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Item Open Access Die teeltstruktuur van die Suid-Afrikaanse merino(University of the Free State, 1977-12) Erasmus, Gert Johannes; De Lange, A. O.English: 1. An analysis of the flock records kept by the Merino Stud Breeders' Association of South Africa is made. A qualitative classification of studs according to definition is made in an effort to determine the breed structure of the Merino. 2. The number of registered breeders as well as the total number of stud ewes shows. a sharp increase to 1967 with an equally sharp decline between 1970 and 1973. 3. The abovementioned changes are largely to be found in the ranks of the smaller studs. 4. The average number of stud ewes per breeder has stabilised at approximately 230 since 1966. 5. It is found that smaller studs have a smaller chance of survival. 6. The 773 active studs. in 1974 are classified as follows by definition: 15 “parent” studs, 258 “daughter studs”, 431 “general” studs, 69 “isolated” studs. 7. The "parent" studs are dominated by three studs and their "daughters" as far as supplying rams is concerned. Large differences in number of stud ewes and number of stud and and flock rams sold exist between parent studs. 8. The "family groups" ("parents" plus "daughters") are the largest vendors of stud rams (76,3 per cent of 'total) while the "general" studs and family groups sell approximately the same number of flock rams. 9. It is estimated that the registered Merino breeders supply only approximately 54 per cent of the total number of Merino rams required in the Republic. 10. Although the average number of stud ewes per breeder is small, it is estimated that registered breeders each possess on the average approximately 2 000 commercial ewes. The recommendation is made that the size of the present stud flocks be in: creased by making use of these ewes. 11. It is calculated that the registered breeders sell on the average approximately 37 per cent of their available rams but that this proportion varies considerably. The proportion of rams sold has no connection with stud size. Many registered studs sell no rams. 12. It is concluded that the breed structure of the Merino rather tends towards a two-tier structure than a classical three tier pyramid. Most of the studs are relatively more dependant on within-flock selection of rams for breeding improvement than on rams purchased. It can, however, be concluded that a more precise description of breed structure is necessary. 13. Evidence pertaining to the existence of a selection plateau in fleece weight in many cases is discussed. It is concluded that effective selection on measured performance is a necessity. 14. The implications of the present breed structure on the strategy of extension efforts with regard to the National performance Testing Scheme is discussed. It is concluded that an extension program directed at the whole Merino industry is needed and that a fleece analysis service cannot be restricted to certain "elite" flocks. 15. It is found that Merino stud flocks are largely centered in the Eastern Karoo area. The implications of this situation is discussed. 16. The necessity of inter-flock comparisons of actual genetic merit is stressed.Item Open Access 'n Ekonomiese evaluasie van sommige gewasopvolgingstelsels onder droëlandtoestande in die Middel-Vrystaat(University of the Free State, 1985-01) Grobbelaar, Jan Adriaan; Blignaut, C. S.; De Jager, J. M.; Human, J. J.Afrikaans: Gewasprodusente in die Middel-Vrystaat het gevind dat die inskakeling van 'n somergewas in bestaande wintergewasproduksiestelsels, met gepaardgaande langer braakperiodes, aanleiding gee tot verhoogde graanopbrengste en 'n vermindering in onkruidprobleme en wortelsiektes. Hierdie bevindinge het daartoe aanleiding gegee dat vrae by die gewasprodusent ontstaan het rondom die ekonomiese geregverdigheid van wisselbou- en braaklandstelseis. Die doel van hierdie studie was om ten spyte van 'n gebrek aan plaaslike navorsingsresultate, die voordele en nadele van wisselbou- en braaklandstelsels, soos gereflekteer deur langtermynwinsgewendheid, teenoor die van monokultuurverbouing op te weeg en om in die proses die mees ekonomiese stelsel te identifiseer. Vir hierdie doel is 'n hipotetiese boerdery-eenheid in die ondersoekgebied gekonstrueer. Die gewasopbrengste van koring en mielies is met behulp van gewasgroeimodelle bereken op basis van die daaglikse klimaatsomstandighede in die gebied vir die tydperk 1960 tot 1983. Daar is bevind dat koringopbrengs op braaklande gemiddeld 76% hoër as die by monokultuurkoring was, met 'n koêffisiênt van variasie van 19,6 % teenoor die 51,9 % van monokultuurkoring. Braaklandmielieopbrengste was 30% hoër as die van monokultuurmielies, met 'n koëffisiënt van variasie van 49,7% by albei. Ses verskillende gewasopvolgingstelsels is geëvalueer, naamlik monokultuurkoring, monokultuurmielies, langbraakkoring, koring-koring-Iangbraak, koring-mielie-wisselbou en