EVALUATING SUPPORT TO AGRICULTURE IN SOUTH AFRICA: THE CALCULATION OF NET PROTECTION COEFFICIENTS (NPCS)

The Effective Protection Ratio (EPR) is used in this study as a measure of the impact of policy distortions on agricultural producers. The results of the EPR analysis show that in 1995, most of the interventions supporting agricultural production have disappeared, particularly if the production is aimed at the domestic market. This holds for basic grains and oilseeds, as well as other products such as potatoes, cotton and tobacco, across all regions. Beef cattle and sheep production is also not being favoured by support in any of the regions. On the contrary, a number of commodities are effectively being taxed.Agricultural and Food Policy,

The effects of water policies on the farm sector in the Western Cape

The farm sector of the Western Cape is modelled using a sector mathematical programming model to determine the effect of different water policies on output, prices, welfare and employment. Two scenarios are analysed, namely the effect of a restriction of water available for irrigation, and an increase in water tariffs. Results show a relative shift away from (intensive) irrigated production, and a decrease in producer welfare, especially for irrigation farmers, under both scenarios. When water availability is decreased, the negative effect falls disproportionately on the poor as employment decreases. In the long run the negative effects are severe, as there is a relative shift out of industries where the Western Cape has a competitive advantage.Resource /Energy Economics and Policy,

THE RELATIONSHIP BETWEEN FARM SIZE AND THE TECHNICAL INEFFICIENCY OF PRODUCTION OF WHEAT FARMERS IN THE EASTERN FREE STATE

Some comments are required to put in perspective the results obtained by Ngwenya, Battese and Fleming (1997). In particular, it is necessary to examine their main conclusion that in 1988/89 there was a significant inverse relationship between the technical inefficiency of wheat farmers in the Eastern Free State and farm size, because this is in direct contrast with the findings of Van Zyl, Binswanger and Thirtle (1995) who used the same dataset.Crop Production/Industries,

DEFINING SMALL-SCALE FARMERS IN THE SOUTH AFRICAN CONTEXT

South African agriculture is comprised of mainly two categories of farmers -- the subsistence farmers in the former homeland areas and the large-scale commercial (mainly white) farmers. This is in contrast with the situation in many other countries in the world where one would find a whole range of farm sizes, ranging from the very small or subsistence farmer to the very large farmer/agribusiness. The paper highlights the situation of small-scale farmers in an international context and compares it with the South African situation that is totally different. Within this context, this paper has as basic premise that in South Africa the concept of "small-scale farmer" is usually value-laden, creates wrong impressions and is often viewed in a negative light. "Small-scale" is often equated with a backward, nonproductive, non-commercial, subsistence agriculture that we find in parts of the former homeland areas. This paper endeavours to correct the negative perceptions towards smallscale farms by redefining the small-scale farmer and laying to rest the fallacy that small relates to land size only.Farm Management,

Estimation of the rate of return to wine grape research and technology development expenditures in South Africa

This article evaluates the impact of research and technology development in the wine grape industry in order to determine the rate of return (ROR) to these investments, and to make specific recommendations on funding. The analysis illustrates the applied and adaptive nature of the research conducted in the industry, with RORs of roughly 40 percent for R&D and extension. This is high, providing excellent motivation for increased investment in R&D.Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,

Steel Wheels in Mozambique

This down-in-the-trenches story about using a Casspir fitted with steel wheels to demine in Mozambique in the early 1990s makes you feel like you are right there. Getting rid of the mines was not the only problem the deminers had; sometimes getting past the insurgents was more challenging

Testing the induced innovation hypothesis in South African agriculture (an error correction approach)

The authors investigate whether factor prices matter in agricultural production and in the selection of production technology. Each stage of the analysis corroborates the inducement hypothesis, which implies that factor prices do matter in agricultural production and in the selection of production technology. The empirical results also suggest that observed rates and biases of technological change are influenced by average farm size, by spending on research and extension, and by favorable tax and interest-rate policies. In South Africa, the authors contend, more attention should be focused on the technological needs of small-scale farmers. The lobbying power of the large commercial farmers, combined with policies followed under apartheid, must have influenced the allocation of research and development funds between labor- and land-saving technical change. This will have distorted the technological bias toward labor saving technical change, which is hardly appropriate for a labor-surplus economy in which small farmers in the former homelands face a chronic scarcity of land. These results show that factor prices do matter in agricultural production and the selection of production technology. And there seems to be merit to the World Bank's usual policy prescription - structural adjustment and market liberalization - for economies in which prices are controlled and distorted. They investigate the role of factor prices by applying cointegration techniques to a model of induced innovation based on the two-stage constant elasticity of substitution production function. This approach results in direct tests of the inducement hypothesis, which are applied to data for South African agriculture for the period 1947-92. They check the time series properties of the variables, establish cointegration, and construct an error correction model (ECM) that allows factor substitution to be separated from technological change. Finally, they subject the ECM formulation to tests of causality, which show that the factor price ratios induce the factor saving biases of technological change.Economic Theory&Research,Environmental Economics&Policies,Agricultural Knowledge&Information Systems,Scientific Research&Science Parks,Markets and Market Access,Environmental Economics&Policies,Economic Theory&Research,Agricultural Knowledge&Information Systems,Scientific Research&Science Parks,Science Education

An Analysis of Alternative Maize Marketing Policies in South Africa

The maize-oriented agricultural economies throughout Southern Africa are in fundamental transition. Increased recognition of the costs of historical controls on pricing and marketing already has led to partial maize market liberalization in several countries in the region. However, there is still intense debate over the appropriate scope and implementation of future food market reform. Much of the debate derives from uncertainty over the consequences of comprehensive and politically risky changes to domestic markets, especially at a time when regional market conditions are also in flux due to agricultural restructuring in neighboring countries. There is currently little information on the direction and magnitude of grain trade between South Africa, Zimbabwe, and other countries in the region under a deregulated external trading environment. There is also a lack of information on the regional consequences of alternative domestic maize policy scenarios currently under deliberation in South Africa. The purpose of this research is fourfold. First, we consider the role of food market reform in affecting future economic growth and food security in South Africa, and discuss the congruence between the government's food policy objectives and the existing marketing and pricing system. Second, trends in maize production, trade, prices and marketing costs in South Africa and Zimbabwe, the two largest maize traders in the region, are presented. Third, we present four alternative maize policy scenarios in South Africa, and then estimate their effects on maize production, gross revenues, consumer prices, and trade flows under various weather and pricing scenarios in Zimbabwe. A comparison of results across four policy scenarios clarifies the gainers, losers, and extent of income transfers between various regions and socio-economic groups within each region. The final section identifies means by which national food policy objectives in South Africa may be more cost-effectively achieved through harmonization of policies between South Africa and its regional neighbors.food security, food policy, maize market, Crop Production/Industries, Marketing, Q13,

The effects of climate change on the farm sector in the Western Cape

This paper links two different methodologies to determine the effects of climate change on the Western Cape farm sector. First, it uses a general circulation model (GCM) to model future climate change in the Western Cape, particularly with respect to precipitation. Second, a sector mathematical programming model of the Western Cape farm sector is used to incorporate the predicted climate change, specifically rainfall, from the GCM to determine the effects on key variables of the regional farm economy. In summary, results indicate that future climate change will lead to lower precipitation, which implies that less water will be available to agriculture in the Western Cape. This will have a negative overall effect on the Western Cape farm economy. Both producer welfare and consumer welfare will decrease. Total employment in the farm sector will also decrease as producers switch to a more extensive production pattern. The total decline in welfare, therefore, will fall disproportionately on the poor.Resource /Energy Economics and Policy,

Agrarian structure in Poland : the myth of large-farm superiority

In Poland, present policies are aimed at promoting large, mechanized farms over smaller family farms. These policies are based on the perception that large farms offer real economies of scale. But international evidence indicates that such large, mechanized farms are generally less efficient and use less labor than small family farms. The authors analyzed the relationship between farm size and efficiency in Polish agriculture. They used two different methods to do so. First they determined differences in total factor productivity between small and large farms. They then used Data Envelope Analysis to estimate scale efficiencies. The results show that, for the sample of farms analyzed: 1) large farms are not more efficient than smaller farms; and 2) smaller farms are more labor-intensive than larger farms. These results have important policy implications for farm restructuring in Poland and other transition economies facing similar issues and conditions.Environmental Economics&Policies,Crops&Crop Management Systems,Agricultural Knowledge&Information Systems,Banks&Banking Reform,Economic Theory&Research,Banks&Banking Reform,Environmental Economics&Policies,Agricultural Knowledge&Information Systems,Crops&Crop Management Systems,Livestock&Animal Husbandry