South Africa: land reform surely not the answer

A leader in yesterday’s Financial Times calls upon President Zuma to act decisively to prevent Eugene Terre’Blanche’s death opening up rifts in South Africa’s fragile polity. I couldn’t agree more – but the FT’s logic is difficult to follow when it urges Mr Zuma to renew efforts at land reform as a means of giving hope to the South African poor.

Exactly what form should this reform take? The demand for sharing land equitably has a long, long history. But land redistribution from the USSR to China to Latin America to many African states has generated few, if any, successful models. If the FT can suggest a reform programme which will not lead to unacceptable coercion and/or massive financial cost, and on the other hand will lead to land going to committed, competent and productive farmers, the Nobel Peace Prize is surely on the way.

In South Africa’s current state, alas, it seems only too likely that land will be redistributed, as in Zimbabwe, to possibly corrupt and probably incompetent supporters of the regime.

Even if this were to be avoided, agricultural productivity will almost certainly slump as big white-owned farms are broken into smaller units and capital equipment is removed or allowed to deteriorate. Foreign investment will be deterred while yet more skilled white and black workers (a million of whom are currently employed in agriculture) leave the country. South African agriculture is of considerable significance to the economy, accounting for around 3% of GDP and 8% of exports: it should not be a political football.

While it might temporarily satisfy hotheaded ANC politicians like Julius Malema and western liberals, land redistribution will surely do very little to improve the dreadful lot of South Africa’s urban and periurban poor.

For those readers interested in land reform in South Africa, we have just published a thought-provoking paper in Economic Affairs on this issue: “Land reform as social justice: the case of South Africa” by Karol Boudreaux.

Wasn’t land reform in Taiwan and Japan fairly successful?

“If the FT can suggest a reform programme which will not lead to unacceptable coercion and/or massive financial cost, and on the other hand will lead to land going to committed, competent and productive farmers, the Nobel Peace Prize is surely on the way.” Sadly more likely to be on its way to somebody who proposes a programme of land reform which has precisely the reverse of these ingredients.

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