Masters Degrees (Agricultural Economics)

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Competitiveness analysis of the South African avocado value chain.
(2022) Zwane, Sibonelo.; Ferrer, Stuart Richard Douglas.
The economic sustainability of the South African avocado industry is highly dependent on its trading performance, with approximately 50-55% of its total production consistently being exported since the 1990s. About 95% of the avocados in South Africa are exported to the EU, the UK, and Russia markets. The South African avocado industry faces potential intense competition from Peru, Mexico Spain, Israel, and Kenya, in these markets. Due to the significant contributions in terms of economic returns the supplying of avocados to the export markets has on this industry and the GDP of the country, and also considering the higher levels of competition this industry has been experiencing from its global rivals, there is a greater need to transport this commodity with fewer rejections, and less inefficiencies and damages to the fruit quality. In 2018, the South African avocado export industry was ranked number nine worldwide, contributing to 1,7% of the total avocado exports in the global markets. By 2020, the industry experienced a major decline which resulted in it falling to number 12. It has been noted that South African exports are increasing, but its share of the world market is decreasing. This is because exports from other countries, primarily South and Central America, including Peru, Colombia, and Mexico, have grown at a greater rate. For example, between 2012 and 2017, South African avocado export volumes grew only by 3% per annum while major competitors such as Mexico and Peru grew by 8% and 15%, respectively. Many factors could be contributing to this phenomenon, and one of the most significant factors could be the competitiveness of the South African avocado value chain. A review of the literature identified a significant gap in the local research when it comes to the understanding of the structure, actors, processes and the flow of avocados in the South African avocado value chain, the competitiveness of the South African avocado value chain, and the factors which are influencing the competitiveness of the South African avocado value chain. Moreover, it also identified that competitive analyses of value chains can provide information and strategies for agribusiness managers to improve value chain competitiveness. This study will try to close this gap by providing a detailed competitiveness analysis of the South African avocado value chain in order to have a better understanding of the state of competitiveness of this value chain. The general objective of this study was to conduct a detailed competitiveness analysis of the South African avocado value chain in order to recommend strategic actions that the value chain participants could use to improve the competitiveness of this value chain, especially in relation to export markets. More specifically, the objectives are to identify the key players involved in the value chain, identify factors which are negatively affecting the competitiveness of this chain, and analyse this information to provide an improved understanding of the business trends, challenges, and transport and logistic processes of this industry. To achieve the main objective of this study, a 7-steps-6-analyses analytical framework was designed and used to provide a much-detailed competitiveness analysis of the South African avocado value chain. Analyses one and two served as an inquiry part of this study were knowledge regarding the structure of the South African avocado value chain, the number and the type of actors in this value chain, flow of avocados, processes within this value chain, relationships between actors in this value chain and how these relationships are developed and maintained, and the factors which are responsible for the inefficiencies within this value chain were identified by these analyses. Analysis two also had a quantitative part, were some of the relationships that actors have within and outside this value chain were quantified using the concept of Social Network Analysis in order to determine how these relationships influence the functioning as well as the competitiveness of some of the actors in the South African avocado value chain. Analyses three, four, five and six were analyses that analysed different components/parts of the South African avocado value chain in order to understand the competitiveness state of the overall value chain and recommend strategies to improve it. The final step (seventh step) involved a critical analysis of all the findings from the six analyses in order to provide the state of competitiveness for the South African avocado value chain. Moreover, during this step that is where the strategic actions to alleviate the constraints/factors negatively affecting the competitiveness of this value chain were developed. The overall findings of this study suggested that the South African avocado value chain is struggling to keep up with competition from its global competitors, mainly Peru, Mexico and Kenya. Moreover, this study was able to conclude that the cause of this was the overall continuous decline in the competitive advantage which is being experienced by this value chain. The overall finding also suggested that this decline in competitiveness is as a result of a number of factors. These factors include supply of nursery trees, relatively lower yields than other competing origins around the world, higher transportation costs, port inefficiencies, low supply of skilled labour, one major export destination, lack of value chain collaborations, higher input costs, increased plantation of avocados by global rivals, and government policies. This study gave rise to 13 strategic actions that could be used by the most important players in the South African avocado value chain, such as agribusiness managers, producers, exporters, seaports and SAAGA in order to improve the competitiveness of this value chain. Some of those strategies include collaborations between different types of value chain actors, understanding of the value chain relationships and systems, attracting and training of new skilled workforce, development of late varieties, economic research, and access to new markets. Keywords: Avocado, Competitiveness, Export markets, Global rivals, Strategic action, Value chain
Economic and market analysis of smallholder farmers' broiler production in the Amatole district municipality, Eastern Cape, South Africa.
(2022) Thibane, Zimi.; Mdoda, Lelethu.; Mudhara, Maxwell.
South Africa is a major broiler producer in Sub-Saharan Africa (SSA) accounting for 80% of total broiler production in the region. Broiler production also dominates the agricultural sector in South Africa and remains the cheapest source of protein relative to other animal proteins. The broiler industry has a dual nature, which consists of both smallholder and commercial broiler farmers. Feed is a major cost issue in the broiler sector, accounting for more than 70%of a broiler producer's overall costs. Another obstacle faced by smallholder broiler farmers, especially those in the Amatole District Municipality (ADM) in the Eastern Cape, is the issue of market access. The aim of the study was to carry out the economic and market analysis of smallholder farmers broiler production in the Amatole District Municipality, Eastern Cape, South Africa .The main objectives of the study, which were used to address the research problem were; to identify and profile broiler farming, determine determinants of market participation among smallholder broiler producers, analyse the factors affecting smallholder broiler farmers’ profitability, and analyse the factors affecting smallholder broiler farmers’ profitability in the Amatole District Municipality in the Eastern Cape, South Africa. A sample of 150 smallholder broiler farmers was drawn and primary data was collected using a structured questionnaire. Descriptive statistics were used to profile the broiler farmers in ADM. The average smallholder broiler farmer in ADM was middle-aged and a female. The double-hurdle model was used to analyse factors affecting market participation decisions. The first stage made use of the probit model to analyse factors affecting the probability of market participation. The second stage involves the assessment of factors affecting market participation intensity by the smallholder broiler farmers in ADM. The marketing constraints were also analysed. Determining the factors affecting the profitability also involved two stages. The first stage made use of the budgetary technique (Gross margin and net farm income) to measure smallholder broiler profits. The results indicated that smallholder broiler production in ADM was profitable, this was indicated by the net farm income of ZAR 996.16 per production cycle. The second stage analysed factors influencing farm profitability. The stochastic production frontier together with the technical efficiency was used to measure the broiler farmers’ productivity. The average technical efficiency of farmers was found to be 0.81 indicating that the average smallholder broiler farmer in ADM is technically efficient. Broiler farmers in the ADM were encouraged to increase their stock size to allow for an increase in their probability to enter markets. Keywords: broiler market, market participation, productivity, profitability
Analysis of rhino poaching incidences and management strategies in South Africa.
(2016) Moneron, Sade Leigh.; Ngetar, Silas Njoya.
