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Using local provincial authorities, the government of Zambia has demonstrated renewed interest in cooperatives as a means of reaching smallholder farmers in rural areas. There exists, however, the ...

Stochastic efficiency with respect to an exponential utility function was used to determine utility-efficient water-conserving irrigation schedules for wheat and maize based on certainty equivalents. Total gross margin risk resulting from production risk of alternative deficit irrigation practices was quantified using an irrigation simulation model and stochastic budgeting procedures. Results showed increasing production variability with increasing levels of deficit irrigation, especially when rainfall has significant potential to contribute to the production process. Risk-averse decision makers are more willingly to adopt deficit irrigation schedules for maize due to increased effective rainfall. The conclusion is that the potential to use rainfall more effectively through deficit irrigation is a key variable determining adoption of deficit irrigation strategies by risk-averse decision makers. Localized weather forecasts may improve acceptance of deficit irrigation by risk-averse decision makers. The value of information for weather forecast might be low because of high risk premiums placed on full irrigation by risk-averse decision makers.

In this article a mathematical model is presented to assist management decisions on an integrated crop and livestock farm. Risk is incorporated into the model as the negative deviation of the actual gross income from the expected value of an activity's gross income. The model includes crop production (permitting and optimising a crop rotation system), dairy production and wool sheep production. Relevant data from a farm in the Swartland region of the Western Cape were used to test and validate the model. The results show that the adoption of crop rotation is superior in terms of gross margin to that generated from a mono-crop strategy. Empirical results also indicate that the complex interrelationships involved in a mixed crop-livestock farm operation play a major role in determining optimal farm plans. These complex interrelationships favour the introduction of crop rotation in the crop production activities of the farm under investigation. Solutions of the model with risk indicate that the crop rotation strategy and animal production levels are sensitive to different risk levels, and that the incorporation of risk greatly affects the level of land allocation to crop rotation and animal production level of the farm. Finally, the results suggest that the introduction of crop rotation is of paramount importance in improving the profitability and sustainability of the farm, thus the inclusion of forage crops such as medics into the integrated crop-livestock production is beneficial for sustained profitability.

This research focuses on the production practice of limited tillage, which is used to reduce input costs. The implementation of limited tillage causes mechanization changes, which in turn, results in higher fixed cost and lower variable cost. The hypothesis claimed that profit could be increased, thus motivating for the promotion of limited tillage for smallgrain production. Two farms in each of four subregions in the Southern Cape served as case studies. The conventional and limited tillage practices of each farm were analysed and evaluated by an expert group. In order to compare the profitability of the various crop rotation systems, an annuity of the total present value of the annual gross margin per hectare of each crop rotation system was calculated. The analyses showed that the crop rotation systems of the various case studies differed significantly, due to soil and climate differences between and even within the subregions. No uniform crop rotation system was found that could serve as a ge...

The results of this survey of 100 smallholders in the Makhathini Flats, KwaZulu-Natal give cause for cautious optimism regarding the impacts of Bt cotton. Farmers who adopted Bt cotton benefited from the new technology, according to all the measures used. Average yield per hectare and per kilogram of seed was higher for adopters than for non-adopters. The increase in yields and the reduction in chemical application costs outweighed the higher seed cost, even in a poor production season due to unusually heavy rainfall. Bt adopters suffered far less of a fall in yields than those who did not adopt. As yields and gross margins are partial measures of efficiency, deterministic and stochastic efficiency frontiers were measured. Both methods confirm the farm accounting results, showing that Bt cotton adopters were more efficient. For 1998, the results showed that adopters averaged 88% efficiency, as compared with 66% for non-adopters. In 1999, the equivalent figures were 74% and 48%. Similarly, the determinist ...

