- Title
- Assessing the economic impact and legal standing of expropriation of land without compensation policy and the effects on farm investment of selected farmers in South Africa
- Creator
- Buthelezi, Sithabiso
- Subject
- Land tenure
- Subject
- Economic impact analysis
- Date Issued
- 2022-04
- Date
- 2022-04
- Type
- Master's theses
- Type
- text
- Identifier
- http://hdl.handle.net/10948/57557
- Identifier
- vital:58073
- Description
- South Africa’s agricultural sector is still labour- intensive and with South Africa’s high unemployment levels, this sector becomes crucial for employment creation. Moreover, the sector assists in eradicating poverty and ensuring food security. The African National Congress (ANC) has introduced the Draft Constitution Eighteenth Amendment Bill, 2019 in the National Assembly. The Minister of Public Works and Infrastructure issued a notice indicating the government’s intention to introduce the Expropriation Bill, 2020 in the National Assembly for debate. After these Bills were issued, there has been a debate in the public, including legal and economic scholars about the potential impact that these policy proposals will have on investment, specifically the agricultural industry. This treatise investigates the potential impact of expropriation of land without compensation on farm investment and assess the legality of the policy. The supporting theoretical literature in this treatise is the property rights theory, efficiency theories and transactional costs theory. The study used various cases and interpretations of legislation across different jurisdictions, to assess the legality of this policy. To test the impact of expropriation of land on farm investment, the study uses a survey collected from 22 farmers, registered with the Department of Agriculture, Land Reform and Rural Development (DALRRD) who responded to the request to participate. Once collected, the data were coded and analysed through the Stata statistical package. The results from descriptive statistics show that several independent variables that were included in the model had an influence on investment decisions. The study also found that the influence of title deeds differs between rural and semiurban dwellers. Semi-urban dwellers are likely to regard their property as insecure without title deeds, whereas rural dwellers indicated strong security of tenure despite staying on leased land. The study also found that the influence of collateral credit differs between small and commercial farmers. Some small farmers, who had collateral assets, did not use it when seeking credit or were denied even after using it. That is due to other factors such as cash flow and affordability. These factors, combined with the low value of collateral assets for small farmers prevent them from accessing additional credit. The results from the regression analysis revealed that certain independent variables have an influence on the dependent variable (farm investment). The regression vi | P a g e analysis results also prove that there is a significant positive correlation between the security of tenure and farm investment. However, the results from the respondents show that the proposed policy (expropriation of land without compensation) has not decreased their security of tenure as yet. The majority of respondents reported knowing about the policy, but still indicated that they intend to increase their farm investment in the coming three years. Therefore, there is no evidence that the proposed legislation had a negative impact on planned investment from a data analysis perspective. However, planned investments are decreased because of the current policy uncertainty. Those participants who indicated that they will decrease their investment, did so because they were not sure if their property will be targeted or not. This policy uncertainty is the source of disinvestment. Government should finalise this policy. It must be clear, indicate the circumstances under which someone’s property will be targeted. This is likely to put everyone at ease and be certain if their property will be expropriated or not. Government should be cautious of putting a policy that is not definite enough and leaves the final decisions to the court to determine the amount to be paid as compensation, as is currently the case. This court-determined compensation increases transactions costs and also creates uncertainty because one does not know how much are they entitled to until the final court determination. This contributes to policy uncertainty and procrastination on investment.
- Description
- Thesis (MA) -- Faculty of Business and Economic Sciences, 2022
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (xi, 93 pages)
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic science
- Language
- English
- Rights
- Nelson Mandela University
- Rights
- All Rights Reserved
- Rights
- Open Access
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | Buthelezi, S.pdf | 1 MB | Adobe Acrobat PDF | View Details Download |