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Human capital development is considered the primary source of knowledge and skills in the innovation process. Despite this, there is evidence of a lack of technical and managerial knowledge among emerging sugarcane farmers who are beneficiaries of South Africa's land reform programme, thus, limiting their full potential in terms of innovation and productivity which is detrimental to their competitiveness. This paper employs the Crépon, Duguet, and Mairesse (CDM) approach, correcting for endogeneity problems, to estimate the causal impact of on-the-job training expenditure, used as a proxy for human capital development, on innovation, and innovation on farm productivity. It is based on a case study of 35 emerging sugarcane farmers in the KwaZulu-Natal north coast, South Africa. The results from the CDM model confirm the causal relationships between human capital (on-the-job training) and the innovation behaviour of the farmers, which positively impact the farm's productivity. This result underscores the relevance of human capital development in boosting innovation and productivity in the agricultural sector. [ABSTRACT FROM AUTHOR]

Despite agriculture being the largest employer of young people, South Africa faces a youth unemployment crisis. The youth are increasingly disinterested in agriculture and often view it as a last resort in the absence of alternative employment opportunities. This paper explores strategies to change these negative perceptions and attract young people to agriculture. Drawing on twenty-two studies conducted over the past decade, national grade 12 statistics, University enrolments, yearbook reviews, and twenty job advertisements, I identify five key areas for intervention. First, the youth interested in agripreneurship need support to access financial and physical resources. They also need training offered jointly by tertiary institutions and the government. Second, agricultural education in primary and secondary schools will likely attract and retain youths to agriculture. Third, we need to reform the education system at all levels to ensure holistic student development opportunities, including the technical and soft skills required by agricultural sector employers. Fourth, our marketing strategies need reform; collaboration with the media is necessary to increase awareness and change youths' perceptions about agriculture and agricultural careers. Five, we need to strengthen the role of agricultural associations to bridge the gap between the agricultural sector and secondary and tertiary education institutions. [ABSTRACT FROM AUTHOR]

This paper explores the prospects of commercial producers who would be willing to exit voluntarily in the near future to make land available in the market. In addition, it also considers what factors are restricting the acceleration of this rate of exit from a land-supply perspective with respect to barriers to exit. The prospect of structural change from such acceleration is also explored using three scenarios. An agent-based mathematical model is used to implement the three scenarios. This model is constructed from a dataset of 450 commercial producers across South Africa. The results suggest that a reasonable amount of arable land could be available for redistribution, with only modest structural change regarding animal production, despite drastic alterations in veld. These results provide some guidelines on how assistance for struggling producers can make land available for efficient producers, which could make the sector stronger. All potential exiting commercial producers have common reasons for doing so, which could be used to initiate a positively inclined, structured discussion on land supply. [ABSTRACT FROM AUTHOR]

The paper investigates if two groups of smallholder sheep farmers who farm using communal grazing land in the N8 development corridor of South Africa can be treated in a homogenous manner. Heterogeneous production environments should result in different production responses, which are unique to the production region. A better understanding of these unique responses could guide the development of improved strategies to increase smallholder livestock production in South Africa. A stochastic production frontier approach was used to evaluate two production districts before grouping the data and estimating the metafrontier. The metafrontier represents a homogenous benchmark for all producers. Results indicate that the two districts cannot be treated the same. Therefore a single production function and strategy cannot be used to improve productivity and efficiency of livestock production in both the districts. The conclusion is that the development of strategies to increase smallholder sheep producers, productivity and efficiency requires an understanding of the production, environmental and institutional factors that the farmers experience within that particular district. Considering the study areas used in the paper, attention to the more technical aspects of production and management can improve the farmers' productivity and efficiency. [ABSTRACT FROM AUTHOR]

Over 2003–2021, the pasture harvested on South African pasture-based dairy farms increased markedly. This increased production and consumption of pasture has helped to reduce the cost of producing milk in South Africa relative to dairying in other countries and delivered comparatively high levels of profit. National milk production has grown steadily. Over this same time, pasture as a proportion of the total diet of dairy herds has decreased significantly: supplements make up the major share of the diet. This change to dairy herd diets puts upward pressure on the average cost of feeding the herd and on the cost of production. The focus of this paper is on whether dairy farmers would be better off if they significantly increased the proportion of pasture in the total diet of their herds and relied less on supplementary feed. It is shown that progressively increasing the pasture component and proportion in the diet of dairy herds, from an industry average of 41% to 57%, could increase profit. Results were a 26% increase in profit (return on capital), a 59% increase in profit margin per litre, and a 7% decrease in cost of production per litre. If this change in production system to increased use of pasture and less use of supplementary feeds was replicated across the entire South African pasture-based dairy industry, farmers in the industry would be significantly more profitable and their businesses would be more resilient than under the current feeding regimes that are used. [ABSTRACT FROM AUTHOR]

The paper is based on a study that sought to understand the nature of the interaction between small-scale farmers and government in the Eastern Cape from a variety of different perspectives. The study involved a sample survey of farmers, and in-depth interviews with farmers, extension officers and other government staff, and leaders of farmer associations. This particular paper explores two themes that emerged in the course of the larger study: first, what is popularly known in South Africa and elsewhere as the "culture of dependency and entitlement", and second, the forms of support that government chooses to offer to small-scale farmers. The paper argues that government is stuck in a vicious cycle whereby it seeks to placate expectant small-scale farmers with material support, which it can most effectively do via problematic group projects; although generally ineffective, the practice has the effect of maintaining widespread demand for such support, even to the point that small-scale farmers form group projects for the sole purpose of attracting it. In seeking to compensate for the weaknesses of this approach, government has sought to introduce compensatory measures such as "strategic partnerships", sometimes with the ironic consequence that small-scale farmers no longer play a role in farming in "their" agricultural projects. The paper concludes that the government in the Eastern Cape needs to return to the basics of effective extension support aimed at supporting individual farmers; to the extent material support is still needed, it should no longer be given away for free. [ABSTRACT FROM AUTHOR]

