Browsing by Author "Duminy, Lize"
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- ItemA system dynamics approach to understanding the ostrich industry of South Africa(Stellenbosch : Stellenbosch University, 2016-03) Duminy, Lize; Brent, Alan C.; Musango, J. K.; Stellenbosch University. Faculty of Engineering. Dept. of Industrial Engineering.ENGLISH ABSTRACT: Although the livestock production sector is recognised as an essential contributor to the green economy in South Africa, there is a lack of simulation tool development for the green economy transition of livestock production. The ostrich production industry, mainly exporting leather and meat, is a significant part of livestock production of South Africa. In terms of the global ostrich product market, the ostrich industry of South Africa accounts for approximately 70% of the total supply. Ostrich leather is positioned as an exclusive luxury item, while meat is positioned as an every-day alternative to red meat in their respective markets. A strong relationship exists between previous market supply of ostrich leather and current income from leather, while the ostrich meat income is considered to be largely unaffected by market supply of ostrich meat. The meat market has the potential to absorb more than tenfold the current market supply of meat. This study contributed the only systems thinking analysis of the ostrich production industry in South Africa, known to the author. The analysis in the form of a system dynamics model, proposed a causal loop diagram, as well as a stock and flow diagram that represented the structure of the ostrich production industry of South Africa. The livestock model proposed was set within a different socio-economic environment, as well as a different type of commodity market, to that of the well-known hog cycle proposed by Meadows (1970). The model, known as the Ostrich Industry Model of South Africa (OIMSA), assumed that ostrich producers base their decision in terms of future production amounts on the gross pro t margin per ostrich, mainly influenced by income from leather, income from meat, as well as the production cost. The model forecasted future production size and income received from each commodity, in addition to replicating historical behaviour. Results from an extensive scenario and policy analysis indicated that the only influence that can cause a sustainable increase in the ostrich industry size is the market size of ostrich leather. Scenarios including disturbances is exchange rates, changes in market demands, changes in product values, food safety concerns, fluctuations in production cost as well as changes in economic climate are also investigated. Recommendations regarding the green economy transition of the South African ostrich industry include fixing the long term industry focus on ostrich leather, as well as the development of additional ostrich leather demand. Additionally, new entrant black farmers should be included into the industry at a rate corresponding to the growth in leather demand. The highly contentious subject of a mandatory transition to a small camp breeding system is shown to be sustainable, yet highly unpopular. The two potential policies, carbon tax per ostrich produced, and water tax on irrigated crops used for ostrich feed, will have the exact same effect of ostrich production, and is therefore not recommended to implement the two types of taxes simultaneously.