Structure, Conduct and Performance in the South African Potato Processing Industry

The South African Potato industry was deregulated in the early 1990’s, leading to changes in market structure. The adjustment in market structure leads to changes in production and marketing practices, including contracting and pricing strategies for processing firms within the industry. The purpose of this paper is to investigate the current status in the potato processing industry, based on market structure, conduct and performance. The objective is to qualitatively measure the driving forces within the industry, and how these factors influence performance of the industry as a whole. The research method was based on the structure-conduct-performance paradigm, giving a better understanding of the potato processing industry and the driving forces, relating to future growth. A short case study of the Australian potato processing industry, which finds itself in a similar position as South Africa, reveals that increasing global competition in the form of low cost importers, are hampering competitiveness and profitability, along with rising production costs. It was found that the South African potato processing industry has a relatively high concentration, which means efficiency is lacking as market shares is not distributed effectively. It was further evident that a lack of trust between processors and producers is a source of concern for processors.Crop Production/Industries,

STOCHASTIC EFFICIENCY ANALYSIS OF ALTERNATIVE BASIC MAIZE MARKETING STRATEGIES

The use of modern marketing strategies to minimize risk exposure is not a widely adopted practice under maize producers. The producers tend to use high risk strategies which include the selling of the crop on the cash market after harvested; while the current market requires innovative strategies including the use of Futures and Options as traded on SAFEX. However, due to a lack of interest and knowledge of producers understanding of modern, complicated strategies the study illustrates by using a SERF and CDF that the use of three basic strategies namely a Put-, Twelve-segment-, Three-segment- can be more rewarding. These strategies can be adopted by farmers without an in-depth understanding of the market and market-signals. The results obtained from the study illustrates that producers who tend to be more risk neutral would prefer using the Twelve-segment- or Spot-strategy while a risk averse producer would prefer the Three-segment-, or Put-strategy. It also indicates that no strategy can be labelled as the all-time best and that the choice between strategies depends on risk adverse characteristics of the producer. The purpose of the study is to prove that the adoption of a basic strategy is better than adopting no strategy at all and to convince producers to reconsider the adoption of modern marketing strategies.Marketing strategies, futures, options, SERF, Crop Production/Industries, Marketing,

TRY plant trait database – enhanced coverage and open access

Plant traits—the morphological, anatomical, physiological, biochemical and phenological characteristics of plants—determine how plants respond to environmental factors, affect other trophic levels, and influence ecosystem properties and their benefits and detriments to people. Plant trait data thus represent the basis for a vast area of research spanning from evolutionary biology, community and functional ecology, to biodiversity conservation, ecosystem and landscape management, restoration, biogeography and earth system modelling. Since its foundation in 2007, the TRY database of plant traits has grown continuously. It now provides unprecedented data coverage under an open access data policy and is the main plant trait database used by the research community worldwide. Increasingly, the TRY database also supports new frontiers of trait‐based plant research, including the identification of data gaps and the subsequent mobilization or measurement of new data. To support this development, in this article we evaluate the extent of the trait data compiled in TRY and analyse emerging patterns of data coverage and representativeness. Best species coverage is achieved for categorical traits—almost complete coverage for ‘plant growth form’. However, most traits relevant for ecology and vegetation modelling are characterized by continuous intraspecific variation and trait–environmental relationships. These traits have to be measured on individual plants in their respective environment. Despite unprecedented data coverage, we observe a humbling lack of completeness and representativeness of these continuous traits in many aspects. We, therefore, conclude that reducing data gaps and biases in the TRY database remains a key challenge and requires a coordinated approach to data mobilization and trait measurements. This can only be achieved in collaboration with other initiatives

Ethanol blending policies and the South African animal feed industry

Ethanol production in South Africa is on the brink of becoming a reality. Government policy is currently one of the major constraints. In 2006, a proposed industry strategy was drafted. One of the main topics in this draft is the proposed blending percentages, namely, 8 per cent for bio-diesel and 10 per cent for ethanol. This would affect the South African animal feed industry, because Dried Distillers Grain with Solubles (DDGS) is a by-product of ethanol production from maize. The effects can be seen by applying the Agricultural Products Requirement (APR) minimum feed cost formulation model. According to the APR model, the total cost of animal feeds would decline at various blending percentages. Consumption of protein-rich raw materials declined most markedly at a 10 per cent blending of ethanol. These raw materials are mostly oil cake, which is currently imported from various countries. Some animals used more DDGS than others in their diets. According to this study, broilers used the most DDGS

PR - Developing A Financial Ratio Benchmarking System For GWK District Farmers In South Africa (p366-379)