This paper examines the determinants of participation in homestead food garden programmes and its impact on productivity and net returns of smallholder maize producers in the Gauteng province of South Africa. The paper further establishes the nexus between land ownership and outputs from homestead food garden programmes. The data was obtained from 500 maize-producing households. The findings demonstrate that participation in homestead food garden programmes could significantly enhance the welfare of rural households by increasing their yield and net returns. Participation in the programme increased maize yield and net returns by 43.37 per cent and 22.01 per cent respectively. Cultivating more than one hectare of farmland enhanced the outcome of participation in a homestead food garden programme more relative to cultivating less than one hectare. Homestead food garden programmes should be run in conjunction with land ownership. Our findings demonstrate the need for policymakers and evaluators of agricultural interventions to consider farmers’ decisions to participate, programme outcomes and land ownership in their assessments in order to avoid biased judgement. The willingness of people to participate in farming should be paramount to the homestead food garden programme and land ownership policy, otherwise the redistribution of farmland to people who are not willing to farm will be meaningless. [ABSTRACT FROM AUTHOR]

This paper explores reasons why some commercial producers in South Africa are expecting to quit and sell their farms, and others are not. Of 450 respondents to a voluntary survey, distinctly different groups of producers emerged concerning their longer-term strategic planning and how they experience and absorb current threats and challenges. Unsupervised learning on the dataset is imposed using a cluster analysis to explore the commonalities and the underlying factors why producers would expect to exit or not. Factors that we hypothesised might play a role included a producer's age and financial position, rural safety concerns, labor problems, industry-related problems, and opportunities for off-farm earnings. The factors the potentially exiting producers had in common were financial difficulty, which was uncorrelated to turnover, problems with access to dependable labor, uncertainty regarding land reform policy, and rural safety concerns. Intention to retire also played a role, although to a lesser extent. It is more often a combination of factors, rather than a single factor, that makes a producer more likely to decide to quit and sell in the future. With the exclusion of farm safety concerns and labor problems, the identified factors in this study are in step with those found internationally. [ABSTRACT FROM AUTHOR]

South Africa has faced multiple waves of COVID-19 infections since March 2020 with various levels of economic restrictions imposed to control the pandemic's spread. Such actions included intermittent bans on alcoholic beverage sales, which have had a substantial impact on the wine sector. This purpose of this paper is to quantify this impact, using a partial equilibrium simulation model to separate the direct impact of sales restrictions from the indirect impact of collapsed GDP growth and consequently also consumer spending. In 2020 alone, it points to a reduction in domestic sales and in exports as a result of the pandemic and the efforts to control its spread. The subsequent stock build up induces a prolonged period of weaker prices, and combined with additional actions imposed up to the end of July 2021, cost actors in the industry R3.6 billion in primary gross production value from 2020 to 2027, even without accounting for further value addition between bulk sale and retail value. [ABSTRACT FROM AUTHOR]

Globalisation and the increased movement of goods such as live animals and animal products across national borders can exacerbate the introduction and spread of diseases. This risk can be mitigated through adherence to trade control measures such as the Sanitary and Phytosanitary Measures (SPS) of the World Trade Organization (WTO). However, compliance with SPS measures usually results in additional production and trade costs. This paper applied cost–benefit analysis, using stochastic scenario analysis, to estimate the financial burden of SPS measures on exporting horses from South Africa to the European Union (EU). These measures were instituted following a ban on the direct export of horses from South Africa to the EU, triggered by outbreaks of African Horse Sickness (AHS) in the AHS Controlled Area in the Western Cape Province. Analysis revealed that compliance to existing SPS measures by exporting a horse via a third country is 1.67 times more costly than exporting directly to the EU. A strengthened public-private sector partnership is recommended to jointly identify the most efficient and effective ways to develop capacity for collaborative judicious investment in order to build a resilient horse industry thereby enabling employment creation and economic growth. [ABSTRACT FROM AUTHOR]

Addressing the high levels of poverty and inequality in South Africa remains a central policy concern. In this regard, this paper uses a Computable General Equilibrium (CGE) microsimulation approach to revisit the effects of taxing water pollution on poverty and inequality at the level of a river basin. We combined the commodity and factor price changes from a regional environmental CGE model, after introducing the water pollution tax, with household survey data from the 2012 National Income Dynamics Survey (NIDS) to explain the welfare impacts. The result shows that the tax policy will in general have adverse impacts in terms of welfare, poverty, and inequality. However, the tax policy coupled with a supply-side compensatory measure such as subsidising water pollution abatement has the potential to reduce regional poverty and inequality as well as improve the ecological status of the river. Our finding has policy implications for national and regional water resource managers. [ABSTRACT FROM AUTHOR]

South Africa's land reform policy might succeed better if it had clear criteria for selecting beneficiaries for land redistribution. The National Development Plan identifies the intended beneficiaries and states how they should be selected, but implementation of the plan is haphazard. A 2019 report by the Presidency's Land Reform and Agriculture Advisory Panel recommends that the beneficiary selection process be clear and transparent. In this paper, we respond to the report and expand on a proposal in the 2020 draft Beneficiary Selection Policy. Our study is based on a review of the relevant policies and the literature on beneficiary selection, and a profile of 833 potential land redistribution beneficiaries randomly selected from three provinces in South Africa. We highlight the flaws in the existing selection methods. Building on the suggestion of Vink and Kirsten (2019) of a tender or job application process, we suggest improvements we suggest improvements that could reduce inefficiencies and make the selection process inclusive and transparent. [ABSTRACT FROM AUTHOR]

