Doctoral Degrees (Agricultural Economics)

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Determining sustainable lignocellulosic bioenergy systems in the Cape Winelands District Municipality, South Africa
(Stellenbosch : Stellenbosch University, 2012-12) Von Doderer, Clemens Cornelius Christian; Kleynhans, Theo Ernst; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: The energy paradigm shift from fossil fuels to renewable energy sources is driven, among others, by a growing sustainability awareness, necessitating more sophisticated measurements in terms of a wider range of criteria. Technical efficiency, financial profitability, environmental friendliness and social acceptance are some of the factors determining the sustainability of renewable energy systems. The resulting complexity and conflicting decision criteria, however, constitute major barriers to processing the information and decision-making based on the information. Seeking to implement local bioenergy systems, policymakers of the Cape Winelands District Municipality (CWDM), South Africa, are confronted with such a problem. Following a case study approach, this study illustrates how life-cycle assessment (LCA), multi-period budgeting (MPB) and geographic information systems (GIS) can aid the decision-making process by providing financial-economic, socio-economic and environmental friendliness performance data in a structured and transparent manner, allowing for a comparison of the magnitude of each considered criterion along the life-cycle. However, as the environmental impacts cannot readily be expressed in monetary terms on a cardinal scale, these considerations are given less attention or are omitted completely in a market economy. By measuring the various considerations on an ordinal scale and by attaching weights to them using the multi-criteria decision analysis (MCDA) approach, this study, illustrates how to internalise externalities as typical market failures, aiding policymakers of the CWDM to choose the most sustainable bioenergy system. Following the LCA approach, 37 lignocellulosic bioenergy systems, encompassing different combinations of type of harvesting and primary transport, type of pretreatment (comminution, drying, and fast pyrolysis) and location thereof (roadside or landing of the central conversion plant), type of secondary transport from the roadside to the central conversion plant, and type of biomass upgrading and conversion into electricity, were assessed against five financial-economic viability criteria, three socio-economic potential criteria and five environmental impact criteria. The quantitative performance data were then, as part of the MCDA process, translated into a standardised ‘common language’ of relative performance. An expert group attached weights to the considered criteria using the analytical hierarchy process (AHP). The ‘financial-economic viability’ main criterion received a weight of almost 60%, ‘socio-economic potential’, nearly 25% and ‘lowest environmental impact’, the remainder of around 16%. Taking the prerequisite of financial-economic viability into consideration, the preferred option across all areas of the CWDM (despite various levels of productivity) comprises a feller-buncher for harvesting, a forwarder for primary transportation, mobile comminution at the roadside, secondary transport in truck-container-trailer combinations and an integrated gasification system for the conversion into electricity.
Dynamics of institutional arrangements for small-scale vegetable farmers in Namibia: An analysis of the market, state and community institutions
(Stellenbosch : Stellenbosch University, 2020-12) Thomas, Benisiu; Vink, N.; Kirsten, Johann; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Agricultural Economics.
ENGLISH SUMMARY : In developing countries, especially in Africa, the commercialisation of agriculture has proven to be a means of increasing the income of farm households and productivity, resulting in poverty reduction at the household level. The principal research question addressed by this study was why it would make sense for the government to invest in services for small-scale fruit or vegetable farmers if these farmers could not increase production because of a lack of market access unless they could make a profit, which would probably imply heavy subsidisation of marketing infrastructures by taxpayers. A vegetable industry development case study was conducted in north-central Namibia. A Probit model was used to determine the factors that influence farmers to supply to the formal markets. The model results indicated that ownership of a vehicle and distance from farm to water source were statistically significant determinants of a farmer’s decision to participate in the commercialisation of high-value crops at p=0.009 and p=0.073 respectively. In addition, the results indicate that water rights are not clearly defined, and there is no land market and limited access to credit for the farmers. Moreover, a transaction cost analysis demonstrated that small-scale high-value crop production in the study area is experiencing high transaction costs that make the vegetable industry to be globally less competitive. The principal reason for high transaction costs is that the commercialisation of vegetables is constrained by information asymmetries or principal-agent problems among actors in the value chain, resulting in the failure of the market, state, and community institutional arrangements. The study introduced a new approach incorporating insights from transaction cost economics in exploring the interrelationship of the market, state, and community institutions in agricultural development in developing countries to understand the influence of transaction costs on economic performance. The model introduces a public-private partnership as a policy instrument linking small-scale farmers to input and output markets through contract production. The model identifies and minimises transaction costs among value chain actors, to overcome the challenges of the market, state, and community institutions. The study concluded that poor implementation of agricultural development initiatives as introduced by the state or the private sector (the market) and cultural embeddedness may limit agricultural development as community values, norms or beliefs take long to adjust to external ideas or technologies due to inadequate information in developing countries. The study recommends that there is a need for policy intervention that addresses water rights and improved access to credit as well as encouraging production and marketing cooperative to reduce costs of accessing input and output markets. An amendment of the Communal Land Reform Act No. 5 of 2002 would enable the introduction of land markets and rentals in communal areas of Namibia enable farmers to use their land as collateral to obtain credit from financial institutions. Amendments to the Communal Land Reform Act should also specify how to protect vulnerable and poor people such as women and the youth in communities and to ensure that land rights are available as a social safety net.
