Browsing by Author "Hayward, Julie Christy"

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    A risk-based planting schedule design for a Sandveld potato farm: case study Taaiboskraal farm
    (Stellenbosch : Stellenbosch University, 2017-03) Hayward, Julie Christy; Vink, Nicholas; Stellenbosch University. Faculty of AgriSciences. Agricultural Economics.
    ENGLISH SUMMARY : Risk in agriculture can primarily be classified systematically according to, the type, frequency and severity of an event. The outcome of the relevant unknown event determines the consequences of the chosen option. To manage risk, the prospective risk first needs to be identified. The interlink ages between the different sources of risk affects the farmers’ overall exposure to risk. An integrated risk assessment therefore helps to identify numerous sources of risk and leads to more efficient decision making. Managing risk does not mean removing risk: rather, it means ensuring that the risk that could occur is at an acceptable level for the decision maker. The best method of managing risk depends upon the nature of the risk involved and the appetite for risk. Potato producers in the Sandveld, farm in conditions of uncertainty. Farmers therefore constantly have to find ways in which to reduce their exposure. The purpose of this research was to determine an optimal four-year planting schedule for a farmer in the Elands Bay region in the Sandveld using Taaiboskraal farm as a case study. There are two predominant electricity tariffs that can be used, namely Ruraflex and Landrate. The farmer can choose between the Cape Town, Durban, Pretoria and Johannesburg fresh produce markets. The main objective of this research was therefore to evaluate the best planting schedule. This would be over four years for Taaiboskraal Farm in the Sandveld regarding the decision maker’s appetite for risk, preferred market and optimal electricity tariff. To obtain the gross margins for each pivot in each state of nature, the potential yields had to be determined using the LINTUL model. The irrigation costs, area and yield dependent costs needed to be determined using a cash flow model. The real prices were obtained for each of the four markets. Once the gross margins were determined, the correlation between prices and yield were determined using multivariate estimates (MVE). Stochastic Efficiency with Respect to a Function (SERF) is the most recent approach in ranking risky alternatives in terms of certainty equivalents (CE) for a specified range of attitudes to risk based on expected utility theory. The SERF model was then used to ascertain the optimal planting schedule after having determined the risk preference of the decision maker. The results indicate that Ruraflex is the best electricity tariff for Taaiboskraal farm. It would therefore not be a good investment to pay the fees to switch to Landrate. When the farmer could choose between the Cape Town, Durban, Pretoria and Johannesburg markets, the Cape Town market was the predominant market of choice. An optimal four-year planting schedule was determined taking into account all the possible opportunity costs.