the number of sales, the collective value was relatively good, coming in at just over R3-billion. The statistics for 2011 reveal that only 363 transfers have been registered thus far, with the collective price paid for agricultural land coming in at a low R1.4-billion.
The story is the same throughout South Africa – farm sales are down dramatically. There can be little doubt that crime and the overall economic outlook has affected these sales. Despite this, perhaps the question that needs to be asked by government is just how much of an effect the increasingly loud voices of the ANCYL and its supporters demanding land redistribution is having on an already precarious situation and how it plans to resolve these pressing issues. Can we really afford to adopt a ‘let’s wait and see’ approach when food shortages are becoming a harsh reality and many, in Africa and in other parts of the world, are dying of starvation?
- Please note, Lightstone’s definition of a farm in this data refers to a farm portion. If a farm has been subdivided into one or more portions, each of the portions are classified as a separate entity and counted or value summed as such.