An econometric analysis of the economic and environmental efficiency of dairy farms in the KwaZulu-Natal Midlands
(Stellenbosch : University of Stellenbosch, 2011-03) Mkhabela, Thulasizwe; Thirtle, C.; Piesse, J.; Vink, N.; University of Stellenbosch. Faculty of AgriSciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: This dissertation is an analysis of dairy production in the Midlands district of KwaZulu-Natal. The analysis of agricultural production generally ignores undesirable outputs that are produced alongside desirable outputs. This research attempted to integrate a model of nitrate leaching from dairy production into a multiple input/output representation of the production technology, together with the analysis of technical efficiency. Estimation of both technical efficiency and environmental efficiency were done following the parametric econometric stochastic frontier (SFA) and the nonparametric mathematical programming data envelopment analysis (DEA) approaches. The study used unbalanced panel data from 37 individual highly specialized dairy farms for the period 2000 to 2007 and totals to 2130 observations. Production functions for the three outputs; milk, animals and farm produced feed, were fitted as a simultaneous system to model the farms’ production activities for the econometric SFA estimation of technical efficiency. A single equation reduced form was fitted as a frontier to allow for the estimation of the relative efficiencies of the individual farms. The results showed that with data this detailed it was possible to refine the model until it fits very tightly. Indeed, in the gross output model that includes cows, there was nothing left to call inefficiency and what was clearly a frontier becomes a mean response function. Technical efficiency was further calculated using the nonparametric DEA approach using the same dataset. The estimation of environmental efficiency was done using both SFA and DEA approaches. Undesirable emissions of nitrate were represented within the models by calculating nitrogen surplus (kg/ha) for each farm. This nitrogen surplus value was based on the intensity of the use of nitrogen containing inputs and the nitrogen content of marketable products specific information and from farm data which were used to calculate a farm nitrogen balance. The stochastic estimation of environmental efficiency used the same data that were used for the estimation of technical efficiency. However, for the DEA calculation of environmental efficiency, a balanced cross-section dataset for 34 farms participating in a pasture-utilization programme was used. This dataset was used because it had quantities of nitrogen fertilizer and other nitrogen containing inputs. Results indicate that there was minimal “over-usage” (over production) of milk thus reducing milk output alone will not lead to improved environmental efficiency. Farm size, herd size, and quantity of nitrogen fertilizer applied, present the best scope of reducing nitrogen surplus thus improving environmental efficiency of the dairy farms. Reducing imported feed by relying more on home grown feed can also help reduce nitrogen surplus. This is feasible because dairy farmers in the KwaZulu-Natal Midlands can produce most of the feed on farm. In summary, to obtain environmental efficiency milk production would have to be reduced by 80 litres per hectare; farm size by 73.69 ha; herd size by 33 cows, nitrogen fertilizer application by 74.3 kilograms per hectare; and imported feed by 13.4 kilograms of dry matter per hectare. The adjustments that would be required if environmentally inefficient farms were to adopt best practice technology and move towards their environmental production frontiers indicate that the production of pollutants (nitrogen surplus) could be reduced at negligible cost to milk production. The positive correlation between technical and environmental efficiencies indicates that improving environmental efficiency could be associated with improvements in technical efficiency. Thus, policies aimed at improving both efficiencies could have substantial rewards.
An enquiry into the competitive performance of the South African deciduous fruit canning industry
(Stellenbosch : Stellenbosch University, 2024-03) Jantjies, Heinrich; Van Rooyen, Johan; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
ENGLISH SUMMARY: This study investigated theoretical constructs to best define, measure and analyse competitive performance of the South African deciduous fruit industry, focusing on the canning/processing function. The enquiry stretches from early 1960s to the early 2020s. This represents a long-term perspective with various factors impacting on industry competitiveness, including the global oil crises, mid 1970s; political-economic sanctions, 1980s; democratisation and economic deregulation, 1990s; the financial crises and economic meltdown of 2008/9; the recent Covid pandemic; and international strife and wars. The study was grounded in new trade theory (NTT), the competitive advantage concept, and the Porter diamond model, which was extended in the study to include international trade and socio-economic transformation factors impacting the South African deciduous fruit industry. This new theoretical construct was referred to as the Porter 7 model, containing seven determinants of competitiveness. A constructivist enquiry approach was applied, employing ‘mixed method’ data gathering and analysis through qualitative and quantitative approaches. Conventional approaches to qualitatively measure competitive performance – RCA, revealed comparative advantage and RTA, relative trade advantage – were complemented by the more recent normalised revealed comparative advantage (NRCA) and extended to a newly developed application, the normalised relative trade advantage (NRTA). The analysis focused on global, industry and firm level applications. Competitiveness is defined as “the sustained ability of an industry to attract investment by trading products in the global marketplace, whilst continuously striving to earn returns greater than the opportunity cost of scarce resources engaged”. This definition allows for comparisons with direct competitors and alternative industries. The quantitative measurements showed that the South African deciduous fruit canning industry globally sustains highly competitive performance – out-performed only by Greece and Chile. It also consistently outperforms other competing South African sub-sectors such as wine and horticultural crops. Recently however, since 2015, a decline has been recorded for the industry. Through surveys and Delphi sessions with industry executives and experts, 134 factors impacting competitiveness were identified and rated on a five-point Likert scale. The rated factors were grouped into the seven determinants of the Porter 7 model. The two most enhancing determinants were “business strategy, structure and rivalry” and “related and supporting industries”. Factors related to “government support and policy” and “transformation and social development” were viewed as constraining. Upon reviewing the qualitative and quantitative results, the study concludes that the competitive landscape for the South African deciduous fruit canning industry is competitive but has been becoming less so from 2015 onwards. Twenty-seven industry-level strategic proposals have been formulated to enhance competitive performance. An institutional structure to improve industry-based dialogue and structured private-public interactions is recommended, supported by an improved strategic intelligence database and “dashboard”, tracking competitiveness performance, linking into the recently accepted National Agriculture Processing Master Plan. Major focus areas for improved sustained competitiveness are listed as emerging markets; the institutionalising of a participative “deciduous fruit canning industry competitiveness strategy (DFCCS)”; improved value chain collaboration; dealing with social transformation; technological innovation; and gaining productive trade agreements. An agenda for continued research in institutional structure and value chain strategy is proposed.
