Department of Logistics

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Browsing Department of Logistics by Author "Bester, Marius"

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    Dominant factors which influence wheat production in South Africa
    (Stellenbosch : Stellenbosch University, 2014-04) Bester, Marius; Janse van Rensburg, Roelof Abraham; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Logistics.
    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.