A framework for the improved competitiveness of resource poor farmers
Date
2009-03
Authors
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Journal ISSN
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Publisher
Stellenbosch : University of Stellenbosch
Abstract
South Africa has a two-fold agricultural sector consisting of large-scale, industrialised,
commercial farmers, as well as small-scale, resource poor subsistence farmers. One of
the aspirations of the post-1994 South African Government is to rectify the imbalances in
South African agriculture, where less than 20% of the farmers produce more than 80 % of
total national agricultural products. In an attempt to improve supply from previously
disadvantaged farmers, a land redistribution programme was launched with the goal of
transferring 30% of total agricultural land to black farmers by 2014.
However, farmers that are beneficiaries of the land transformation and redistribution
programme often struggle to sustain the previous levels of productivity of the land. This is
due to inexperience in macro-agriculture as well as a lack of resources. In such cases the
beneficiaries revert back to subsistence type farming on previously productive and
successful commercial farms. This phenomenon can have a devastating effect on the
country’s food security, Gross Domestic Product, unemployment rates and the farmer’s
prosperity and development opportunities. By reverting to small-scale farming, access to
formal marketing chains is also restricted because of the economies of scales required to
sustain a competitive supply to these markets. Urgent strategies are therefore required to
improve the competitiveness of farmers who farm on a small scale due to restricted
resources and inexperience. In this regard two proven theories to analyse industries for
improved competitiveness exist, namely value chain analysis and clustering. Both are
investigated in this study in order to determine their suitability for application in the
emerging farming sector of South Africa.
Value chain analysis has been widely applied to production and manufacturing industries
(including agricultural production and agri-food manufacturing) to scrutinise production
processes. Valuable insight into an industry’s strong and weak points can be gained by
studying various factors. These include the inputs required for the manufacturing of the
final product, the steps or processes required in the chain of events, the value added in
each step, the contributors in the chain, as well as the linkages between the contributors.
Knowledge is also gained regarding chain and process optimisation potential for improved
competitiveness. The clustering of small firms to improve their ability to compete in formal markets has
received a significant amount of academic interest over the past 100 years. In this regard
it is important to determine the factors that influence competitiveness, and to develop
strategies to improve the potential of small-scale manufacturing firms to compete with
larger scale enterprises. The clustering or grouping of small firms to co-operate with each
other and to compete against larger firms – as opposed to competing against each other
– has resulted in improved competitiveness for many small firms across the world.
A number of common key success factors for improving the competitiveness of smallscale,
resource poor farmers are identified in this study through the investigation of a host
of case studies. The results from these case studies also provide adequate evidence that
the analysis and upgrading of value chains, as well as the promotion of collective action
by small farmers, are key components for improving competitiveness and market access.
This study focuses on the development of a framework to guide the development of
strategies for improving competitiveness amongst small-scale, resource poor farming
industries, including a production cost analysis sheet to calculate the competitiveness of
farmers in this sub-sector. The Framework is also evaluated for its functionality by
looking at the implementation thereof amongst a group of emerging farmers in the
Western Cape.
Description
Thesis (MScEng (Industrial Engineering))--University of Stellenbosch, 2009.
Keywords
Emerging farmers, Dissertations -- Industrial engineering, Theses -- Industrial engineering