Knowing the performance of competing farmers in an industry is very important. This provides farmers with an important tool to evaluate their position against the position of their competitors. Benchmarking is an effective method to evaluate the performance of a farm against other competing farms. The research is aimed at developing a benchmarking system for farmers within the GWK district, South Africa, using the Sweet 16 financial ratios as a guideline. This will provide the farmer with a tool to evaluate his performance against competitors from the specific district. The financial analysis was obtained from GWK cooperative who use the financial statements of farmers in their study groups. These statements were analysed using Microsoft Excel, where the data was analysed into 14 ratios, based on the Sweet 16 ratios used by the Farm Financial Standards Council in the USA. The main results from this research show that there are significant differences in the financial performance and correlation from the enterprises in the district. Differences in the ratios can be influenced by several factors, including the cash flow and leverage situation of the farm, which will require different management strategies in order to improve financial ratios of different farms

PR - Basic Routine Sourcing Strategies For Price Hedging Of White Maize In South Africa

Maize Milling firms use complex procurement strategies to procure their raw materials which include price hedging strategies. In this, study basic routine price hedging strategies were analysed as part of the procurement of white maize over a ten year period ranging from 2002-2012. Part of the pricing strategies used to procure white maize over the period of ten years were a call and collar strategy. These strategies were compared to the baseline futures (spot) market. The data was obtained from the Johannesburg Stock Exchange’s Agricultural Products Division better known as SAFEX. The data was analysed by using descriptive statistics and a Cumulative Distribution Function. However these routine price hedging strategies were used, by using the real (Not taking inflation into account) costs incurred were over the ten year,period is also revealed in the paper for implementation in each of the strategies. The results obtained from the study prove that by using basic routine price hedging strategies to procure white maize, it is more beneficial to do so then by procuring from the future (spot) market. Thus it can be concluded that it is not necessary to use a complex method of sourcing white maize through SAFEX, to be efficient, by implementing a basic routine price hedging strategy year on year it can be better than procuring from the futures (spot) market

Structure, Conduct and Performance in the South African Potato Processing Industry

The South African Potato industry was deregulated in the early 1990’s, leading to changes in market structure. The adjustment in market structure leads to changes in production and marketing practices, including contracting and pricing strategies for processing firms within the industry. The purpose of this paper is to investigate the current status in the potato processing industry, based on market structure, conduct and performance. The objective is to qualitatively measure the driving forces within the industry, and how these factors influence performance of the industry as a whole. The research method was based on the structure-conduct-performance paradigm, giving a better understanding of the potato processing industry and the driving forces, relating to future growth. A short case study of the Australian potato processing industry, which finds itself in a similar position as South Africa, reveals that increasing global competition in the form of low cost importers, are hampering competitiveness and profitability, along with rising production costs. It was found that the South African potato processing industry has a relatively high concentration, which means efficiency is lacking as market shares is not distributed effectively. It was further evident that a lack of trust between processors and producers is a source of concern for processors

Women Access to Credit: An Empirical Evidence from Eritrea

This paper accesses the availability of credit for women in Eritrea using a probit regression model. A woman as a variable is fitted into the probit model with other variables. The parameters in the model are estimated using the maximum likelihood approach over the ordinary least square because the dependent variable is a binary. For policy implications, the marginal effects of the explanatory variables are also derived. The result shows that gender and adoption of rain water collection technology had the greatest impacts on women access to credit followed by access to extension officer visit and number of children in the household. Women households had less to access credit facility due to collateral and social constraints, especially in the male-dominated agricultural businesses. Without serve as collateral, women are also cut off from access to credit, and without credit, they often cannot buy essential inputs to boost production. The study recommends that, Saving and Micro-credit program (SMCP) in Eritrea doing valuable work in improving women’s access to credit, the government should mobilize resources to coordinate among different stakeholders involved in development programs and the financial institutions to sustained and ensure women’s access to credit

PR - Proposed Procurement Marketing Framework For Potato Processing Companies

The potato processing industry production has increased over the last few years with as much as 143% within 10 years; together with this there is also an increased growth in the import of frozen fries. This puts direct pressure on the processing companies to procure good quality potatoes at reasonable prices, in order to remain competitive. The aim of this paper is to develop a procurement marketing framework that will assist processing companies with the establishment of longer term contracts and relationships with producers as suppliers. This framework is constructed by evaluating the needs of producers, transaction costs, the profit margins, price risks and incentives such as Decision Support Models

Characteristics of potato contract producers in the South African potato processing industry

Imports in the South African processing and frozen fries industry are on the increase. Thus, procurement for processing companies becomes more complex and the competition for local producers is increased. Local processors need to find adequate supplies at the lowest price whereas producers need to deliver at the best price. In order for processing companies to ensure sufficient quality and quantity, a good procurement strategy such as contract marketing is required. However, the characteristics of producers willing to adopt contract marketing must be identified. In order to do so, characteristics of contract producers in the Eastern Free State who used two different governance structures (contract and spot-market) were interviewed. A questionnaire was used and data were analysed with a Principal Component Regression combined with a Logit model. Out of 26 possible characteristics, nine were identified as significant (P < 0.1 or P < 0.5). The characteristics included less marketing cost, market information, only channel, less quality penalties, transport, price certainty, negotiation period, number of contacts, and less risk. Processing companies wanting to establish marketing strategies, target producers, and improve current contracts can use the nine characteristics. The characteristics can also be used to negotiate long-term contracts with producers