South Africa’s Plan to Divide Farms Seen Risking Food Output

South Africa’s proposals to buy half of every farm on behalf of workers and limit land ownership will risk food production as growers won’t be able to access finance, the largest grain lobby said.

In draft proposals released in February 2014, the country said it is considering buying half of every plantation and would deposit payment in a trust that will finance production as it seeks to change land-ownership patterns that were skewed in white people’s favor during apartheid rule, which ended in 1994.

The so-called 50-50 proposal will violate South Africa’s constitution, which protects property rights, and impede farmers’ ability to get loans using land as security, Jannie de Villiers, chief executive officer of Grain SA, told reporters at an agricultural show in Bothaville, about 220 kilometers (137 miles) southwest of Johannesburg. About 83 percent of commercial farmers produce food with loans from banks, De Villiers said.

The government’s responsibility “is first to make sure there is food in this country,” he said. “What we plead today with government is, can we sit down and find a better way than the 50-50, because the 50-50 is going to destroy us.”

The Regulation of Land Holdings Bill, first outlined by President Jacob Zuma in February, will limit the amount of land anyone can hold to 12,000 hectares (29,652 acres). It proposed a ceiling of 1,000 hectares for a commercial small-scale operation, and 5,000 hectares for a large farm, Land Reform Minister Gugile Nkwinti said in a May 8 speech.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE