Institutions and economic research: a case of location externalities on agricultural resource allocation in the Kat River basin, South Africa

The Physical Externality Model is used to illustrate the potential limitations of blindly adopting formal models for economic investigation and explanation in varied geographical contexts. As argued by institutional economists for the last hundred years the practice limits the value and relevance of most general economic inquiry. This model postulates that the geographical location of farmers along a given watercourse, in which water is diverted individually, leads to structural inefficiencies that negatively affect the whole farming community. These effects are felt more severely at downstream sites and lead to a status quo where upstream farmers possess relative economic and political advantages over their counterparts elsewhere. In the study of the Kat River basin these predictions appear to be true only in as far as they relate to legal and political allocations and use of water resources. In terms of lawful uses of land resources aimed at expanding citrus production, the model’s predictions are not met. The status quo is however fully explained by the implications of having adopted formal water scheduling rights by upstream farmers as well as other geographical factors. Hence, the case for investigating the effects of important institutions within general economic research is strengthened.institutions, water allocation, physical externality, Kat River Valley,

A Game Theoretic Framework for Cooperative Benefits in South Africa’s Land Redistribution Process: A Case of Northern Kwa-Zulu Natal Sugarcane Farmland Transfers

A good indicator of successful farm redistribution cases has to be the continuation of viable productivity rates in their post transfer periods. Continued productivity benefits all the stakeholders that are involved in the process. Unfortunately negative productivity levels have been reported in numerous South African land redistribution transfers in recent years. A game theoretic perspective is adopted to argue that cooperation among key stakeholders, which could be enforced through long term contracts between a land buyer, sellers and new owners, would lead to higher productivity levels and other benefits. Additional benefits would, for example, include market related prices paid by a buyer. Sugarcane farm transfer cases from two municipality districts in KwaZulu Natal province are used to show that the productivity rates in post transfer periods of cooperative land sales were more than 10% higher than the rates observed before such transfers. At the opposite end of the scale, the productivity rates in noncooperative land sales dropped by 16% after land takeovers. Furthermore, the prices paid for farms that became less productive after transfers were higher by more than 40% compared to those paid for productive farms. The cases illustrate the values of cooperative strategies in economic transactions.Sugarcane, farms, redistribution, productivity, cooperation, games, Land Economics/Use, Research Methods/ Statistical Methods,

The effects of economic incentives in controlling pollution in the South African Leather Industry

Pollution of the environment is becoming an increasingly serious problem. A large contributor to this is industry which generates effluent as a by-product of its production process. Two methods of controlling the pollution generated by industry are the so-called “command and control†techniques and economic incentives. In theory, economic incentives promise a more economically efficient and equitable means of pollution control. This paper sets out to ascertain whether this would hold in practice by applying environmental economic theory to the practical problem of controlling the effluent generated by one particular industry, viz the South African leather industry.Environmental Economics and Policy,

Farm labour in the Eastern Cape, 1950-1973

Farm labour, Eastern Cap

Institutions and economic research: a case of location externalities on agricultural resource allocation in the Kat River basin, South Africa: a rejoinder

In Mbatha and Antrobus (2008), an argument was put forward against an importation or adoption of universal models or general theorems to explain locally prevailing socio-economic conditions and predict outcomes in varied geographical contexts such as in the Kat River basin. In response to this argument a comment in this edition argues that our results are caused by, metaphorically speaking, comparing apples and oranges. If, however, all of the relevant information is taken into account, a simple economic model may suffice to depict the situation within the KRV. Here we illustrate that the comment comes from a misreading of basic details in the original discussion and in its construction and presentation of an alternative model of the KRV conditions the comment reiterates our original argument that general models and theorems are likely to fail to explain local intricacies primarily because they are not founded on local historical institutions.

A cooperative benefits framework in South Africa's land redistribution process: The case of sugarcane farmland transfers

A good indicator of successful land redistribution cases has to be the continuation of viable productivity rates in their post-transfer periods. Continued productivity benefits all the stakeholders that are involved in the process. Unfortunately, negative productivity levels have been reported in numerous South African land redistribution transfers in recent years. A game theoretic perspective is adopted to illustrate and argue that cooperation among key stakeholders, which could be enforced through long-term contracts between land buyers, sellers and new owners, may lead to maintenance and higher productivity levels and other benefits within the country's land redistribution process. Sugarcane farm transfer cases from two municipality districts in the KwaZulu-Natal province are used to show that the productivity rates in the post-transfer periods within cooperative land sales were more than 10% higher than the rates observed before such transfers. At the opposite end of the scale, the productivity rates in non-cooperative land sales dropped by 12% after the land was sold and taken over by new farmers. Also notable is that the prices paid by government for farms that became less productive after transfers were higher by more than 40% compared to prices paid for productive farms. The cases could be illustrative of the benefits of cooperation in land redistribution transactions

VALUING THE ARTS

Economic impact studies have been used to measure the value of a variety of public and mixed goods, such as arts festivals, sports facilities and educational institutions, partly to motivate for public funds. The attraction of this sort of study rests largely on the fact that it produces a quantifiable monetary measure of the value of a project as opposed to a less easily valued qualitative study. “Public officials, boosters and the media accept the ‘quantifiable’ which appears to represent reality in order to justify a desired project” (Johnson and Sack 1996:370)

Farmers’ perceptions of the impact of legislation on farm workers’ wages and working conditions: an eastern cape case study

The status of South African farm workers has changed significantly over the past five decades. Using data from three major surveys conducted between 1957 and 2008, an Eastern Cape district was used as a case study to assess farmers’ perceptions of the changes that had occurred, particularly as a result of legislation. Considering the changes, the impacts on the farm labour market and wage and non-wage working conditions are analysed. The legislation focused on includes the Extension of Security of Tenure Act 62 (ESTA) of 1997, the Basic Conditions of Employment Act 75 (BCEA) of 1997 and minimum wage legislation. Farmers believed legislation had both positive and negative effects, which were compounded by changes in the political and economic contexts. The case study reveals that government has a role in improving the status of farm labourers, with education and healthcare services requiring special attention. However, caution is needed to ensure that further reductions in farm employment are restricted

Institutions and economic research: A case of location externalities on agricultural resource allocation in the Kat River basin, South Africa: A Rejoinder

In Mbatha and Antrobus (2008), an argument was put forward against an importation or adoption of universal models or general theorems to explain locally prevailing socio-economic conditions and predict outcomes in varied geographical contexts such as in the Kat River basin. In response to this argument a comment in this edition argues that our “results are caused by, metaphorically speaking, comparing apples and oranges. If, however, all of the relevant information is taken into account, a simple economic model may suffice to depict the situation within the KRV.” Here we illustrate that the comment comes from a misreading of basic details in the original discussion and in its construction and presentation of an alternative model of the KRV conditions the comment reiterates our original argument that general models and theorems are likely to fail to explain local intricacies primarily because they are not founded on local historical institutions

Role of Agricultural Marketing in Transforimg Subsistence Agricultre: African Case Study

A lack of agricultural marketing facilities is generally seen as one of the major obstacles to agricultural development. However, subsistence producers in southern Africa are influenced by certain exogeneous factors, such as competition from commercial production, the well-developed marketing system, and off-farm employment opportunities in South Africa. This paper studies the effect of the institution of an organized marketing system in Ciskei on the level of agricultural production. This is found to have had no significant effect because the majority of the able-bodied males are working in the metropolitan areas of South Africa. This has resulted in agriculture becoming a part-time supplementary activity for women, old men, and children in the rural areas