TESTING THE EFFICIENCY OF THE SOUTH AFRICAN FUTURES MARKET FOR WHITE MAIZE

Cointegration analysis is used to test whether the South African futures market for white maize was efficient (futures prices predict spot (cash) prices that reflect all publicly available information) in 1997 and 1998. Tests are also conducted to assess whether or not white maize futures prices are unbiased predictors of future spot prices (for effective price discovery). There was no long-run relationship between white maize futures and spot prices for 1997, but there is evidence of a long-run relationship between these price series in 1998. Furthermore, the 1998 futures price was an unbiased predictor of future spot prices for both the annual and three-month contract. This could be evidence of a market learning process and a progression towards efficiency, which has seen a marked increase in market liquidity (contract volumes traded) since late 1996

USE OF MAIZE MARKETING ALTERNATIVES AND PRICE RISK MANAGEMENT TOOLS BY COMMERCIAL MAIZE FARMERS IN SOUTH AFRICA

The demise of the Maize Board in South Africa in 1997 placed responsibility for maize marketing in the hands of individual producers. Given the inelastic nature of maize supply and demand, these farmers now face considerable price risk. In the absence of the Maize Board, price risk management mechanisms have evolved to serve maize farmers. Results of a postal survey of commercial maize producers in 1998 indicate that maize farmers are making increased use of the forward contracting market relative to the spot market. The percentage of respondents using SAFEX increased markedly over a three-year period, the hedging ratio rising from 27 percent in 1997/98 to reach 49 percent for 1998/99 and 1999/2000. Survey respondents were divided into lower- and higher- level users of price risk management tools, based on their scores for an index of price risk management. Higher-level users tended to operate larger farms, and be younger, less experienced, but more educated, computeradopting operators who were less likely to individually own their operations. Farmers perceived their marketing management skills to be relatively weak. Maize marketing education seminars and magazine articles explaining available marketing alternatives could increase farmers’ use of price risk management tools. Further research opportunities lie in the estimation of optimal hedging ratios in a South African context and the monitoring of farmers’ marketing activities as the maize market matures

Factors influencing the use of alternative land cultivation technologies in Swaziland: implications for smallholder farming on customary Swazi nation land

Poor land preparation and late planting are among the factors responsible for the decline in food production on customary Swazi Nation Land (SNL). While efforts are being made to develop an improved national land cultivation programme, this process can be helped by identifying factors that influence farmers to use alternative technologies for land cultivation. Using cross-section data collected in 2009 from a random sample of 210 farmers in Komati, three land cultivation technologies were identified; (i) use of tractors; (ii) use of draught animals; and (iii) use of hand hoes. For a country like Swaziland where human health problems, particularly HIV/AIDS, make manual labour a scarce resource, the use of tractors is regarded as a modern technology that can achieve time and labour savings. The empirical evidence from this study indicates that the use of tractors is significantly influenced by household wealth and size of arable land used by households. However, given that land holdings on customary land are generally small, sparsely distributed and often fragmented, tractor hire service providers face relatively high overhead and transaction costs. Furthermore, investment in mechanised farming by individual SNL households is constrained by the lack of secure tenure. Given these challenges, this study makes recommendations for creating an enabling environment that could promote the adoption of improved land cultivation methods by smallholders on customary SNL.

An approach to the management of orchards that are vulnerable to attack by invasive species

Discrete time Markov chain, Invasive species, Orchard management, Tree replacement, Q24, C44,