Expropriation without compensation poses a major risk to commercial banks and will constrain agricultural finance, the agriculture business chamber (Agbiz) said on Tuesday. Total farm debt currently amounts to more than R197bn, of which roughly 75% is collateralised through the value of the land. Agbiz is an organisation that represents commercial farmers and agribusiness enterprises nationally. "Expropriation without compensation poses a risk to commercial banks, which have an exposure of R148bn, with the Land Bank holding R49bn and the remainder primarily sitting with agribusinesses," Theo Boshoff, the head of legal intelligence at Agbiz, told Parliament’s constitutional review committee on Tuesday. "In the absence of reliable collateral, it will constrain agricultural finance. This could likewise have a spill-over effect on the rest of the value chain as well as other sectors of the economy," The committee, which is looking into the possibility of amending section 25 of the const...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00.