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March 03, 2009

Land reform farm prices too low, says Namibian farmers' union

by Wezi Tjaronda

Namibia Agriculture Union’s land committee has asked the Government to pay market-related prices when buying land for the land reform process.

The land committee met recently to analyse the land reform process and reflect on the union’s involvement. The committee noted the current high land prices are an indication that agricultural land is on demand.

Earlier, Agribank had expressed concern over the price of farmland, which the bank said had increased resulting in the scarcity of farmland being offered for sale to prospective commercial farmers.

The high price of farmland on the market resulted in a decline in the total loans granted to Affirmative Action Loan Scheme (AALS) farmers in 2008. Of the N$102.8 million that was loaned to mostly AALS farmers from April to December last year, N$21.8 million was loaned out for the purchase of farmland, which is a decrease from N$22.5 million that the bank loaned out over the same purpose in 2007.

NAU Executive Director, Sakkie Coetzee, said that the current model, where land is offered to the Government and the Government determines the price, did not leave much land on the supply side.

“The demand is great and the land is not necessarily there, so the prices are going up,” he said.

Coetzee said since the willing buyer-willing seller plan was based on the free market system, more land is now going on auction where landowners get market-related prices compared to what the Government is willing to pay. He added that the current mechanism scared off landowners willing to offer the Government land because even when they are unhappy with the Government’s offer, they are not allowed to withdraw the offer.

The current land prices on auction range between N$800 and N$1 600 per hectare, according to farmland that will be auctioned in May. Land in the Windhoek and Dordabis area can cost up to N$2 000 per hectare, while in the south it goes for up to N$650 per hectare.

Depending on where the land is located, an auctioneer said that people were willing to pay between N$5 million and N$6 million for land. This is two times the amount the buyers were paying for land two years ago. He also said if the Government could decide to pay market-related prices for land, it would buy more land for the land reform programme.

‘If a farmer offers land for N$1 200 per hectare, the Government has the first option to buy and they must buy at that price and not on a predetermined price,’ the auctioneer said, adding that many farmers were willing to sell but the Government was not willing to pay.

According to Coetzee, NAU supports the willing buyer-willing seller plan because investment trust in Africa is often measured in the success of the land reform programmes.

“The willing buyer-willing seller policy in the agricultural sector is one of the instruments which motivates investors to be willing to also invest in other sectors of the economy,” he said.

However, he advised that the land reform process should not only focus on land redistribution but also concentrate on ensuring sustainable production, alleviation of poverty, employment creation and guaranteed food security.

Other proposals made by the committee include categorising farms, implementing the Negotiated Land Reform Forum and conducting a study on what market related land prices should be.

Categorising the land would assist landowners and the Government with the categorising of farms based on ownership, economic activities, size and presence on the land and with whom the Government can negotiate to obtain farms for the land reform process.

The committee said it wants the Negotiated Land Reform Forum to be implemented this year and that other role players of the forum should accept the forum.

The committee proposed an investigation into what market-related prices for agricultural land should be and other mechanisms, which can be employed to create trust, for agricultural landowners to offer their farms as possible substitutes for the current mechanisms.

Currently, about 1 300 farms with a total surface of approximately 6 million ha are already transferred through the various programmes to previously disadvantaged farmers. Of this, the Agribank clients are the biggest group with about 755 farms, the resettlement programme with 275 farms and 271 farms, which were obtained by previously disadvantaged farmers through other means.

NAU is currently actively involved in the training of emerging farmers in the finer art of commercial farming practices by means of training programmes and a mentorship scheme, which is offered by the Emerging Commercial Farmers Support Programme.

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