Farm modelling for interactive multidisciplinary planning of small grain production systems in South Africa
(Stellenbosch : University of Stellenbosch, 2010-12) Hoffmann, Willem Hendrik; Kleynhans, T. E.; University of Stellenbosch. Faculty of Agrisciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: A complex and volatile decision-making environment and constant pressure on product prices, due to the cost-price squeeze, complicates decision-making for grain farmers in the Western Cape. Furthermore, available alternative crops and cultivation practices are limited due to local soil and climatic conditions. The farm system itself is complex due to the interdependence of a variety of factors and the synergy resulting from specific sequences of cash and pasture crops. The aim of this research project was to establish a method that would contribute to identifying strategies to advance the profitability of grain production. Research in the grain industry is traditionally specialised within specific fields, such as, agronomy, soil science, entomology, agricultural economics, etc., causing a fragmentation of knowledge. To ensure that the systems nature of a complex farm is accommodated, various related research domains should be acknowledged and incorporated. The use of expert group discussions, as a research method, is suitable, firstly, for gathering information in a meaningful manner and, secondly, to stimulate individual creativity by presenting alternative perspectives provided by various participating experts. In support of expert group discussions, simulation models in the form of multi-period whole-farm models were developed. This type of modelling supports the accurate financial simulation of farms, while the user friendliness and adaptability thereof can accurately accommodate typical farm interrelationships, and quickly measure the financial impact of suggested changes to parameters. Suggestions made by experts during the group discussions can thus be quickly introduced into the model. The financial implications are instantly available to prevent further exploration of non-viable plans and to fine-tune the viable plans. Participants in the group discussions represent fields of expertise such as agronomy, soil science, entomology, plant pathology, the agricultural chemical industry, agricultural mechanisation. Also represented are professionals such as extension officers from local agribusinesses, local producers and agricultural economists. The dynamics of the group discussions are supported by each participant’s specific strengths and perspectives. For each relatively homogeneous production area of the Western Cape, a typical farm budget model was developed, which served as the basis for the group discussions. The budget models measure profitability in terms of the IRR (internal rate of return on capital investment) and affordability in terms of expected cash flow. For the Swartland, the homogeneous areas identified were Koeberg/Wellington, the Middle Swartland and the Rooi Karoo, and for the Southern Cape, the homogenous areas identified were, the Goue Rûens, Middle Rûens and Heidelberg Vlakte. A model of a typical farm in the Wesselsbron area was developed for comparison with the Western Cape farms. For each area the expected impact of climate change, fluctuating product and input prices, and the possible impact of partial conversion to bio-fuel production were evaluated in terms of expected impact on profitability. Various area-specific strategies were identified that could enhance the profitability of grain production: most of the strategies focused on optimising machinery usage and expanding or intensifying the livestock enterprise. The repeated successful use of the model in support of the expert groups in all the chosen study areas illustrates the value thereof for identifying and evaluating plans to increase the profitability of small grain production.
Gedifferensieerde woonbuurtvorming binne die munisipaliteit van Bloemfontein : 'n faktorekologiese toepassingstudie
(Stellenbosch : Stellenbosch University, 1977-12) Senekal, W. F. S.; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
Geen opsomming beskikbaar.
'n Grondopname van die Malmesbury-Piketberg streek
(Stellenbosch : Stellenbosch University, 1945-12) Slabber, M. H.; Du Toit, M. S.; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
AFRIKAANSE OPSOMMING: n Kort oorsig van die landbougeskiedenis, fisiografie, geologie, klimaat, plantegroei en bevolking van die Malmesbury -Piketberg - streek word gegee. 'n Grondopname is van die streek gemaak en die verskillende grondtipes is gekarteer. Die invloed van klimaat, moedergesteente, topografie en plantegroei op die grondvormingsprosesse word aangetoon. Die podsoliese geaardheid van die gronde wat uit kalsiumarme materiaal onder die bepaalde klimaatstoestande ontstaan het, word bespreek en die invloed van die topografie en digtheid van die oorsprongsmateriaal op die ontwikkeling en samestelling van die E horison word aangetoon. Die vrugbaarheid van die grondtipes, geoordeel aan toeganklike voedingstowwe, uitruilbare basisse, grondreaksie en humusgehalte, word bespreek en moontlike stelsels vir die beheer en verbetering van die grondvrugbaarheid word aan die hand gegee.
An institutional economics approach to agribusiness in development : South African case studies
(Stellenbosch : Stellenbosch University, 2006-04) Karaan, Abolus Salam Mohammad; Vink, N.; Stellenbosch University. Faculty of AgricSciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: This dissertation is a sojourn into institutional economics and its application to contemporary economic and development issues in South Africa. Economic development initiatives in agribusiness have much to gain from the theories and approaches advanced by the new institutional economics. Institutions are considered essential to the functioning of economies, markets and organizations, despite its neglect in neoclassical economics The study intends to prove that 'institutions matter', especially when social and economic transformation is necessary. The cases studied exhibit how institutions matter and shape economic outcomes. The theoretical basis established in this thesis was applied to economic development challenges such as contracting, organizational innovation, economic empowerment, land reform, building social capital, organizational design, supply chain management, entrepreneurial development, and modes of constructive engagement. The thesis is a compilation of academic papers applied to the various selected developmental challenges prevalent in South African agriculture. The study begins by delving into the more popular New Institutional Economics literature and specifically transaction cost economics. Somewhat unexpectedly, this leads to a greater appreciation for the insights generated by the Old Institutionalists in investigating the nature of institutions. Hence, the old institutional economics gains prominence in the latter part of this work, contrary to contemporary approaches followed in agricultural economics. The acknowledgement given to aspects like social capital and embeddedness is consistent with Williamson's proposed framework for the economics of institutions and this is used as the conceptual framework in this thesis. Whereas the new institutional economics was found to be useful in yielding knowledge through analysis and remediable outcomes, the old institutional economics retains its advantage in promoting understanding of problems especially in the face of complexity. This inclination has influenced the thesis in two ways. First, it diverted the latter part of the work towards the old institutional economics and the role of social capital in shaping institutions and economic behaviour. Second, it reverts to theories on the nature of the firm that complements the transaction cost approach. The transaction costs approach is thus only used where it is found most effective i.e. analysing vertical integration between firms and the relevant ex ante incentives and the ex post governance aspects Most studies are motivated by a general recognition of the role of institutions in framing economic outcomes and end up in the new institutional economics and subsequently transactions cost economics. This favouring of the transaction cost approach has found appeal due to its ability to predict structural and organisational outcomes such as the efficient boundaries of firms, internal organisation, contractual relations, incentives, etc. Methodologically, it enables analysts to employ the empirical and mathematical rigour that has become a feature, but too often the purpose, of economic research. Three papers are devoted to this approach and elicit organisational designs that best contend with identified transaction costs. The study confirms that several aspects matter in institutional analysis when applied in an economic developmental context such as South Africa. Historical context is acknowledged as a critical facet of institutional analyses in the sense that institutions are shaped by the forces of history. Social capital is established as an important component of institutional economic analysis and particularly relevant in situations where social capital has been eroded by political economic manipulations. Attending to social capital require (inter alia) insight into the nature of the societal context, implied path dependency, the extent of trust, enforcement mechanisms, and agency relations. Three of the papers attend to these aspects.
