Does govt understand farming?

2008-04-06 00:00

Judging by the cavalier treatment of matters affecting agriculture, food security is not a particularly pressing concern of politicians and policy makers.

We’d like to think it is a case of ignorance of agriculture and its demands, and that the noises emanating from those warming the benches of Parliament do not carry too much ideological weight.

It’s not always easy to separate the wheat from the chaff though, especially when the matters on hand are of a deeply controversial nature. Expropriation is one such issue, because it deals with arguably the most emotive matter of all — land.

Now, land and land reform in southern Africa are deeply controversial, probably because historically, it has always been resolved via confrontation. The human overlay notwithstanding, land has always provided food or, if you prefer, the land has been farmed to be productive.

Much as South Africa has been a net exporter of food, the winds of change are howling to herald an alarming drop in food production, and more so in the context of land reform.

Consider that production on 44% of land reform farms has declined, that 42% produce only a small marketable surplus; that 27% have not delivered any produce at the time of measurement; that 24% have not delivered any produce since the land has been transferred, and that 36% of owners of land reform farms could not service the first payment on their bonds.

Strange then that our Parliamentary leaders turn a blind eye to these failings, and prefer to drum the same beat of disempowerment. Put differently, had there been a serious appreciation of the problem in the making, we wouldn’t have seen poorly thought out legislation such as the Municipal Property Rates Act.

Exhaustive research shows that the rating of agricultural land is likely to drive several agricultural operations in KwaZulu-Natal to the wall.

The reasons are myriad, but in essence boil down to the long-term returns on agricultural investment, the erratic nature of these returns, and the absence of protective tariffs and subsidies.

Also, the asset base of agricultural property is heavily skewed towards its land asset — which is rateable — as opposed to industrial or commercial property where the asset base tends to be skewed towards plant and equipment — which is not rateable.

In practice, it means that the property rate liability of a farm would be 10 times that of a factory or commercial enterprise with the same market value.

Then there is the valuation of agricultural property at "market value" as opposed to "use value", meaning that, while the value of one hectare of sugar cane land could realistically be about R20 000 per hectare, the same land may be worth 50 times more to a developer.

By law, a valuer is obliged by the act to value the property not at R20 000, but R1 million, and be liable for the higher rates.

Not surprisingly, the vast majority of countries in the world have deemed it economically imprudent to levy property rates on their agricultural land.

What chance of a wake-up call?

French energy

France clearly has an appetite for alternative energy. While its expertise in nuclear energy is well-documented, it also has an interest in wind generation.

Agence Française de Développement signed a 100 million euro (R900 million) financial agreement with Eskom for the construction of a 100 MW wind farm on the Cape west coast, set to be the biggest wind infrastructure in sub-Saharan Africa.

New urgency

The auctioneers of expensive property seem to have cooked up a new urgency in their attempts to draw interest. The term "owner relocated/transferred" that usually went with URGENT SALE, has made way for emigration. We’re not so sure this is a good tactic as it casts aspersions on the key considerations of property ownership — location, location, location.

Flower foul

Bread Ahead proprietor Rob Boyd wants his petunias back, the ones that brought colour to the walls and cheer to patrons.

It is understood that the occupants of a white VW Polo, one male and two females, liberated the plants from the flowerbox facing Alan Paton Avenue, and Boyd is determined to nip the problem in the bud.

"The flowers were happy where they were, and if the perpetrators really wanted flowers, I would have donated them one of the dried ones we sell inside," he said.

For the record, the registration number of the Polo is ND 206 509.

Light up

The city should perhaps learn from eThekwini as far as prioritising electricity is concerned. We understand that the automotive park in Prospecton, naturally dominated by Toyota, has negotiated a total exemption from load shedding with the metro.

The reason is to ensure that Toyota’s export orders are not compromised in view of the automaker’s contribution to the region’s economy.

Fuel furore

Motorists still smarting from the latest fuel price increases had better come to terms with the fact that we’re unlikely to ever have anything approximating cheap oil. The reason is simple — supply and demand economics, especially when one considers that the international price of crude oil has doubled over a five-year period, from $52 a barrel to about $100 currently.

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