Livestock production remains vulnerable to animal disease, threatening the productivity and food security of smallholder farmers. Application of primary animal health care (PAHC) practices is considered a cost-effective method for farmers to prevent and control livestock diseases. Using data collected on 593 smallholder farmers in five provinces of South Africa, this paper uses partial proportional odds (PPO) modelling to evaluate the determinants of livestock keepers' choice of PAHC practices. Access to animal handling facilities, contact with animal health practitioners, farmers' associations, household income and positive perceptions about vaccines had a positive influence on the farmer's choice of PAHC practices, while negative perceptions about vaccines had a negative influence. Increased timely delivery of animal health services and provision of animal handling facilities is recommended to expedite increased farmers' uptake of PAHC practices. Development of animal health policies using the "One Health" approach is advised to ensure a collaborative, multisectoral and transdisciplinary effort at local and national level to achieve optimal health outcomes. Use of the PPO model is a departure from the norm in the literature for determining a farmer's adoption strategies. The model proved to be instrumental as it predicted significant variables extra to those usually applied in multinomial models. [ABSTRACT FROM AUTHOR]

This paper develops and applies a simple non-parametric methodology for estimating the direct and indirect economic contribution of small-scale black agriculture in South Africa. The direct contribution is understood as the per capita food expenditure savings of agriculturally-active households relative to other households. Meanwhile, the indirect contribution is understood as the expenditure savings enjoyed by rural households by virtue of residing in areas characterised by widespread, albeit modest local production. The analysis is based on the Income and Expenditure Survey of 2010/11. Further to estimating the magnitude of the direct and indirect contribution of small-scale agriculture, the paper seeks to provide econometric evidence for the economic logic underpinning the indirect economic contribution of small-scale black agriculture. [ABSTRACT FROM PUBLISHER]

Food self-sufficiency is an important contributor to food security, and one of the potential solutions to this problem is increased food production productivity through agricultural biotechnology. In this paper, we study the relationship between a country's genetically modified (GM) food policy and the food self-sufficiency rate (SSR) under conflicting interests, with the example of GM crop regulation and GM maize production in South Africa. We develop a theoretical model of a small open economy and investigate the GM food policy as the outcome of a GM and a non-GM food groups' lobbying game that follows the model of Grossman and Helpman. The government maximises its payoff by considering the weighted sum of social welfare and contributions from interest groups. Our findings suggest that a lower GM food regulation supports domestic agricultural production, and we offer potential reasons why a country that has a low SSR still has a strict GM food policy regulation. We also find that the food SSR is a biased measure of food availability when both production and consumption change simultaneously. [ABSTRACT FROM AUTHOR]

In this paper tariff rate quota (TRQ) fruit products are analysed as representative sectors in a Global Trade Analysis Project (GTAP) Computable General Equilibrium (CGE) static model to establish impacts on trade and welfare. Simulations are carried out to remove EU tariffs on fruit products, non-tariff measures (NTMs) and other influential factors accounting for the unfilled portion of the TRQs. A large proportion of quota under-fill is explained by the presence of NTMs which include aspects of the TRQ administration methods on the exporter side. The results of the simulations show that the increase in exports is greater with the removal of NTMs than with tariff removal. The findings of the equivalent variation (EV) measure of welfare show a welfare loss of −US$14 040 in South Africa when quota fill is simulated without the removal of NTMs. Partial trade liberalisation characterised by the removal of only tariffs, exhibits smaller welfare gains (US$31 943) compared with the combined liberalisation of tariffs and NTMs which improves welfare by US$221 834. The study concludes that the trade liberalisation process of fruit products TRQs should simultaneously implement full tariff liberalisation with TRQ expansion and the reduction of NTMs. [ABSTRACT FROM AUTHOR]

In many developing countries, land ownership remains a subject of contention. In South Africa, notwithstanding the strides that have been made to foster equitable land ownership, land reform policies have been unsuccessful in delivering land to the poor majority. Due to the nature of agriculture as a source of food production and national security, and the lack of farming skills and related competencies’ equilibrium, programmes intended to deliver land to black people have been inadequate in their reach. Whereas policy has emphasised the urgency of solving equity issues in land ownership, equally challenging has been finding the right set of programmes to achieve this without triggering a perennial land ownership squabble. After 18 years of democracy, a need remains to find a balance between continuity in food production and equitable redistribution of land in South African agriculture. In this paper, we argue that it is possible to achieve equitable and fair redistribution of land without inhibiting agricultural production, through land sharing. We show that sharing land could help fast-track the development of a farming skills and related competencies’ equilibrium between black and white farmers. The paper further demonstrates that the gains in land sharing far outweigh other programmes of land reform that have been used and suggested thus far. [ABSTRACT FROM AUTHOR]

In this paper the nature of diversity that exists with regard to food consumption in the Free State Province is investigated. Furthermore, this paper also investigates the factors (quality attributes and household characteristics) differentiating these market segments from one another. Four separate steps were followed in an integrated manner in the investigation. Firstly, a representative sample was drawn for the Free State Province food consumers. Households are then segmented into smaller submarkets. The second step involved the use of principal component analysis to correct for the strong and prevalent underlying structure with respect to household preferences. In the final step, a binary logit model was applied to analyse the determinants of the market segments’ food consumption. Five market segments are prevalent in the Free State Province, namely: Cluster 1 (34.7%) – inferior-product consumers; Cluster 2 (23.6%) – at-home (basics) consumers; Cluster 3 (26.6%) – balanced consumers; Cluster 4 (12.3%) – value-added-oriented consumers, and Cluster 5 (2.6%) – high-frequency consumers (broad product range). The final logit model that was applied consisted broadly of economic and non-economic variables. The results show that significant differences prevail amongst the five market segments, for both economic and non-economic variables included in the model. Producers, marketers and other participants in the food value chain can use this as a basis from which appropriate marketing strategies could be developed, formalised and implemented. [ABSTRACT FROM PUBLISHER]

This paper intends to contribute to the ongoing debate about whether and how restructured agri-food markets can provide viable market opportunities for small-scale farmers in South Africa. It analyses contract farming from the small-scale farmer perspective to better understand the implications for small-scale farmers of contractual arrangements with processing and/or marketing firms. The paper, based on empirical research conducted in the Limpopo Province of South Africa using a combination of qualitative and econometric analyses, argues that contract farming is not a panacea for small-scale farmers. On the one hand, contract farming improves agricultural production for contract farmers who benefit from increased incomes, enables better access to services and resources, and creates new opportunities to participate in markets. However, on the other hand, the results show that contract farming remains limited and mostly involves the already better-off, who have benefitted from specific development paths and public support. This case study shows that contract farming in itself does not appear to provide an efficient means of reducing poverty, nor does it provide an institutional tool through which to improve rural livelihoods. It does, therefore, not represent a tool appropriate for the majority of small farmers or for redressing the historical imbalances in the South African agricultural sector. [ABSTRACT FROM PUBLISHER]