ABSTRACT The illegal hunting and global trade in wildlife and wildlife products is a transnational, highly organised crime that threatens the survival of many endangered species. The rhinoceros is a well-known example of this trade as the demand for rhino horn for use in East Asia has resulted in the global decline of rhino populations, resulting in the Western Black rhino in Africa (Diceros bicornis longipes) officially being declared extinct in 2011. Although poaching has always existed, the number of African rhinos killed by poachers has escalated in the past eight years with at least 1 338 rhinos killed by poachers across Africa in 2015. This is the highest level since the rhino poaching crisis began in 2008, resulting in at least 5 940 African rhinos being killed. The majority of these incidences occurred within South Africa. South Africa plays a leading role in the conservation of the African rhino, currently conserving 83% of the African rhino population. However, it has been suggested that should poaching continue to increase as it has done over the past few years the rhino population in South Africa may begin to decline as early as 2016. South Africa’s upsurge in rhino poaching over the last few years has given rise to a kaleidoscope of debates on how to reduce poaching. An understanding of the different management strategies and their effectiveness would play a large role in identifying which method or combinations of methods work best to reduce poaching. The second chapter of this dissertation thus critically analyses the past, current and proposed strategies that are relevant to reducing incidences of rhino poaching using empirical literature from various scholars and stakeholders and attempts to provide insight into which strategy or combination of strategies is best suited to reduce poaching. As poaching involves a combination of aspects, it is clear that no one strategy or management tool will address all of these aspects on its own, and if implemented in isolation will not be successful. A combination of strategies that address all aspects of poaching needs to be working concurrently to decrease poaching levels. Law enforcement is one such management strategy crucial in the reduction of poaching and with increasing poaching incidents, law enforcement efforts in the form of deployment of anti-poaching unit, focused on high risk areas would provide for a more efficient and effective use of resources in reducing poaching incidences. The third chapter of this dissertation sought to investigate the spatial and temporal patterns of rhino poaching in the Hluhluwe-iMfolozi Park (HiP) between 1990 and 2013 and examine the relationships between observed patterns of poaching and biophysical and human variables using Geographic Information Systems (GIS). The results reveal poaching hot spots, and spatial and temporal variation in poaching incidences. Biophysical and human variables were also found to influence poaching densities differently depending on where they occurred spatially or temporally. The successful use of GIS in this analysis validates its potential as a geospatial tool for understanding the spatial and temporal distribution patterns of rhino poaching in the HiP. Understanding these patterns is crucial for future anti-poaching planning and mitigation of poaching activities with protected areas.
An evaluation of the factors that influence households’ participation and perceptions of the tree and ecological restoration in the eThekwini District, South Africa.
(2022) Soni, Siphelele Goodenough.; Mudhara, Maxwell.; Mabhaudhi, Tafadzwanashe.
Ecological restoration, described as the method of assisting the regeneration of an ecosystem that has been degraded, weakened, or lost is an important tool for achieving conservation objectives. Concern for the environment is expanding as a result of increased environmental damage brought on by human activity. Without knowing how people perceive the environment, effective environmental management cannot be achieved. Interactions between people and nature are frequently influenced by their beliefs, perceptions, and environmental concerns. The effectiveness of ecological restoration is seen as being largely dependent on community participation. Understanding factors influencing households’ perceptions and participation in restoration assists restoration managers in creating ecological restoration programs that encourage community participation. Hence this study evaluated socioeconomic and demographic factors influencing household perceptions and participation in the tree and ecological restoration in eThekwini Districts, South Africa. Primary data were collected from 160 randomly selected household heads. Multinomial logistic regression was utilized to evaluate the factors influencing households’ decision to participate in the tree and ecological restoration. The results showed that socioeconomic and demographic factors such as age (p<0.000), gender (p<0.030), years of education (p<0.000), and total monthly income (p<0.077) statistically significantly influence participation positively, whereas household tenure (p<0.012) affects negatively. Ordinal logistic regression was utilized to determine the socioeconomic factors and household demographic characteristics influencing households’ perceptions towards trees in their environment. The results showed that socioeconomic factors and household demographic characteristics such as age (p<0.000), gender (p<0.020), marital status (p<0.023) and dwelling type (p<0.007) were significant predictors of households’ perceptions towards trees in their environment. Principal component analysis (PCA) was used to generate composite indices representing perceived income from the ecological restoration projects. Ordinary Least Squares was then employed to determine the factors influencing such valuation of the ecological restoration project. The model showed that socioeconomic and demographic factors such as age (p<0.000), gender (p<0.060), total monthly income (p<0.039), years of education (p<0.001), household size (p<0.073) and access to forest resources (p<0.032) influence obtained income from the restoration project. The study concludes that socioeconomic and demographic elements, which were very important in the research area, should be incorporated into the government policy framework on ecological restoration projects. These factors could encourage local people's involvement in ecological restoration projects if they are thoughtfully incorporated into policy formulation. Keywords: Ecological restoration, socioeconomic factors, demographic factors, community participation, environmental concerns, household perceptions.
The effect of ICT use in enhancing market participation and household welfare outcomes among smallholder farmers in the Eastern Cape province of South Africa.
(2022) Cebiso, Zodidi.; Mudhara, Maxwell.
Enhancing the ability of smallholder farmers to actively engage in markets is one of the most pressing development challenges in sub-Saharan Africa. Despite being deemed significant contributors towards the production of various commodities, smallholder farmers have weak linkages to the markets. They are poorly equipped to make sound marketing decisions, partly due to a lack of access to market information. As the agricultural sector becomes more knowledgeintensive, due to the availability of the new information technology there is a greater need for a good information flow and sharing among all agricultural stakeholders. Therefore, since Information and Communication Technologies (ICTs) are emerging as key source of information on new production technologies, they could contribute immensely to the amelioration of the dearth of information among the poor smallholder farmers along the value chains and could thus link them to profitable markets. The number of mobile phone subscribers in South Africa is increasing daily and most rural households currently own ICT tools. However, the extent to which rural households utilize these technologies for agricultural activities remains unexplored. Therefore, this study adds to the existing literature on the use of ICT amongst smallholder households by examining the effects of its use in enhancing market participation and the household welfare outcomes among smallholder farmers in the Eastern Cape Province of South Africa. Data were collected by using a questionnaire survey from 246 randomly selected smallholder farmers in the Port St John’s Local Municipality. The first objective was to investigate factors influencing the use of ICT by smallholder farmers for accessing market information, by using binary logistic regression. The second objective was to examine the effects of ICT-use on smallholder market participation and the quantity of green mealies sold, by using the double-hurdle model, while the third objective was to assess the effect of market access on the welfare outcomes of smallholder farmers, by using propensity score matching. The results from the descriptive statistics showed that 78% of the sampled population used ICT for accessing market information, which was mostly accessed by using mobile phones. The results also showed that only 2% of the population was familiar with agricultural farming applications, with the mostly used applications being Leaf Snap, Plantix and Agri-assistant apps. Based on the empirical results variables such as age, household income, access to electricity, and quality network coverage, are positively and statistically significant in influencing the use of ICT by smallholder farmers for accessing market information, while farm size was negatively and statistically significant in influencing the use of ICT by smallholder farmers for accessing market information. Among the variables tested against market participation and the quantity of green mealies sold the farm-level characteristics that were found to be statistically significant for market participation included gender, being a member of a farmer’ organization, access to extension services and the use of ICT. The age, gender, farm size, and ICT use of those participating in markets were found to be statistically significant in relation to the quantity of green mealies sold. Furthermore, those variables tested with regard to market access, marital status, being a member of a farmers’ organization or group, and access to market information were negatively and statistically significant in relation to market access, while access to extension services, was positively and statistically significant in relation to market access. Based on the results, the study concludes that farmers in the study area are using ICT to access market information. However, the use of ICT for accessing market information seems to be ineffective for enhancing the market participation of smallholder farmers and their welfare outcomes. This is shown by the negative effect on the use of ICT on both smallholder market participation and on the quantity of green mealies sold. Therefore, the study recommends that an awareness should be created focusing on the potential advantages of ICT applications and services on agricultural marketing and that this should be accomplished through training. The supply of marketing information alone to farmers is not sufficient for transforming their produce marketing. Therefore, the study also recommends that farmers should be trained in how to interpret marketing information.
Value chains in rain-fed agriculture and rural youth entrepreneurial development: the case of Umzinyathi and Amajuba districts, KwaZulu-Natal, South Africa.
