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Farmers 'milking' land reform
05/09/2004 08:16 - (SA)
Justin Arenstein
Johannesburg - Shrewd white land speculators are milking the land reform programme by systematically selling farms to the Land Claims Commission (LCC) at massively inflated prices.
Mpumalanga LCC commissioner Nceba Nqana on Saturday reluctantly confirmed that he had "ignored" pre-emptive warnings from concerned local farmers and professional land valuators and spent R25.7m on six farms in the Badplaas district, which had originally been bought for a combined price of R4.3m. This left speculators with a cool R21.3m in estimated profit.
The prices on some of the sales, such as Onverwacht farm, represent a 300%increase on their 2004 market value.
Records at the Deeds Registry Office indicate that the Onverwacht farm was bought from the original owner for R1.2m in May and resold to the LCC for R3.3m just one month later.
Nqana is unable to explain how the land could have tripled in value in so short a time.
He also said he doubted if a transaction "could take place" in such a short period of time. Onverwacht is, however, not an isolated incident.
Nqana declined to discuss specific cases on Saturday, saying he was out of office and did not have the files with him. Deeds Registry records, however, confirm local speculators snapped up another nearby farm, Engelschedraai, for R650 000 in 2002 and resold the land to the LCC for R4.1m (600% more) in June.
Speculators also bought Vaalkop farm from Mondi Forests for R1.6m in 2000, and resold the land to the LCC at a 500% markup of R8.2m on June 17.
The 306 hectare Vygeboom dairy farm was purchased from the original farmer for R1.6m in 2002 and resold to the LCC for R4.4m, while the neighbouring 516 hectare Doornhoek farm was purchased for R250 000 and resold to the LCC for R5.7m - 22 times the original price.
Badplaas farmers were so concerned about the deals that their attorney, Richard Spoor, wrote to Nqana in May warning him that profiteers were seriously undermining land restitution by "wasting taxpayer's money" and simultaneously making it "too expensive" for neighbouring farmers to continue operating.
"This is not a good situation for anyone other than profiteers," Spoor warns in his letter.
The letter focuses on the Vygeboom sale, warning that speculators paid the original owner R1.6m for the dairy and vegetable farm in 2002, with R1m of that price paid for the farm's 538 dairy cows.
The farm's true land cost, Spoor argues, was therefore R600 000.
The LCC paid R4.4m for the land, without any cows or other moveable goods.
"This is significantly above the market price (especially) because no improvements had been made to the land since 2002. In fact, the farm has deteriorated significantly," says Spoor.
"(We) are also advised that several (more) properties being offered (to the LCC) are not owned by the sellers, and have only been secured by an option. We are advised that the difference between the option price and the sale price to you is substantial."
Badplaas wildlife farmer Fred Daniel, who is facing land claims on some of his property, is spearheading calls for a re-evaluation of the sales prices.
"I suppose I could keep quiet, negotiate a lucrative deal with the LCC and walk away from this a very rich man. But, the amounts of money we're talking about here are obscene and are actually undermining the whole agricultural market. What happens when the bubble bursts?" says Daniel.
"This matter is so clear-cut that I am deeply concerned the local LCC office is either incompetent or corrupt, because the prices paid bear no relationship to the actual land values.
"They simply cannot be justified. My own company, Grand Valley Estates, has purchased comparable properties in this area for just R350 000 over the past three years."
Ironically, the department of land affairs publicly warned this week that the department needed to allocate a minimum of R12bn a year to land claim settlements or government would fail to meet President Thabo Mbeki's December 2005 deadline for settling all restitution cases. - African Eye News Service
- City Press
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