koring-koring-mielie-wisselbou. Deur die wins van die boerdery-eenheid vir elke stelsel te bereken, is bepaal dat dit essensieel is om 'n ekonomiese evaluasie van gewasopvolgingstelsels tot op boerderywinsvlak deur te voer, aangesien alle koste-aspekte waarin verskille kan voorkom, nie op bruto marge- en netto inkomste-vlak in ag geneem kan word nie. So is daar bevind dat die stelsel met die laagste bruto boerderyproduksiewaarde die derde hoogste marge bo veranderlike koste en die tweede hoogste boerderywins op grond van gemiddelde opbrengs gehad het. Die koring-mielie-wisselboustelsel het die hoogste boerderywins getoon. Deur jaarlikse boerderywinssyfers oor die 24-jaartermyn te bereken, is bevind dat dit belangrik is om so 'n evaluasie nie net op gemiddeldes te baseer nie. Die monokultuurstelseIs, met die laagste gemiddelde winssyfers, het in minstens 7 van die 24 jaar die hoogste boerderywins gehad. Die stelsel met die hoogste gemiddelde winssyfer het in 3 van die 24 jaar 'n verlies getoon, terwyl die langbraakkoringstelsel in geen jaar 'n verlies getoon het nie. Deur jaarlikse absolute boerderywinssyfers met behulp van prysindekse te bereken, is bevind dat 'n ekonomiese evaluasie met konstante pryse aanleiding kan gee tot 'n verkeerde besluit. Die verhouding tussen die pryse van koring, mielies, boerderybenodigdhede en verbruikersitems het gedurende die 24-jaartermyn sodanig verander dat 'n bepaling van die absolute huidige waarde van die jaarlikse boerdery- winssyfers getoon het dat die langbraakkoringstelsel of die langtermyn meer winsgewend as die koring-mielie-wisselboustelsel was. Omdat bogenoemde boerderywinsberekenings slegs die vaste koste voortspruitend uit die belegging in losgoedkapitaalitems en nie die verskil in die jaarlikse gebruik en gepaardgaande vervangingskoerse in ag geneem het nie, is die interne opbrengskoers van elke gewasopvolgingstelsel op basis van hierdie berekening het die winsgewendheidsvolgorde op basis van absolute boerderywinssyfers bevestig, alhoewel die verhouding tussen die onderskeie stelsels verander het. Hierdie berekening kan dus ook 'n verandering in die winsgewendheidsrangorde van gewasopvolgingstelsels teweeg bring, wat nader aan die kol as enige van die vorige berekenings sal wees. In die laaste instansie is die risiko van elke stelsel in terme van die waarskynlikheid om in 'n bepaalde jaar nie in staat te wees om die vaste verpligtinge van die boerdery-eenheid na te kom nie, bereken. Hierdie waarskynlikheid was 11,3% by die langbraakkoringstelsel en 22,8% by die koring- mielie-wisselboustelsel, teenoor die 54,2% van monokultuur- mielies en die 47,7% van monokultuurkoring.Item Open Access 'n Ekonomiese evaluering van alternatiewe spilpuntbeleggingstrategieë in die Suid-Vrystaat substreek met inagneming van risiko(University of the Free State, 1989-11) Meiring, Jan Andries; Oosthuizen, L. K.English: The lack of reliable procedures for the economic evaluation of centre pivot investment alternatives results in unsatisfactory research results in respect of the economics of irrigation on the one hand, and often causes irrigation farmers to make investment decisions that are economically inefficient and financially unfeasible on the other hand. The purpose of the study was to develop and illustrate a scientific procedure to evaluate the economic profitability and financial feasibility of alternative centre pivot investments in the Southern Free State subregion, taking risk into account. There are approximately 112 land owners in the area studied, and approximately 80 per cent of the 8 500 hectare of scheduled irrigation area is under centre pivot irrigation. Data was collected by means of the group discussion and the Dephi technique. Data was also generated by means of the PUTU crop growth simulation model. The research methodology entailed, firstly, the development of a cost-accounting procedure for centre pivots which took the technical aspects of the systems into account. Eighteen representative centre pivot systems were compiled and designed for the Southern Free State subregion. After irrigation cost-accounting was done for all the systems, economic profitability analyses were carried out by means of the net present-value technique. Given a crop rotation system of wheat, maize and cotton, the economic analyses for a period of fifteen years were made and repeated twenty times for each investment alternative. Production and price risk were taken into account in the analyses by simulating yields and making the series analyses. The net benefit: investment ratio was used to rank the centre pivot systems according to relative profitability. Subsequently financial profitability analyses for six profitable centre pivot investments were made by applying the cash flow technique. Finally risk-efficient investment strategies were selected by means of stochastic dominance criteria. The main result of the study was that a procedure for the economic evaluation of appropriate centre pivot