Investing in farmland in South Africa in 2025 is a complex decision, shaped by the country’s new Expropriation Act, ongoing concerns about food security, the African National Congress (ANC) government’s policies, and the persistent issue of farm attacks and murders.
While South Africa boasts some of the world’s most innovative and resilient farmers, contributing to a relatively stable but vulnerable food supply, the risks tied to land reform, political dynamics, and safety concerns demand careful consideration. Below, we explore the factors influencing this investment decision, drawing on recent developments and expert insights, to assess whether it’s a wise move.
The Expropriation Act: A Major Concern for Investors The Expropriation Act, signed into law by President Cyril Ramaphosa on January 23, 2025, has sparked significant debate due to its provisions allowing land expropriation without compensation in certain cases, such as for unused or abandoned land or where historical injustices are cited. This legislation aims to address historical land
ownership disparities, but it has raised alarms among commercial farmers and investors about property rights and economic stability
Impact on Property Rights: AgriSA, a leading agricultural organization, warns that the Act threatens private property rights, the cornerstone of South African agriculture, potentially deterring investment and destabilizing the sector. Johann Kotzé, AgriSA’s CEO, emphasized that the law could undermine agricultural sustainability and food security by creating uncertainty. Risk of Underutilization: Critics, including AgriSA and the Southern African Agri Initiative (Saai), highlight that redistributing land to small-scale farmers without adequate training, resources, or financial support could lead to underutilized land and reduced productivity, as seen in some past land reform projects.
For example, Christo van der Rheede, former AgriSA CEO, noted that many land reform initiatives have become “poverty traps” due to insufficient support.Legal Safeguards and Uncertainties: Legal experts, like Annelize Crosby of Agbiz, argue that the Act must comply with the South African Constitution, which requires “just and equitable” compensation, and that expropriation should be a last resort. However, the provision for “nil compensation” in specific circumstances, coupled with a lack of clarity on compensation calculations, raises concerns about fairness and potential abuse. Theo de Jager of Saai questioned what prevents corrupt officials from expropriating land at below-market value, citing past cases like the Akkerland farm in Limpopo, where fabricated claims led to unjust expropriation attempts.
International and Economic Implications:
The Act has drawn international scrutiny, with former U.S. President Donald Trump criticizing it as discriminatory and threatening to cut funding until investigations are complete. This could strain trade relations and deter foreign investment, critical for a sector where agricultural debt averaged 52% of GDP from 2019–2023.The uncertainty surrounding the Act’s implementation—whether courts will ensure fairness or if political pressures will lead to aggressive expropriation—makes farmland investment riskier. The Democratic Alliance (DA) has filed a legal challenge to declare the Act unconstitutional, which could delay or alter its impact, but outcomes remain uncertain.
Farm attacks remain a significant concern, with 2024–2025 seeing continued incidents, though exact figures are debated. AgriSA and Saai report that these attacks, often targeting remote farming families, create a climate of fear, deterring investment and prompting some farmers to scale back operations. The psychological and economic toll of this violence, combined with inadequate government response, adds a layer of risk for investors, particularly in rural areas.
Food Security: Stable but Vulnerable
The agricultural sector projects 3.5% growth in 2025, but rising input costs (e.g., 10.6% electricity tariff hikes) and price volatility, as seen in the FMD crisis, strain profitability. Bennie van Zyl of TLU SA noted that uncertainty from the Expropriation Act has led farmers to halt long-term investments, critical for sustained productivity.
The ANC government’s focus on land reform often overlooks the needs of commercial farmers, who produce the bulk of South Africa’s food. The government’s failure to address FMD effectively, as voiced by farmers like Cobus van Coller and Ndumiso Gule, highlights a broader disconnect. This lack of support, coupled with bureaucratic overregulation, hampers farmers’ ability to plan and invest.
Despite these challenges, South African farmers’ technological advancements and family-run operations offer stability. Vorster, an economist, noted that agriculture is less volatile than other sectors, sustaining rural economies even in tough times. This resilience makes farmland a potentially attractive long-term investment, provided risks are mitigated.
South Africa’s food security is relatively stable, with agriculture contributing significantly to domestic needs and exports (e.g., R513 billion in agricultural trade in 2024). However, vulnerabilities persist:
Expropriation Risks:
If land redistribution disrupts commercial farming without ensuring new farmers’ productivity, food security could falter. Only 13% of South Africa’s 122 million hectares is high-potential agricultural land, making efficient use critical. Wandile Sihlobo of Agbiz emphasized that without proper financing and training, expropriated land risks becoming unproductive, echoing Zimbabwe’s post-reform food shortages.
