President Jacob Zuma has told delegates at the Black Management Forum (and the rest of South Africa for that matter) that changes have to be made to the “willing buyer, willing seller” model for land transactions.

He was quick to discount any thoughts that a revision of this kind might lead to land invasions saying that the government would not tolerate such behaviour. “We do things within the law,” he said.

So far the government’s land redistribution policies have cost taxpayers a fortune and have not really produced the results that the Departments of Agriculture, Land Affairs or even the Cabinet could be proud of.

Worryingly, many of the claims have resulted in completely unproductive land being wasted by the farmers or the communities that have been the recipients of redistributed land.

I was mulling over this the other day and wondering about a couple of fundamental points:

- If you receive something for free, it has no value;
- The value that you place on something is often unrelated to its market price (consider the drawing that your own 4-year-old did for you);
- How do you determine value?
- If someone has a stake in the land (through land ownership), then they have something to protect.

The “willing buyer, willing seller” principle tends to take supposition out of the equation. So if you want to buy something you make an offer and if the buyer thinks it’s worth accepting he or she accepts it.

Let’s look back in history: When Cecil John Rhodes was buying up mining claims from individual diamond claim-holders, he didn’t consider what the claim would be worth in terms of diamonds. Instead, he asked: “What will the person accept?”, and then made his offer on those terms, Kimberley Joe accepted it and headed off to Pilgrim’s Valley, Barberton or Bourke’s Luck.

The value of the offer was based on the mineral content of the land, not on its value as grazing for a couple of sheep.

Similarly, when the mining companies did a deal with the Bafokeng, that deal was not based on the value of grazing land but on the value of the minerals under the ground. The Bafokeng today are incredibly rich – but the original “owners” of the land might not be.

Now how do you set a fair value for land if it is not based on “willing buyer, willing seller”?

Perhaps you go for the expropriation option. Maybe you say (as government) that “. . . the value of land is X. If you accept X, you will be paid, but if you don’t accept it then we will take it anyway. . .”

By doing that, government is adhering to the “willing buyer, willing seller” principle. Because that’s at the heart of the transaction: “You offered X, I accepted it. Deal done.”

So I will be really interested to see what the “new model” for land redistribution could be.

Land ownership is a dream for millions of South Africans (and millions of other people in countries everywhere in the world). Land ownership is at the heart of the disputes in the Niger Delta (along with the mineral value of the resources beneath the land).

But how do you determine the value?

For instance, if the Kimberley Hole was filled in and turned into agricultural land would it be as valuable today as it was when Barney Barnato and Cecil John Rhodes bought up all the claims and took out all the diamonds? No way.

Does anyone want to own the smoking seams of coal under the suburbs of Witbank after all the minerals have been stripped? Would the titanium mining project for the dunes of Richard’s Bay actually provide more value to the community than St Lucia does?

I’m not about to prejudge the issue because, at this stage anyway, I don’t know what alternative mechanism President Zuma or any of the other clever people in the ANC might devise.

What I do know is that the Department of Agriculture has been repossessing farms that were given to communities and the communities failed to use them. What I do know is that the Mbombela council was accused of trying to relocate families given land under a legitimate land claim and then tried to forcibly relocate them in order to erect a new stadium for the FIFA World Cup 2010 and surround it with a luxury housing estate.

I do know, too, that the domestic worker who did a lot of chores for me and my family in the 50s and early 60s had been born in a strangely-named suburb of Lady Selbourne (where Newlands in Pretoria is today), because that’s where her ancestors had been born.

The township’s gone and so is her history.

So, like many of us, I am very confused about what the benchmark for land transactions could be if it were not based on “willing buyer, willing seller’, because:

- Enforced expropriation is “land theft”
- Annexation is “land theft”
- Voluntary surrender is “land invasions”
- Historical surrender is based on some past events and does not take into account the investments made in the land and its preservation.

What other models exist?

If we can’t use the “willing buyer, willing seller” principle then we have no basis to calculate value because value is based on “why sell it to you if I can get more by selling it to someone else?”.

And if you strip the “willing buyer, willing seller” from land ownership then you might place at risk one of the fundamental tenets of property: the fact that property appreciates in value over time and if you want to buy a property then you have the right to complete ownership. That is entrenched in the South African constitution.

If you take away that principle, you undermine every property’s value in this land.

And that’s a very dangerous thing to do.

But let me not prejudge it: Let me wait and see what better model there is. After all if the rest of the Western world hasn’t found a better model maybe that’s because they all think like capitalists.

And if the Communist model has failed dismally, then that might be because the Soviet Union (or the Chinese) did it wrongly in the first place.

So let’s see what model our government can come up with that hasn’t been tried (and hasn’t failed) and which is better than “willing buyer, willing seller”.

I’m looking forward to it.

*Paddy Hartdegen writes a regular column for Property24.com. The content of his columns constitutes his personal opinion and doesn’t pretend to be facts or advice. Contact him at paddy@neomail.co.za.

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