(2020) Baloyi, Raesetse Johanna.; Zegeye, Edilegnaw Wale.; Chipfupa, Unity.
Unemployment has been relatively high in South Africa and continues to rise, especially among the youth, particularly those who reside in rural areas. This has resulted in various socio-economic challenges such as poverty, food insecurity, and multiple social ills (drug abuse, crime, social unrest, etc.). This is despite the implementation of various national policies and strategies from the government and different stakeholders that seek to reduce the level of unemployment in the country. In an attempt to fast-track job creation, the government has been promoting entrepreneurship as a potential solution to the youth unemployment challenge. Considering the exposure at the disposal of rural youth regarding agriculture, it is expedient for them to utilize these skills in opportunities that will potentially create them income through self-employment. The challenge is that empirical studies in the past (local and elsewhere) have shown that youth are not interested in agriculture as they perceive the sector to be of low status and dirty with no potential to create for them the luxurious lifestyles they aspire. However, most of this literature emanates from studies done mainly on primary agriculture. It largely ignores the possibility that, although youth might not be interested in primary agriculture, they might be interested and willing to engage in other available opportunities along the agricultural value chain. For the mentioned reasons, the study had two empirical objectives, namely, (i) the investigation of factors affecting rural youth’s interest to participate in different agricultural activities, and (ii) the examination of the impact of entrepreneurial spirit and managerial capabilities on rural youth’s potential participation in agricultural value-adding economic activities (AVAEAs). The study was conducted in two districts (Amajuba and Umzinyathi) in KwaZulu-Natal province, South Africa. Purposive, stratified, snowballing, and random samplings were employed to collect the required data. A total of 224 youth (152 being youth not engaged in agriculture while 72 were already engaged in agriculture) were interviewed. Descriptive statistics were run to compare the socio-economic status, resource endowment, and entrepreneurial spirit of the two types of youth. The factors affecting rural youths’ interest to engage in agricultural activities along the value chain were examined using the Multinomial Logistics Model. The results indicated similarities in the factors affecting rural youth’s interest to engage in different agricultural activities along the value chain relative to not engaging in any agriculture-related activity. Access to credit and formal education were found to decrease the likelihood of rural youth being interested to engage in all agricultural activities along the value chain while having at least one household member already engaged in agriculture (demonstration effect) increases this likelihood. Furthermore, the results found that the likelihood of rural youth being interested to engage only in primary agriculture increased as the youth aged and decreased with access to social media (Twitter, Facebook, Instagram, etc). Similarly, the youth’s likelihood of being interested to engage only in AVAEAs decreased with access to social media and increased if the youth received some agriculture-related training, are endowed with positive psychological capital, and had access to primary ICT facilities. The likelihood of youth being interested to engage in the “whole value chain”, that is, to incorporate both primary agriculture and AVAEAs, increased if the youth received agriculture-related training, had access to agricultural land, and are endowed with positive psychological capital. It, however, decreased with an increase in the dependency ratio, and household wealth. The impact of entrepreneurial spirit and managerial capabilities of rural youth on their potential participation in AVAEAs was analyzed using the Fractional Logit Model. Two separate models were estimated. The first model used the proportion of time the youth were willing to spend on AVAEAs of their choice as a dependent variable while the second model used the proportion of money the youth were willing to contribute/invest, given they had the money, towards initiating AVAEAs of their choice. The results from both models indicated that endowment in business management skills, gender, positive psychological capital, and positive agricultural perception positively affect the potential participation of rural youth in AVAEAs. However, entrepreneurial spirit and household wealth negatively affected this potential participation. In general, the findings suggest that policymakers should focus on designing policies and intervention strategies that improve the resource endowment of rural youth. That is, the development of initiatives that improve the youth’s social capital and access to production credit; the development of transformative approaches to providing agriculture-related trainings; and cultural changes that will improve the youths’ access to agricultural land. Also, there is a need for a mindset shift from the youth themselves regarding their perceptions of the agricultural sector. Future research should aim at expanding the research to other provinces to assist in understanding if intervention strategies aiming at attracting rural youth are location-dependent or homogenous. Also, future research can investigate if the perceptions of rural youth getting jobs from other sectors is a significant factor in affecting their participation in agricultural activities. Since this study used the ex-ante approach to investigate interest, future studies can use the ex-post approach and examine factors affecting participation of rural youth in AVAEAs from the perspective of those who are already engaged.
The impact of electrification on rural women's participation in agriculture and their welfare.
(2021) Makuwaza, Dionne Farai.; Mudhara, Maxwell.
South Africa’s National Development Plan highlights support to smallholder farmers and rural electrification as strategic interventions aimed at fostering economic growth. The government has assigned significant financial investments toward smallholder support programmes and multibillion rand projects have spent on electrification on the premise that electrification will alleviate poverty. Development strategies that lack empirical research to guide policy can result resource misallocation, and adverse consequences for intended beneficiaries and growth sectors. Electrification is a time-saving technologies that can free up farmers' time, especially women's, enabling them to increase their participation in agriculture. There are very few studies that analyse the impact of electrification on agriculture in South Africa. The few studies from South Africa and other countries show mixed results on the effect of rural electrification on time allocated to agriculture by women and the impact on their welfare. This study analysed the relationship between access to electricity and smallholder farmers' participation in agriculture using data from a sample of 243 households in Ward 14 in Msinga Local Municipality of KwaZulu-Natal Province of South Africa. The data from the sample was also used to analyse the impact of electrification on female-headed household's income. The relationship between access to electricity and smallholder farmers' participation in agriculture was assessed using descriptive analysis, Categorical Principal Component Analysis and Principal Component Regression. The study results show a negative relationship between participation in agriculture and access to electricity, high household income per capita, household head employment in fulltime off-farm employment, household ownership of television, and radio ownership. Households that spend more time collecting firewood and cooking allocate more time to agriculture despite the time demands of their home-based chores. Young and elderly smallholder farmers participate more in agriculture compared to middle-aged smallholder farmers. Entrepreneurial smallholder farmers with small plots participate less in agriculture compared to non-entrepreneurial smallholder farmers. Ordinary Least Squares regression was used to analyse the impact of electricity and other household attributes on households' welfare. The econometric results show that female-headed households have higher income per capita than male-headed households. The results suggest that the income advantage is from smaller family sizes and access to electricity. The study also found that access to electricity, age, education, time spent in off-farm employment, and occupation of household head impact household income. The results suggest that most households are engaging in subsistence farming out of necessity. Therefore, policies that seek to improve agricultural participation and productivity in rural areas must focus on creating awareness amongst households on the benefits of farming as a business. Trends in the sample that contradict findings at the municipal level also show that agricultural programmes and assessments need to consider microdata for more effective implementation and evaluation. The pivotal role of women in the study area emphasises the importance of a gender-sensitive approach in rural development policies and strategies.
The economic impact of a sugar-sweetened beverages tax in South Africa.
(2021) Mvelase, Lungani Mzwandile.; Darroch, Mark Andrew Gower.; Ferrer, Stuart Richard Douglas.