A non-parametric data envelopmentanalysis (DEA) is usedto measurethe rc/ative efficiency of wool production on farms in theformer Transkei. The agricultural activities on thefarms are merely non-commercial. Wool is consideredas a by-product of keeping sheep,which are slaughtered on specialfamily occasionsor sold live. A sampleof farmers in three villages of theformer Transkei (Mhlahlane, Xume and Luzie) was interviewed. In Luzie a shearing shed was built to organise the marketing of the wool, leading to a higher revenuefrom wool. The farmers however are not able to convert this into a positive gross margin. A small number of farms succeedsin maximising the production of wool given the relative large investment. The negative result of wool farming on the other farms is partly compensatedby high benefits from the sales of live sheep.Also in Xume a shearing shed was built, and extension on production practices is provided. But no marketing of wool through the shearing shed was done at the time of the survey. The existenceof a shearing shed should be essentialfor a higher retail price for wool and extellsion doeshavea positive influence on the benefitsof the farms. However, the production practices are not adaptedto the production of wool only, so that the useof inputs is too high for thegeneratedoutput.

This paper shows the development of a trade simulation model for the South African fresh orange industry using the programme STELLA. The model consists of seven production models (for different regions and cultivars), a local market model, an export model and an exchange rate model. Production models run on an annual basis, whereas trade models run on a monthly basis to capture seasonality of fresh orange markets. This model compares a base scenario with a scenario of the Free Trade Agreement between South Africa and the European Union. Results indicate that the Free Trade Agreement has minor positive effects on the South African fresh orange industry. The difference in gross margins in 2011 is predicted to be approximately two percent. This is lower than the tariff cut in the months June until September because of no benefits on the local market and in other months on the European Union market.

The Small Grain and Grain Crops Institutes, both of the Agricultural Research Council, found that the gross margin of maize monoculture was higher than any other crop rotation system tested in a trial. In this paper the effect of different crop rotation systems on net cash flows are quantified. A whole farm simulation model that incorporates risk was used for this purpose. From a net cash flow point of view maize monoculture was found to be the riskiest. However, the choice of a crop rotation system depends on the risk preference of the decision-maker since higher risks are also associated with higher profits.

Using experimental data from the northern Namibia pearl millet based subsistence sector the gross margins (GM) and savings on food expenditure (SFE) were computed and compared. The value to cost ratios from the SFE approach were higher than those from the GM approach implying that investment into the selected technologies would be more attractive under subsistence production than under commercial production. This underlines the importance of change agents not to change the farmers' target for farming. Furthermore, it helps explain why subsistence farmers continue to farm when all GM calculations show that they are always loosing money.

The purpose of this research was to determine whether the Marico-Busveld Goverment Water Scheme can be successfully privatised. Representative farming units were developed and Dynamic Linear Programming was used as a diagnostic technique to model a planning horison of twenty years. The time value of money was calculated by discounting cash received against a chosen interest rate. The expected cash flow can then be expressed in a single value. The present value of the incremental capital expenditure is subtracted to obtain the net present value. Results show that two of the three representative farming units are financially viable after privatisation. The third representative farming unit will only be viable if gross margins are increased. The scheme can successhllv be privatised only if better management is applied at farm level.

This article concentrates on the optimal replacement of seedling tea by higher yielding clonal varieties. A hypothetical 500ha tea estate under seedling tea is used for this purpose. Representative yields, revenues, costs and replacement data with respect to the hypothetical 500ha tea estate are discussed first. This is followed by a gross margin analysis. However, as this produces only partial answers which may be misleading, a whole farm approach to the replacement problem is subsequently taken. Dynamic linear programming is used to derive economically optimal replacement strategies over a 30 year planning horizon, given certain yield and price scenarios. Some conclusions are also drawn.

Results obtained with stochastic dominance, linear risk-programming (MOTAD), regression line evaluation and expected value calculations on maize-cultivar selection under varying circumstances were compared. Maize cultivar trial results of four localities over 14 years were used. Two levels of management were included. Cultivar selections obtained by the different methods show a remarkable similarity. This is probably the result of the relative normal distribution in cultivar gross margins. The largest single disadvantage of cultivar selection by adaptation regressions and expected value calculations is that it considers only the value of the gross margin and largely ignores the variance. This can lead to selection of ill-adapted cultivars. Stochastic dominance and MOTAD take both the expected value and variance into consideration. MOTAD is particularly useful as it invariably selects cultivar combinations.