Farm prices in South Africa have plunged by a third since the ANC decided to seek a change to the constitution to make it easier to expropriate land without compensation.
The average price of agricultural land sold in July was R9 318 a hectare compared to R13 700 in December, according to Johann Bornman, economist and chairman of Agri Development Solutions. He uses data from the country’s Deeds Office, which maintains the property registry.
“Everybody agrees we have to do this – there is no single farmer I know who is not prepared to be part of this in a constructive way,” Bornman said. “The problem is that we don’t get to a point where we say ‘this is where we are, here’s the plan and this is where we want to land up’.”
Lingering policy uncertainty and weak economic growth dragged an index tracking confidence in South Africa’s agriculture industry to a more-than two-year low in the third quarter, the Agricultural Business Chamber said.
Output by the agricultural industry contracted 29 percent in the second quarter – a major contributor to the country falling into its first recession since 2009.
The average price of a hectare of agricultural land is 43 percent lower than April 2016, when it was at a record, Bornman said. The total value of transactions has dropped 57 percent since December to R826m, he said.
Farming debt with lenders such as commercial banks and cooperatives and which is often secured with land is at about R160bn, according to IHS Markit, which based the figures on central bank data.