Picture: ISTOCK
Picture: ISTOCK

The resolution passed by Parliament on Tuesday. to establish a committee to amend the Constitution to allow land expropriation without compensation has got white South Africans, farmers and business rattled.

This is hardly surprising as security of ownership of property and assets is the cornerstone of a market economy. Should this right be compromised in any way, the very foundations of the economy — private ownership, investment and wealth accumulation — will be undermined and hollowed out.

There would be particularly dire consequences for farming. Without security that assets will not be arbitrarily seized, no one will invest in food production, which is now highly capital intensive, with the value of equipment way outstripping the value of the land alone. As R60bn of agricultural land is effectively owned by the banks through loans to farmers, the threat of expropriation threatens financial stability too.

So this is a dangerous debate and the sooner the governing ANC provides some content to its ideas the better. It is too soon to panic though. It is worth reminding ourselves how this situation came about 24 years after the dawn of democracy.

The vast majority of black people have yet to find their way out of the poverty trap created by dispossession

It was only a short while ago that the EFF tabled in Parliament this exact motion, which was opposed and defeated by the ANC. Months later at its national conference the party reversed its position.

The conference was tense and finely balanced. The resolution on land came to the floor late on the last night. The debate was short and heated — so much so that delegates had to be separated by security officials. It almost collapsed the conference.

While the Cyril Ramaphosa camp had gone to the conference opposing land expropriation, when push came to shove it was clear that to hold the conference together the camp had to concede. The land issue is an emotional issue and the scars of the past cut deep.

As Ramaphosa explained on the closing night of the conference, land dispossession has led to generations of poverty. The vast majority of black people have yet to find their way out of the poverty trap created by dispossession.

It is this historical injustice that makes the land issue resonate deeply in the ANC’s electoral base and it is for this reason that so many black South Africans were thrilled by the outcome of Tuesday’s debate. The fact that land reform and restitution have to date been a failure — not because of the state’s inability to expropriate for free but due to underfunding and poor execution — is a detail that is lost on most people.

A hurried formulation — the one Ramaphosa has repeated several times: that expropriation will be done only in a way that increases agricultural production and food security — was put together in the midst of high tension on the conference floor as a damage-control exercise.

But beyond those additions, the ANC has no other plan or proposals for how this limited form of expropriation will take place. That is why in Tuesday’s debate the ANC did not provide any. It is still working out what to do.

This means that from a market and economy perspective Ramaphosa’s caveats are all we have to go on for reassurance at the moment. Whether he will be able to manage the process and provide both reassurance of property rights, on the one hand, and enshrine expropriation without compensation in the Constitution on the other seems unthinkable unless the caveats too are built into the Constitution.

If the ANC plans to go this route, the EFF, which is looking for a much more radical solution — the nationalisation of all land — may be no longer inclined to support the bid to change the Constitution. And without the EFF’s 6%, changing the Constitution cannot be done.

So there are many more questions than answers. It is still early days in the debate and that is why it is too soon to panic.