The newly implemented Health Promotion Levy (HPL) in South Africa (SA) imposes a tax on Sugar-Sweetened Beverages (SSBs) containing more than four grams of sugar per 100ml. The HPL is legislated in terms of Chapter VB of the Custom and Excise Act No. 91 of 1964, on SSBs manufactured in SA or imported into South Africa. There is a disagreement between the proponents of the tax (government) and opponents of the tax (beverage and sugar industry). The proponents of the tax contend that the SSBs tax will reduce obesity and boost SA’s economic growth by reducing government spending on prevention and treatment of obesity-related non communicable diseases (NCDs). The opponents of the tax, on the other hand, contend that the tax will be detrimental to the growth of the SA’s economy by reducing the beverage and sugar industry returns, which will, in turn, lead to labour disemployment. There are relatively fewer published empirical studies to date in South Africa that have examined the economic impact of the SSB tax. Most of the published empirical literature to date has focused more on the health impact of the SSB tax. Furthermore, there’s no empirical study that has examined the impact of the SSBs tax on the South African sugar industry. Given this background, this study aims to investigate the economic impact of the SSBs on the South African sugar industry. This is achieved by (1) assessing the impact of the SSB tax on the quantity of sugar demanded in the domestic sugar market, and (2) determining the impact of the SSBs tax on the revenue earned by the South African sugar industry from local sugar sales and Recoverable Value (RV) price received by sugarcane growers’. The analysis used time-series data for the period 1977-2019 and involved the use of the simultaneous equations regression method (Three Stage Least Square regression (3SLS)) and the Vector Error Correction Model (VECM). To deal with challenges associated with time-series data, several diagnostic tests were employed. In addition, the direction of causality between domestic sugar demand and supply variables was examined using a Wald test for Granger’s causality. Furthermore, a Johansen’s Cointegration test was used to check the presence of long-run relationships between domestic sugar demand and supply variables. The static demand and supply model (3SLS regression) results revealed that variables such as the real domestic price of sugar, previous period sugar consumption, and consumers’ real disposable income influence the domestic sugar demand in South Africa. Whereas variables such as the real domestic price of sugar, technological changes, and the real price of sugarcane in the previous period influence the domestic sugar supply in South Africa. From the 3SLS regression model, the own-price elasticity estimates of domestic demand and supply for sugar in South Africa were estimated to be -2.652, and 0.838, respectively. Implying that the domestic demand for sugar in South Africa is relatively more responsive to own-price changes, whereas the domestic supply of sugar is relatively less responsive to own-price changes. From the VECM, the short-run own-price elasticity estimates of domestic sugar demand and supply were estimated to be -0.301 and 0.762, respectively. Implying that in the short run both domestic sugar demand and supply are relatively less responsive to domestic sugar price changes. In addition, the long-run own-price elasticity estimates were estimated to be -2.243 and 1.809, respectively for the domestic sugar demand and supply equations. This implies that in the long run both domestic demand and supply for sugar in South Africa are relatively more responsive to domestic sugar price changes. This is because over time the South African sugar producers are likely to discover more alternative products to produce or develop close substitute in consumption that contains less sucrose sugar. Similarly, domestic sugar consumers are likely to discover more sugar substitutes in the long run. Based on the 3SLS model's own-price elasticity estimate of domestic sugar demand (-2.265), the quantity of sugar demanded by domestic consumers of sugar was estimated to have decreased by 184 169 tons, causing a revenue loss of about R1.68 billion in the domestic sugar market. Based on the VECM short-run own-price elasticity estimate of domestic sugar demand (-0.301), the quantity of sugar demanded in the domestic sugar market was estimated to have decreased by 209 01 tons, leading to a domestic sugar revenue loss of about R190 million. Lastly, using the longrun own-price elasticity estimates of the domestic sugar demand (-2.243), the quantity of sugar demanded in the domestic sugar market was estimated to have decreased by 154 917 tons, leading to a domestic sugar revenue loss of about R1.41 billion. Furthermore, by applying the sugar industry division of proceeds formula, the RV price received by sugarcane growers’ during the 2019/20 season was estimated to be lower by 9.167% when compared to the RV price that growers could have received if there was no SSBs tax. Given the negative impact of the SSBs tax on the South African sugar industry’s financial position, the study recommended the South African sugar industry to invest more on other alternative income streams, i.e., expand the production of biofuels using sugarcane as a feedstock. In this regard the study recommended the South African government to support the South African sugar industry stakeholders with legislation that will allow them to generate revenue from expanding the production of biofuels, electricity co-generation, and biochemical feedstock, amongst others. For instance, provides legislations that are necessary to promote the use of ethanol-blended petroleum and legislations necessary to enable sugar mills to sell electricity from co-generation. Keywords: Health Promotion Levy (HPL), South African Sugar Industry, Three-Stage Least Square (3SLS), Two-Stage Least Squares (2SLS), Vector Error Correction Model (VECM), Sugar tax.
An ex-ante assessment of the socio-economic impacts of genetically modified sugarcane in the ILembe district of KwaZulu-Natal.
(2021) Ntuli, Zamandlela Nokwethaba.; Ferrer, Stuart Richard Douglas.
The increasing prevalence of the stalk borer, Eldana saccharina Walker (eldana), and creeping grass weed, Cynodon dactylon (cynodon), in sugarcane growing regions of South Africa have caused costs associated with control of pests and diseases in sugarcane production to increase. This has contributed to a decline in the relative profitability of sugarcane farming, which has contributed to a decline in the area planted to sugarcane. The South African Sugar Research Institute (SASRI) is currently considering developing an insect-resistant (IR) and herbicide-tolerant (HT) genetically modified (GM) sugarcane cultivar to address these challenges. This GM cultivar is specifically intended to be suited to production in coastal regions of KwaZulu-Natal. The expected socio-economic impacts of introducing GM cultivars are an essential component of SASRI’s decision. A review of literature on the topic indicates that the adoption of GM crops, since the early 1990s, has generally had positive socioeconomic impacts. Farmers benefited through energy and environmentally friendly chemical control, reduced chemical cost, and improved human health owing to less handling of chemicals. However, no cultivars of GM sugarcane have yet been commercialised globally, and limited research has been done on the impact of GM perennial crops. This study, therefore, aims to fill this knowledge gap. Because the development and roll-out of a GM cultivar will take approximately ten years, this research is an ex-ante study. The study was conducted in the North Coast region of KwaZulu-Natal, where eldana and cynodon are most prevalent. Commercial sugarcane farms were aggregated into two representative farms, based on different climatic conditions, cane cutting cycles, yields, and soil types. Data were collected through focus group discussions with SASRI experts and commercial farmers. Microsoft Excel was used to compile enterprise budgets of GM sugarcane and conventional sugarcane under different cutting cycles to determine the profitability of the different sugarcane cultivars. An analysis of cultivar gross margins shows that the hypothetical GM sugarcane harvested on an 18-month cutting cycle is relatively more profitable than conventional sugarcane harvested on either a 14 to 16-month cutting, or an 18-month cutting cycle on sandy and loam soils in both the Coastal and Hinterland regions of the North coast. On clay soils in coastal areas, the N59 cultivar harvested on an 18-month cutting cycle had marginally higher gross margin than the hypothetical GM cultivar. Mathematical Linear Programming farm models that account for risk using Baumol’s E-L criterion, variability in farmland resources, and SASRI’s recommendations against planting one variety of sugarcane in more than 33% of the total area under sugarcane on a farm, amongst other factors, were then compiled for each of the two representative farms. The models were verified by their ability to closely simulate observed land-use decisions on the representative farms for a current scenario. Having verified the models, the likely change in land use decisions due to GM sugarcane was investigated by re-running the models for a scenario in which a hypothetical GM sugarcane cultivar is available, ceteris paribus. The current scenario was used as a baseline due to uncertainty about a likely scenario ten years from now when a GM sugarcane cultivar is expected to become available. The impacts of GM sugarcane were assessed by comparing yields, gross margins, farmer’s production decisions, chemical applications, and employment across the two scenarios. Results of the study are that farmers that adopt GM sugarcane cultivars are likely to benefit through savings in pest and weed chemical control and improved sugarcane yield and quality. Furthermore, the reduction in chemical requirement has indirect benefits such as less handling of chemicals leading to improved health and safety of farmers, increased management time, and less on-field traffic reducing soil compaction, which increases soil stress, increasing the prevalence of eldana. Based on the findings, it is recommended that information and communication of GM sugarcane be shared along the supply chain for it to be successfully produced and commercialised. Additionally, the decision on the sugarcane cultivar that will be commercialised in the first stage is crucial for the successful adoption of GM cultivars. Furthermore, training of smallholder farmers is recommended to improve the likely impacts of GM sugarcane. Keywords: cynodon, eldana, genetically modified, herbicide-tolerant, insect-resistant, linear programming farm model, Sugarcane
Causality analysis and physio-economic impacts of climate change on maize production in South Africa.
