Dominant factors which influence wheat production in South Africa

Bester, Marius (2014-04)

Thesis (MComm)--Stellenbosch University, 2014.

Thesis

ENGLISH ABSTRACT: The protection of South Africa’s agricultural sector and in context, the wheat industry, is vital to ensure the food security and rural development of the country. The wheat industry contributes about R 4 billion to the gross value of agricultural production in South Africa and currently provides about 28 000 job opportunities. Preceded by maize, wheat is the second most important grain produced in South Africa. The phasing out of the Wheat Board in 1997, which led to the deregulation of South Africa’s wheat industry, has exposed the market price of wheat to international market forces. Post-harvest agricultural logistical services have also been transformed by the deterioration of agricultural infrastructure, leading to the employment of alternative transport and storage systems. Wheat production in South Africa has decreased significantly over the past two decades. The wheat industry is currently struggling to generate sufficient revenue for it to remain a financially viable crop. Producers are either shifting their focus to more profitable commodities or are abandoning farming altogether. It is the objective of this study to describe and define the dominant factors which influence wheat production in South Africa. This includes all the relevant post-harvest logistical activities and market related forces which influence the production volumes of wheat in South Africa. A qualitative research approach was undertaken to gather input data for the research presented. This was inclusive of liaising with producers as well as expert interviews with members in the wheat value chain. This provided unique and valuable insights into the dominant factors influencing wheat production in South Africa. The research presented in this thesis concluded that wheat production in South Africa is being negatively influenced by a decrease in the market price of wheat and a further increase in the cost of post-harvest logistical services. Furthermore the market price of wheat is being lowered by the implementation of an open market policy which allows the importation of cheap subsidized wheat. The cost of post-harvest logistical services has increased due the inefficiency of transport services resulting from a deteriorated transport infrastructure. In order to sway preference to wheat production in South Africa, government support will be required in the form of import tariffs, used to protect local farmers, and agriculture infrastructure development, which will be required to decrease the cost of post-harvest logistical services.

AFRIKAANSE OPSOMMING: Die beskerming van die Suid-Afrikaanse landbou-sektor en in hierdie konteks, die koringbedryf, is noodsaaklik vir die versekering van voedselsekuriteit en landelike ontwikkeling in Suid-Afrika. Die koringbedryf dra ongeveer R4 miljard tot die brutowaarde van landbouproduksie in Suid-Afrika en bied tans sowat 28 000 werkgeleenthede. Voorafgegaan deur mielies, is koring die tweede belangrikste graan wat in Suid-Afrika geproduseer word. Die uitfasering van die Koringraad in 1997, wat gelei het tot die deregulasie van Suid-Afrika se koringbedryf, het gelei tot die blootstelling van die markprys aan internasionale markverwante kragte. Na-oes landbou logistieke dienste is ook verander deur die agteruitgang van landbou-infrastruktuur, wat gelei het tot die ontwikkeling van alternatiewe vervoer- en berging stelsels. Koringproduksie in Suid-Afrika het oor die afgelope twee dekades beduidend afgeneem. Die koringbedryf sukkel tans om voldoende inkomste te genereer vir produsente. Produsente verskuif tans hul fokus na meer winsgewende kommoditeite of laat vaar boerdery heeltemal. Dit is die doel van hierdie studie om die faktore te beskryf wat koringproduksie beïnvloed in Suid-Afrika. Dit sluit in na-oes logistieke aktiwiteite en markverwante kragte wat die produksie-volumes van koring in Suid-Afrika beïnvloed. 'n Kwalitatiewe navorsingsbenadering is onderneem om insette in te samel vir die navorsing wat aangebied word. Dit sluit in onderhoude met produsente, sowel as deskundiges in die koring-waardeketting. Dit het ‘n unieke en waardevolle insig gelewer in die dominante faktore wat koringproduksie in Suid-Afrika beïnvloed. Die navorsing wat in hierdie tesis onderneem is het tot die gevolgtrekking gekom dat koringproduksie in Suid-Afrika negatief beïnvloed word deur 'n afname in die markprys en 'n toename in die koste van na-oes logistieke dienste. Die markprys van koring word verlaag deur die implementering van 'n opemark beleid wat die invoer van goedkoop gesubsidieerde koring toelaat. Verder het die koste van na-oes logistieke dienste toegeneem weens die ondoeltreffendheid van vervoer, bygedra deur ‘n verswakte vervoerinfrastruktuur. Om voorkeur terug na koringproduksie in Suid-Afrika te swaai, sal dit die ondersteuning vereis van die regering deur die implementering van invoertariewe, wat beskerming sal bied vir plaaslike boere, asook landbou-infrastruktuur ontwikkeling, wat die koste van na-oes logistieke dienste sal verbeter.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/86586
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