Abstract
Abstract In the communal agricultural sectors three reasons for market failure were advanced (a) free access to communal grazing which is a problem if the group is larger than the immediate family (b) lack of incentive to invest in improved pastures and fodder production due to the free rider situation and (c) opportunity cost of land differs from what market forces will determine. Commercial land expropriated should be resettled on a private individual tenure basis by small scale farmers and not on a communal basis. Under a communal system the return (rent) on grazing land is zero while the return on arable land is low due to lack in permanent tenure. This explains idle arable land in KwaZulu in spite of population pressure. The rental value is the cost to the farmer for non usage of land if it can make a positive contribution. The market mechanism penalizes the commercial farmer for the non usage of commercial land. A land tax does not increase this cost and will thus not bring unproductive land into pr...
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