(2019) Magodora, Tatenda Lysias.; Baiyegunhi, Lloyd James Segun.
Agriculture, as part of the human ecological footprint on climate change, has become a serious concern because climate change has an impact on agriculture. For instance, when crop production is considered, climatic elements are influenced by greenhouse gas emissions that come from agricultural activities such as the application of synthetic fertilizers, herbicides and pesticides, as well as the use of heavy machinery in modern crop production. This study analyzed the possible causalities between climatic variables and maize production in South Africa using time series data for the period 1924 to 2016. The analysis was done using VAR Granger causality analysis to ascertain if there are feedback loops between climatic elements and maize production in South Africa. The results from the Granger analysis suggest a bidirectional causality that runs between maize production and temperature. Rainfall alone was found not to be significant in influencing maize production but a combination of both temperature and rainfall affects maize production in South Africa. The results from variance decomposition of the future forecasts suggest a relatively large magnitude of impact (13.37%) of temperature on maize production in the 3rd year of the forecast with the highest effect of 27.43% in the 15th year of forecast. The forecasted impact of rainfall on the other hand remained relatively low (below 10%) throughout the forecast period. Continued current production activities (use of synthetic fertilizers and agricultural chemicals, for example) will affect climatic variables both in the short term and in the long term, and the effects of these changes in climatic elements on maize production will be realized in the long term as revealed by the variance decomposition result. The study further investigated the impacts of global warming on maize production in South Africa using meta-analysis (for physical impacts) and the Ricardian analysis (for economic impacts). The meta-analysis made use of studies that investigated and reported percentage changes in maize yield owing to climate change in South Africa. The average estimated percentage change in maize yield was calculated from 34 studies using the bootstrapping sampling technique. Results from the meta-analysis suggest that maize yield will drop by more than 15% owing to temperature increase of about 20C to be realized between 2081 and 2100. The Ricardian analysis made use of time series data for the period 1987 to the end of 2018. The results from the Ricardian analysis also show that climate change is a significant threat to the South African maize industry, as it is estimated to lose an average of 38% of revenue owing to plus 20C warming. Given these outcomes, the study suggested the adoption of sustainable farming activities such as minimum tillage, balanced fertilization and biochar amendments at a much faster rate in order to ensure a sustainable increase in maize production, while at the same time reducing the human ecological footprint on climate change. The study also recommends the recognition of the agricultural sector as one of the sectors that should be targeted by the carbon emission reduction systems.
Investments in ecological infrastructure: an assessment of the expected costs and benefits of rehabilitation of the Mthinzima Wetland in KwaZulu-Natal.
(2018) Buthelezi, Nothando Sharon.; Ferrer, Stuart Richard Douglas.; Browne, Michelle.
The uMgeni River is an important water resource in KwaZulu-Natal. It is, however, one of the major systems identified as having water that may pose a serious health risk to users of its (untreated) water. Increasing pollution in the upper catchment, supplying the Midmar Dam has been attributed to sewage effluent due to inadequate sewage infrastructure, expanding agricultural lands and household waste from Mpophomeni Township. The Mthinzima River flows adjacent to the settlement where it joins a tributary that flows through Mpophomeni settlement (a 6000-unit settlement that was developed in the 1960s), after which it flows under the district road (R617), through a degraded wetland system (The Mthinzima wetland) and into Midmar Dam. The Mpophomeni township development was poorly planned and should not have been situated near a strategic water resource, because it posed threats to the water resource. Two interventions were proposed to reduce the pollution flowing from the Mpophomeni Township into Midmar Dam: a new Waste Water Treatment Works (WWTW) would be built in conjunction with rehabilitation of ecological infrastructure. The rehabilitation of ecological infrastructure would primarily entail wetland rehabilitation. Ecological infrastructure has value that is important for human well-being. However, the key incentive challenge is the public dimension of the value. Often studies that aim to value investments in ecological infrastructure give total economic value of the ecological infrastructure instead of the change in total economic value attributable to the investment. The purpose of this study was to investigate the incremental change in supply of services from the wetland post rehabilitation, considering the demand, supply and opportunities for those wetland services. The new conceptual framework introduced in this study considered the potential of ecological infrastructure to supply its services, the opportunity (activities or circumstances that make it possible for the wetland to be used) afforded to the ecological infrastructure to supply its services and the demand for ecological services. It also examines the impacts of investments (or disinvestments) in ecological infrastructure and/ or engineering infrastructure on the value of ecological infrastructure. Economic Cost-benefit analysis (CBA) was used for this analysis, it is widely applied as an appraisal technique particularly for use as an input into public decision-making processes. CBA both helps inform decision-makers and helps hold them accountable for their decisions. The cost benefit analysis technique was used to evaluate whether investments in ecological infrastructure bring about a worthwhile change in ecosystem services. The study was limited by data shortages and used the replacement cost technique (one mega litre waste water treatment works) to value the incremental change in wetland services post rehabilitation. The net present value results of the CBA were all positive, the estimated net present value for change in wetland services post rehabilitation over the period of 20 years was found to be between R7 086 573 and R11 935 240 using different discount rates. The net present value of the wetland rehabilitation investment showed an increasing pattern as the wastewater treatment plants maintenance costs were assumed to be a higher percentage of the wastewater treatment plant. Therefore, the study concluded that investments in ecological infrastructure in the form of the Mthinzima wetland rehabilitation was worthwhile as the investment yielded net positive marginal results post rehabilitation. The results of CBA do not govern the choice of investment especially as data availability was limited, rather it is a useful tool to test the robustness of a project to alternative assumptions concerning the magnitude of costs and benefits, and the various social demands with respect to the return on invested capital. Based on this the results of the CBA, the study concluded that investing in wetland rehabilitation of the Mthinzima wetland is robust.
An ex ante impact assessment of the farm level impacts of genetically modified (GM) sugarcane to contain insect resistant (IR) and herbicide tolerant (HT) genes in the Eston sugarcane supply region of KwaZulu-Natal, South Africa.
(2019) Mthimkhulu, Celumusa Bhekithemba.; Ferrer, Stuart Richard Douglas.
