South Africa's new agriculture minister said on Tuesday the continent's biggest maize producer would not seize white farms to redistribute to blacks as this would harm its economy.

"With our willing-buyer, willing-seller policy there are times when the land becomes too expensive for the state to purchase and if we face a programme of expropriation, it would further destabilise the economic industry of agriculture," she told an agribusiness conference in Cape Town.

After the fall of apartheid in 1994, the ruling African National Congress set itself a target of handing 30 percent of all agricultural land to the black majority by 2014.

But progress towards the target has been slow and only about four percent of land has been acquired from private owners amid funding problems that government officials say might hinder the government from meeting its goal.

Land reform is a sensitive issue in Africa's biggest economy, where critics say the programme has hurt investment in the commercial farming sector and drastically reduced the land that is available for commercial agriculture.

Now farms are hot property

Contrary to the most of the property market, sales of agricultural land are buoyant at the moment.

Gerhard Kotzé, CEO of the ERA South Africa property group, says that this is due to a 'happy confluence' of elements including the desire of many city dwellers for an escape from increasingly pressurised and problematic urban lives and the search by many farmers for new opportunities after receiving land claim settlements.

A further if lesser element, he says, is that of overseas buyers seeking a lifestyle very comparable to that in prime farming areas of Europe and elsewhere but at a fraction of the cost.

"A tranquil lifestyle, the opportunity to turn a profit from a cash crop or activity and perceived value for money relative to, say, a holiday home on the Cape eastern seaboard or a smallholding in Provence in the south of France is a potent combination, making South African lifestyle farms increasingly attractive," he adds.

It’s a trend that’s being experienced countrywide but areas of particular activity for the ERA group in this respect include the likes of Upington, Paarl and Thabazimbi.

In the Upington area of the Karoo, the big driver of farm sales recently has been the land claims settlements in neighbouring North West province which have generated cash-in-hand for numerous displaced farmers.

Dirk Myburgh of ERA Upington says that land prices in the area rose by as much as 100 percent in the two years to end-2008, but have since stabilised and that demand is strong with sales only being limited by many existing owners’ reluctance to dispose of their properties.

"This is a primarily sheep area but an additional factor is the emergence of smallholders paying from R10 000 per hectare for productive land under grape and other cash crops."

Heinie Gersbach of ERA Gersbach in Paarl reports a similar scenario with numerous enquiries but owners being reluctant to part with their holdings while buyers are hunting for bargains. Nonetheless deals are being done in this wine, grape, wheat and sheep producing area where land values start at around R20 000 per hectare.

In the Thabazimbi district, ERA Thabazimbi/Bosveld’s Herman Barnard says land claims have been less prevalent than in neighbouring areas and that farm demand is good. Prices range between R6000 and R9000 per hectare for land that lends itself to game and cattle farming in this bushveld terrain.

Residential eco-estate development is also booming in the area and there are numerous game lodges offering safaris and hunting to local and international clientele, all of which further underpins the demand for farmland.

South Africa The Good News - www.sagoodnews.co.za

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