DA POLICY DOCUMENT ON "WILLING SELLER, WILLING BUYER" PRINCIPLE


The Democratic Alliance argues in this document for the retention of a market orientated approach to land reform, which by necessity would include upholding the willing buyer, willing seller principle. The document spells out the reasons why the abandonment of the willing buyer, willing seller principle would jeopardise not only land reform, but the stability of the economy as a whole.

The DA is fully in favour of a sustainable, equitable and just land reform programme. However, we reject most of the recommendations that emanated from the recent Land Summit.

Firstly, the "distortions and imperfections" referred in the draft recommendations are not distortions and imperfections of the land market itself but rather, if they exist, they are failures of the capital and other markets or the result of a lack of initiative and ineffective management and regulation by the state.

Secondly, the abandonment of the willing buyer, willing seller principle would undermine investor confidence in rural areas and threaten the stability of the agricultural sector. This would include emerging farmers who would not be given access to desperately needed finance, as the security of their collateral, namely the land they own would become uncertain.

Thirdly, by jettisoning a market-oriented approach to land reform, the government would encourage the development of a "black market" in land transfer, which would, in turn, lead to price distortions, which would ultimately make it more difficult for a just and fair land reform programme to take place. It would also create uncertainty of tenure, as in order to be of value land must be "bankable", which it can only be if there is security of tenure. The lack of certainty over tenure would have a directly negative impact on both current landowners and future landowners as it would limit their ability to access capital.

Fourthly, if the government were to abandon the willing buyer, willing seller principle and embark on large-scale expropriation, there is a very real possibility that this would undermine the overall productivity of the agricultural sector. Accelerated and haphazard land reform of this nature will in all likelihood leave recipients worse off than before and ensure that land is not used to its full productive capacity. Previous experience has shown that all too often recipients of land reform are left to fend for themselves, with little or no support from the state in terms of the provision of the necessary assistance such as skills transfers and equipment.

The state is lagging behind in its commitment to redistribute 30% of agricultural land to black owners by 2014 because of delays, corruption and incompetence on its part. For example, in the budget allocation of the Department of Land Affairs for the current financial year, only 20 percent is earmarked for land redistribution.

The DA calls upon government to implement appropriate strategies to identify willing sellers and to commit more funds to land redistribution and restitution. Government must also become a far more active participant in the land market and take greater advantage of the up to 4% of privately owned land that is available on the market every year.

Furthermore, government must also look to the remaining amounts of state owned land that can be made available for redistribution. There is also enormous unexploited potential in communal or trust land. This latent potential can be freed up by transferring title to residents of these areas. This will tap into previously untapped possibilities for development in areas such as the Eastern Cape and KwaZulu- Natal, which together constitute some of the most fertile land in the country.

A research report recently released by the Centre for Development and Enterprise shows that in certain provinces in the 1990s, the value of land redistributed through the open market to black South Africans was five times higher than that redistributed by the state. This proves that the land market is the most effective mechanism for redistributing land.

Unfortunately, the ruling party often obstructs the efficient functioning of markets through bureaucratic delays and by creating an atmosphere of uncertainty, confusion and mistrust around land reform.

The DA believes that the land reform programme can be speeded up by allowing for more market, less state - not the other way round. As such, we commit ourselves to the constitutional provisions bearing on land reform and the retention of the willing buyer, willing seller principle.

Download supporting documents (DAPOS willingbuyer seller.doc)