investment strategies was developed whereby irrigation farmers and advisers can analyse the economic profitability and financial feasibility of centre pivot systems satisfactorily. In general the objectives of the study were achieved to a sufficient extent. A cost-accounting procedure was developed that took the technical properties of centre pivot systems into account fully. Fixed and variable cost, as well as the marginal factor cost of centre pivot irrigation, can be estimated by hand method or computer programme for new or existing centre pivot systems. Eighteen typical centre pivots ranging in size from thirty to sixty hectare, with application capacities of 8 mm, 10 mm and 12 mm and pumping heights of -15 m and 10 m were developed for clay and sandy soils in the study area. An increase in pumping height and capacity led to higher fixed and variable costs, while clay soils also had higher irrigation costs than sandy soils. All eighteen typical centre pivot systems in the Southern Free State were economically profitable. A sixty hectare system with a static height of -15 m and a capacity of 12 mm on sandy soil under irrigation was the most profitable centre pivot investment with an aggregate net present value of R563 238. Production and price risk caused big differences in the net present value that can be expected. Two of the six selected profitable centre pivot systems are financially unfeasible if a cooperative loan for a period of five years at an interest rate of 19.75 per cent is used. The probabilities that a cash flow deficit will occur during the five years of the investments are 65 and 70 per cent and the deficit can amount to R20 678. Risk-efficient investment strategies were selected by means of first order stochastic dominance. The most important implication of the study is that the economic and financial analyses of the economics of irrigation must be extended to a total farm level.Item Open Access An economic evaluation of crop rotation systems under centre pivot irrigation in the Southern Free State sub-area(University of the Free State, 1992-11) Den Braanker, Johan Pieter Diederick; Oosthuizen, L. K.English: The lack of sufficient and accurate knowledge of the effect of alternative crop rotation systems on economic profitability and financial feasibility for irrigation farming indicates that farmers purchase mechanisation systems and plant successive crops without having determined the effect of these actions on long term farm profitability and feasibility. The importance of the study is reflected by the large numbers of irrigation farmers and the relatively large number of farmers having a high debt to asset ratio. The study is done in the irrigation area below the P.K. le Roux Dam but can also be applied to other irrigation areas without the need for structural changes. The objective of this study is to determine the economic profitability and financial feasibility of alternative crop rotation systems in the research area, taking into consideration price, production and financial risks. The lack of comparable and accurate information on crop yield and gross water requirements over a lengthy period necessitated these values to be simulated. Data on crops, soils and climate are used to validate and calibrate the PUTU crop growth simulation model P9MZAB3 for this area. The BEWAB irrigation scheduling model is .used to determine the irrigation scheduling of the crops. The calibrated PUTU model then is used to generate the crop yields and .gross water requirements for wheat, late maize, cotton, peanuts, dry beans, lucerne and soyabeans for a period of eleven consecutive years . Selected farmers in this area provided the data on crops and crop rotation systems. Based on economic, agronomic and practical principles, fourteen alternative crop rotation systems are developed. For each typical crop rotation system an appropriate mechanisation system, which includes a centre pivot irrigation system, is developed. The crop rotation systems are evaluated to run over a period of ten years. The irrigation systems are used to irrigate an area of sixty hectares with a predominantly sandy soil. Depending on the crop rotation system various land utilisation percentages (degree of double cropping) are considered. The systems are used to irrigate areas with two different pumping heights: +10 m (Sarel Hayward canal) and -15 m (Ramah area). The simulated gross water requirements of the crop rotation systems are calculated and compared for the ten-year period to the available water quota. The results indicate that the maximum water quota of 900 000 m3 is sufficient in satisfying the gross water requirements of the follbwing crop rotation systems: 45W45LM15P (The number refers to the number of hectares while the symbols are explained as W = Wheat, LM = Late Maize, P = Peanuts, L = Lucerne, S =:= Soyabeans and C = Cotton) 30W30S30L, 30W30LM30L 30W30S30LM30L 30W30LM30C30L 30W30S30C30L Price risk is the result of crop