In developing countries, where few incentives exist for private sector investment in research, public investment in agricultural research and development (R&D) is critical for technological change that stimulates agricultural development, food security and poverty alleviation. This article analyses trends for key indicators in agricultural R&D in South Africa, building on the work of Liebenberg et al. (2011). The paper uses data collected from a range of sources including the Agricultural Science and Technology Indicators (ASTI) surveys comprising data for the period 2000-2014. Results show fluctuations in agricultural R&D spending, although there was a general increase in gross spending on R&D at national level, reflecting a continued trend of increased funding for non-agricultural research. Research spending intensity ratios for South Africa remain higher than the recommended 1 per cent. Despite the harsh economic environment and lower than expected economic growth in South Africa since 2011, the government continues to provide the major source of funds for the Agricultural Research Council (ARC). When compared with countries in Africa south of the Sahara, South Africa continues to rank second in agricultural R&D investment, whilst it invests much less than its BRICS (Brazil, Russia, India and China) counterparts, despite having the highest research intensity ratio. The article supports Liebenberg et al. (2011)'s recommendations for revisiting policies for long term support of agricultural R&D and explores mechanisms for the ARC to establish sustainable funding streams for agricultural R&D. Recommendations for establishing comparable research spending intensity ratios are also made. [ABSTRACT FROM AUTHOR]

This paper quality adjusts machinery inputs for South African agriculture. It does this by treating different qualities of machinery as separate inputs. Thus, quality adjustment becomes quantity adjustment when there is sufficient disaggregation. This matters because many mechanical and chemical inputs have been transformed by technological progress. If this is not taken into account, the inputs are under-counted and total factor productivity (TFP) calculations are not accurate. Gandidzanwa and Liebenberg (2016) estimated the proportion machinery to implements and used this series to scale up the tractor series, instead of assuming fixed proportions. This study quality adjusts the machinery and implements input series by applying a greater level of disaggregation and by careful monitoring of model turnover. The number of models monitored was increased tenfold. Removing tractor improvements resulted in a price index that grew more slowly than the official index. Thus, the tractor stock value series is deflated less and by 2015 was 53% larger than in the official figures. The service flow entering the TFP calculations will be similarly increased, so there is less residual to be attributed to TFP growth. If all the inputs were equally undercounted, the TFP estimate would be double its true value. [ABSTRACT FROM AUTHOR]

Livestock disease outbreaks in Africa threaten improved animal and human health, increased productivity, and sustainable agricultural livelihoods. Investment into research and development of livestock vaccines has potential to generate new technologies that can benefit the livestock sector and result in control of diseases such as Rift Valley fever (RVF) and lumpy skin disease (LSD). Veterinary research and development efforts have focussed on the development of an improved, combined LSD RVF 2-in-1 vaccine, using new generation technologies. Through collaborative, multidisciplinary research, it is possible to create solid economic arguments that guide policy and investment on strategies for controlling livestock diseases. Using Monte Carlo simulation through various vaccination scenarios this paper evaluates ex-ante the costs and benefits of an LSD RVF 2-in-1 vaccine on dairy production in South Africa. Simulations over a 15 year period yielded positive net present values at R830 641 and R13 954 073 with internal rate of return at 32.4 per cent and 32.9 per cent for small scale and large scale operations, respectively. The results of the study provide decision makers with solid economic arguments regarding the potential benefits of investing in new generation vaccines for control of RVF and LSD. Continuous awareness on the importance of the vaccines, particularly for small-scale farmers is recommended for improved livestock productivity. [ABSTRACT FROM AUTHOR]

Wheat is South Africa's second most important grain crop and is produced in winter rainfall, summer rainfall, and irrigation regions. Despite being a net importer of wheat, the country has stringent wheat quality requirements as per the Agricultural Products Act (Act No. 119 of 1990). This paper investigates the effects of the quality requirements in different regions and the wheat industry as whole. Forward regression and benefit-cost analysis were applied to data on wheat area planted, seed adoption rates, prices, and cultivar performance from 1999 to 2016. A total of 31 527 observations from winter, summer and irrigation regions were used, each accounting for 4563, 8824 and 18 140 cases respectively. Forty-nine cultivars were used for trials during this period. Results show that stringent quality requirements have resulted in losses of approximately 39 000 tons from 1999 to 2016. The benefits of pursuing the prevailing quality standards amounted to R400 million while the costs amounted to R514 million, far exceeding the benefits. The resulting benefit-cost ratio was 0.78, implying that for every rand invested in breeding for quality alone, 22 cents is lost. It can be concluded that government intervention through quality standards has led to more losses than gains. In addition, investments made towards quality improvement alone have not been recovered due to the high standards. There are therefore cogent reasons to consider relaxing the quality standards to allow for higher wheat outputs, thus unlocking growth in local wheat production. [ABSTRACT FROM AUTHOR]

It is well accepted that biological innovations, particularly varietal improvements, have greatly contributed to agricultural yield and output growth in the past. At the same time, public funding for breeding programmes such as at the Agricultural Research Council in South Africa has dwindled. In an effort to confirm the importance of continued funding of varietal improvement programmes, this paper estimates the benefits from wheat varietal innovations and attributes them to the different institutional sources (public, private and others) that have contributed to varietal changes in South Africa. The empirical analyses used data on market shares of wheat varieties planted by farmers and annual quantities of wheat produced across different wheat-production areas in South Africa (summer dryland, dryland winter, and irrigation). A vintage regression model was estimated to calculate the proportional yield gain from wheat varietal improvements. The results indicated that the rate of gain in yield as a result of releases of new wheat varieties (variety research) was 0.8 per cent per year (equivalent to 19.84 kg/ha/year) for dryland summer varieties, and 0.5 per cent for both irrigation (equivalent to 32.20 kg/ha/year) and dryland winter varieties (equivalent to 16.65 kg/ha/year). The attribution of benefits among different institutional sources confirms that not accounting for attribution of benefits by source and time period results is overestimation of benefits to any specific research programme. Attribution of benefits by institutional source showed that Sensako dominated, while the share of the ARC-SGI substantially declined, after deregulation of the wheat sub-sector. The results highlight the impact of the decline in public funding for wheat variety improvement research after deregulation and provide a strong argument for continued public funding for variety improvement in South Africa. [ABSTRACT FROM AUTHOR]