Investigating farm-level exit decisions and exit rates in commercial agriculture in South Africa, an agent-based approach
(Stellenbosch : Stellenbosch University, 2022-04) Cloete, Johanna Cecilia; Hoffmann, Willem H.; Greyling, Jan C.; Mann, Stefan; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Agricultural Economics.
ENGLISH SUMMARY : Land supply is an undeniable but neglected component in the agriculture transformation debate, with discussions on and research in the field of structural change in the sector considered overdue. The structural transformation of the agricultural sector rests on the interplay between exogenous and endogenous decisions in the agricultural sector that feed back into the sector’s operations, as a collective, and the role players within it as individuals. Ignoring the factors that motivate commercial producers to exit farming has resulted in a substantial gap in the literature regarding this important component of land reform. This study aimed to uncover the reasons that lead to decisions to exit or stay by making use of an analytically rigorous process to bridge the land supply literature gap. Considering the ex-post review of commercial agriculture over the last 100 years and its learnings, this study explores how an ex-ante modelling analysis approach to the planned and potential effects on producer numbers over the next ten years can enhance land-use planning. A core outcome of this study is the creation of a baseline projection for remaining in or exiting from primary agriculture, and how the exploration of the underlying factors in individuals’ strategic decision-making can inform policy and affect structural change. Three methods are applied in this study. The characteristics of producers planning to exit were identified through clustering. A consequent regression analysis determined the drivers of the ex-ante decision to exit or remain in agriculture, highlighting the interplay between business climate and capital invested. An agent-based model was constructed to create a virtual laboratory in which the output provides insight into how the structure of the sector – demographics, land use, production output, farm size and numbers – will change as the aggregate of the decisions made at the individual farm level drives the structural change at a sector level. Findings from the cluster analysis show that farm exit decisions are affected by financial problems, access to dependable labour, uncertainty regarding land reform policy and concerns about rural safety. In the subsequent regression analysis that was performed to order the key drivers, age (as a categorical variable), cost of investment and financial constraints feature most prominently in the decision to exit, whilst the presence of production loans and business confidence are significant in countering the decision to exit. From the cluster and regression analyses, two alternative scenarios were constructed in which some factors that appear to keep producers locked in were removed. The outcomes thereof were then compared to the baseline exit rate from the extrapolated and upscaled survey data. The baseline and two alternative scenarios in the agent-based model provided exit rates of 22.43%, 25.63% and 34.81%, respectively over ten-year periods, with the structural effects of the different rates discussed at a sub-sector level. Consideration is given to the barriers to exit, which subsequently limit the opportunities and scope for new entrants into commercial agriculture. This output is a critical element in the continued interaction between demand for and supply of land in the land reform debate.
'n Kommunikasiestrategie vir die Nasionale Departement van Landbou ter ondersteuning van kleinboerontwikkeling
(Stellenbosch : Stellenbosch University, 2000-03) Viljoen, Hendrik Christophel; Laubscher, J.; Marincowitz, G. J. O.; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: It is indeed possible for agricultural institutions to render optimum services to farmers provided that such services meet the requirements of the farmers. Insofar as the agricultural extension and information arm of these services operated in the past, the emphasis was on keeping abreast - on a scientific basis - of the needs of commercial farming. The reason for this was that over the years a clear picture of the commercial farmer as individual and his particular needs had emerged and the focus was on this. The opposite is true of developing agriculture. It is evident from available literature that there are substantial differences between them, and that these may well have a very real influence on the nature of their information requirements. Inadequate knowledge and information concerning the developing farmer - mainly as a result of very little personal contact at grassroots level - therefore create a gap in the armour of the National Department of Agriculture (NDA) as a service organisation. This study is aimed at making a contribution to this inadequate - often totally lacking - pool of knowledge and to formulate a strategy that could narrow this gap. To gain an insight into and become conversant with the world of small farmers and subsistence farmers and the influence that the realities of their lifestyle may ultimately have on their ultimate information requirements and the implementation thereof, a profile was compiled of traditional small-scale farmers in several Rural Areas of the Western Cape Province. This information was acquired from recent surveys and studies carried out in these areas. Using this profile as background, an attempt was made to describe the information environment by using a qualitative investigation method known as the focus group data collection technique. The findings of the investigation show that the very real need for land ownership and the availability of financial assistance are primary needs. Before these problems are solved to the satisfaction of small farmers, it can not be expected that they will identify information as a high priority. As regards the utilisation of specific channels of information, fellow-farmers and agricultural extension officers are identified as the most important personal channels, with the radio and printed media as the major mass-media channels. In the absence of a departmental communication strategy, development support communication (DSC) is put forward as a potential strategy to bridge the shortcomings that emerged form the investigation. In fact, DSCis the liaison between interest groups with a view to reaching consensuswhich leads to action in which the interests, needs and abilities of all role players are taken into account. The role of the go-between to act as mediator between ground-level communities and institutions such as the NDA's Directorate of Communication, and extension and research would also be vital.
