Trends in land prices paid for farms redistributed under the proactive land acquisition strategy in South Africa (2005–2018)

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Introduction South Africa’s market-based land reform has long been criticised for its slow pace, partly due to concerns about limited budgets, alleged inflated land prices, and the acquisition of low-potential land. Yet, despite these claims, no national study has systematically examined land prices paid under the Proactive Land Acquisition Strategy (PLAS). Methods This study analyses trends in land prices for 1,989 PLAS farms purchased between 2005 and 2018—representing 89% of all PLAS acquisitions and compares these prices with open-market agricultural land values. Using descriptive statistics and an Ordinary Least Squares regression model, we identify key determinants of land prices and assess whether PLAS transactions exhibit signs of market distortion or opportunistic pricing. Results and Discussion Results show that 1.67 million hectares were acquired at an average cost of R5,984 per hectare, substantially lower than both privately purchased land by black farmers and national open-market averages. Prices vary widely across provinces and enterprise types, with irrigated and high-value enterprises such as table grapes costing significantly more than extensive grazing land. Regression results indicate that farm size, location, access to water rights, and extension services significantly influence prices, whereas distance to markets and farmer characteristics play a smaller role. The comparison with open-market transactions shows that PLAS land is consistently cheaper, suggesting that the state largely purchases lower-value land rather than overpaying for it. These findings indicate no national evidence of systematic price inflation but highlight structural market inefficiencies and resource constraints that shape acquisition outcomes. Policy implications include adopting standardised valuation frameworks, prioritising high-potential land, and aligning acquisition with spatial planning to strengthen long-term farm viability.

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