Land reform puts drought-hit Cape farmers in the cross-hairs‚ MEC warns

Land expropriation without compensation comes at the worst possible time for drought-stricken farmers already battling to access bank financing‚ Western Cape MEC for Economic Opportunities Alan Winde said on Thursday.

Farmers were already swimming in debt and now had to convince banks to finance new investment in a climate of uncertainty around land reform‚ Winde said‚ adding that parliament's resolution this week to back land expropriation without compensation lacked clarity.

“It adds to the risk in the financing space. It concerns me immensely‚” Winde said at drought briefing in Cape Town. “There will be big discussions going forward around the risk in financing [agriculture] investment.”

Winde said organised agriculture was already deep in discussion with banks regarding financial problems and possible “soft loans” to address the drought. Figures presented at the briefing showed an average 20% decline in agricultural production in the Western Cape due to the drought‚ amounting to a gross value loss of R5.9-billion and about 30 000 job losses. The figures included the knock-on impact on the agri-processing industry.

Winde also questioned the ability of the Department of Water and Sanitation (DWS) to address the challenges of water infrastructure‚ particularly the need for new investment in dams. He said he hoped to raise his concerns with new minister Gugile Nkwinti.

“There are a lot of questions about the department. We’ve now got a new minister and we sincerely hope he rattles the cage big time‚” Winde said‚ adding that he believed the National Treasury needed to step in to make budget available.

This week‚ parliament’s standing committee on public accounts confirmed it would pursue criminal charges against DWS officials implicated in illegal activities related to the department’s dismal finances.

Winde said the Western Cape was allocating its own resources to assist with infrastructure repair and drought relief.

In a statement released at the briefing‚ he said: “We recognise how difficult this period has been for farmers. We have no choice but to support this vital sector to ensure that it is able to continue production until good rains come.”