This paper reflects on the standing and impact of the work of agricultural economists in South Africa to illustrate the critical decisions faced by the profession as it contemplates its future. The focus is on the agricultural economic scholarship per se and not on the policy and practice issues of the discipline. Following the review of agricultural economic research output in South Africa the paper then also raises questions about relevance and impact of the discipline and the quality of training. Given these concerns the paper makes the case for improved coordination and perhaps consolidation of the discipline and presents a proposal for the establishment of a national institute that will consolidate and improve training at the various universities as well as adequately fund and direct research. [ABSTRACT FROM PUBLISHER]

Although South Africans are not predominantly wine drinkers, the industry is exploring ways to develop the local market to balance exports. The black middle class, increasingly referred to as the 'Black Diamonds' are the most powerful marketing trend during the last 10 years, as they have emerged as the strongest buying influence in the economy, and making inroads in understanding this market presents a good opportunity. The data used in this paper was collected from an integration of a consumer behaviour survey; as well as personal interviews and focus group discussions. The paper asserts that the key factors influencing the South African consumers' behaviour are age, gender, income, race and wine drinking history. The paper also asserts that, not only is the black middle class different from the white middle class, but that different segments exist within the 'Black Diamonds'. The industry should particularly focus on marketing to women and the 'Start-me-up' age group, as there is limited consumer knowledge about wines, but a high willingness to experiment. The paper also suggests various new brand communication platforms that can be explored to reach this market as well as competition between industry stakeholders. [ABSTRACT FROM AUTHOR]

This paper argues that within the range of complementary activities necessary to secure the food security of marginalised groups in South Africa in places such as Greater Sekhukhune, the aspect of agricultural production is often neglected. A comprehensive approach to food security should focus on exploiting opportunities around increasing local food availability through production, as well as stimulating food accessibility by, for example, supporting small enterprises through micro-credit, and supporting food utilisation through education. In this way a range of options is created that vulnerable people can adopt to promote their livelihoods beyond survivalist strategies. This paper explores the issue of agricultural production within Greater Sekhukhune to provide insights into the challenges facing a comprehensive food security strategy that would guarantee food supply through a range of interventions. The study in the Greater Sekhukhune District in Limpopo Province was conducted through two sets of household surveys (2004 and 2006) and the responses to the agricultural production part of these surveys are discussed. Marked changes from 2004 to 2006 were observed. For "agrarian reform" to be a success, the necessary institutional framework needs to be in place to enable a broad range of services from government and non-governmental actors. The facilitation of such "joined up government", although in existence in theory, requires concerted political will to become a reality. [ABSTRACT FROM AUTHOR]

With South Africa's urban population approaching 60%, supermarkets and fast food chains have become important players in the South African food system. These large players in the food sector have systematically modified their procurement practices especially with regard to fresh fruit and vegetables and are now circumventing spot markets in favour of sourcing via in-house sourcing companies who mainly procure from preferred supplier producers. This paper draws extensively from a global research programme which seeks to highlight the market changes that potentially contribute to continued exclusion of the small producers from mass consumer markets. This paper illustrates, through a series of case studies, how integration of small-scale farmers into the urban retail market can be facilitated and how the challenges posed by the changing food system could possibly be overcome. The case studies illustrate various initiatives through which small-scale farmers and agribusinesses can be integrated into mainstream agri-food systems and may be used as models for an innovative approach to include small-scale farmers while still maintaining profitable business operations. They highlight the need for a multi actor approach for the successful participation of smallholder farmers in order to allow them to join the supply chain at any point within the channel. [ABSTRACT FROM AUTHOR]

This paper applies a discrete choice model to determine specific characteristics that influence South African grain farmers' preferences to hedge against uncertainties. This is the first empirical study on South African grain producers' preferences to adopt derivative contracting and is based on the survey, data of Grain South Africa for 2006. With the application of separate binary logit models for each major grain commodity, this paper establishes that different grain farmers are significantly heterogeneous. The results also show that grain farmers' preferences to adopt derivative contracting are mostly influenced by the farmers' prediction of daily grain prices and trends, farm size and various geographic characteristics. From a policy perspective it hag been indicated that food and income insecurity will be reduced if farmers can adopt derivative contracting at large scale since it will enable the producers to produce staple food on a continuous basis at a relatively profitable level. [ABSTRACT FROM AUTHOR]

This paper presents an overview of contracting arrangements in agribusiness procurement practices in South Africa. The objective of this paper is to contribute to a better understanding of the structures and issues of raw commodity procurement in South African agribusiness supply chains. The results suggest that a wide range of institutions are employed to procure raw commodities for the South African agro-processing sector and that companies are increasingly moving away from the open market as a source of supply for raw commodities, and are utitising contractual arrangements instead. According to the main findings, 78.5% of the total volume of fruit and vegetables procured by agribusiness companies for processing is based on some form of contracting arrangement. The balance is procured through a combination of the open market, own estates, agents and imports. It is only in the case of potatoes, onions, beans and peanuts that a stronger reliance on the spot market is evident. South African retailers source 70% to 100% of their fresh produce directly from farmers (usually through growing programmes). The procurement of meat, poultry and eggs appears to favour vertical integration (and in some cases own production), medium- to long-term contracts and long-term 'informal' supply arrangements with selected groups of farmers. [ABSTRACT FROM AUTHOR]

