Agriculture

4.         (a)  Land ownership modes and patterns fall within the mandate of the Deeds Office.  To be able to extract deed data on land ownership, departments need to have the necessary budget which Agriculture unfortunately does not have. Furthermore, besides obtaining data from the Deeds Office, it could take years to determine any trends as it is advisable to base any trend on two to three years of data. However, contact details of the Cape Town Deeds Office are as follows:

Deeds Office Cape Town

90 Plein Street, Cape Town 8001

021 464 7600

(i, ii, iii) To understand production, the Department have invested in Cape Farm Mapper. The Cape Farm Mapper (CFM) online tool was developed in-house by the Department and continuously upgraded to provide detailed production related data per area and region. In addition, with the current Fly-Over Census (survey completed and final information will be available in February 2024), the Department will be able to identify and compare production trends and land use changes over the last decade.

The data recently shared by StatsSA (Agricultural 2022 Survey) unfortunately provides broad national results with limited regional specific data.  In response to a need expressed for detailed regional data down to municipal levels, StatsSA said that indeed it was possible, but that such surveys/censuses would then be done by a user-pays principle of which at present is impossible due to budget constraints as mentioned earlier.

However, limited older data on land ownership is available from StatsSA and Land Audit Reports. The Census of Commercial Agriculture (2017) reveals that nationally individual ownership went down by -34,2% and so did ownerships in Trusts (-47,8%), Public Corporations (-86,2%) and State Owned Enterprises (-26,1%).  Ownership through Private Companies increased by 223.9% which indicates a major shift nationally away from private individual ownership.

(b) South African Farm Ownership Statistics (2007 & 2017)

According to the November 2017 Land Audit Report Version 2 published by the then Department of Rural Development and Land Reform, land ownership in the Western Cape in terms of hectares is as follows:

(c) (i) Within the fast-changing agricultural environment where agriculture is required to transform into a business mode, it can be expected that farmers are moving away from what they are used to in terms of agricultural operations and its business forms.  It is rational that individual or sole ownership are preferred by farmers to have full control over all their assets and decision-making around its various production systems, but tax regimes and economic environments are changing faster than ever before necessitating that farming business keep track of these movements in order to stay sustainable.

Some farmers, especially a decade or two ago, preferred to transfer their farming assets into trusts in order not to incur transfer duties or death taxes.  This was also a popular way to keep the farm within the family.

(ii) Some reasons thus are:

• Protection of property against the farmers’ (or trustees’ and beneficiaries’) possible insolvency or divorce.
• The growth in value of the farm takes place in the trust, possibly reducing the farmer’s dutiable estate.
• Saving on executor’s fees (no executor’s fee is paid on trust assets).

Trusts also seems to be especially prevalent to farmers with larger families who wanted equitable sharing of assets amongst their family members.  However, trusts seems to have lost traction within farming communities with partnerships and private companies being the preferred ownership option. Although reasons may differ amongst communities, it seems that transitioning to a farming company is an option that can save a farmer from heavy tax bills, most especially where a farmer is exposed to tax at the higher rate on a larger proportion of their income. In addition, there is a growing trend where agribusinesses/food companies buy own farm land in order to be able to trace the origin of their products as well as the way it is produced in order to gain the necessary accreditation for their commodities.

Partnerships have the advantage of pooling resources to obtain capital which is so crucial to efficient farming operations – basically to secure credit or by doubling seed money as well as to reap the benefits of being able to utilise the strengths, resources and expertise of partners. Within the Western Cape context, farmers encourage their children to continue with tertiary education to develop additional skills within logistics, engineering, marketing and after some years of working off-farm, to return and make a sound contribution albeit as part of a company, trust or partnership.