Modelling multi-product industries in computable general equilibrium (CGE) models
(Stellenbosch : Stellenbosch University, 2013-03) Punt, Cecilia; McDonald, Scott; Vink, Nick; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: It is common practice in computable general equilibrium (CGE) models that the output composition of multi-product industries remains constant despite changes in relative prices of products. The results of any scenario will show that products produced by a single industry will still be produced in the same ratio to each other as reflected by the base data. The objective of the study was to develop a CGE model for South Africa in which this assumption of fixed composition of output can be selectively relaxed. In order to allow industries to adjust their output composition in response to changes in relative prices of products a Constant Elasticity of Transformation (CET) function and the related first order condition were incorporated into an existing CGE model. This alternative specification of an output transformation function in the model enables the modeller to allow selected multi-product industries to increase production of products that show greater price increases relative to other products. The first order condition of the CET function determines the optimal combination of products for each industry. With the inclusion of the CET function there is a trade-off between theoretical rigour of the model and realism of the results, therefore an assumption of input-output separability was introduced as a way of recognising that the inclusion of a CET function violates the assumption that prices in the same row of a social accounting matrix (SAM) are equivalent. The model was calibrated with a SAM for South Africa for 2007 that was developed for purposes of this study. Set controls were included in the model to generalise the model in order that it can be calibrated with data from other countries as well. The SAM for South Africa contains provincial level information in the accounts for agriculture, labour and households. The agricultural industries are defined by geographical area, hence these industries are particularly good examples of multi-product industries that respond to relative price changes when determining production levels of individual products. The adjusted CGE model was used to analyse four scenarios focusing on selected issues mentioned in the National Development Plan for South Africa released by the National Planning Commission in 2011. The scenarios relate to increases in fruit exports as a result of global positioning, technical efficiency improvements for the agricultural sector through continued research and development, factor productivity growth in government and selected services sectors resulting from fighting corruption and curbing strikes, and augmenting the supply of skilled labour through an improvement in the quality of education. The results of the adjusted model show the desired effect: producers produce relatively more of the products for which they can get a relatively higher price and vice versa. This holds true regardless of whether the level of industry output increases or decreases. The impact of the model adjustment and the effects of changes in the levels of elasticities and choice of variables to close the model were analysed as part of the sensitivity analyses. The impact of changes in the functional form, elasticities and model closures on results, are different for each scenario.
Modelling the financial vulnerability of farming systems to climate change in selected case study areas in South Africa
(Stellenbosch: Stellenbosch University, 2014-12) Oosthuizen, Hamman Jacobus; Lombard, Johannes Petrus; Louw, Daniel Barend; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: Numerous studies indicate that the agricultural sector is physically and economically vulnerable to climate change. In order to determine possible impacts of projected future climates on the financial vulnerability of selective farming systems in South Africa, a case study methodology was applied. The integrated modelling framework consists of four modules, viz.: climate change impact modelling, dynamic linear programming (DLP) modelling, modelling interphases and financial vulnerability assessment modelling. Empirically downscaled climate data from five global climate models (GCMs) served as base for the integrated modelling. The APSIM crop model was applied to determine the impact of projected climates on crop yield for certain crops in the study. In order to determine the impact of projected climates on crops for which there are no crop models available, a unique modelling technique, Critical Crop Climate Threshold (CCCT) modelling, was developed and applied to model the impact of projected climate change on yield and quality of agricultural produce. Climate change impact modelling also takes into account the projected changes in irrigation water availability (ACRU hydrological model) and crop irrigation requirements (SAPWAT3 model) as a result of projected climate change. The model produces a set of valuable results, viz. projected changes in crop yield and quality, projected changes in availability of irrigation water, projected changes in crop irrigation needs, optimal combination of farming activities to maximize net cash flow, and a set of financial criteria to determine economic viability and financial feasibility of the farming system. A set of financial criteria; i.e. internal rate of return (IRR), net present value (NPV), cash flow ratio, highest debt ratio, and highest debt have been employed to measure the impact of climate change on the financial vulnerability of farming systems. Adaptation strategies to lessen the impact of climate change were identified for each case study through expert group discussions, and included in the integrated modelling as alternative options in the DLP model. This aims at addressing the gap in climate change research, i.e. integrated economic modelling at farm level; thereby making a contribution to integrated climate change modelling.
Multi-criteria decision-making for water resource management in the Berg Water management area
(Stellenbosch : University of Stellenbosch, 2006-12) De Lange, Willem J.; Kleynhans, T. E.; University of Stellenbosch. Faculty of Agrisciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: The concept of social welfare maximisation directs strategic decision-making within a milieu of integrated planning problems. This study applies the aforementioned statement to decision-making regarding the long-term allocation of bulk-water resources in the Berg Water Management Area of South Africa. Public goods, such as bulk water supply infrastructure, is vulnerable to failures in market and government allocation strategies because both fields are subjected to unaccounted costs and benefits. This implies a measurement problem for the quantification of the total cost/benefit of management options and result in decision-making with incomplete information. Legitimate decision-making depends on reliable and accurate information, and the measurement problem, therefore, poses an obstacle to better social welfare maximisation. A need has been identified to broaden the decision-making context in the Berg Water Management Area to promote the accommodation of unaccounted for costs and benefits in water resource allocation decision-making. This study engaged this need by expanding the temporal and spatial dimensions of the decision-making context. Accordingly, improved indecision-making information and decision-support processes is needed. Spatial expansions manifested in physical expansions of the decision-making boundaries that led to expansions in representation in the decision-making process. Temporal expansions manifested in the consideration of different sequences of bulk supply schemes over time instead of a selection of schemes at the same time. The study incorporated components of economic valuation theory, multi-criteria decision analysis, a public survey and a modified Delphi expert panel technique to account for the increased decisionmaking information load. The approach was applied in the Western Cape province of South Africa and specifically focused on a choice problem regarding different long-term bulk-water resource management options for the area. Two surveys were completed to accommodate these expansions. The first focused on public preference in water allocation management and the second survey utilized a modified Delphi technique. Questions regarding the extend of public participation in long-term water resource allocation decision-making came to the fore and the applicability of economic theory to accommodate public preference as a regulatory instrument, was questioned. A willingness to pay for “greener” water was observed and may be used to motivate a paradigm shift from management’s perspective to consider, without fear of harming their own political position, “greener” water supply options more seriously even if these options imply higher direct costs.