Fresh water resources provide a platform for complex and often emotional issues to develop, particularly in resource scarcity situations. Bulk water infrastructure contains elements of a public good and proved vulnerable to failures in market and government driven allocation strategies. Common to both are uncaptured costs and benefits due to shortcomings in cost quantification techniques. Natural ecosystems stands to lose the most since ecosystem services are often not quantifiable in monetary terms and therefore neglected in allocation decision-making. This paper took on the challenge of expanding current decision-support in order to promote more inclusive long-term water management. A case-study approach with the focus on a choice related problem regarding different long-term bulk water resource management options was applied in the Western Cape province. The paper incorporated components of economic valuation theory, a public survey and a modified Delphi expert panel technique. Both spatial and temporal dimensions of the decision-making context were expanded. Two surveys were completed to accommodate these expansions. The first focused on public preference in water allocation management and the relative merit of accommodating public preference in highly specialised decision-making such as long-term water allocation decision-making. The second survey utilized a modified Delphi technique in which an expert panel indicated the relative merit of two alternative long-term allocation strategies. A willingness to pay for "greener" water was observed and may be used to motivate a paradigm shift from management's perspective to consider, without fear of harming their own political position, "greener" water supply options more seriously even if these options imply higher direct costs to public. [ABSTRACT FROM AUTHOR]

This paper reports on a survey of municipal commonage users, which was undertaken in Philippolis in the southern Free State, in May 2005. The survey showed that a significant number of commonage users are committed to their farming enterprises, as shown by five proxy indicators: Their readiness to plough their income into their farming enterprises; their sale of livestock; their desire for more land, and their willingness to pay rental to secure such land; their desire to farm on their own; and their desire to own their own land. The paper reflects on the significance of commonage in the context of the South African government's land reform policy, and argues that commonage can transcend survivalist or subsistence production, and can be used as a "stepping stone" for emergent farmers to access their own land parcels. Finally, the paper argues that, if commonage is to become a key part in a "step-up" strategy of land reform, then appropriately sized land parcels should be made available for commonage users, to enable them to "exit" from commonage use and invest in smallholdings or small farms. [ABSTRACT FROM AUTHOR]

This paper develops the structure and closure of an econometric regime-switching model within a partial equilibrium framework that has the ability to generate reliable estimates and projections of endogenous variables under market switching regimes. Models used in policy evaluation usually either ignore the possibility of regime switching using just a single method of price determination based on average effects, or incorporate highly stylised components that may not reflect the complexities of a particular market. This paper proposes an approach that the authors believe allows the incorporation of features of regime switching in a multisector commodity level model that capture salient features of the South African market and therefore are able to produce more reliable projections of the evolution of the sector under alternative shocks. [ABSTRACT FROM AUTHOR]

This paper provides an overview of the main research contributions of the past decade using general equilibrium models to analyse agricultural issues in South Africa. The methodological developments since the change to democracy ten years ago are viewed in the context of developments in this area of research carried out internationally. It will be shown in this paper that the modelling and computing techniques have vastly improved during the past decade, both in an ongoing attempt to refine existing models, and in an attempt to extend the modelling framework to make provision for issues that cannot be sufficiently captured in the standard comparative static models. These extensions include dynamic modelling, global modelling, environmental modelling and micro simulation. The paper highlights the non-trivial data requirements of this type of modelling. The national statistical agency, Statistics South Africa, supports general equilibrium modellers by their development of input-output tables, social accounting matrices and, more recently, supply and use tables. This decade has therefore witnessed an improvement in the data for the construction of national level social accounting matrices. Requirements for provincial level data have however not been met sufficiently, posing huge challenges for provincial and regional modelling. The lack of primary data has however stimulated development of advanced data estimation techniques that can be applied to overcome this data challenge. Application of general equilibrium techniques to analyse agricultural issues in South Africa still remains limited and substantial support and training of researcher is still needed to expand domestic capacity in this field of research. [ABSTRACT FROM AUTHOR]

This paper assesses the likely impact on the agricultural sector of the Southern African Development Community (SADC) countries of the Harbinson modalities, along with the EU and US proposals as alternative scenarios in the context of the ongoing negotiations of the WTO Agreement on Agriculture, Impacts are assessed on a number of indicators, notably government revenue, producer, consumer and total welfare measures and trade flow. Reflecting country- and commodity-specific factors, the three modalities have different impacts on the indicators. The SADC as a whole is found to lose in terms of total welfare under all three proposals. But while this loss under the Harbinson and EU proposals is due to declines in consumer surpluses and government revenues, reduced producer surplus and government revenue explain the loss in total welfare under the US proposal. Thus, the ranking of the modalities differs according to the impact indicator used, revealing important trade-offs in the choice of the modalities. An issue raised is the value of consumer gains relative to producer gains for low-income economies highly dependent on agriculture because for them effective demand for consumption itself depends on incomes generated from increased agricultural activities, which in turn requires sustained gains in producer surpluses. The paper presents a range of results and discusses the trade-offs, with the hope that SADC trade negotiators and policy makers find these to be useful as they negotiate for the final form of the modalities. [ABSTRACT FROM AUTHOR]

In light of its recent classification by the Department of Trade and Industry as an industry in distress, this paper undertakes a comprehensive evaluation of the competitiveness of South African broiler production in the global context. A qualitative review of industry structure revealed a great deal of similarity to market leaders globally. Price formation within broiler production contracts in South Africa utilizes the same tournament pricing used successfully in the USA, resulting in high levels of technical efficiency, however economic efficiency is lacking. Univariate time series analysis confirmed that the domestic price of chicken is more elastic to changes in the import parity price than changes in feed costs. Feed remains crucial to economic efficiency and while declining protein meal prices in the future is plausible given recent investment into the industry, marketing strategies that optimize the returns from an entire carcass could aid effective competition with imported products. [ABSTRACT FROM AUTHOR]

