In 1990 we also bought a farm with a 100% bank loan, developed it by putting up buildings and infrastructure to provide fresh produce markets in Gauteng and Mpumalanga with tons of vegetables for 7 years. The loan was fully paid by the end of 1994. We were then virtually forced to sell this farm to a trust via the Department of Land Affairs, to enable, so we were told, the many so-called disadvantaged citizens to farm the land in 1997.
Four years after the sale of this beautiful, productive farm we visited the farm, only to experience that this once productive farm, was now a squatter camp. Were there were once deep irrigatable Hutton soil, seedling nurseries, now stood hundreds of shacks. The nurseries producing a very good income when we left the farm, have been dismantled, the swimming pool was now used as a pig sty and the boreholes were out of order. No vegetables or any crops were produced.
We have once again in 2006 purchased farms near Jeffreys Bay and spent a lot of our hard-earned saving for many years to develop the infrastructure on these farms. The ANC has now targeted 139 farms to be expropriated without compensation in terms of expropriation of land without compensation and now, at the beginning of 2019, we once again face the same dilemma that we faced in 1995.
This time round we might have to leave the farm with all the game and infrastructure to be expropriated without compensation. Should the Constitution be amended to allow for the expropriation of land without compensation, it may be permissible, subject to legal challenges, not to compensate us for the land. However, there is an argument to be made that some compensation will still need to be paid for relocation costs, machinery (if acquired as a going concern) and other incidentals. Taking this into consideration, some compensation, although less than market value, may still need to be paid.
We are at a crossroad once again regarding any further developments on these farms. We have frozen all capital expenditure, resulting in loss in earnings, job creation in developing the lucrative foreign tourist market. Food insecurity in the country is already at unacceptable levels and could get worse if land is distributed to previously disadvantaged individuals without putting proper mechanisms in place to increase access to markets, financing, inputs, infrastructure and the development of agricultural expertise.
Another question is the extent to which expropriation will take place. It remains to be seen if it will only apply to agricultural land or whether- or- not, it will include residential land too. The reality of land expropriation, with or without compensation, looms large for South Africa’s agricultural landowners. Expropriation is a drastic step which deprives the owner of a property of its ownership rights and therefore puts a damper on any developments.
We now should have reported in our first Blog on the developments of the chalet’s and the hiking trials but are now forced to report that we are unable to proceed with this development and without further clarity on the criteria of expropriation at this point, we therefore are considering strategies to protect our investments against expropriation with the consequent catastrophic financial loss. We also plan the restructuring of our balance sheets to protect ourselves against the potential financial implications of such expropriation of land for no value.
We therefore include herewith our latest photographs of some of our game on our (at this stage) property.
