Browsing by Author "Du Toit, Jacobus Francois"
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- ItemThe financial and managerial impact of including low-chill apples as an enterprise on a typical wine farm in selected areas(Stellenbosch : Stellenbosch University, 2023-12) Du Toit, Jacobus Francois; Hoffmann, Willem; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.ENGLISH SUMMARY: The South African wine grape sector is significant to the country's economy. Many wine grape producers have expanded their operations to incorporate other long-term crops as an alternative source of revenue due to the difficulties that the industry has faced, particularly during the past 10 years. The wine grape farmers of the Robertson, Worcester, and Paarl regions have access to a wide range of crop options ideal for this diversification process. The main objective of this study is to test the inclusion of apples with a minimal cold unit demand (low-chill apples) as a diversification option for wine grape farmers. The lack of proof in the anticipated financial and management results of such a change as well as the potential cash flow impact are major stumbling blocks to implementation. Consequently, the study set out to determine the managerial and financial effects of incorporating low-chill apples into a typical wine grape farm. To address the primary research objective, three specific research goals were pursued: (i) determining the production needs for low-chill apples in the chosen areas; (ii) determining the financial effects of producing low-chill apples; and (iii) determining the financial implications of incorporating a low-chill apple enterprise at farm level for the chosen areas. Within the framework of the systems thinking methodology, a multi-year whole farm budget was developed. A farm system is complex and made up of many interconnected elements, making it challenging to understand the impact of changing any specific element. The systems thinking method can assist in the simplification of farm-level decision-making through the incorporation of the complexities involved in farming systems. Considering that farming systems are made up of interrelated components, a simulation model can include the interaction that occurs between different components. A model is a representation of a real system that models the socioeconomic, biological, and physical aspects of farming and examines the relationships between its various components. The main goal of this study's research is to determine the predicted managerial and financial effects of incorporating low-chill apples as an enterprise into a typical wine grape farm. For this goal, a budget model will be sufficient. The model predicts that the wine grape farms in the Robertson, Worcester, and Paarl districts stand to benefit financially from the diversification process. It is anticipated that infrastructure changes won't have a big cost impact. According to the findings, as the area planted with low-chill apples increases, the IRR rises. It also shows how the IRR is significantly improved by automating the harvesting process and reducing the cost of thinning for low-chill apples. This option was considered because low-chill apples would target the juice/cider market, where size and quality are less important. The IRR exhibits substantial sensitivity to changes in the Rand per tonne price and tonne per hectare of apples.