ECONOMIES OF SCALE FOR SMALL AND LARGE SUGAR CANE FARMS IN KWAZULU-NATAL

This paper gives a profile of a sample of a small and large sugar cane farms in the North coast region of the KwaZulu-Natal sugar cane belt. The survey was conducted during May 1995. Farms studied varied between one and 600 hectares. Values for small farms were significantly lower than large farms for human capital resources, farm resource utilisation, rate of search and utilisation of farm information, and adoption of appropriate and improved cultural farm practices. Such differences may account for the differences in farm productivity between small and large farms that exist in the South African sugar industry. A linear discriminant function model shows that small and large farms studied differ significantly on lines of human resources and cost of borrowed capital (market related). The findings of the study show that large cane farms face lower market related interest rates, are relatively better equipped in human resource capital, and are in a position to implement appropriate and recommendable farm practices (soil analysis and use of certified seedcane) compared to small farmers

DISCRIMINANT ANALYSIS OF WATER TRADE AMONG IRRIGATION FARMERS IN THE LOWER ORANGE RIVER OF SOUTH AFRICA

This study found that a water market emerged within the Lower Orange River for river water rights. The market emergence is attributed to the scarcity of water in this region and the demonstrated demand by farmers for a change in the allocation of these rights. Transfers were facilitated by authorisation of the Department of Water Affairs and Forestry permitting transfers of water rights, and the enabling environment defined by the regional Water Affairs office. Improving water trade could be achieved by the delegation of authority to the regional Department of Water Affairs to approve transfers, extending support to market transfers of canal water, and ensuring that water extraction is closely monitored as river water use increases in future. A discriminant analysis indicated that water rights transferred from farmers with potential to irrigate wine grapes, raisin grapes, and field crops to farmers with potential to irrigate table grapes, representing the highest valued use of the water. Farmers stated that the proposed new Water Law created much uncertainty about their water rights, stifling water market activity, and that it will lead to underinvestment in irrigated agriculture. Overcoming such institutional and legal barriers for market performance will require that water use allocations be specified for reasonable periods, be inherently secure, and water trading be permitted through the relevant legislatures

THE EXPECTED CONSUMPTION OF PROTEIN FEED IN SOUTH AFRICA BY 2020

The consumption of animal products in South Africa is projected to 2020 and used to derive protein feed usage. A spreadsheet model, developed for this purpose, has the following novel features:- it is interactive and readily allows for scenario analysis; the price of protein is endogenous in the South African model as it is generated by an international model; income elasticities of demand are permitted to decline with GNP growth; it incorporates estimated rates of technological progress in livestock production, and predicts the resulting real price change. Total protein consumption is projected at 1.54 million tons by 2010, a 24% increase from 2000, and 1.96 million tons by 2020, a 58% increase from 2000, under base population growth and low income growth. Broiler, egg and pork product prices (projected to decline in real terms because of expected technological advances) contribute to increasing protein usage even in the absence of significant real income growth rates. Population growth remains the most important demand driver and scenario analysis reveals that alternative population growth rates impact significantly on projections. The negative effect of HIV/AIDS on population growth and the subsequent restriction on potential protein use is evident