Browsing by Author "Chipfupa, Unity."

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Entrepreneurial development pathways for smallholder irrigation farming in KwaZulu-Natal : typologies, aspirations and preferences.
(2017) Chipfupa, Unity.; Zegeye, Edilegnaw Wale.
Smallholder irrigation in South Africa is strategically recognized as an important sector in addressing rural poverty, food insecurity and rising youth unemployment. However, despite the government’s efforts and huge investment, the sector has failed to make a meaningful contribution to overcoming these challenges. The poor performance has been attributed to the failure of the existing programmes to develop the human and social capital to manage the schemes and effectively engage in market-oriented agricultural production. This has resulted in the inability of smallholders to utilize the opportunities availed through irrigation farming. South Africa’s national policies identify entrepreneurship as an appropriate intervention strategy for improving the performance of smallholder irrigation. However, to unlock entrepreneurship, a better understanding is required regarding smallholder farmer behaviour vis a vis the relevance/application of the concept to smallholders, and their aspirations, heterogeneity and preferences for irrigation water management. Thus, the objectives of the study were: to assess the validity and applicability of the mainstream concept of entrepreneurship to smallholder irrigation farming in South Africa and identify avenues of adaptation to make it relevant; to identify sources of smallholder heterogeneity and determine the farmer typologies in smallholder irrigation, accounting for psychological capital; to examine aspirations of smallholder farmers to expand irrigation crop production; and assess farmer preferences for managing irrigation water resources and their willingness to pay for irrigation water. The data for the study came from a stratified random sample of 328 smallholders in and around Makhathini and Ndumo-B irrigation schemes in Jozini, KwaZulu-Natal, South Africa. The data were collected through a household questionnaire survey and focus group discussions. The study employed literature review, descriptive analysis and several empirical approaches (Principal Component Analysis, Cluster Analysis, Heckman two-step selection model and choice experiment modelling). The research uniquely introduced and integrated the concept of psychological capital to the Sustainable Livelihoods Framework literature to enhance understanding of entrepreneurship among smallholder farmers. The findings showed that smallholders do not conform to the mainstream definition of entrepreneurship which is mainly the result of the neoclassical economics paradigm. This does not, however, mean that such farmers cannot be entrepreneurial, but it highlights the need for redefining the concept to suit their context. A paradigm shift is required to improve the performance of smallholder irrigation and unlock entrepreneurial spirit, putting smallholder behaviour at the centre for which the concepts of psychological capital and behavioural economics are expected to play a bigger part. There is also a need to embrace indigenous knowledge, the multipurpose nature of smallholder farming, heterogeneity and creating an enabling environment. In the end, the study proposed a contextualized definition of entrepreneurship for smallholders which places more significance on the willingness and ability of entrepreneurial smallholders, through their own initiatives, to address their challenges, even in the midst of constraints. The study revealed five farmer typologies in smallholder irrigation in South Africa: elderly and uneducated, cautious and short-sighted, financial capital and psychological capital endowed, social grant reliant, and land endowed rainfed farmers. Heterogeneity in these typologies is observed regarding psychological capital endowment, market access, collective action and access to credit. The results affirm the fact that the ‘one size fits all’ approach to agricultural policy and support is not appropriate. Heterogeneity among smallholders should be accounted for in future agricultural and rural development programmes. However, accounting for this heterogeneity is a double-edged sword. On one side it complicates tailor-made policy formulation and on the other side, if there is capacity, it makes the portfolio of policies and strategies impactful and relevant. Th study identifies psychological capital as important and recommends its recognition and nurturing as a key livelihood asset. The findings suggest that farmers’ willingness to expand irrigation farming activities is affected by positive psychological capital, access to markets, access to credit, land tenure security and membership to social groups. Their ability to achieve their aspirations is determined by asset ownership, access to markets and local resource use conflicts. This evidence further demonstrates the importance of developing positive psychological capital among smallholders. The priority areas for improving access to agricultural credit and markets include, among others, value chain financing, reforming the existing agricultural credit schemes and investment in road and transport infrastructure. Smallholders’ ability to achieve their aspirations and make better use of irrigation schemes should be enabled through improving access to physical capital assets, addressing land security concerns, and supporting institutions that promote social interaction and learning. The findings from the choice experiment demonstrate that valuing and recognizing the scarcity of irrigation water is essential for its sustainable use. The results suggest the need for irrigation water pricing to reflect irrigation intensity. They also show that improving agricultural production and productivity, with market access can enhance farmers’ willingness and ability to pay for irrigation water. The study reveals the need to consider multiple uses of irrigation water, while a focus on women smallholders has positive implications for sustainable management and use of irrigation water. It also recommends a shift towards volumetric water pricing at the farm or plot level in the irrigation schemes. In sum, the study has shown why it is of critical importance to take the mindset and human behaviour as the locus of interventions to improve the performance of smallholder irrigation schemes. It recommends a psychological and behavioural economics approach to understanding farmers’ decisions and behaviour and to provide the road map to realize the returns on investment in the smallholder irrigation sector. Agricultural extension approaches need to target for developing the psychological capital and entrepreneurial spirit of smallholders and supporting cooperatives deliver their mandate effectively. Furthermore, policies should assist in creating an environment that nurtures farmer entrepreneurial spirit, and that is supportive of smallholder entrepreneurs. This includes, but not limited to, encouraging and incentivizing own effort rather than embracing a culture of dependency.
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.