Notwithstanding public contention about GM crops, commonly defined as crops for which the genes have been engineered by inserting genes from other organisms such as bacteria or animals into their DNAs, there is a general consensus in the agricultural economics literature that adoption of GM crops has generally benefitted the farm sector through increased yields, reduced use of agrochemicals and profit gains for farmers. The South African sugar industry is a high-quality competitive producer of sugar. Nonetheless, it is under financial stress, which has been partly attributed to increased prevalence of various pests, notably eldana and cynodon grass. Genetic modification of sugarcane has been advocated as a strategy to partially counter these threats. The South African Sugar Research Institute (SASRI) is currently developing an insect resistant (IR) and herbicide tolerant (HT) genetically modified (GM) sugarcane cultivar that is suited to coastal production regions. Some sugarcane cultivars suitable for production in coastal areas are also suited to commercial production in the inland regions where eldana and cynodon are also prevalent (e.g. the Eston cane supply region). This study investigates the socio-economic impacts of GM sugarcane in the Eston cane supply area in KwaZulu-Natal, assuming that the GM sugarcane cultivar is suitable for commercialization in the Eston area. In the Eston area, large-scale and smallholder growers produce 95% and 5% of sugarcane, respectively. Large scale farmers in the region were aggregated into three representative farms to account for climatic variation within the area. A fourth represents smallholder growers in the region. Data for representative farm models were collected through focus group discussions with SASRI experts and commercial farmers. In this study, GM sugarcane is modified on the N52 cultivar because it fits the desired traits (high yields, and resistance to diseases and drought tolerance) of GM cane. Microsoft Excel was used to compile enterprise budgets of GM cane and conventional cane to compute their gross margins. Furthermore, Linear Programming (LP) farm planning models were compiled for each representative farm to determine the likelihood of GM cane adoption and the risks associated with the technology. The baseline scenario, “without” GM cane was compared with the GM cane scenario to analyze impact on farm decisions, ceteris paribus. In addition, focus group discussions with smallholders were held to gauge their demand for GM cultivars of sugarcane. Results show that GM cane will be adopted on all four representative farms. Large scale farmers will save up to 29%, 75% and 49,3% on weed control at planting, ratoon management and on eldana control per hectare per annum, respectively. Farmers will also achieve up to a 34.5% share change in gross margin per ha per annum. The LP output shows that GM cane will perform well even in poorer soils: steep and marginal poor soils. Farmers and farm workers will also benefit from GM through sustainable farming and environmental conservation because less agrochemicals such as imazapyr will be used to control pests. Furthermore, higher yields on GM cultivars are expected to increase employment because ratoon management and harvesting will require more labours owing to higher yields. Keywords: ex ante, eldana, cynodon, genetically modified, insect resistant, herbicide tolerant, linear programming
Adoption and willingness to pay for organic fertiliser: a case of smallholder potato (solanum tuberosum L.) farmers in KwaZulu-Natal, South Africa.
(2020-03-12) Bhekani, Sandile Zondo.; Baiyegunhi, Lloyd James Segun.
Potato cultivation involves intensive soil tillage throughout the cropping season, which often results in soil degradation, erosion, and leaching of nitrates. Literature suggest that efforts to produce sufficient food necessitate an increase in agricultural production per unit of inputs by adopting fertility-enhancing techniques (both organic and inorganic fertilisers) to replenish soil nutrients required by crops. However, inorganic fertiliser as a soil ameliorant is known for causing soil degradation, environmental pollution, and it is associated with escalating costs. As a result, smallholder farmers are constrained in realizing their maximum yield potential. One of the ways to boost productivity without degrading the environment is to adopt a more sustainable, low-cost, and efficient integrated nutrient management system, which also suit their socioeconomic status. Although there is sufficient advocacy in the adoption of sustainable agricultural inputs such as organic fertiliser, the economic linkage between farmers' socioeconomic factors and adoption has not been adequately explored. Moreover, there is a dearth of empirical evidence regarding the willingness of farmers to pay a price premium for organic fertilisation of their soil. The aim of this study was to evaluate socioeconomic factors influencing the adoption and use intensity of organic fertiliser among smallholder potato farmers’ as well as to estimate their willingness to pay (WTP) a price premium for organic fertiliser. Primary data was collected from 189 smallholder farmers in three municipal areas in KwaZulu-Natal Province, South Africa, through a multi-stage sampling technique. The analytical framework incorporated descriptive statistics, double-hurdle, and ordered probit models. The double-hurdle model was used to identify the factors influencing the adoption and use intensity of organic fertiliser, under the assumption that the decision to adopt and the intensity of adoption are separate. The contingent valuation method (CVM) was used to elicit information for the WTP, and after that, the ordered probit model was employed to estimate the determinants of farmers' WTP for organic fertiliser. Empirical results indicate that factors such as household head gender, household size, access to credit, access to extension, knowledge of organic fertiliser usage, land ownership, livestock size and access to social grants significantly influenced the decision of organic fertiliser adoption. In contrast, factors such as the age of farmer, knowledge of organic fertiliser usage, farm size and livestock size significantly influenced the use intensity of organic fertiliser. In addition, results revealed that factors such as marital status, access to extension services, and knowledge of organic fertiliser usage, land ownership, livestock size and distance to the source of organic fertiliser were also statistically significant in determining the farmers’ WTP a price premium for organic fertiliser. The study found that the rate of organic fertiliser adoption is very high among the sampled potato smallholder farmers even though there is still a notably large number of farmers who are not using organic fertiliser. This result leads to the conclusion that organic fertiliser is the most popular soil nutrient ameliorant among smallholder potato farmers in KwaZulu-Natal Province, South Africa. This study also found that WTP a price premium for organic fertiliser was very high and this lead to a conclusion which justify the prospect of commercialization of organic fertiliser to facilitate the availability of organic fertiliser to those that are willing to pay for it. This study recommends improved access to extension services to improve technical information dissemination and knowledge of organic fertiliser usage among smallholder farmers. There is also a need to develop policies that strive to institute security of land tenure among smallholder farmers, which will encourage smallholder farmers WTP and also adopt and intensify organic fertiliser. Keywords: Organic fertiliser, smallholder farmers, adoption, use intensity, willingness to pay, Contingent valuation, Craggs’ Double Hurdle model, Ordered logit model.
Economic and agronomic evaluation of using excreta-derived plant nutrients sources (latrine dehydrated and pasteurised pellets, struvite and nitrified urine concentrate) as agricultural fertilisers.
(2018) Chapeyama, Benjamin.; Zegeye, Edilegnaw Wale.
Faecal sludge can be recycled and processed into usable products such as the Latrine Dehydrated and Pasteurised (“LaDePa”) pellets and urine into Nitrified Urine Concentrate (NUC) and struvite, which can be used as fertilisers. The financial costs and benefits and the agricultural-effectiveness of using LaDePa, NUC and struvite as fertilisers in South Africa and the wider sub-Saharan African region have not been empirically quantified. A study was carried out using experimental data to quantitatively establish the cost-effectiveness of using LaDePa, NUC and struvite for maize production. The costs per hectare of using these products to meet crop nutrient requirements for maize and achieve a specified target yield were determined and compared with the costs per hectare of using recommended commercial fertilisers. The financial feasibility was determined using partial budgets. The income per hectare of using these products was determined and compared with that of the commercial fertilisers. Pot trials in a tunnel were also carried out to determine the agricultural-effectiveness of the products compared with the commercial fertilisers and crop growth parameter results analysed statistically using GenStat. The results showed that LaDePa, NUC and struvite are financially viable, if used in place of the organic fertiliser studied. Their net income (gross income less total calculated costs) per hectare was also higher compared with that of commercial fertilisers analysed. On the agronomic side, the products also proved to be very effective for crop growth and might be better than the assessed commercial fertilisers. On top of being a viable nutrient source, LaDePa is even more cost-effective if it is used as a soil amendment to improve soil physical properties. The use of NUC and struvite as nitrogen and phosphorus sources, respectively, was shown to be financially viable. If one is to add the environmental benefits of recycling waste products as fertilizers, the products will be even more economically viable. However, there is a need for more research on consumer acceptance of the agricultural goods produced this way.
Effects of interactions between governance, intergenerational and gender dimensions on smallholder irrigation scheme in KwaZulu-Natal, South Africa.
(2018) Dlangalala, Senamile Fortunate.; Mudhara, Maxwell.
