Key factors influencing smallholder market participation in the former homelands of South Africa : case study of the Eastern Cape

Hlomendlini, Pilile Hamlet (2015-12)

Thesis (MScAgric)--Stellenbosch University, 2015.

Thesis

ENGLISH ABSTRACT: This study uses a double-hurdle (DH) model to examine the key factors influencing market participation decisions among maize-producing households in the former homelands of South Africa. In the first stage of the double-hurdle model, using data on South African rural maize growers, the decision whether or not to participate (binary variable) is used to estimate the maximum likelihood estimation (MLE), which is assumed to follow a probit model. In the second stage, the conditional quantity sold (continuous variable) is assumed to follow a truncated normal regression model, whereby the MLE is estimated by fitting a truncated normal regression into the quantity sold. The results of the double-hurdle regression point specifically to five key factors that were found to have a positive statistical effect on rural smallholders’ market participation decisions, and on the conditional quantity of maize they traded (viz. household size, land size, access to credit and government transfers for the first stage, which was estimated using the probit model, and age, education and employment status of the household head, use of tractor when cultivating, government transfers, quantity produced, market price, and own transport to the market for the second stage which was estimated using truncated normal regression). Based on the findings highlighted above, it is recommended that the integration of rural smallholders as market participants cannot be achieved without effective policy interventions that create and sustain an enabling environment that encourages greater participation. This includes improving access to land and road infrastructure; providing extension services and making available relevant advice and information related to both production and marketing aspects; and enhancing the accessibility of both credit and production input.

AFRIKAANSE OPSOMMING: Hierdie studie maak gebruik van die dubbel-hekkie (DH) model om die vernaamste faktore te ondersoek wat besluite oor markdeelname onder mielieproduserende huishoudings in die voormalige tuislande van Suid-Afrika beïnvloed. In die eerste stadium van die double-hurdle model, met gebruik van data oor landelike Suid-Afrikaanse mieliekwekers, is die besluit oor deelname of andersins (binêre veranderlike) gebruik om die maksimum-aanneemlikheidsberaming (maximum likelihood estimation (MLE)) te skat wat aanvaar word om op ’n probit-model te volg. In die tweede stadium is die voorwaardelike hoeveelheid verkoop (kontinue veranderlike) aanvaar om op ’n afgeknotte normale regressiemodel te volg, waardeur die MLE beraam word deur ’n afgeknotte normale regressie in die hoeveelheid verkoop te pas. Die resultate van die dubbel-hekkie regressie dui spesifiek op vyf sleutelfaktore wat gevind is om ’n positiewe statistiese effek op landelike kleinboere se markdeelnamebesluite te hê, en op die voorwaardelike hoeveelheid van mielies wat hulle verhandel (naamlik grootte van die huishouding, grootte van die grond, toegang tot krediet en regeringsoordragte vir die eerste stadium, wat geskat is deur gebruik te maak van die probit-model, en ouderdom, opvoeding en indiensnemingstatus van die hoof van die huishouding, gebruik van trekker tydens bewerking, regeringsoordragte, hoeveelheid geproduseer, markprys en eie vervoer na die mark vir die tweede stadium, wat geskat is met afgeknotte normale regressie). Gebaseer op die bevindings wat hierbo uitgelig is, word daar aangeraai dat die integrasie van landelike kleinboere as markdeelnemers nie moontlik is sonder doeltreffende beleidsingrypings wat ’n instaatstellende omgewing skep en onderhou wat groter deelname sal aanmoedig. Dit sluit in verbeterde toegang tot grond en pad-infrastruktuur; verskaffing van voorligtingdienste en relevante raad en inligting m.b.t. produksie- en bemarkingsaspekte; en die verbetering van toegang tot beide krediet en produksie-insette.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/98008
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