The paper employs a gravity model to measure the trade effects of technical barriers in South Africa's major markets for oranges. The gravity model estimation is backed by a price-wedge framework that identifies technical barriers (equivalent to tariffs) that could be restricting South Africa's orange exports. The simulation of the gravity equation shows that removing technical barriers will have a 0.1% increase in South Africa's orange exports to the EU, suggesting that the growth potential of the EU market is somewhat limited by some additional factors such as low demand growth, and South Africa's diversion to higher-return markets. Nonetheless, reducing technical barriers still has a fairly significant impact on South Africa's other major markets, particularly China, the United States, Canada and Russia. This is an important result, not only because the analysis generally affirms the tightening of technical barriers in key markets, but also because the analysis unpacks the cross sectional idiosyncrasies of technical barriers across major export markets. [ABSTRACT FROM PUBLISHER]

Agricultural land is the preferred form of collateral used by financiers to finance South African farmers. The objective of the paper is twofold; firstly, to determine the valuation methods used by financiers in determining the value of agricultural land used as collateral, and secondly, to determine the correlation between the agricultural land value and the amount of financing provided. Interviews were conducted with five respondents representing the Land Bank, three of the four largest commercial banks and an agricultural company. It was found that the market value approach and the income capitalisation approach are considered to be the most suitable valuation techniques. It was furthermore found that the amount of finance provided is based on varying percentage adjustments made to the value of agricultural land. The practical policy implication is that it is imperative that reliable governmental statistics on agricultural farm values and sales be re-established to encourage conformity among financiers in market value valuations. [ABSTRACT FROM PUBLISHER]

Despite volumes of research and substantial investments by government, the financial performance of smallholder farmers in South Africa remains poor. The past decade saw little change in the general behaviour of smallholder farmers, and the stumbling blocks faced by smallholder farmers who want to participate in commercial agri-food chains. A possible reason may be that researchers tend to focus on the current behaviour and performance of the farmers while neglecting the influence of the incentive structure on their behaviour. The aim of this paper is to develop a conceptual framework that allows for a more holistic analysis of farmers and their value chains to better understand the reasons underlying current behaviour, and to identify potential solutions to change the behaviour of the farmers and relevant role-players to better match the requirements for successfully participating in competitive agri-food chains. The integrated value chain, New Institutional Economics – Structure-Conduct-Performance framework, does allow for a comprehensive analysis of the incentive structure embedded in the social, physical and institutional environment within which the farmers operate. Special attention is also awarded to the relationship between the farmers and their buyers to identify the appropriate coordination strategy that will minimise transaction costs. [ABSTRACT FROM PUBLISHER]

Fairtrade initially was limited to improving the lives of small-scale and peasant farmers, but later on it embraced commercial farmers, which attracted criticism. While there are a number of justifications for the Fairtrade organization's decision, there are authors who feel that meaningful “fair trade” cannot be achieved with the inclusion of commercial farms. This paper investigates the impact of Fairtrade on commercial farms and small-scale farmer cooperatives in South Africa. Fairtrade on South African commercial farms embraces a number of policy concerns related to land reform, BEE and sustainable development. The results of the study show that when commercial farms are included in the Fairtrade model, communities in which these farmers live benefit from developmental projects. In addition, in some instances, farm workers gain shares in the commercial farms, and benefit from the farm owners’ knowledge and capital. [ABSTRACT FROM PUBLISHER]

The paper aimed at drawing up a list of food pricing strategies that could be used to promote healthy eating and address food insecurity by soliciting expert opinions using the Delphi method. Respondents represented the broad spectrum of the food industry and data were collected in three rounds. The participants were selected purposively according to their experience in the food industry and marketing of agricultural and food products. In round one, experts designed promising pricing strategies. The pricing strategies were divided into four broad categories and these were: A. Taxes; B. Government interference and insurance; C. Packaging; and D. Price and discounting strategies. The strategies were subsequently evaluated on eight criteria using a time-budget model incorporating Sleep, Leisure, Occupation, Transportation and Home-based activities (SLOTH). Results were analysed using median and inter-quartile deviations scores. The results revealed reasonable consensus among experts and a varied list of promising pricing strategies. The panel agreed on the potential success of offering small gifts, providing price cuts on healthy foods and discounting healthier foods more frequently. Also, it was found that experts gave higher rates to pricing strategies for which the implementation responsibilities could be placed elsewhere. [ABSTRACT FROM AUTHOR]

The aim of this paper is to extend existing research that analyses technical and allocative efficiency and its determinants by quantifying and comparing the potential financial gains from improving technical and allocative (cost) efficiency levels of emerging raisin producers from Eksteenskuil in the Northern Cape Province of South Africa. Results show that, at whole farm level, the average financial gains in margin above variable costs from improving technical and cost efficiency amount to R21 335 and R21 581, respectively. Importantly, the gains represent potential increases of 246% and 249%, respectively, in margins above variable costs. Improving the levels of efficiency with which the farmers use their inputs thus may contribute substantially to increase the contribution of raisin production to the livelihoods of raisin farmers from Eksteenskuil. The close comparison of the potential gains suggests that the current emphasis of extension services on maximising output levels should be extended to also promote the use of inputs in cost minimising combinations. Farmer-to-farmer skills transfer has a major role to play in supporting the farmers to use their inputs in a technically efficient manner. Extension officers and other support services should pay more attention to developing the skills of the farmers to be able to select the least cost combination of inputs. [ABSTRACT FROM AUTHOR]

Urban agriculture is potentially an important element of land reform and economic development programmes in South Africa. The social value of urban agriculture, such as improving food security, developing a sense of community and promoting ecological conservation, is well documented. But in order to effectively contribute to development agendas, urban agriculture must also present viable, sustainable economic opportunities. This study sets forth vegetable box schemes as a context-appropriate, economically feasible urban agriculture enterprise for which there is growing consumer demand. A survey of 354 subscribers to vegetable box schemes in Cape Town is analysed, finding these households source half of their fresh produce and a quarter of their total groceries from box schemes. The study explores dimensions of consumer satisfaction and considers ways in which box schemes may be expanded. This paper also offers a brief comparison of different box scheme models in order to demonstrate that a development-oriented social enterprise model can compete with other for-profit models in the market. [ABSTRACT FROM AUTHOR]

