- ItemInvestigating 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.
- ItemOrganic 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.
- ItemUnlocking the potential of the emerging smallholder farming sector in South African agriculture : an agent-based approach(Stellenbosch : Stellenbosch University, 2021-03) Zantsi, Siphe; Vink, N.; Greyling, Jan C.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Agricultural Economics.ENGLISH SUMMARY : This dissertation investigates how land redistribution can be achieved and how its main prospective beneficiaries, emerging farmers, can be integrated effectively in commercial farming in South Africa. A survey of 833 potential emerging farmers in three provinces with dense populations of smallholders is used together with a survey of 605 commercial farmers across the country. The dissertation first provides an overview of the prominent reasons why land redistribution has achieved little success. It then identifies five main reasons (insufficient post-transfer support, poor beneficiary selection, large farm size coupled with lacking or incompetent farming skills, and the reluctance of the state to give freehold titles to beneficiaries along with limited programme budget) often ascribed to the failure of land redistribution projects. The presented research study addresses two of these reasons directly and others partially as sub-questions through an array of methodologies. The study begins (first phase) by explaining the emerging farmer concept, showing how it is inappropriately used in the South African context and pointing out the dangers associated with this use. It then takes a multifaceted approach and finds that no single measure should be used alone in defining emerging farmers in the South African context. In the second phase, the study deepens this discussion by analysing attributes of the potential emerging farmers through a multivariate analysis and finds five distinct cluster groups of farmers who share similar attributes. It then gives relevant policy recommendations for each cluster. In the third phase, the study delves into land redistribution beneficiary-selection criteria based on the relevant literature, legislative and policy documents, and the profile of potential land redistribution beneficiaries. A suggestion for using a vacancy farm-advertising format for the selection of land reform beneficiaries is then proposed. Inspired by the outcome of the third phase, the study applies a stepwise binary logistic regression in the fourth phase to explore the determinants of the willingness to relocate among potential land redistribution beneficiaries and finds that proxy variables for aspirations and cultural innovation influence this decision among the study participants. Responding to the recommendations of the Advisory Panel on Land Reform and Agriculture appointed by the presidency and a wide array of researchers, the fifth and sixth phases explore the hypothesis of subdividing commercial farms intended for redistribution to emerging farmers. In the fifth phase, a viable farm size is determined based on viable farm household income. Viable farm sizes for the land reform farms were explored in a novel agent-based model. These farm sizes were validated in the sixth phase. The study finds that it is possible to subdivide commercial farms in a manner that satisfies the aspirations of the emerging farmers. It also finds a clear difference between number of farms created when redistribution farms are subdivided and when they are not. This difference are also visible per farm type (enterprise) and have profound implications for land redistribution. Several other policy implications and how the results of the study can be used are discussed.
- ItemDynamics 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.
- ItemPolicy, 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.