Doctoral Degrees (Agricultural Economics)
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Browsing Doctoral Degrees (Agricultural Economics) by Subject "Agriculture--Economic aspects--KwaZulu-Natal."
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Item Distortion of incentives for farm households in KwaZulu.(1989) Lyne, Michael Charles.; Nieuwoudt, Wilhelmus Liberté.KwaZulu is a less developed region of South Africa. Low agricultural incomes have contributed to widespread poverty in the region. Despite intense population pressure on the land, arable resources are underutilized. Conversely, grazing resources are overutilized. Tribal tenure prevents the sale of land and has also precluded an active land rental market. Population growth has reduced farm sizes because households have an incentive to retain their rural land rights. At the same time, the opportunity cost of household farm labour has increased. As a result, the average cost of producing crops has risen relative to product prices. Households are generally able to procure food and income at lower cost by allocating better educated workers to urban wage employment. Consequently, many households have little incentive to produce crops and are deficit food producers. Arable land is underutilized because these households cannot rent land to others who would farm it. A mathematical programming model constructed from models of representative households demonstrates that output responses to higher food prices and reduced input costs are small. Furthermore, an increase in food prices harms most rural households and lower input costs do little to improve household welfare. However, the model predicts that a land rental market will have a substantial impact on crop production and could generate significant income opportunities in agriculture and its service industries. A rental market for arable land would require minor institutional changes and has equity as well as efficiency advantages. The uncultivated portion of a household's tribal land allotment is regarded as common property for grazing purposes. Access to these grazing resources is not restricted and an empirical analysis of herd data indicates that stocking rates decline when the private cost of keeping cattle increases relative to their perceived benefits. Unlike most 'solutions' to the common property problem, privatization of grazing land would not only reduce overstocking and its associated social cost, but would also improve incentives to upgrade herd and pasture quality. It is recommended that privatization of grazing land (even in the limited sense that arable land is privately controlled) should be encouraged.Item Expenditure elasticities and growth linkages for rural households in two study areas of KwaZulu-Natal.(2002) Hendriks, Sheryl Lee.; Lyne, Michael Charles.Expenditure patterns were investigated to determine the potential impact of a widespread income shock on household expenditure and to estimate the potential for growth linkages to spur agriculture-led growth in two communal areas of KwaZulu-Natal. Expenditure data were collected from 99 sample households at the rural areas of Swayimana and Umzumbe during 1997. District and wealth group expenditure analyses for commodity groups suggested expenditure elasticities of close to unity for food. Low expenditure elasticities were found for staple foods. Expenditure elasticities for meat, meat products, and poultry were close to unity, while horticultural products showed the greatest potential for demand growth within the food category. Of the statistically significant commodity categories, expenditure elasticities for durables, housing, and transport were more than double those estimated for the aggregate food category. There was little difference in the response of wealthier households (the top expenditure decile) and that of poorer households. However, wealthier households have a greater propensity for increased expenditure on transport, while poorer households show a greater propensity for increased expenditure on housing and durables. District and wealth group expenditure analyses for tradable versus non-tradable farm and non-farm goods and services suggest a less than proportional increase in the demand for tradable farm commodities, and a more than proportional increase in demand for non-tradable farm commodities, following a one percent increase in household expenditure. Expenditure on non-farm tradables (imported consumer durables) showed the greatest potential for demand growth, with expenditure elasticities ranging from 1.75 to 2.59. A one Rand increase in household income is predicted to add an additional 28 cents (multiplier of 1.28) to the local economy. However, even relatively weak growth linkages could lead to much needed new income and , employment opportunities within the local farm and non-farm sectors if the constraints inhibiting agriculture, and hence broad-based growth in rural incomes are alleviated. Agriculture-led growth in South Africa requires public investment in both physical and institutional infrastructure to reduce transaction costs and risks in all markets, encouraging greater participation by local entrepreneurs and private sector investors. In addition, the roles, functions and services offered by extension agents should be extended to promote collective marketing, facilitate land rental contracts, provide training, and technical and business support for farm and non-farm entrepreneurs.Item Marketing constraints faced by communal farmers in KwaZulu-Natal, South Africa : a case study of transaction costs.(2002) Matungul, Maliem Pierre.; Ortmann, Gerald Friedel.; Lyne, Michael Charles.Farmers engaged in small-scale agriculture in Africa generally have limited access to factors of production, credit and information. Empirical studies throughout the African continent have shown the extent to which high transaction costs constrain or prevent access to information and markets, especially for small-scale farmers. Despite these constraints, farmers in two communal areas of KwaZulu-Natal (Impendle and Swayimana) have managed to produce food for both own consumption and marketing. This study draws heavily on the New Institutional Economics, and particularly Transaction Cost Economics, which have demonstrated the important role of transaction costs in constraining economic activity, and of institutions developed to lower these costs. Transaction costs are the costs of exchange, including costs of information, negotiation, monitoring, coordination and enforcement of contracts. These costs can be implicit or explicit. The main objective of the study is to assess marketing constraints faced by communal farmers in the Impendle and Swayimana regions of KwaZulu-Natal, South Africa. Data were drawn from random sample of 120 household heads in each of the regions. In Swayimana, data were collected in January and February 1999 whereas the survey in Impendle was undertaken in April and May 1999. The empirical analysis attempts to identify factors determining the quality and number of marketing channels used (i.e. depth in marketing methods), which in turn affect the level of income generated from crop sales by small-scale farmers in the two study areas. The identification of such factors might support initiatives to create a more viable small-scale farming sector in the communal areas of KwaZulu-Natal. A block-recursive model was formulated and estimated using ordinary least squares (OLS) and two-stage least squares (2SLS). Empirical analysis of the OLS equation suggested that transaction cost variables are important in explaining the choice of, and depth in, marketing methods. Results of the combined samples indicate that cooperation with neighbouring commercial farmers, and the interaction of distance and ownership of a vehicle were the most important factors in the choice of marketing methods. Other factors such as the age of household head, having a formal bank account and the area of allocated arable land, also significantly and positively influenced the depth of marketing methods. At a regional level, the same equation revealed that while COOP was the most important factor in Swayimana, DISTRA and ACC were the main determinants in Impendle. The 2SLS regression analysis indicated that greater depth in marketing methods, which reflects lower transaction costs faced by growers, has a strong and positive impact on the level of crop income generated; i.e. the lower the transaction costs faced, the greater is the depth in marketing methods, and the higher the level of crop income. The results imply that formal marketing channels are associated with low transaction costs and higher levels of crop income. The area of cultivated arable land and income from non-agricultural activities were the other two important determinants of crop income. It is concluded that accessibility to formal market outlets is limited by considerable farm-to-market distance, poor infrastructure (roads, telecommunications), and inadequate transportation. Recommendations give due consideration to the development of a better physical and institutional infrastructure which would effectively link these production areas to market centres and improve market knowledge by providing relevant market information and farming skills.