Department of Agricultural Economics

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Browsing Department of Agricultural Economics by browse.metadata.advisor "Bolt, Jutta"

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    Policy, production, and productivity : spatial dynamics in the South African maize industry during the 20th century
    (Stellenbosch : Stellenbosch University, 2019-04) Greyling, Jan C.; Vink, Nick; Pardey, Phillip; Bolt, Jutta; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Agricultural Economics.
    ENGLISH SUMMARY : This dissertation investigates the way distortionary agricultural policies, responding to political tensions during South Africa’s structural transformation, also distorted the location of production. Taking the example of maize, it explores the interplay between changes in policy, production and productivity, and changes in the spatial footprint of production. The study covers more than a century (1904–2015), so as to include all the agricultural policy phases typical of an economy undergoing structural transformation. It finds that changes in agricultural policy after the mid-1930s, enacted in response to the political tensions that emanated from the converging and diverging interests of groups within the mining and agricultural sectors, are reflected in changes in maize production and prices. With the implementation of supportive policies, production expanded into areas previously supporting little maize, thereby undermining environment-based comparative advantages of production. Using spatial indexes, the study estimates that at its peak this policy-induced shift in the location of production reduced productivity by between 7.9 and 15.3 per cent. The dismantling of supportive policy during the 1980s and 90s coincided with the removal of land from maize production by farmers. By 2015 the area planted to maize had reverted back to the level it had reached almost 80 years earlier in 1935, before supportive measures were implemented. But spatial inefficiency partly persisted because some production continued in drier, lower-yielding regions. After the distortionary policies were removed, some of the spatial distortion remained, despite the lower productivity, because of region-specific investments in improving plant material, farming practices and infrastructure. So, while some of South Africa’s maize production ended up in the wrong places, technological improvements eventually made the wrong places more right. Despite the misguided policies, drought-focused research-and-development investment in technologies such as hybrid maize generated a sequence of innovations which more than quadrupled the maize yield per unit of rainfall between 1950 and 1993. The South African case serves to show that distortionary policies carry both short- and long-term costs. This is particularly relevant to sub-Saharan Africa, several of whose countries have pursued or are still pursuing various forms of maize and other agricultural intervention. The case also offers an example of successful adaptation to adverse weather conditions and suggests that a change in the location of production can serve as a proxy for climate change. Three new historical datasets for the period were created specifically for this study: maize price, trade and production data; hybrid adoption, replacement and yield trial data; and district-level maize output and area planted data compiled from 17 digitised agricultural censuses, standardised to current spatial boundaries. Although the datasets are limited to maize, the procedures devised to construct them can be used by future researchers to extend the analysis to other crops and regions.