This would be agrarian reform by stealth, and should be a matter of concern, given the record of such measures up to this point.
Terrence Corrigan, Daily Friend – 5 February 2024
Pledging to resolve the ‘land question’ has been a perennial theme for the ANC. For the most part, this has been approached as a political rather than an economic or developmental question. Actual land reform – at least in its agrarian manifestation – has never been a priority, and its successes have been modest.
In keeping with the political focus, there has been a steady progression of measures aimed at shifting control over land to the state. The Expropriation without Compensation drive from 2018 onwards was the most explicit of these. The attention it garnered had a lot to do with the manner in which it was branded and presented to the public – the seizure of assets by the state with nothing being paid in return – and the fact that it involved the first attempt to meddle with the Bill of Rights.
The Institute opposed these measures vigorously, and warned that at issue was not a mode of agrarian redress, but a deep and deliberate ideological impulse. This sees the state as the rightful authority to manage and arbitrate economic decisions, with the ruling party being the natural and essentially immutable incumbent in office (deliberate politicisation having at any rate blurred much of the distinction between the two). Indeed, the Department of Rural Development and Land Reform defined its objectives as ‘a rapid and fundamental change in the relations (systems and patterns of ownership and control) of land, livestock, cropping and community.’
For all the attention attracted by the proposed constitutional amendment, that was neither the defining feature of the overall strategy, nor necessarily the most important. Hence the IRR warned that such developments as the new Expropriation Bill and the regulations guiding the work of the Valuer General represented parallel processes towards the same end. Each would have the balance of control over property shifted from private owners to the state.
Russell Lamberti, IRR president, remarked presciently that the strategy was less to seize the means of production than to regulate them into subjugation and extract their value. This contextualises the pending amendments to the Water Services Act and the National Water Act.
Water is indispensable for farming; it accounts for some 60% of water usage in South Africa. Given the paucity of rainfall, the ability to draw from water sources is critical. In 1998, the National Water Act established the principle of state custodianship of the country’s water resources. In terms of this Act, water use would be managed in terms of licences issued by the Department of Water and Sanitation. (This was particularly applicable to those seeking new rights; some users were able to continue with ‘existing lawful water use’ entitlements.)
In issuing these licences, the Act specifies a list of considerations, some economic, some environmental, and the ‘need to redress the results of past racial and gender discrimination’. Cumulatively, the approach seemed to balance competing needs and impulses.
In common with the approach to land, however, the imperatives of ‘transformation’ have come to exercise a defining importance in official attitudes to water policies. Officials issuing water licences were for a time inclined to place the redress factor before any others. This ultimately found its way into court, and in a 2012 judgement, Makhanya v Goede Wellington Boerdery, the requirement to fully consider all relevant factors was affirmed.
This evidently prompted renewed official thinking as to how redress could become the prime driver, as opposed to one of several. The 2018 National Water and Sanitation Master Plan called for the relevant legislation to be amended to ‘make equity the primary consideration in water allocation.’
This is – in part – what the proposed legislation does. It seeks to introduce an amendment stating: ‘A responsible authority must prioritise the redress of past racial and gender discrimination when issuing a licence or general authorisation and set aside a certain volume of water in each water management area to achieve this redress.’
This would make redress no longer one of 11 considerations, but the primary consideration.
The amendment fails to provide clarity on how this is to be managed in practice. For example, it’s unclear just how much water in each management area is to be set aside for redress purposes. This raises all sorts of risks about inconsistent, subjective, if not arbitrary awards.
The amendments also propose curtailing ‘existing lawful water use’ permissions. This has been a critically important matter for existing agricultural enterprises, not least because the issuing of new order licences has been a frustratingly slow process.
The amendments would make continuing ‘existing lawful water use’ contingent on a variety of factors and would remove Section 33 of the National Water Act. This means that some forms of existing lawful water use will no longer be recognised as such. (Those holding such rights from before the commencement of the Act in 1998 appear to retain them under the amendments.)
The upshot is that many commercial farmers may well find water access restricted. Gaining access to water would essentially be in the gift of a bureaucracy more committed to ideology than to agriculture.
A likely goal is to divert resources to emerging farmers in pursuit of a ‘fundamental change in the relations.’ This would be agrarian reform by stealth, and should be a matter of concern, given the record of such measures up to this point. Well-executed land and agrarian reform can be valuable, but this has not been the case in South Africa. There is very little to suggest that anything new would alter its prospects in the near future. The implications for agricultural production, along with food security and export earnings, would be profound. But if these things are seen by officials as largely a process of race-coded transfers, it’s unlikely that the potential damage would figure prominently when they make decisions.
Another possible goal – one less widely admitted, but in some quarters probably infinitely more attractive – would be to use water licences to compel BEE deals. This would link (in the time-tested manner of informal patronage politics) politically-connected ‘businesspeople’ with actual farmers as a condition for the latter to access the water they need. As a means of rewarding political insiders, this would be a sweet deal: contribute a name in exchange for a large chunk of equity. Recall that last year proposals were floated for water licences for larger operations to require 75% black ownership.
This would be a picture-perfect example of regulating the means of production. For those seeing the world in ideological terms, and for those with the necessary connections to benefit personally from these arrangements, these amendments would be most attractive. For actual farmers, for agriculture and for South Africa’s growth prospects, they would not.