Expropriation Without Compensation A Loss For All

As the ruling party’s elective conference in December approaches, South Africa’s focus is on who will emerge as the ANC’s new leader.

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 But while the leadership race is key, we should not neglect the central policy issues due to be decided at this conference.

Chief among these is the land debate and whether to amend the Constitution to allow for expropriation without compensation.

Ironically, this ‘sideshow’ may have the most direct impact, as ordinary citizens will feel the crunch.

MITIGATING LOAN RISKS

South African agriculture competes against global competitors who receive considerable support, such as subsidies, from their governments. The sector imports many of its inputs, which places our producers at a disadvantage due to the fluctuating exchange rate. As a result, the sector has become reliant on credit, usually as bond financing.

It was recently estimated that South African farmers’ debts amount to roughly R160 billion. This debt is shared between the Land Bank (25%), development finance institutions, and agribusinesses, but the lion’s share – 70% – is held by commercial banks.