What is really in the economic partnership agreements for the Southern African region? A perspective from Botswana’s beef export markets

The signing of the Economic Partnership Agreements (EPAs) between the European Union (EU) and the African Caribbean Pacific (ACP) nations dominated the multilateral trade agenda in late 2007 and early 2008. While the Caribbean nations signed the full EPAs, some of the African countries only singed interim agreements with the EU and a number of West African countries chose not to sign any EPA. Using the case of Botswana’s export markets, especially in agriculture, it is argued that the interim Southern African Development Community (SADC) EPA, which was signed by Botswana and her neighbours, with the exception of South Africa, may have been economically sensible in protecting Botswana’s rural poor, at least in the short run. By tracing trade flows from the border to specifically poor sectors of the country, the importance of the beef exports sector to the poor and rural communities was found. The potential effects on the most significant exports of tariff bands associated with preferential agreements with the EU were found to be most beneficial in comparison to the Most Favoured Nation (MFN) and the South Africa-EU Trade Development and Cooperation Agreement (TDCA) tariff bands. But it is also argued that the EPA will most likely have far reaching long run costs on regional economic development and institutional integration, within the SADC and Southern African Customs Union (SACU).Botswana, economic partnership agreements, European Union, exports, beef,

A Game Theoretic Framework for Cooperative Benefits in South Africa’s Land Redistribution Process: A Case of Northern Kwa-Zulu Natal Sugarcane Farmland Transfers

A good indicator of successful farm redistribution cases has to be the continuation of viable productivity rates in their post transfer periods. Continued productivity benefits all the stakeholders that are involved in the process. Unfortunately negative productivity levels have been reported in numerous South African land redistribution transfers in recent years. A game theoretic perspective is adopted to argue that cooperation among key stakeholders, which could be enforced through long term contracts between a land buyer, sellers and new owners, would lead to higher productivity levels and other benefits. Additional benefits would, for example, include market related prices paid by a buyer. Sugarcane farm transfer cases from two municipality districts in KwaZulu Natal province are used to show that the productivity rates in post transfer periods of cooperative land sales were more than 10% higher than the rates observed before such transfers. At the opposite end of the scale, the productivity rates in noncooperative land sales dropped by 16% after land takeovers. Furthermore, the prices paid for farms that became less productive after transfers were higher by more than 40% compared to those paid for productive farms. The cases illustrate the values of cooperative strategies in economic transactions.Sugarcane, farms, redistribution, productivity, cooperation, games, Land Economics/Use, Research Methods/ Statistical Methods,

Institutions and economic research: a case of location externalities on agricultural resource allocation in the Kat River basin, South Africa

The Physical Externality Model is used to illustrate the potential limitations of blindly adopting formal models for economic investigation and explanation in varied geographical contexts. As argued by institutional economists for the last hundred years the practice limits the value and relevance of most general economic inquiry. This model postulates that the geographical location of farmers along a given watercourse, in which water is diverted individually, leads to structural inefficiencies that negatively affect the whole farming community. These effects are felt more severely at downstream sites and lead to a status quo where upstream farmers possess relative economic and political advantages over their counterparts elsewhere. In the study of the Kat River basin these predictions appear to be true only in as far as they relate to legal and political allocations and use of water resources. In terms of lawful uses of land resources aimed at expanding citrus production, the model’s predictions are not met. The status quo is however fully explained by the implications of having adopted formal water scheduling rights by upstream farmers as well as other geographical factors. Hence, the case for investigating the effects of important institutions within general economic research is strengthened.institutions, water allocation, physical externality, Kat River Valley,

How to understand, evaluate and influence efficient progress in South Africa’s land reform process: A typology from historical lessons from selected sub-Saharan African countries