Disease Outbreaks: The 2025 FMD crisis, impacting beef and dairy farmers, has caused financial losses and disrupted supply chains, with farmers like Malinda Rautenbach and Lizemari de Klerk highlighting severe economic and genetic impacts.
Policy Uncertainty: The ANC’s ideological approach, criticized by Vorster for relying on a dysfunctional state, undermines food security. The government’s failure to provide clear naspeurbaarheid (traceability) for diseases like FMD exacerbates risks.
Investing in farmland could support food security by strengthening productive operations, but the threat of expropriation and disease-related disruptions poses significant risks.ANC Government’s
The ANC’s push for land reform, driven by historical redress, often clashes with commercial farmers’ interests. The government insists the Expropriation Act aligns with the Constitution and will be implemented fairly, with support programs for new farmers. However, critics like Theo de Jager argue that the ANC’s alignment with parties like the Economic Freedom Fighters (EFF), who advocate for radical land policies, could lead to more aggressive expropriation, further alienating investors.
Political Fluidity: The 2024 elections and formation of the Government of National Unity (GNU) indicate a shift, with the ANC’s dominance waning, especially in Gauteng. The 2026–2027 municipal elections and the ANC’s 2027 conference could reshape policies, potentially opening opportunities for private-sector partnerships but also risking populist measures.
Lack of Farmer Support: Farmers like Dr. Jaco de Villiers criticize the ANC for secrecy and failure to address crises like FMD, fostering distrust. This disconnect, combined with the government’s focus on ideology over practicality, reduces confidence in stable agricultural policy.
Is Investing in Farmland Wise?:
- Resilient Sector: South African agriculture’s stability, driven by innovative farmers, offers long-term potential, especially in high-demand crops like canola or citrus.
- Opportunities for Emerging Farmers: Land reform could create opportunities for investors supporting new farmers through training or partnerships, aligning with government goals.
- Stable Rural Economies: Family farms, as Vorster noted, sustain rural areas, offering a hedge against economic volatility.
- Potential Policy Improvements: The GNU and private-sector partnerships could lead to more balanced policies, enhancing investor confidence if legal challenges succeed.
- Expropriation Risks: The Expropriation Act’s “nil compensation” clause and unclear implementation threaten property rights, potentially leading to forced sales at below-market value.
- Safety Concerns: Farm attacks and murders create a high-risk environment, particularly in remote areas, deterring investment.
- Food Security Vulnerabilities: Disruptions from land reform or diseases like FMD could reduce output, impacting returns.
- Political Uncertainty: The ANC’s declining influence and potential alliances with radical parties like the EFF could lead to harsher policies, further destabilizing the sector.
Economic Barriers: High input costs, price volatility, and bureaucratic hurdles make farming less attractive without significant capital or risk tolerance.
- Focus on High-Potential Areas: Target regions with high-potential agricultural land (13% of total land) and strong infrastructure, like the Western Cape, where productivity is less likely to be disrupted.
Partner with Established Farmers: Collaborate with experienced commercial farmers or organizations like AgriSA to mitigate risks and leverage expertise. - Support Emerging Farmers: Invest in training programs or blended financing models, as suggested by Annelize Crosby, to align with land reform goals and ensure productivity.
Diversify Investments: Consider agribusinesses or value-added processing (e.g., canola oil production) rather than solely land ownership to reduce exposure to expropriation risks.
- Monitor Legal Developments: The DA’s legal challenge and court oversight could clarify the Act’s application, potentially reducing risks if constitutional safeguards are upheld.
- Enhance Security Measures: Invest in farms with robust security systems or in less vulnerable areas to mitigate risks of farm attacks.
The country’s world-class farmers and stable agricultural base offer significant potential, but the Expropriation Act, farm safety concerns, and the ANC government’s disconnect with commercial farmers create substantial uncertainties. The risk of land expropriation without fair compensation, coupled with ongoing farm attacks and food security vulnerabilities, suggests that only investors with high risk tolerance, deep local knowledge, and a long-term perspective should consider this market. Strategic partnerships, diversification, and close monitoring of legal and political developments are essential to navigate these challenges.
For now, the wiser approach may be to explore alternative agricultural investments, such as supporting emerging farmers or agribusiness ventures, until the Expropriation Act’s impact becomes clearer. Our farmers are strong - they need to stand together- Food will become a crises in the future.
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