Don’t bank on land reform panic, policy menu is diverse

2018-06-28 12:07

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

When controversial public policy proposals are put on the table, it is easy to choose with an “either… or” mentality, ignoring the rich menu of options. This is particularly the case when emotions trump rationality. 

There are many policy options that can be explored on land reform. But the high-pitch emotional rhetoric, if allowed to dominate public debate, can turn into an “either… or” scenario, depriving South Africans of a well-thought-out outcome. 

It’s either there is expropriation without compensation, or there is no transformation – the emotional argument goes.

But it should not be an “either… or” matter. Only those who don’t know the historical realities of South Africa can dispute the need for transformation in the agricultural sector. Similarly, only those who don’t have the slightest clue about the workings of the economy would want to undermine property rights, using the legitimate need for transformation. 

It sounds complicated, doesn’t’ it? But it isn’t, actually. Transformation, including the distribution of land to black people for agricultural production, can be done without necessarily resorting to the deprivation of property rights. After all, even the beneficiaries of land reform would like to benefit from the system of property rights that serve as the backbone of the entire agricultural value chain, including finance. 

What South Africa needs is transformation that diversifies and grows the entire agricultural value chain. It should whet the appetite of commercial banks and state-owned development finance institutions such as the Land Bank to continue to oil the engines of agribusinesses. 

But we would be inhuman if we were not emotional. Not all emotional reaction to policy options are negative. There is something positive about emotional reactions in the debate about expropriation of land without compensation: it has jolted those who believe in rationality to stand up, wear their thinking caps and contribute towards solutions. 

The parliamentary public hearings on the matter are therefore more likely to yield rational outcomes. This would be good for the economy. With farm debt exposure at R170 billion, the banking sector cannot afford to panic. It too has to act rationally. 

Fortunately, South African banks understand the potential negative consequences of banking sector panic in the economy and have therefore continued to extend credit to the agricultural sector. 

John Hudson represents Nedbank, one of the commercial banks that continues to support agriculture, and that is making a submission to Parliament on land reform. He shares his perspective…

This post and content is sponsored, written and provided by Nation In Conversation.


Inside News24

Traffic Alerts

Jobs in Cape Town [change area]

Jobs in Western Cape region

Cluster Financial Manager

Cape Town
Network Finance
R950 000.00 - R1 000 000.00 Per Year

IT Manager (contract)

Cape Town CBD
Communicate Cape Town IT
R330 000.00 - R458 000.00 Per Year

Reporting Accountant

Cape Town
Network Finance Professional / Prudential
R310 000.00 - R360 000.00 Per Year

Property [change area]

There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.