Sunday 26 August 2018

South Africa and the Land 'Chatter'

Over the past week, President Trump talked about South Africa and this seizure of land deal.  A lot of journalists are stumbling over the topic and generally....people are missing the big picture.  So I'll offer this insight.

First, South Africa is about the size of California, Oregon, Washington State, Nevada, and Arizona.  Population?  Just about 56-million.  It might surprise folks.....but the bulk of the population lives on the eastern end of the nation.....go figure around two-thirds of the nation there.  The western half is sparse, and less populated.  You can also say that most of the population on the western end lives around five or six major urban areas.

Second, there's a lot of chatter about farm-land and seizure.  The government has written up a new law where farms or land can be seized, without compensation (it's been on the books for a total of four years now).  The one and only case to be up at this point....involves a non-farm (it was a game preserve of a private individual).  The guy put up a fence, and appears to have done some improvement to the property over the past twenty years.  The local tribe did the paperwork, and the court approved their acquisition.  That's the ONLY case that has occurred so far.

Third, more acquisitions likely?  No one says for sure.  There is this one odd factor.  When you look at the map and so much open territory.....the fact is that only around 10-to-15 percent of the land is farm productive.  The massive bulk of land is NOT productive....nor will ever be.  When you go and chat over real productive land (worth something)....most suggest that it won't be more than three to four percent of the total land of South Africa.

Fourth, back in 2014....there was a plan established by the government to take 30-percent of productive land and hand it to 'disadvantaged' blacks.  It's not exactly clear who the advantaged 'disadvantaged' blacks are, or the disadvantaged 'disadvantaged' blacks (the ones who won't get property when the big deal finally occurs).  Some folks believe that insiders will manipulate the system, and friends of the big party members will walk away with big chunks of property.  Earlier this year, the government wrote additional rules to the concept (making it easier to acquire the property), and to firmly say that no compensation will occur.

Fifth, adding to this whole redistribution idea.....the water supply on the western side of South Africa is in question.  This is the side which produces a great deal wine which is sold around the world, and brings a neat income into South Africa.  There are some predictions that long-term (suggesting fifty years)....the water supply will only get worse and worse.  So taking this property might not be in anyone's interest.

Sixth, no one from either side wants a repeat of the mess in Zimbabwe.  There, they broke up the large farm production centers and just about every single farm in the country became marginalized.  A good example would be version one.....one white farmer running 500 acres of land, and producing a fair amount of crop.  Version two....after the break-up....was two-hundred-and-fifty farmers managing two acres each.  They basically produced enough for their gardens, but could not produce enough to sell.....so the one variable farm could not return anything of value.

The image in twenty years in South Africa?  Unknown.  They might limit themselves to the 30-percent deal going from the white farmers to the black farmers.  They might go and push the number of acquisitions to 75-percent of the farm land.  The drought might challenge the system and make this a non-issue.

The Trump chatter about farmers killed?  There's a BBC report in 2017 that was produced and they went back to look at data over a 22-year period.  There were 361,000 murdered folks in that period (a fairly healthy 'chunk').  Around 1,500 of these folks murdered....were killed on farms, and out of that....only 15-percent of them were blacks (meaning the bulk were white).

In general, crime has gone up and down (urban and rural) and there are roving gangs around South Africa which look for easy 'prey (rural farms without any nearby police protection are precisely that).  If you go dig around the trend analysis business.....a lot of this crime peaked in 2001, and it's gone down drastically in the past five years.

Even if the land is turned over to black farmers, that doesn't really mean that the gang or crime issue goes away.  I would suggest that the trend will likely just continue on, with more black farmers killed simply because they took over the role of wealthy farmer (probably a non-existent term, but people would think that).

There's nothing to say here....the land will be redistributed, and I would generally expect less production numbers to be seen over the next decade.  The murders will continue....although they won't compare to the 2001-period. Fairness?  Maybe if there was some compensation going on, it might be less of a topic, but the national government simply doesn't have the money.  And in the long term, I would expect the folks who get the farms over the next ten years.....to find themselves in twenty years....forced to hand it to the next group.  This will repeat over, and over.  Don't expect otherwise.

So if you were looking for a fairly safe and dependable place to farm....South Africa is probably not the place for you.

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