Smallholder irrigation schemes (SISs) face several challenges hindering them from performing at satisfactory levels. In South Africa, the government made considerable financial investments in developing SISs and revitalising them to improve their performance. However, poor performance persisted, indicating that the key root of poor performance could lie elsewhere, e.g., weak institutional arrangements, an aspect which is often overlooked, and in an inequitable distribution of land and other productive resources across intergenerational and gender dimensions. Researchers have argued that the absence of effective management regimes was underpinning the poor performance of SISs. This study sought to assess the effects of the interaction between governance, on one hand, and intergenerational and gender dimensions, on the other, on the performance of SIS in KwaZulu-Natal, South Africa. The specific objectives were to describe the institutional arrangements for water management in SISs, to identify the determinants of farmer awareness of water governance dimensions across intergenerational and gender dimensions in SISs, and to investigate the effects of governance on cropland allocation across gender and intergenerational dimensions in SISs. The study was conducted in Mooi River, Tugela Ferry Irrigation Schemes located in Msinga Local Municipality and Ndumo Irrigation Scheme located in Jozini Local Municipality. Primary data were collected through focus group discussions, key informant interviews and a structured household questionnaire administered by Zulu-speaking enumerators. Stratified and systematic random sampling techniques were employed to select survey respondents. Empirical models used were the Descriptive Statistical technique, Principal Component Analysis, Ordinary Least Squares technique and Fractional Regression Generalized Linear model. The results indicated that the studied irrigation schemes had functional institutional arrangements, and all schemes had scheme committees, i.e., the leaders responsible for ensuring that all the scheme rules and policies are obeyed. Furthermore, the study revealed that formal water institutions were unknown and non-existence at the local level which led to a high reliance on informal institutional arrangements for water resource management. The statistically significant determinants of farmer awareness of water governance dimensions were along the gender, level of education, water management training, scheme location, membership in water users association, stakeholder participation, farmer’s involvement in scheme decision-making processes, and source of information. Age of an irrigator, size of a plot, type of land vi ownership, access to credit, revenue (farm income), and irrigation water sufficiency were found to have a significant influence on cropland allocation decisions. Through the application of Fractional Logit Generalised Linear Model, the study concludes that gender of an irrigator, farmer perceptions with scheme water governance and irrigation water schedule do not influence farmer decisions on cropland allocation in Mooi River, Tugela Ferry and Ndumo irrigation schemes. There is a need to raise irrigators’ awareness about formal water institutions, their intentions and the importance of knowing them. In addition, irrigators need to be capacitated on best management practices and in making informed production decisions. Therefore, improvements in communication between irrigators and external stakeholders are critical. Moreover, government and policymakers must incorporate customary laws when formulating national laws to increase compliance by smallholder irrigators with formal water institutions.
Improved rice varieties adoption and technical efficiency of smallholder rice farmers in Ogun State, Nigeria.
(2019) Olalekan, Bello Lateef.; Baiyegunhi, Lloyd James Segun.
Rice (Oryza sativa) is an essential food crop and the most consumed staple crop in the majority of the urban and rural households in Nigeria. Rice consumption in Nigeria is the highest in Africa; also, the country is one of the largest producers of rice on the continent and simultaneously one of the largest rice importers in the world (FAO, 2016). The high importation is due to the inconsistency and variability in production of rice in Nigeria. Rice yield in irrigated and rain-fed land is 3.0–3.5 mt/ha and 1.5-3.0 mt/ha which is below the potential output of 7-9 mt/ha and 3-6 mt/ha respectively. Low adoption of improved rice varieties (IRVs) is one of the major constraints leading to this low yield encountered by the resource-poor smallholder farmers. The main objective of this study was to examine the factors influencing adoption of IRVs and its impact on productivity and to estimate the differences in technical efficiency among adopters and non-adopters of IRVs in Ogun State, South West, Nigeria. A multi-stage random sampling technique was used to select 250 rice farmers and data was collected through a well-structured questionnaire. The Probit regression model was used to analyse the determinants of IRVs adoption while the stochastic frontier production function was used to model the determinants of rice output and technical efficiency. The results of the probit model showed that education, rice farming experience, access to extension services, access to credit and seed access had a significant influence on adoption of IRVs. The estimates of the average treatment effect (ATT) from the PSM method indicated that the adoption of IRVs increases productivity of smallholder rice farmers by 452kg/ha. The implication of the results suggests that priority must be given to the use of improved agricultural technology such as IRVs in order to enhance rice production. The estimate of the stochastic frontier analysis (SFA) indicates that smallholder rice farmers are producing below their potential output, however, adopters of IRVs are more technically efficient than the non-adopters. The mean technical efficiency of adopters and non-adopters of IRVs is 0.97 and 0.84, respectively. The study determined the sources of farmers’ technical inefficiency from a combined effect of farm-specific, socio-economic, socio-institutional factors and predicted probability of IRVs. The findings of the study suggest that adoption of IRVs plays a crucial role in improving the technical efficiency of smallholder rice farmers. The study, therefore, recommends an agricultural policy aimed at promoting farmers’ education, through effective extension services, providing sustainable credit facilities and efficient relationship between farmer-based organizations and seed companies (private, NGOs and government) to enhance easy accessibility of IRVs by the rural smallholder rice farmers.
Social grant dependence, irrigation water use and on-farm entrepreneurial spirit: a behavioural explanation for smallholders in KwaZulu-Natal.
(2018) Zaca, Fortunate.; Zegeye, Edilegnaw Wale.
Unemployment, poverty, hunger and inequality still remain the key rural development challenges in South Africa. Since the demise of apartheid, one of the key objectives of the South African government has been to decrease the level of poverty and improve the quality of life for all South Africans. The government, in its efforts to alleviate poverty to the disadvantaged and vulnerable segments of communities, introduced several poverty reduction strategies such as the social grants. With social grants becoming the main source of income for most rural households in South Africa, there is a concern that poor rural households are turning away from small-scale agriculture as a result of their dependence on social grants. However, there is insufficient empirical research examining the possible effects of social grants on on-farm entrepreneurial spirit of smallholders. Therefore, this study ought to fill this knowledge gap by explaining the behaviour of smallholder farmers using a revealed preference (RP) method. While other previous studies have constructed entrepreneurship and psychological capital (PsyCap) indices following the stated preference (SP) method, this study adopted the RP method to construct entrepreneurial spirit and PsyCap indices using a behavioural approach. The study was also unique compared to other studies evaluating the impact of unearned income on utilising agricultural resources at their full capacity by farmers. Most studies in the past analyse the impact of social grants and remittances on agriculture separately. Thus, pooling social grants and remittances to analyse the impact of unearned income on the proportion of land operated makes this study different compared to other studies in the past. The study was conducted in two irrigation schemes (Tugela Ferry and Bululwane) in the KwaZulu-Natal province, South Africa. Both purposive and stratified random sampling techniques were applied to select the respondents in this study. The study purposively selected small-scale farmers who were involved in food crop farming to allow for comparison between different farmer typologies. A stratified random sampling method was then used to select the respondents. Smallholder farmers were categorised into four types of farmers, namely, scheme irrigators (104), homestead food gardeners (32), community food gardeners (23) and non-irrigators (16). The reason for stratification according to the farmer type was to capture the developmental paths and challenges or constraints of progressing to the next level in each farmer type. A total sample of 175 farmers, comprising of different farmer typologies, was obtained in the selected irrigation schemes. The data were analysed using descriptive statistics, Principal Component Analysis (PCA), a two-limit Tobit regression model and Fractional Logit model. The analysis of descriptive statistics was used to summarize the data set and to compare differences between farmer typologies including the household demographics and socio-economic characteristics. The Tukey’s HSD post hoc test was conducted to indicate which of the specific farmer typologies differed from each other. The study used the PCA technique to create positive PsyCap indices (mainly capturing hope, resilience, self-efficacy and optimism) and on-farm entrepreneurial spirit indices (proactive, innovative, competitive and risk taking). The Keiser-Meyer-Olkin (KMO) and Bartlett’s sphericity tests were applied to test the assumptions underlying the use of PCA. A two-limit Tobit regression model was applied to estimate the impact of social grant dependence on on-farm entrepreneurial spirit of smallholders. The Fractional Logit model was adopted in this study to analyse the impact of unearned income on smallholders’ ability to utilize their resources at their full capacity. The study found a positive relationship between social grants