Farm prices in SA have plunged by a third since the ANC decided to seek a change to the constitution to make it easier to expropriate land without compensation, and as commodity prices fell due to bumper harvests following a drought.

The average price of agricultural land sold in July was R9,318 a hectare compared with R13,700 in December, when the ANC adopted the policy, Johann Bornman, an economist who is the chairman of Agri Development Solutions, said on Monday.

Bornman uses data from the country’s Deeds Office, the agency that maintains the property registry.

The average price of a hectare of agricultural land is 43% lower than it was in April 2016, when it was at a record, Bornman said.

The total value of transactions has dropped 57% since December to R826m, the economist said.

The ANC’s move has added to wider emerging-market jitters in knocking SA assets.

Erosion of property rights

Critics of the plan and investors say the move could lead to a devastating erosion of property rights.

The ANC says more needs to be done to correct racially skewed land ownership patterns dating back to colonial and apartheid rule.

While there is widespread consensus that land reform needs to be accelerated, views on how it should be done are widely divergent.

"Everybody agrees we have to do this — there is no single farmer I know who is not prepared to be part of this in a constructive way," Bornman said. "The problem is that we don’t get to a point where we say ‘this is where we are, here’s the plan and this is where we want to land up’."

Lingering policy uncertainty and weak economic growth dragged an index tracking confidence in SA’s agriculture industry to more than a two-year low in the third quarter, the Agricultural Business Chamber said.

Output by the agricultural industry contracted 29% in the second quarter — a major contributor to the country falling into its first recession since 2009.

Farming debt with lenders such as commercial banks and co-operatives and which is often secured with land is at about R160bn, according to IHS Markit, a global information provider based in London, which based the figures on central bank data.