Weather index-based crop insurance offers farmers a way to mitigate production risk without the moral hazard, adverse selection and high administrative cost problems that plague conventional loss-based crop insurance. This is especially important for developing countries that lack government subsidised crop insurance programmes and high quality yield records. In this paper, we analyse weather-based crop insurance theoretically and provide an empirical application to South African maize producers. We examine several weather indices, investigate the farmers’ demand with and without loaded premiums, and evaluate the benefits of weather index-based insurance to farmers with alternative risk preferences. Results show that the risk management efficiency of a contract has direct bearing on how well the index describes the production variability, especially a combination of two weather variables tend to describe production risk better than any single variable. [ABSTRACT FROM AUTHOR]

The advent of grid electrification in the Sandveld region of South Africa in the 1980s increased the utilisation of groundwater resources for commercial irrigation purposes. In the wake of the consequent increased pressure on the resource, it behooves landowners to use water more productively and responsibly. This paper calculated the marginal product value (MPV) of irrigation water for potatoes and vine production in this region to assess and to allow the comparison of the productivity of irrigation water with other commodities and regions. However, the results suggested that the scope for leveraging changes to water use behaviour in the Sandveld solely through water pricing is limited. Given that electricity is a critical input for the utilization of groundwater, we suspect that the price of electricity would be a suitable lever to influence irrigation behaviour. In light of the imminent Government electricity price hikes, we advise some further investigation on the impacts these impending hikes will have on irrigation farming in the study area. We suspect that pumping costs (as opposed to the price of water itself) will become the most limiting factor for irrigation water use in the Sandveld in the foreseeable future. A mixture of water and energy pricing strategies therefore lends itself as a more pragmatic policy approach to follow in order to influence irrigation behaviour, as opposed to a sole focus on water pricing. [ABSTRACT FROM PUBLISHER]

This paper considers epistemology in economics, looking at the ways in which theory, observation and measurement are combined. Agricultural economics is a policy science and so scientific research programmes operate simultaneously with political action programmes. Taking policy positions and advising government makes scientific detachment impossible. With this as background progress in production economics is considered, especially regarding technology, productivity and the returns to R&D. The position taken is that progress has been considerable and we can by now measure technological progress and show how it is generated by agricultural R&D. Almost all the studies show that this is an investment with a high rate of return. The main point of the study is that almost all the agricultural economics research that has made this possible was conducted in the USA, where the theory and data were in place when needed to convince the politicians that public funding should be maintained at adequate levels. The payoff is that agricultural productivity has grown monotonically in the USA. The UK case shows the costs of our profession failing to mount an effective political action programme in the area at time of Mrs Thatcher's cuts in the early 1980s. The result was about sixteen years of negative productivity growth. This should act as a warning for South Africa, which is pretty clearly cutting R&D and following the UK productivity path. These failures are so costly, it is odd that only USA seems to have the knowledge and funding required for steady productivity growth. [ABSTRACT FROM PUBLISHER]

The European Union (EU) has remained South Africa's biggest trading partner, with total exports destined for the Union constituting about 30 per cent of South Africa's total exports in the last ten years. However, owing to recent developments, new market opportunities, especially in the developing world, have emerged, with countries like China capturing some of South Africa's total exports. Analysts like Sandrey and Jensen (2007) have argued that such developments signal a significant change in the relevance of the EU as South Africa's main trading partner. This paper, however, argues that, even with the rise of emerging markets, South Africa still needs to take the EU seriously and remain strategic in its relationship with the Union. Even though total export flows to countries like China have risen exponentially since 2005, they still constituted only about 5 per cent of South Africa's total exports in all other sectors in 2008. More specifically, agricultural export data shows that, since 1997, EU-destined exports in the sector have been growing at a rate above that of agricultural exports to the world. The trends could imply that the ongoing implementation process of the Trade, Development and Cooperation Agreement (TDCA) between the EU and South Africa remains relevant for economic growth and probably for poverty alleviation as well. [ABSTRACT FROM PUBLISHER]

Most South African farmers employ standard insurance to protect crops from natural disasters such as hail or strong winds, but no insurance contracts exist to compensate for rain damage (although floods are covered), or for temperature damage to relevant crops. Weather derivatives do exist, but are mostly available in foreign markets and used chiefly by energy companies. Some South African over-the-counter weather derivatives are available, but trading is rare. This paper establishes a pricing equation for weather derivatives specifically for use in the South African market. The methodology employed borrows heavily from the techniques used to price credit default swaps. [ABSTRACT FROM PUBLISHER]

Global biofuel production has risen substantially in recent years, principally driven by government support for these industries. The stated motivations for these initiatives are numerous and have varied over time. This article presents a review of some important economic aspects of the most widely used biofuel and related policies around the world, and provides some theoretical and empirical evidence of these initiatives. The South African government's current biofuel policy stance is also evaluated, with concerns expressed over the fact that the commitment to the White Paper on Renewable Energy (DME, 2003) is not binding. Continued technological advancements, infrastructure development, and government interventions will be central to the future developments of biofuel industries, both locally and globally. [ABSTRACT FROM AUTHOR]

This paper focuses on estimating the effect of drainage water reuse on the technical efficiency of small-scale vegetable growers in South Africa applying a data envelopment analysis (DEA). In the semi-arid North West Province of South Africa water scarcity and the soon to be implemented water charges have urged farmers in small-scale irrigation schemes to evaluate the efficiency of their water use. Data on 60 farmers were used to estimate the level of technical efficiency and the effect that drainage water re-use could have on efficiency levels. This effect of water reuse was simulated by a 5, 10, 15 and 20 per cent reduction in water use at farm level. A Malmquist productivity index was calculated to evaluate the effect of these reductions. The main finding was that under current farming conditions many farmers operated at suboptimal levels of technical efficiency. While a reduction in water use evidently increased factor productivity for most farms, the effect clearly varied strongly between farms. This confirms the need to take a systems approach for this type of evaluations. [ABSTRACT FROM AUTHOR]