Measuring the impact of climate change on South African agriculture: The case of sugar-cane growing regions

This study employed a Ricardian model that captures farmers' adaptation to analyze the impact of climate change on South African Sugarcane production under irrigation and dryland conditions. The study utilized time series data for the period 1977 to 1998 pooled over 11 districts. Results showed that climate change has significant nonlinear impacts on net revenue per hectare of sugarcane in South Africa with higher sensitivity to future increases in temperature than precipitation. Irrigation did not prove to provide an effective option for mitigating climate change damages on sugarcane production in South Africa. The study suggests that adaptation strategies should focus special attention on technologies and management regimes that will enhance sugarcane tolerance to warmer temperatures during winter and especially the harvesting phases.Environmental Economics and Policy,

MODELLING THE MARKET OUTLOOK AND POLICY ALTERNATIVES FOR THE WHEAT SECTOR IN SOUTH AFRICA

In this study, the structure of the South African wheat market is analysed using economic theory and econometric modelling techniques. The developed model is used to make baseline projections regarding the supply and use of wheat in South Africa and to analyse the impacts of various policy alternatives on the wheat sector for the period 2002 2008. Results indicate that after an initial decline in the area harvested in 2003, the area harvested will increase over time. Domestic consumption will gradually decrease over time, which will result in lower levels of imports and higher level of exports. Three policy scenarios are analysed, the elimination of the import tariff for wheat, a twelve percent depreciation in the exchange rate, and the convergence of the elimination of the import tariff and the 12% depreciation in the exchange rate.Agricultural and Food Policy, Crop Production/Industries, Research Methods/ Statistical Methods,

The impact of the WTO agricultural negotiating modalities on Southern African Development Community countries

This paper assesses the likely impact on the agricultural sector of the Southern African Development Community (SADC) countries of the Harbinson modalities, along with the EU and US proposals as alternative scenarios in the context of the ongoing negotiations of the WTO Agreement on Agriculture. Impacts are assessed on a number of indicators, notably government revenue, producer, consumer and total welfare measures and trade flow. Reflecting country- and commodity-specific factors, the three modalities have different impacts on the indicators. The SADC as a whole is found to lose in terms of total welfare under all three proposals. But while this loss under the Harbinson and EU proposals is due to declines in consumer surpluses and government revenues, reduced producer surplus and government revenue explain the loss in total welfare under the US proposal. Thus, the ranking of the modalities differs according to the impact indicator used, revealing important trade-offs in the choice of the modalities. An issue raised is the value of consumer gains relative to producer gains for low-income economies highly dependent on agriculture because for them effective demand for consumption itself depends on incomes generated from increased agricultural activities, which in turn requires sustained gains in producer surpluses. The paper presents a range of results and discusses the trade-offs, with the hope that SADC trade negotiators and policy makers find these to be useful as they negotiate for the final form of the modalities.International Relations/Trade,

Determinants of adoption and intensity of use of improved maize varieties in the Central Highlands of Ethiopia: A Tobit analysis

This study employed a Tobit model to examine factors that influence the adoption and intensity of utilisation of improved maize varieties in the West Shoa Zone in the central highlands of Ethiopia. The estimated results indicate that level of education, household labour, farm size, extension services, farm income, and timely availability of improved maize seeds significantly influence the adoption and intensity of use of improved maize. It also showed that the impact of off-farm income and age of the household head on adoption and intensity of use of improved maize seed was insignificant.Crop Production/Industries,

MODELING THE SOUTH AFRICAN AGRICULTURAL PRODUCTION STRUCTURE AND FLEXIBILITY OF INPUT SUBSTITUTION

This paper evaluates the production structure of the South African agricultural sector for the period 1970-1998, using a translog function. The results show that the production structure is best represented by production technology that is Hicks-neutral and homothetic. This information is useful in evaluating the results of previous research on the structure of South African agricultural production, particularly relatively recent research on elasticities of substitution. In addition, it also provides the basis for meaningful future analysis of aspects related to the production structure of agriculture.Industrial Organization,

IS AGRICULTURAL SECTOR GROWTH A PRECONDITION FOR ECONOMIC GROWTH? THE CASE OF SOUTH AFRICA

In this paper a simple growth model is adapted to explain the effect of the agricultural sectors' growth on the non-agricultural sector. The empirical results suggest that for a 1% growth in the agricultural sector, the non-agricultural sector responds by more than 1%. The results also confirm that productivity difference exists, the non-agricultural sector being more efficient in terms of input use. The empirical results support the argument of President T. Mbeki, that South Africa should follow an "agricultural-led" growth strategy for successful development.International Development,

The impact of real exchange rate changes on South African agricultural exports: An error correction model approach

This study evaluates the long run and short run effects of real exchange rate changes on South African agricultural exports using an Error Correction Model (ECM). The results suggest that there is a unidirectional causal flow from exchange rate to agricultural exports. Moreover, appreciation of the Rand will be detrimental to agricultural exports

Representing the production structure of South African agriculture

This paper evaluates the production structure of the South African agricultural sector for the period 1970-1998, using a translog function. The results show that the production structure is best represented by production technology that is Hicks-neutral and homothetic. This information is useful in evaluating the results of previous research on the structure of South African agricultural production, particularly relatively recent research on elasticities of substitution. In addition, it also provides the basis for meaningful future analysis of aspects related to the production structure of agriculture

The impact of the WTO agricultural negotiating modalities on Southern African Development Community countries

This paper assesses the likely impact on the agricultural sector of the Southern African Development Community (SADC) countries of the Harbinson modalities, along with the EU and US proposals as alternative scenarios in the context of the ongoing negotiations of the WTO Agreement on Agriculture. Impacts are assessed on a number of indicators, notably government revenue, producer, consumer and total welfare measures and trade flow. Reflecting country- and commodity-specific factors, the three modalities have different impacts on the indicators. The SADC as a whole is found to lose in terms of total welfare under all three proposals. But while this loss under the Harbinson and EU proposals is due to declines in consumer surpluses and government revenues, reduced producer surplus and government revenue explain the loss in total welfare under the US proposal. Thus, the ranking of the modalities differs according to the impact indicator used, revealing important trade-offs in the choice of the modalities. An issue raised is the value of consumer gains relative to producer gains for low-income economies highly dependent on agriculture because for them effective demand for consumption itself depends on incomes generated from increased agricultural activities, which in turn requires sustained gains in producer surpluses. The paper presents a range of results and discusses the trade-offs, with the hope that SADC trade negotiators and policy makers find these to be useful as they negotiate for the final form of the modalities

Satellite and resource accounting as tools for tourism planning in southern Africa

The potential for improvements to tourism planning through development of tourism satellite accounts (TSAs) to measure economic activity, and tourism asset resource accounts (TARAs) to measure the natural asset base, was studied in southern Africa. It was concluded that economic efficiency in tourism development would be enhanced if all the countries pursue plans to develop TSA, TARA and economic models for tourism planning. Basic TSA, including consumption, production, supply and use, employment and capital tables are required. TSA development should take place step by step, with specific data collection surveys and agreements between the stakeholders. Surveys should be focused on both tourists and the suppliers of tourism products, and should be carried out by central tourism agencies in collaboration with national accounting agencies. TARAs should involve both physical accounts for specific resources, such as water or wildlife, as well as land accounts for general tourism activity and potential. TSAs and TARAs should be integrated with input-output/social accounting matrix modelling tools. Countries should match the rigour of their TSA and TARA development with their anticipated capacity for analysis and planning. Donors could assist in the process, especially in a regional context.