South Africa Confiscates White-Owned Farms

How are things in South Africa today? I am sure you want to know. After all, former president Barack Obama just delivered a speech there, one that happily ignored the conditions in that country.

After all, you can’t have everything, can you?

Anyway, the government of South Africa is now trying to change the constitution in order to confiscate land held by white farmers. As we have reported, these farmers have been subjected to harassment and even murder… about that, no one really cares.

The Daily Mail reports:

South Africa's white farmers have blasted the government's decision to endorse constitutional changes in order to speed up the redistribution of white-owned land to the country's poor black majority as 'catastrophic.'

On Tuesday night, President Cyril Ramaphosa said his ruling African National Congress party will push ahead with the amendment to allow for the expropriation of land without compensation.

More than two decades after the end of apartheid, whites still own most of South Africa's land and ownership remains a highly emotive subject.

Investors said Ramaphosa's speech was aimed at winning political points ahead of an election in mid-2019.

But experts have claimed the move will lead to dire consequences for the country akin to those suffered in Venezuela and Zimbabwe.

Dire consequences… who would have imagined such a thing. Following the example set by Venezuela and Zimbabwe… some people do not learn from history.

What is the problem?

'Agrarian reform can only happen successfully working hand in hand, in partnership, with the private sector' Omri van Zyl, the executive Director of Agri SA, added.

'We have seen this movie play out all over world – Venezuela, Russia – the promise for emerging farmers of tools, fertilizer, seeds and extension services are superficial – many have promised this as election ploys– and yet the outcome is always catastrophic for agriculture and food security.

'This is a populist move from the ANC that will lead to an economic downgrade – massive capital exodus and a contagion effect of all property and intellectual property classes.'   

Once a government gets into the business of confiscating property, investors the world over sell their holdings. South African authorities insist that they will not threaten the food supply. Though one wonders whether the new reforms can do anything but threaten the food supply.

Markets and investors are wary because of concerns about wider threats to property rights. The rand fell sharply and government bonds weakened after Ramaphosa's announcement.

Analysts say South Africa is unlikely to follow the route of Zimbabwe, where the chaotic and violent seizure of white-owned farms under former president Robert Mugabe triggered economic collapse.

Ramaphosa has repeatedly said the policy will be implemented in a way that does not threaten food security or economic growth. ANC officials have said unused land will be the main target.

Still, the risks are substantial. South Africa feeds itself and is the continent's largest maize producer and the world's second-biggest citrus exporter.

Agriculture accounts for less than three percent of national output but employs 850,000 people, five percent of the workforce. Threats to production would also fan food inflation, hurting low-income households.

Stay tuned… it’s going to get a lot worse before it gets better.