Organic wine : choice and consumer value perceptions
(Stellenbosch : Stellenbosch University, 2022-04) Ghezelbash, Atousa; Said, Emanuel; Vink, N.; Van der Merwe, Melissa; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Agricultural Economics.
ENGLISH SUMMARY : The purchase and consumption of organic wine are generally ascribed to altruistic motivation. However, there is a dearth of research that can comprehensively explain the value perceptions of organic wine consumers and why such consumers may move from conventional to organic wine and vice versa. This study offers a new theoretical perspective on how organic wine consumers develop and manifest their value perceptions. The study poses two research questions to achieve this objective: What dimensions of consumer value perceptions influence consumers to purchase and consume organic wine instead of conventional wine, and how do they relate to each other? Why does a segment of organic wine consumers float between organic and conventional wine? The study employs a constructivist grounded theory approach to answer these research questions and presents the findings emerging from 25 interviews with a selection of conventional and organic wine consumers in the United Kingdom. The study extends existing theory about the value perceptions of organic wine consumers. Organic wine consumers develop their perceptions of value through a process that involves an interplay between the emotions generated by organic wine and perceptions of the benefits obtained through organic wine consumption. The motivations of organic wine consumers are personal and selfish rather than altruistic. A cycle of selective information search leads to the development, and constant reinforcement, of an emotional (rather than cognitive) consumption loyalty to organic wine. However, organic wine consumers are not dogmatic in their behaviour and are flexible about the purchase and consumption of conventional wine without feeling dissonance. This flexibility offers an understanding of why organic wine consumers float between organic and conventional wine. As a result, the study proposes an alternative conceptual model of the consumers’ perceptions of the value of organic wine. The findings suggest that further research intending to offer insights into the enduring involvement of consumers with organic wine, as well as extending the applicability of the proposed conceptualisation to organic products generally, is justified. Marketers of organic wine should focus less on organic wine’s sustainability characteristics and concentrate more on the benefits provided for consumers personally.
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.
Proportional yields and processing of pork derived from different halothane hyperthermia pig genotypes
(Stellenbosch : Stellenbosch University, 1998-12) Fisher, Peter Philip; Hoffman, Louwrens C.; Mellett, F. D.; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: The carcass and meat quality characteristics of three halothane genotypes in pigs were evaluated. Sixty crossbred Landrace x Large White pigs (NN = 25, Nn = 19, nn = 16) of ± 86 kg live weight were slaughtered, the carcasses chilled for 24 h at 2°C, certain carcass and meat quality traits determined and the shoulder and leg cuts deboned and devided into primal cuts. Least squares (LS) means for dressing percentage of the Nn genotypes was higher (P < 0.05) than that of the NN and nn genotypes. LS means for carcass length was highest (P < 0.05) for carcasses derived from the nn genotype. The LS means calculated for several measurements on the split carcasses (midline fat measurements) and cross sections between the 2nd and 3rd last thoracic vertebrae relating to fat depositioning (45 mm from the midline) and lean depositioning (eye muscle width, depth and area) provided significant evidence that the nn genotype yielded leaner carcasses than Nn and NN genotypes. Fitting prediction equations to some of the these measurements to calculate LS means for predicted lean yield confirmed that nn genotypes yielded carcasses with less fat and more lean. Further dissecting of selected cuts (shoulders and legs) also showed that the LS means for bone, fat and lean yield from nn genotypes were more desired than those from the other two genotypes, with probabilities varying from P > 0.05 to P -< 0.001. It was also demonstrated that the LS means of all subprimal cuts from the legs (topside, silverside, thickflank and rump) expressed as a percentage of cold carcass weight were higher for carcasses originating from the nn genotype (P < 0.05). This could be ascribed to the higher LS means for leg weight (P < 0.05) originating from the nn genotype. However, when meat quality traits were compared the shortfall of the nn genotypes became evident. LS means for pILs (P < 0.001), pH24 (P < 0.05), drip loss (P < 0.001) and reflectance values (P < 0.05) differed and were inferior for this genotype. The backs and legs were used to prepare cured, smoked bacon and canned hams. Comparison of LS means revealed the following: initial gain in pumped weight was significantly higher (P < 0.001) for the NN and Nn genotypes compared to the nn genotypes. Similarly, the total gain in bacon yield (finished product yield) was the highest for the Nn (11.5%) and NN genotypes (1O.0%), significantly higher (P < 0.05) than the bacon produced from the backs of the nn genotypes (3.4%). Differences between sexes were not significant. Canned hams (without added phosphate) produced from the NN genotypes had a significantly (P < 0.001) lower percentage cooking loss (27.92%) compared to that of the Nn (30.12%) and nn genotypes (31.14%), which did not differ. Addition of phosphates (0.3% on final product) had a similar response, with the hams produced from the NN genotype having 13.75% cooking loss, significantly lower (P < 0.001) than the Nn (16.87%) and nn genotypes (17.73%). Results for the two types of fresh sausage manufactured from the meat of the different genotypes (with rusk, without rusk) indicated that for the sausage without rusk that the NN genotypes (15.7%) had lower total moisture losses (P < 0.05) compared to the nn genotypes (18.9%), with Nn intermediate (17.4%). The treatment with rusk addition did not differ significantly between genotypes (NN = 12.6%, Nn = 13.0, nn = 14.2%), indicating that some of the disadvantages may be overcome by processing technique. Taste panel evaluation of the fresh sausage made without rusk indicated no differences between genotypes when evaluated for juiciness. In an emulsion type sausage the smoking and cooking losses during manufacturing of the product indicated that the sausage manufactured from the meat of the nn genotype (12.47%) had significantly (P < 0.05) higher losses than that from the Nn genotype (1l.31 %), with NN genotype intermediate (12.35%). The results from this investigation suggest that the presence of the halothane gene is associated with decreased fresh meat and processing properties (lower water holding capacity, reflected by yield or total loss and higher reflectance values) in certain products. This leads to inferior quality in finished products as well as deminished financial returns for processors.