and on-farm entrepreneurial spirit. Though the level of packaging and processing fresh produce is generally low among small-scale farmers, it improves as the proportion of income from social grants increases. This implies that the lack of entrepreneurship among smallholders is caused by other factors. For example, results indicated low levels of education among smallholders making it difficult for them to search for information. Scheme irrigators were also found to be less entrepreneurial compared to other farmer typologies which can be attributed to failure of irrigation schemes. It is recommended that the policy makers revisit the idea of rehabilitation of schemes in the rural areas to revive entrepreneurial spirit among smallholders. The findings also show that, while the proportion of unearned income has a negative impact on the proportion of land operated, the use of social grants as an investment in agricultural activities is positive. This implies that when social grants are used as an investment in agricultural activities, they indirectly meet the object of poverty reduction. More operated land means more agricultural production, more income, which in turn, reduces poverty or food insecurity among beneficiary households, ceteris paribus. However, when the grants are not invested in agriculture, this policy acts as a disincentive to agricultural production. In their design, social grants were never meant for use in agricultural production but they were expected to provide temporary relief to overburdened individuals or households so that they can meet their immediate needs. Thus, the policy itself as it stands, before considering the practice by rural households to invest the money in agriculture, does not encourage households to work for themselves. The government and its strategic partners should review the policy and ensure that the unintended negative consequences on labour productivity in agriculture are minimized. Male farmers put more land under cultivation compared to females. This indicated partial absence of women empowerment in the rural areas which is caused by current customary laws. It is recommended that strategies and interventions for empowering women farmers should be developed and implemented not only in irrigation schemes but in the broader smallholder agricultural sector. Women are the majority of smallholder farmers in irrigation and hence the future of smallholder agriculture cannot be certain without empowered women. Areas for empowerment include access to and control over resources, especially those that are critical in agricultural production such as equipment, education and training and entrepreneurial skills. Given the positive impact of social grants on rural households’ farming activities, this study recommends that the social cash transfers policy should continue. However, the fact that smallholder farmers are using social grants for agricultural purposes implies that there is a gap in terms of agricultural support. This means there are other farming and institutional factors which hinder smallholder farmers’ entrepreneurial spirit. Addressing these farming constraints (e.g. limited access to credit, inadequate farming assets, water insecurity, lack of farming inputs, etc.) and improving institutional support (e.g., access to credit, training, other extension services) will positively contribute to enhanced on-farm entrepreneurial spirit and utilisation of farm resources. Future research should also seek further investigation into the use of social grants as an investment in agriculture. This study did not go deeper to understand how exactly the social grants are used in agriculture and to what extent. Furthermore, it would be useful to investigate the impact of CSG on youth’s willingness to participate in small-scale farming. Such an analysis is required to broaden the understanding of the role of social grants in the smallholder agricultural sector.
Exploring the role of digital technology in enhancing an environmentally responsive architecture: toward a fog water harvesting and visitors centre on Signal Hill
(2018) Magon, Stefan.; Horner, Bridget Marian.
The development and progression of architecture throughout the ages has been for the most part as a result of the influence of new technologies. Today, more environmentally responsible and innovative buildings are being constructed thanks to research and developments in technology. As the information age transforms into the digital age, the trend for digital integration into every-day life is becoming the norm. Concurrently, the promotion of sustainable living in our society has been facilitated by digital technology. While digital technology and sustainable living might seem like completely different fields, they are more interconnected than we may believe. This dissertation explores how digital technology can enhance an environmentally responsive architecture. The thesis provides principles for developing a connection between digital technology and environmental architecture in order to facilitate a sustainable approach toward sourcing water.
Factors influencing the economic performance of a panel of commerical milk producers from East Griqualand, KwaZulu-Natal and Alexandria, Eastern Cape, South Africa: 2007-2014.
(2018) Ross, Jethro James.; Ortmann, Gerald Friedel.
The South African dairy industry has been characterized, in recent years, by an observed movement towards fewer, larger producers, implying a more competitive milk market in which efficiency measures are likely to become increasingly important determinants of farm financial success and survival. Due to the imperfect nature of efficiency estimates, a more integrated approach is adopted in this study in which economic performance is defined as an unobservable variable for which there exist many imperfect indicators, including various measures of efficiency. This study presents a two-stage approach to analyse economic performance, and its key determinants, for a panel of commercial milk producers in East Griqualand (EG) and Alexandria, South Africa, over the period 2007-2014. Stochastic frontier analysis was used to estimate technical efficiency (TE) from a translogarithmic production function, selected ex-post from several specified models with different functional forms and distribution assumptions. Parametric scale efficiency (SE) was then estimated from the resulting scale elasticities and parameter estimates. Results indicate that sampled producers are, on average, highly technically efficient, generally operating close to the efficient frontier, and are relatively homogenous in production. The general decline of mean TE scores over the study period indicates that farms on the best practice frontier became more efficient over time, while the average farm has become less efficient in relation to the advancing frontier. High mean SE scores confirm that most farms do not experience a substantial loss in output due to scale efficiency problems, but rather to inefficiencies in production (TE). Analysis of SE scores reveals that most farms operated at suboptimal scale, with increasing returns to scale, and could improve output by expanding towards the optimal scale. Latent economic performance was modelled in a Multiple-Indicators, Multiple-Causes (MIMIC) model framework, with estimated TE and SE serving as imperfect indicators. Three latent indices were constructed to represent managerial quality regarding the breeding, feeding and labour programme, and were included in the structural equation, in conjunction with traditional explanatory variables, as latent causes of economic performance. Evaluation of model fit for several specified models led to the selection of the most simplistic specification, in which the latent managerial constructs were not included. Results suggest efficiency, milk yield per cow, and level of specialization in dairying all have a significant effect on the economic performance of the sampled farms. It should be noted that the sign of latent economic performance was not in line with expectations, and requires further research.
An evaluation of availability of traction power for tillage and its effects on food security of smallholder farmers’ households in KwaZulu-Natal, South Africa.
(2017) Motokolo, Patience Refilwe.; Mudhara, Maxwell.; Chaminuka, P.
Agricultural input availability remains an impediment to poverty reduction and achievement of food security in Sub-Saharan African countries. Timely availability of traction power is important in crop production, yet its availability is limited among smallholder farmers due to capital constraints, location bias of government traction power programmes and relatively small landholding. The circumstances facing households influence their traction power choice. An understanding of the determinants of their choices and the effect of traction power availability on crop productivity as well as food security can allow policy makers to develop appropriate strategies and programmes to enhance the productivity of smallholder farmers. This study aimed to contribute to the literature in two ways. The first objective of this study was to determine the factors influencing choice of alternative traction power source for tillage. Secondly, the study sought to evaluate the effect of traction power availability on maize productivity as well as household food security. The study focused on six villages from Okhahlamba Local Municipality, KwaZulu-Natal in South Africa. A Multistage probability sampling was used to select villages and households, whereby 207 households were surveyed. The study identified three main groups of tillage categories that smallholder farmers use, i.e., tractor, animal power, and a combination of the two sources. The multinomial regression results identified household characteristics significantly influencing the choice of traction power source for tillage. The results from Cobb-Douglass production function and multinomial endogenous treatment effect model show that traction power availability affects maize productivity as well as food security. Using animal power and a combination of mechanical and animal power showed a positive effect on maize productivity as well as food security. The results suggest that the policies and programmes affecting traction power availability directly or indirectly through ownership, hire or government services should be improved as they affect crop productivity and food security. Also, there is need to enforce gender equity strategies in rural areas to ensure equal access to inputs and participation in government programmes. There is also a need to consider the introduction of tillage power suitable for the relatively small land sizes that smallholder farmers operate.

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