Search

The study used a stochastic metafrontier model followed by a Tobit regression model to estimate technical efficiency and meta-technology ratios and assess factors influencing efficiency of a suite of beef farm types in Botswana. Results show that the average technical efficiency level is 0.496 for the whole sample and 0.355, 0.463 and 0.571 for beef farms who engage in cattle only, cattle and crop, and cattle, crop and small stock farming, respectively. Considerable scope is identified for improving beef production in Botswana, and targeting is enabled by the differential results across the farm types. Policy analysis using models that assume different beef farm types operate under similar technology are therefore presenting a misleading picture. Considering the importance of livestock sector in poverty reduction, there is a need for appropriate policies directed towards enhancing efficiency. Especially, such policies should be targeted on provision of technology-related services such as controlled breeding methods.

The livestock sector is vital to Botswana’s rural economy comprising nearly two-thirds to the national agricultural sector. The goal of this research is to measure competitiveness and identify the factors affecting it, so as to advocate change in Botswana’s smallholder livestock systems. The study examines a cross section of farm-level data gathered from 556 randomly selected livestock producers to investigate the profit efficiency and competitiveness of three farm size categories of small holder livestock farmers. Results found a considerable capacity to improve beef profitability. Scale effects on profit efficiency are generally positive, but the results indicate a number of interactions between scale and other variables such as off-farm income and the use of credit. Policy analysis and commercial decisions using models that assume efficiency are therefore presenting a misleading picture, particularly on the elusive subject of Botswana smallholders’ beef supply response., The International Food and Agribusiness Management Review is published quarterly by IFAMA. For more information visit: www.ifama.org.

A central problem in estimating per unit costs of production originates from the fact that most farms produce multiple outputs and standard farm-accounting data are only available at the whole-farm level. The seemingly unrelated regression (SUR) approach is used to estimate per unit production costs based on German farm accountancy data. Special emphasis is put on outlier detection prior to the estimation of production costs to increase the robustness of the results. Outlier observations are identified based on the Mahalanobis distance for each observation on the data set. It was observed that less negative cost coefficients are estimated after the exclusion of the outliers. The time series analysis of cost estimation based on SUR regression shows the costs of arable crops after 2004, affected by rising prices of fertilizer, seeds and energy, while the increase of livestock production costs after 2006 is attributed to feed costs.

According to the RCA and RCA# the beef sub-sector in South Africa has shown a revealed comparative disadvantage for 17 out of the 22 years to 2002, while the maize sub-sector showed a revealed comparative advantage for 18 out of the same 22 years. However, this article argues that these results do not show the real state of competitiveness that exists in these sub-sectors, mainly because RCA measures should not be used to make definitive conclusions whether an industry, sector or sub-sector is competitive, nor whether it uses scare resources efficiently. RCA measures explain in more accurate ways, relative to a simple analysis of export trends, how a country features in the context of world trade. Hence, one possible application of RCA measures is to deduce the impact of changes in trade policies on an industry, sector or sub-sector. Cognisance should also be taken that the RCA measures fail to distinguish between a region's factor endowments. Finally, it appears as if both the beef and maize sub-sectors have adjusted favourably since the implementation of the Marrakech agreement and subsequent deregulation of the domestic market. Favourably in this context means that both sub-sectors appear to have discounted the changing trade and regulatory environments into their respective supply chains. The question of how competitive these sub-sectors are relative to their international counterparts however remains unanswered, and will require a more in-depth analysis of the complete chains for these sub-sectors.

Trade policies form the main economic 'buffer' between one national economy and another, i.e. the general and specific elements of each nation's trade policy interact directly or indirectly with those of other nations in all economic transactions across international borders. A nation's trade policy involves specific actions to encourage and promote or discourage foreign trade through the legal, financial and institutional environment within which foreign transactions occur. This study evaluates the trade policy applicable to the beef and maize sub-sectors in South Africa. Issues that are investigated include whether trade policy provides more or less protection than needed, whether it creates more openness for trade and the revealed comparative advantage of beef and maize. According to the RCA and RCA# the beef sub-sector in South Africa shows a revealed comparative disadvantage for 17 out of the 22 years since 1980. The maize sub-sector, on the other hand, shows a revealed comparative advantage for 18 out of the 22 years since 1980. It appears as if both the beef and maize sub-sectors have adjusted favourably since the implementation of the Marrakesh Agreement and subsequent deregulation of the domestic market. Favourably in this context means that both sub-sectors appear to have discounted the changing trade and regulatory environments into their respective supply chains. It is however important to take note that the results do not show the real state of competitiveness that exists in these sub-sectors. The reason for this is that the RCA measures should not be used to make definite conclusions whether an industry, sector or sub-sector in a country is competitive nor whether it uses scare resources in an efficient manner. The RCA measures explain in more accurate ways, relative to a simple analysis of export trends, how a country features in the context of word trade. Hence, one possible application of RCA measures is to deduct the impact of changes in trade policies on an industry, sector or sub-sector. Cognisance should also be taken that the RCA measures fail to distinguish between a region's factor endowments. The study also shows that the ERP calculation is lower than the NRP for beef and higher for maize. This means that the protection for inputs is higher than that of the output in the case of the beef sub-sector and vice versa in case of the maize sub-sector. The results from the ERP calculations show that the beef sub-sector is taxed, whilst the maize sub-sector are subsidized. Furthermore, this study recommends the market niche should be exploited more. However it is necessary to give attention to: (i) Small scale farmers (ii) Increased efficiency and (iii) Considering issues such as food safety.