A reinterpretation of the value attributes of agricultural land for the valuation of farms bought for lifestyle purposes
(Stellenbosch : University of Stellenbosch, 2009-03) Reed, Lily Lozelle; Kleynhans, T. E.; University of Stellenbosch. Faculty of Agrisciences. Dept. of Agricultural Economics.
Traditionally, agricultural land was regarded mainly as a production factor. Accordingly, in their application of the market sales comparison approach to agricultural land, valuers relied on a set of attributes related to agricultural production as the primary determinants of an agricultural property’s highest and best use (HBU) and market value. These characteristics were measurable and related to the property’s income-generating capacity. The emergence of a multi-functional rural land market with alternative uses of agricultural land, such as for lifestyle purposes, has transformed this concept. Lifestyle inspired buyers often focus on a wider range of attributes not necessarily related to income, but associated more with satisfaction derived from the property. This creates a measurement problem for agricultural land valuers, as the characteristics valued by lifestyle buyers are more intangible and subjective, which leave valuers without a base from which to value such properties. The presence of lifestyle inspired buyers makes agricultural land valuations more demanding as it implies different interpretations of the same farm and complicates the choice of a single HBU. The continued use of familiar conventional farming attributes by valuers when valuing farms where lifestyle motivations are present, and the omission of less measurable characteristics, implies that the market sales comparison method cannot be executed accurately. The objectives of the study were twofold: to reveal the dominance of value attributes applicable to farming as HBU when valuing farms bought primarily for lifestyle purposes and to identify the characteristics of land important to lifestyle inspired farm buyers.
Strategic planning of agricultural land information systems in South Africa
(Stellenbosch : Stellenbosch University, 2008-12) Makhwaje, Ernest N.; Kleynhans, T. E.; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
The planning processes involved in the design and development of strategic land information systems in a semantic context require a logical approach. An array of efficacy problems associated with the relevance of the information required and the data to be provided must be dealt with in terms of this logical approach so that wise decisions can be made about future land resource use options. This study applies the aforementioned statement to strategic decision-making regarding information management in the provision of accurate and relevant information about the characteristics of the land resource for use by both the public and private sectors in South Africa. With ever evolving human needs that increase pressure on the limited land resource, the need for accurate and relevant information for strategic purposes is increasing. However, even at the present time, land information systems design and development is characterised by a technical design orientation and a narrow cost-efficiency focus, with a lack of strategic envisioning. Strategic decisions require effective choices regarding what data should be collected and how this should be stored and processed to support landresource- use decisions in the future. Information systems can, however, not cater for too many variables due to cost implications. Hence, strategic choices in generating only the required information and data for storage and processing become necessary.
Structural adjustments in the wheat industry of the Western Cape Province
(Stellenbosch : Stellenbosch University, 2001-03) Troskie, Dirk Pieter; Vink, N.; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
ENGLISH ABSTRACT: The objective of this dissertation was to investigate the structural imbalances of the wheat industry of the Western Cape Province and, with due recognition of a changing environment, to develop an effective strategy for the industry. It was found that the origins of the structural imbalances could be detected in the interaction between policy, technological and demand factors and is not unique to the specific industry. The farm problem provides an explanation for the instability of and downward pressure on wheat prices as well as the sluggish adaptation to environmental change experienced in the wheat industry. Internationally similar problems led to a whole range of policy measures. Relatively unique to South African agriculture, but not only to the Western Cape wheat industry, is the circumstances that gave rise to the current dual structure of the domestic agricultural sector. The origins of these circumstances could be traced back to the Dutch settlement of the Cape in 1652 and the resulting measures was later upheld under British rule. After the commercialisation of the local agricultural sector following the discovery of diamonds in South Africa, certain measures were lobbied for at the end of the 19th Century to protect white farmers. These measures were expanded in the 20th Century and gave rise to the particular duality along ethnic lines of the South African agricultural sector. If it is accepted that the structural problems of the wheat industry are the result of political, policy, technological and demand factors, the question of the potential future role of the sector, and more specifically the wheat industry, can be asked. It was established that agriculture is a natural catalyst for economic development through the provision of food, foreign exchange, manpower, and capital formation as well as a market for industrial produce. Whereas the potential exists, agriculture has not yet fulfilled this role in Southern Africa due to inconsistent domestic policy, adverse trade regimes, inappropriate technology and problems encountered in the management of development. This potential role of agriculture has been quantified for the Western Cape Province. In the development of a strategy for an industry it is imperative to evaluate the future economic and social environment. It was verified that in the next phase of economic development, towards information societies, agriculture would still fulfil the functions previously mentioned. However, a new and more esoteric role relating to identity could be added to this list in an information society. Given the important role of agriculture as described in the previous section, intuition would lead one to expect that government would play an important role in alleviating the structural problems of the Western Cape wheat industry. However, contrary to this intuitive expectation it was found that, in alleviating the problems of the Western Cape wheat industry, government intervention will be largely limited to creating a favourable enabling environment. In getting to this conclusion the theory of welfare economics, public choice and politician - voter interaction were explored. The traditional wisdom has it that in searching for a Pareto-optimal state, or at least a second-best solution, pressure group activities may play an important role. This is seen as important due to the difficulties, as indicated by Arrow's impossibility theorem, in transforming individual preferences into political preference functions. However, numerous examples have shown that pressure group activities may only playa marginal role in influencing the final outcome. The underlying structural characteristics of the national and provincial economies may be a more important determinant. This became more certain as the way politicians perceived agriculture before and after the 1994 political transition was analysed. It follows that a strategy for the wheat industry of the Western Cape will take the global, social, policy, natural and consumer environment into account and both the strategy and the industry will have to be self-reliant. It was argued that a solution would be found in changing the slope (elasticity) of the demand and supply functions for agricultural produce. With the aid of a spatial model developed the impact of the different elements of the strategy on the profitability of wheat production in the Western Cape was evaluated. This model took into consideration the yield potential for wheat, the gross and net margin of wheat production, spatial dispersion, transport costs and also made provision for different intermediate markets. It was found that each of the components of the strategy would substantially contribute to a more profitable wheat industry for the Western Cape. The combined effect of the strategy would result in a 97 percent decrease in the area where wheat production is unprofitable. Profitable production of wheat would be possible on 99,3 percent of the total area that is suitable for rainfed wheat production. The production of wheat would be highly profitable at a margin of more than R200 per ton on more than 1,1 million hectares (77,1% of the total area). It is concluded that, while taking the global, social, policy, natural and consumer environment into account and without relying on government, a strategy could be developed that will rectify the structural problems of the Western Cape wheat industry.
