Latest data from the Agricultural Business Chamber and Industrial Development Corporation’s Agribusiness confidence index reach a nine-year low. Picture: ISTOCK
Latest data from the Agricultural Business Chamber and Industrial Development Corporation’s Agribusiness confidence index reach a nine-year low. Picture: ISTOCK

As parliament adopted a report recommending that the constitution be amended to allow land expropriation without compensation, more evidence emerged of the harm the policy is causing to agriculture.

Latest data from the Agricultural Business Chamber and Industrial Development Corporation’s Agribusiness confidence index released on Tuesday showed that the index plummeted to a nine-year low.

A few hours later, 209 MPs voted in favour of the proposed amendment, with 91 against.

President Cyril Ramaphosa’s announcement late in July that the ANC would seek a change in the constitution to explicitly allow for the state to take land without paying for it — though conceding that the step was probably unnecessary — unnerved investors, sparking a sharp drop in the rand.

That marked the end of the "Ramaphoria" that accompanied his replacement of Jacob Zuma as president in February.

The move sparked debate about the future of property rights and gave rise to concerns that Ramaphosa, who narrowly won the ANC presidency in Nasrec, could be pushed by the EFF into more populist measures, to the detriment of his agenda to revive the economy.

The Banking Association of SA and the state-owned Land Bank have warned that the seizure of bonded properties that have been used as collateral could cripple financial institutions. Some commentators have also warned the policy could threaten food security and negatively affect economic activity and job creation as the country battles with an unemployment rate of more than 27%.

The Agribusiness confidence index dropped six points to 42 in the fourth quarter of the year — the lowest level since the fourth quarter of 2009. A score below the neutral 50-point mark indicates agribusinesses are gloomy about business conditions.

"There is despondency in the sector," said Wandile Sihlobo, the head of research at the chamber and a member of the panel appointed by Ramophasa in September to advise on land reform. "We doubt that there will be a meaningful improvement in confidence in the near term if there is still no clarity regarding the land reform policy," he said.

In November, the constitutional review committee formally resolved to recommend that the property section of the constitution be changed, ignoring objections from opposition parties, business organisations and some academics.

The DA has vowed to launch a court challenge against the process.

The National Council of Provinces will likely adopt the report on Wednesday.

Another committee will in 2019 consider how the clause should be redrafted, a process that will require another round of public participation.

This means that the process is unlikely to be finalised before the elections in 2019 and might therefore not happen at all if the ANC and EFF fail to secure a two-thirds majority between them.

However, ANC chief whip Jackson Mthembu indicated that the party would bring a motion on Thursday to possibly fast-track the process, while the EFF insisted that it wanted it concluded before the elections.

EFF leader Julius Malema said the process was fair. "People with different views were heard. The intention was not to conduct a referendum."