Background: With reports of widespread failures in South Africa’s land reform programmes, the levels of policy uncertainty in the political rhetoric that influences land reform have been increasing. Since 1994 policy targets to transfer land to black farmers have not been met. Of the 2005 target to transfer about 25 million ha of commercial farmland to black farmers by 2014, less than 5 million ha. have been transferred for commercial use. Some studies report failure rates in resettlement projects of up to 90%. To account for the failures, revisions of policies and amendments to legislations have been proposed within a political environment that is becoming increasingly intolerant to slow progress in land transfers and to resettlement failures. Aim: Against this environment, this paper presents a typology for understanding and evaluating important elements of the land reform project in order to influence progress in the process. Setting: The study adopts a historical review of land reform processes in post-colonial Kenya and Zimbabwe in order to identify potential challenges and key lessons for South Africa. Methods: Hence, using institutional and historical analytical lenses in exploring different narratives, the paper reviews reported failures and successes in land reform policy cases from the selected countries. From an institutional framework, prevalent social institutions and key lessons from Kenya, Zimbabwe and South Africa, a typology for evaluating important elements of the land reform process in South Africa is developed and discussed. Additionally, a review of global data collected on average sizes of farms in different regions of the world is provided as evidence to support propositions of what would constitute efficient farmland size ranges for small to medium commercial farms in South Africa. Results and conclusion: A proposition is made on how to use the typology to guide policy and research interventions to reduce failures and promote successful cases in different areas of the land reform process in South Africa, and possibly other similar contexts

Institutions and economic research: a case of location externalities on agricultural resource allocation in the Kat River basin, South Africa

The Physical Externality Model is used to illustrate the potential limitations of blindly adopting formal models for economic investigation and explanation in varied geographical contexts. As argued by institutional economists for the last hundred years the practice limits the value and relevance of most general economic inquiry. This model postulates that the geographical location of farmers along a given watercourse, in which water is diverted individually, leads to structural inefficiencies that negatively affect the whole farming community. These effects are felt more severely at downstream sites and lead to a status quo where upstream farmers possess relative economic and political advantages over their counterparts elsewhere. In the study of the Kat River basin these predictions appear to be true only in as far as they relate to legal and political allocations and use of water resources. In terms of lawful uses of land resources aimed at expanding citrus production, the model’s predictions are not met. The status quo is however fully explained by the implications of having adopted formal water scheduling rights by upstream farmers as well as other geographical factors. Hence, the case for investigating the effects of important institutions within general economic research is strengthened

What is really in the economic partnership agreements for the Southern African region? A perspective from Botswana’s beef export markets

The signing of the Economic Partnership Agreements (EPAs) between the European Union (EU) and the African Caribbean Pacific (ACP) nations dominated the multilateral trade agenda in late 2007 and early 2008. While the Caribbean nations signed the full EPAs, some of the African countries only singed interim agreements with the EU and a number of West African countries chose not to sign any EPA. Using the case of Botswana’s export markets, especially in agriculture, it is argued that the interim Southern African Development Community (SADC) EPA, which was signed by Botswana and her neighbours, with the exception of South Africa, may have been economically sensible in protecting Botswana’s rural poor, at least in the short run. By tracing trade flows from the border to specifically poor sectors of the country, the importance of the beef exports sector to the poor and rural communities was found. The potential effects on the most significant exports of tariff bands associated with preferential agreements with the EU were found to be most beneficial in comparison to the Most Favoured Nation (MFN) and the South Africa-EU Trade Development and Cooperation Agreement (TDCA) tariff bands. But it is also argued that the EPA will most likely have far reaching long run costs on regional economic development and institutional integration, within the SADC and Southern African Customs Union (SACU)

A Game Theoretic Framework for Cooperative Benefits in South Africa’s Land Redistribution Process: A Case of Northern Kwa-Zulu Natal Sugarcane Farmland Transfers

A good indicator of successful farm redistribution cases has to be the continuation of viable productivity rates in their post transfer periods. Continued productivity benefits all the stakeholders that are involved in the process. Unfortunately negative productivity levels have been reported in numerous South African land redistribution transfers in recent years. A game theoretic perspective is adopted to argue that cooperation among key stakeholders, which could be enforced through long term contracts between a land buyer, sellers and new owners, would lead to higher productivity levels and other benefits. Additional benefits would, for example, include market related prices paid by a buyer. Sugarcane farm transfer cases from two municipality districts in KwaZulu Natal province are used to show that the productivity rates in post transfer periods of cooperative land sales were more than 10% higher than the rates observed before such transfers. At the opposite end of the scale, the productivity rates in noncooperative land sales dropped by 16% after land takeovers. Furthermore, the prices paid for farms that became less productive after transfers were higher by more than 40% compared to those paid for productive farms. The cases illustrate the values of cooperative strategies in economic transactions