Sustainable land use planning in the aftermath of the clearing of alien invasive plant species : a system dynamics modelling approach
(Stellenbosch : Stellenbosch University, 2018-12) Mudavanhu, Shepherd; Vink, Nick; Blignaut, James Nelson; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Agricultural Economics.
ENGLISH SUMMARY : Biological invasions caused by invasive alien plant species (IAPs) pose diverse direct and indirect impacts on economic, social and environmental systems globally. The net impacts can be beneficial or harmful, although in most cases the negative impacts outweigh the beneficial effects. IAPs pose a significant threat to various systems through for example loss of biodiversity, excessive consumption of water, reduction in stream flow, health hazards to both animals and humans, increased fire risks and encroachment into agricultural lands and native ecosystems. Despite these negative impacts, IAPs to a limited extent also offer benefits to society, amongst them carbon sequestration, raw materials for manufacturing of value added products as well as habitat services for fauna. Given the predominant negative effects, however, the government of South Africa, through the Working for Water Programme (WfW), funded the clearing of IAPs mainly through labour intensive manual, mechanical and chemical means, as well as biological control using pathogens and insects as the control agents. Despite the aforementioned clearing efforts, IAPs have continued to spread exponentially, warranting more funding to finance the clearing operations targeting both new invasions and follow up clearing. In addition, the failure to contain invasions by IAPs has also led to sub-optimisation of agricultural land, which is attributed to a deficiency of land use planning frameworks and the ineffectiveness of laws governing agricultural land use in South Africa. As disclosed in this study, most of the research conducted to date has focussed mainly on control, distribution mapping, impact assessments and evaluation and to a lesser extent, partial cost benefit analyses of controlling IAPs. Given the complexities involved in the science of IAPs and land use planning decisions, the linear approach used in most studies has not been successful in fully capturing all the system elements, dynamics, causal and effect relationships thereof in order to understand the impacts of IAPs on the whole system. These complexities are further exacerbated by differences in land tenure systems. In order to understand the implications of the various land use options on land restored through clearing IAPs, within different contexts and tenure systems, it is imperative to undertake a non-linear analysis that captures the aforementioned complexities. This study identified the key decision-rules that should guide decision making in selecting the best land use and management options under diverse contexts, within the aforementioned complex and dynamic system. This was done using a system dynamics modelling approach and a multiple criteria decision analysis. The, focus was put on four study sites in the Western Cape and Northern Cape provinces of South Africa. Three system dynamics models and one multiple criteria decision analysis (MCDA) model were developed for: (i) understanding the integrated (i.e. both private and externality) benefits and costs associated with restoration of natural capital1 through the clearing of IAPs; (ii) exploring and identifying the land use capability of the land restored through clearing of IAPs and the alternative best use land types based on multiple criteria decision analysis; (iii) investigating the potential economic, social and environmental sustainability of the returns emanating from the land use types and value added industries implemented inter alia the valuation of ecosystem goods and services; (iv) assessing the economic feasibility of prospective land use types and value added products (VAPs) that can be pursued in the areas were clearing of IAPs has taken place in South Africa (with a specific focus on four sites in SA) (v) determining the opportunity cost of unrestored land cleared from invasive alien plant species in South Africa (vi) formulating scenarios under which the land use types, VAPs and management options considered will be tested using the system dynamics modelling approach in order to see the respective impacts thereof; and for (vii)understanding the policy shortcomings, options, and implications with respect to restoration of natural capital and land use types in South Africa. Validation tests of system dynamics models were also done. These included structure verification, parameter verification, dimensional consistency and extreme conditions tests which were undertaken to check for the structural validity. In addition, a behavioural validity test was conducted using multivariate sensitivity analysis to test the sensitivity of the Net Present value to the discount rate. As for the MCDA model, a parametric sensitivity analysis was conducted to test the sensitivity of the results to a change in the model parameters in order to build confidence in the analysis.Lastly, while efforts were made to capture all the economic, social and environmental aspects of IAPs management and land use planning decisions, not all core aspects were considered due to unavailability of data, methodological limitations and other unanticipated modelling complications. The limitations of the study were made explicit while concluding remarks and recommendations were made.

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