THE AGRICULTURAL POTENTIAL OF SADC

Various institutions wanting to invest in agricultural production or the agribusiness sector in the SADC region need information on the quality and location of agricultural resources. Generating agricultural resource information on a regional level provides the challenge of integrating vast amounts of information from the various countries, implying storing, retrieving and manipulating it to determine areas best suited to grow a particular crop; or various crops that can be grown in a particular area. A Geographical Information System (GIS) has been developed as part of a broader project to assess the agricultural potential of SADC countries from a physical-biological-climatological point of view. Crop suitability maps obtained from the GIS containing information on resource quality, combined with transport modelling to add information on transport cost, can be used by private sector institutions for location decisions and the public sector for planning the provision of physical and social infrastructure. Incorporating resource data of the whole region implies that the available data on the climate, topography and soils of most of the SADC countries is coarse which only allows analyses on a national and regional level.International Development,

Determination of priorities of buyers regarding value contributing characteristics of farm land in the Stellenbosch District, South Africa

The use of the comparable sales method to value farm properties requires that professional valuers must think like a typical buyer of farm properties in a particular area. The Stellenbosch district, located on the periphery of the Cape Metropole, is a famous wine-producing area. The typical buyer is sophisticated and wealthy: someone for whom lifestyle could probably be just as important as the income generating capacity of the wine estate. A variety of site and situational factors have to be considered by the valuer: some of which are easily identifiable and quantifiable, where others are more elusive. This study aimed to identify and order the more important motivations as perceived by typical buyers in order to provide guidelines to valuers. An empirical study was done to determine buyers' and property characteristics, and buyers' ratings of possible motivations for buying land in Stellenbosch. Factor analysis provided a hierarchy of motivations. Terroir is the dominant site factor and the most important motivation, followed by location relative to Cape Town, the aesthetic beauty of the property, accessibility of the property, potential for new/more vineyards, meso-climate and the status of the “address”.Land Economics/Use,

Farm Modelling for Interactive Multidisciplinary Planning of Small Grain Production Systems in the Western Cape, South Africa

Subject matter research has made many contributions to small grain production in the Western Cape province of South Africa, but much of this focuses on single commodities and is undertaken within conventional disciplinary boundaries (e.g. soil science, genetics, economics). The result is that the solutions offered often have knock-on effects that are not properly accounted for by researchers. Expert group discussions, as a research method, are suitable, firstly, for gathering information in a meaningful manner and, secondly, to stimulate individual creativity by presenting alternative perspectives provided by various participating experts. In support of expert group discussions, multi-period wholefarm simulation models were developed. This type of modelling supports the accurate financial simulation of farms, while the user-friendliness and adaptability thereof can accurately accommodate typical farm interrelationships, and quickly measure the financial impact of suggested changes to parameters. Suggestions made by experts during the group discussions can thus be quickly introduced into the model. The financial implications are instantly available to prevent further exploration of nonviable plans and to fine-tune the viable plans. In this study, for each relatively homogeneous production area of the Western Cape, a typical farm budget model was developed, which served as the basis for the group discussions. The budget models measure profitability in terms of IRR (internal rate of return on capital investment) and affordability in terms of expected cash flow. The homogeneous areas identified were Koeberg/Wellington, the Middle Swartland and the Rooi Karoo, the Goue Rûens, Middle Rûens and Heidelberg Vlakte. For each area, the expected impact of climate change, fluctuating product and input prices, and the possible impact of partial conversion to bio-fuel production were evaluated in terms of expected impact on profitability. Various area-specific strategies were identified that could enhance the profitability of grain production: most of the strategies focused on optimising machinery usage and expanding or intensifying the livestock enterprise.whole-farm modelling, expert group discussions, Farm Management,

FYNBOS EXPORTS FROM THE WESTERN CAPE PROVINCE: A PROBLEM OF LOGISTICS

During 1997 research was conducted on trends in factors that affect the supply and demand for airfreight space for fynbos exports from South Africa. The aim was to sensitise decision-makers to probable trends in those factors that will shape cargo space availability. The main finding was that the supply of airfreight to South African producers is aggravated by the unbalanced availability of cargo space on southbound and northbound trips originating from Cape Town. If the price and quantity of cargo space were determined by supply and demand, an imbalance couldn’t arise in a perfect market, as prices would balance cargo space supplied and demanded. However, airfreight tariffs are rigid per weight level. The result is that items with a higher mass per volume unit represent a higher income per palette, and are therefore preferred by export agents. This finding has implications for future growth in the industry.International Relations/Trade,

An evaluation of the environmental care orientation of deciduous fruit producers in the Western Cape

A classification system developed to evaluate the environmental care orientation of companies and, more specifically, their strategies to deal with the environmental care requirements prescribed by the market was applied to the deciduous fruit sector in the Western Cape. A survey was done to determine the attitude towards and status of, environmental care activities amongst deciduous fruit producers who have already obtained Eurepgap certification or who are busy preparing for the certification audit. A questionnaire was used and the responses were judged in terms of the guidelines of the classification system. The nature of the typical South African - European deciduous fruit export supply chain is that South African producers desire to supply the retail market at higher prices than that of the wholesale market. The producers are then confronted with the stringent environmental care requirements of the retail chains, who use the environmental care product image aggressively as a selling point in the retail market, acting like typical Class III market oriented institutions. The classification shows that the majority of producers try to comply with these requirements with minimum effort (Class I). The more progressive producers accept them as good agricultural practices to increase their production efficiency. (Class II). Some farmers participate in a comprehensive Integrated Crop Management (ICM) system to establish a culture of environmental care at farm level in a more efficient way. ICM implementation also helps to prepare proactively for possible changes in the environmental care requirements of individual retail chains. This seems to be the more effective strategy for the primary producer.Crop Production/Industries, Environmental Economics and Policy,

