Following the passing of the Expropriation Bill to the National Council of Provinces, industry body Agri SA has submitted comments on the proposed legislation, which highlight the potentially catastrophic" impact it could have on the agricultural sector and food security.

Should the council approve the Bill, it will be sent to the President for assent, whereupon it will become law in South Africa.

Agri SA believes the Bill will weaken property rights and make capital raising even more challenging for farmers, since farmers would normally leverage property rights to access operating capital, owing to the cyclicality of the sector.

The organisation is particularly concerned about the definition of expropriation and with Section 12 of the Bill, which deals with compensation for expropriation.

“This undermining of the viability of established, emerging and new producers could lead to a collapse of the country’s food security. South Africa already faces substantial threats to food production in the form of inflationary pressures, loadshedding and deteriorating infrastructure, not to mention floods, droughts and locust infestations,” Agri SA Centre of Excellence for Land chairperson Willem De Chavonnes Vrugt states.

With reduced food production will come the need for increased food imports, to the detriment of the national balance of trade. The resulting net outflow of money from the local economy will mean less revenue for the fiscus and a further diminution of desperately needed resources to rebuild infrastructure and institutions.

Beyond food security, the organisation says the Expropriation Bill will undermine the very objective it seeks to achieve: the transformation of the agricultural sector.

Agri SA believes that without constitutionality protected property rights, fewer emerging farmers will be able to access the capital needed to build sustainable farming operations.

Additionally, established and new entrants in the sector will have to contend with a right in law that could at any moment be taken away from them.

Agri SA says the Bill is defective with reference to the South African Constitution, as well as constitutional democracies globally. As demonstrated in the Zimbabwean and Venezuelan economies, the watering down of property rights has dire consequences.

The organisation maintains that property rights are the cornerstone of economic development and will use every tool at its disposal to ensure their continued protection under the Constitution.