US embassy cable - 05PRETORIA3930

UNCLAS SECTION 01 OF 02 PRETORIA 003930 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR AF/S M. TABLER-STONE 
DEPT PLEASE PASS TO USAID/AFR 
DEPT PLEASE PASS TO USTR P. COLEMAN 
TREASURY FOR OASIA B. CUSHMAN 
COMMERCE FOR ITA J. DIAMOND 
AGRICULTURE FOR ITP 
 
E.O. 12958:  N/A 
TAGS: PGOV, PHUM, ECON, EAGR, SF 
SUBJECT:  SOUTH AFRICA EXPROPRIATES FIRST FARM IN LAND 
 
REFORM PROGRAM 
 
This message is Sensitive but Unclassified.  Not for Internet 
distribution. 
 
1.  (SBU) Summary.  The South African Government initiated 
expropriation procedures against the first farm as part of 
its land reform program, but will compensate the farmer for 
his property.  The land restitution program seeks to restore 
land, which was seized by the apartheid regime, to its 
original black owners or their descendants.  To date, the 
Government has restored land largely through negotiated 
purchases, but the farmer in this case sought 63 percent more 
than the independent auditor value for the land.  Through 
this expropriation action, the South African Government is 
sending a signal to other farmers to play ball on land 
reform.  The Government is also playing to its political 
base, which strongly supports land reform, proving that it is 
serious about accelerating reform.  Zimbabwe-type land 
seizures remain highly unlikely, as the SAG is committed to 
market-based reform and the protection of private property. 
End Summary. 
 
2.  (U) The South African Government announced September 22 
that it had started expropriation procedures against 
Leeuwspruit farm, marking the first time the government has 
exercised its right of eminent domain to expropriate as part 
of its land reform program.  The 500-acre farm in North West 
Province, now owned by Hannes Visser, was seized by the South 
African government in 1942 from black farmers.  The 
descendants of the original owners filed a restitution claim 
in 1997 under the Restitution of Land Rights Act of 1994. 
This Act allows those dispossessed of their land between 1913 
and 1994 "as a result of past racially discriminatory laws or 
practices" to bring a restitution claim for either 
compensation or the return of the land.  In the case of 
restored land, the law requires the Government to pay farmers 
the fair market value of land. 
 
3.  (U) In the Leeuwspruit case, the Commission on Restitution 
of Land Rights determined nearly three years ago that the 
restitution claim was valid.  The Government entered into 
negotiations with Visser to purchase the land through a 
negotiated sale, but have been unable to reach agreement on 
the fair value.  (Visser continues to dispute the validity of 
the claim itself, but was willing to negotiate for the 
transfer.)  Visser claimed that the improved portion of the 
land was worth Rand 3 million (approximately USD 500,000), 
while independent auditors valued it at Rand 1.75 million 
(approximately USD 300,000).  As a "last resort," and 
consistent with the Restitution Act and South African 
Constitution, the Government announced September 22 that it 
was expropriating Visser's farm and paying him the 
independent auditor value.  Visser has the right to appeal 
the decision to the Minister of Agriculture and Land Affairs, 
and then the courts. 
 
4.  (U) The major farmer's union in South Africa, AgriSA, 
suggested that the Government was making an example of 
Visser.  They argued that the Government had not exhausted 
all avenues before the expropriation.  The opposition 
Democratic Alliance emphasized that the value of the 
compensation was the critical factor; the state had the 
burden of proving that the compensation offered was fair and 
market-related. 
 
5.  (SBU) While Visser has challenged the independent 
auditor's valuation, Government and several land NGOs have 
argued that commercial farmers often inflate the value of 
claimed land in a bid to take advantage of -- or slow down -- 
the land reform program.  Marc Wegerif of Nkuzi Development 
Association, a land reform organization, told PolOff 
September 23 that he believes that the independent auditor 
prices are often tilted in the farmers' favor; the (largely 
white) auditors have long-standing relationships with the 
(largely white) commercial farms, so they err on the side of 
over-valuing farms slated for restitution or redistribution. 
 
6.  (SBU) COMMENT:  By pursuing the expropriation claim, the 
South African Government sending a signal to white farmers to 
play ball on land reform.  Land remains an emotional, 
political issue in South Africa, and the Government needs to 
show progress.  The transfer of land from the white farmers 
to blacks is moving slowly.  While many South Africans are 
impatient with the pace of reform, we believe that 
Zimbabwe-like land seizures remain highly unlikely.  The 
Constitution and legal framework protect property rights, and 
the Government is committed to reform through market-based 
transactions.  END COMMENT. 
 
------------------------- 
Background on Land Reform 
------------------------- 
 
7.  (U) South Africa's land reform program has three planks: 
restitution, redistribution, and tenure reform.  Each is 
summarized below: 
 
-- Restitution:  Significant progress has been made on 
restoring land to those who filed claims under the 
Restitution of Land Rights Act.  Of the 79,693 claims lodged 
before December 31, 1998 (the cut-off date for such claims), 
80 percent have been settled.  Most of the settled claims 
were in urban areas (e.g., District Six and Sophiatown).  The 
more difficult rural cases (like the Leeuwspruit farm) have 
not yet been settled.  Most of the remaining rural claims are 
in Limpopo, Mpumalanga, and KwaZulu-Natal.  The Government 
wants to settle all restitution claims by 2008. 
 
-- Redistribution:  At the end of apartheid in 1994, white 
farmers held 87 percent of the commercial farm land.  The 
Government committed to transferring 30 percent of the land 
to black farmers by 2014, but has succeeded in redistributing 
only 4.2 percent by the end of 2004.  The Government supports 
redistribution through grants and other mechanisms to 
encourage black farmers to purchase land on the market.  Some 
have criticized the "willing seller/willing buyer" process as 
slow and ineffective. 
 
-- Land Tenure Reform:  Parliament passed the Communal Land 
Rights Act (CLRA) in 2004 to provide increased tenure 
security to those living on traditional, tribal, or community 
land.  Most of this land is in the former "homelands," where 
30 percent of the population live and poverty is most 
serious.  Implementation of CLRA is a politically-sensitive 
issue because it challenges the power of local traditional 
leaders, and is only now beginning. 
 
TEITELBAUM