Towards more inclusive long-term bulk water resource management

Fresh water resources provide a platform for complex and often emotional issues to develop, particularly in resource scarcity situations. Bulk water infrastructure contains elements of a public good and proved vulnerable to failures in market and government driven allocation strategies. Common to both are uncaptured costs and benefits due to shortcomings in cost quantification techniques. Natural ecosystems stands to lose the most since ecosystem services are often not quantifiable in monetary terms and therefore neglected in allocation decision-making. This paper took on the challenge of expanding current decision-support in order to promote more inclusive long-term water management. A case-study approach with the focus on a choice related problem regarding different long-term bulk water resource management options was applied in the Western Cape province. The paper incorporated components of economic valuation theory, a public survey and a modified Delphi expert panel technique. Both spatial and temporal dimensions of the decision-making context were expanded. Two surveys were completed to accommodate these expansions. The first focused on public preference in water allocation management and the relative merit of accommodating public preference in highly specialised decision-making such as long-term water allocation decision-making. The second survey utilized a modified Delphi technique in which an expert panel indicated the relative merit of two alternative long-term allocation strategies. A willingness to pay for 'greener' water was observed and may be used to motivate a paradigm shift from management's perspective to consider, without fear of harming their own political position, 'greener' water supply options more seriously even if these options imply higher direct costs to public.water management, decision-support, public participation, Resource /Energy Economics and Policy,

THE COMPETITIVENESS OF WESTERN CAPE WHEAT PRODUCTION: AN INTERNATIONAL COMPARISON

This paper reports the results of an international comparison of the cost of producing wheat in 8 Western Cape, 3 Free State and 7 foreign producing areas. Results show that South African yields are low compared to foreign countries whose production costs are as high as or higher than those in South Africa, while the net margins for South African producers are less than a third of those for countries that have the same or lower yields as South Africa. If the wheat industry in the Western Cape is to survive international competition, it will have to create its international competitiveness.Crop Production/Industries, International Relations/Trade,

The development of a spatial decision support system to optimise agricultural resource use in the Western Cape

This paper describes the development of a decision support model for regional agricultural resource utilisation. The analysis was generated in a spatial context and the optimisation technique was interactive with a geographical information system (GIS). Economic and operational research methodologies were linked to the GIS in the process of determining the appropriate resource uses for the region. The optimisation technique was applied for the Western Cape Province for eight crops. The results of this research are discussed in this paper, with specific reference to its application value for the public sector and agri-business.Farm Management, Resource /Energy Economics and Policy,

A comparison between South African agricultural exports to the European union and those of other selected southern hemisphere countries

Primary Eurostat data of EU imports of agricultural products from selected southern hemisphere countries - namely, South Africa, Argentina, Chile, Australia and New Zealand - was used to compare the exports from those countries to the EU for the period 1988 to 2000. The study starts with a general overview of the total and agricultural export performance of these selected countries in a global context and their specialization indexes for food. This is followed by a comparison of the total value, total mass and value per tonne of agricultural exports to the EU and of their exploitation of seasonal differences with the northern hemisphere in terms of relative emphasis on particular product groups and value/mass ratios of their major products. Comparison is made of the impact of their location relative to EU ports in terms of transport cost and duration of trips and the efficiency of their own ports. The conclusions reached is that in order to remain competitive, South Africa will have to add value to carefully selected non-seasonal products. Seasonal production will have to expand with a sharper focus on market windows becoming narrower due to research and development conducted by both northern and southern hemisphere competitors. The overview motivates an even more aggressive research and development (R&D) programme by South African agriculture and food industries in order to remain competitive on export markets, especially given the rapidly changing environment. For example, the introduction of much faster ships which will decrease South AfricaÂ’s present advantage of having the shortest distance to the EU among the other southern hemisphere competitors.International Relations/Trade,

Farm Modelling for Interactive Multidisciplinary Planning of Small Grain Production Systems in the Western Cape, South Africa

Subject matter research has made many contributions to small grain production in the Western Cape province of South Africa, but much of this focuses on single commodities and is undertaken within conventional disciplinary boundaries (e.g. soil science, genetics, economics). The result is that the solutions offered often have knock-on effects that are not properly accounted for by researchers. Expert group discussions, as a research method, are suitable, firstly, for gathering information in a meaningful manner and, secondly, to stimulate individual creativity by presenting alternative perspectives provided by various participating experts. In support of expert group discussions, multi-period wholefarm simulation models were developed. This type of modelling supports the accurate financial simulation of farms, while the user-friendliness and adaptability thereof can accurately accommodate typical farm interrelationships, and quickly measure the financial impact of suggested changes to parameters. Suggestions made by experts during the group discussions can thus be quickly introduced into the model. The financial implications are instantly available to prevent further exploration of nonviable plans and to fine-tune the viable plans. In this study, for each relatively homogeneous production area of the Western Cape, a typical farm budget model was developed, which served as the basis for the group discussions. The budget models measure profitability in terms of IRR (internal rate of return on capital investment) and affordability in terms of expected cash flow. The homogeneous areas identified were Koeberg/Wellington, the Middle Swartland and the Rooi Karoo, the Goue Rûens, Middle Rûens and Heidelberg Vlakte. For each area, the expected impact of climate change, fluctuating product and input prices, and the possible impact of partial conversion to bio-fuel production were evaluated in terms of expected impact on profitability. Various area-specific strategies were identified that could enhance the profitability of grain production: most of the strategies focused on optimising machinery usage and expanding or intensifying the livestock enterprise