Price escalation attributed to government’s acceptance of highly priced farms

20 March 2015, Windhoek - High prices have hampered the Namibian government’s efforts to acquire 15 million hectares of land, by 2020, for redistribution as a vehicle for poverty alleviation.

A report, “Study into Agricultural Land Prices” commissioned by the Government of Namibia working in partnership with the Food and Agriculture Organization of the United Nations (FAO) has shown that only 2.6 million hectares were acquired mainly because of high prices.

The report showed that the government accepted high price offers and voluntarily purchased expensive farms thus setting precedence for future transactions as sellers, government evaluators and estate agencies then use these prices as a benchmark.

Similarly, a considerable number of farms were purchased at high prices under the Affirmative Action Loan Scheme, an AgriBank financed facility and resultantly these were also considered the market prices.

Increasing commercial agricultural land price a major concern

The Minister of Lands and Resettlement, Alpheus !Naruseb, said the ever increasing commercial agricultural land price was an issue of concern to the leadership of the country and a challenge to the policy of equitable land redistribution.

“This issue has sparked debate at every level of our society that has sent signals for the need for an investigation into the underlying causal factors to these price hikes. The outcome of this study report provided government with a framework for possible policy interventions. At ministry level, we have already internalized the findings and recommendations of this Report and I am glad to inform you that some of the recommendations are already under implementation,” said the minister at an occasion to launch the findings of the report on March 16.

Speaking at the same occasion, FAO Country Representative, Babagana Ahmadu, said the land prices study was conducted within the framework of the Voluntary Guidelines on the Responsible Governance on Tenure of Land and to support Namibia’s demonstrated and well-established principle of responsible governance of land.

“The Voluntary Guidelines recognize that food security for the ever-growing world’s population depends on equitable secure access to land as factor of production,” said Ahmadu.

The report recommended that landowners underutilising farms should be forced to sell them to government while the investigation team hinted at the possibility of introducing price controls when selling the pieces of land.