prices that change over time. For late maize and wheat price scenarios are determined. By using linear regression analysis on the basis of historical national production levels of these crops, equivalent 1990 adjusted national production levels and prices are calculated. The prices of dry beans and lucerne hay are subject to price variability and determined largely by supply and demand situations. A procedure, is followed to generate a distribution of prices for these two crops that takes the price variability into consideration. For soyabeans, cotton and peanuts no quantifiable price risk is assumed and subsequently predetermined fixed prices are used. By using an irrigation system cost calculation method the fixed, variable and marginal irrigation system costs are calculated for the two systems with different pumping heights. On the basis of the supplied data on crops, mechanisation costs and determined average crop prices and yields, the crop budgets are developed and the net margins calculated. The crop net margins are the basis on which the different crops are analysed for economic profitability. For the consideration of production and price risks the net margins of the crops in the budgets are calculated for each year of. the ten-year period on the basis of randomly selected crop prices and yields from the respecti ve price and yield distributions. This process is repeated twenty times to obtain a distribution of twenty net margins for ten years for each crop. The net present value method is used to calculate the economic profitability of the crop rotation systems. By including in the calculation the distributions of the determined net margins the production and price risks are taken into consideration. On the basis of the net present values and ratios of net present values to investment the economic profitability of the crop rotation systems can be evaluated on an equal basis. The results indicate that crop rotation systems with late maize and/or soyabeans as the main summer crops are the least profitable, while crop rotation systems with lucerne and cotton as the main summer crqps are the most profitable. The results also indicate that crop rotation system irrigated by the systems with higher pumping heights have a considerably lower economic profitability. In the financial feasibility analysis the crop rotation systems are analysed for a hypothetical farm for cash deficits for the ten-year period by comparing basically the cash incomes with the cash costs (financial obligations). On the hypothetical farm two sixty-hectare areas are irrigated and only the associated revenues and costs are considered. In the financial feasibility analysis the financial risks are firstly incorporated by including the distribution of net margins and secondly by using three different debt to asset ratios. The annual cash costs are calculated for each year for the ten-year period and for each debt to asset ratio. The annual cash incomes are calculated from the crop net margins minus the non-cash fixed costs for each year for the ten-year period. A decision rule is implemented to determine. when a crop rotation system is feasible. The results indicate that the debt to asset ratio is the main factor influencing financial feasibility of the crop rotation systems. For a 70/30 debt to asset ratio all crop rotation systems are unfeasible for the irrigation systems with a positive pumping height (+10 m) and unfeasible, except one (30W30S30C30L), for the negative pumping height (-15m). For a 50/50 debt to asset ratio only five crop rotation systems are feasible for irrigation systems with positive and negative pumping heights (30W30S30L; 30W30S30LM30L; 30W30LM30L; 30W30LM30C30L; 30W30S30C30L). For a 20/80 debt to asset ratio all crop rotations systems except one (60W60LM) are feasible for both pumping heights. The conclusion is that the debt to asset ratio is more important in obtaining financial feasibility than the choice of the crop rotation system and the given crops.Item Open Access Simulation studies on Digitaria eriantha Steud. Subsp. eriantha at differing soil nitrogen levels(University of the Free State, 1993-11) Howard, Micheal David; De Jager, J. M.Abstract not availableItem Open Access Transfer and adoption of technology: the case of sheep and goat farmers in Qwaqwa(University of the Free State, 1998-12) Nell, Wilhelm Thomas; Van Schalkwyk, H. D.; Sanders, J. H.; Schwalbach, L.English: It is evident from the literature studied that very little is known about the characteristics and farm level factors (predictors) contributing to or affecting the adoption of livestock veterinary technologies of small ruminant (sheep and goat) farmers in former homelands and rural areas of South Africa. This study contributes by identifying and evaluating critical factors (variables) that predict the transfer, adoption and utilisation of livestock veterinary technologies by small ruminant farmers in Qwaqwa, a former homeland of South Africa. A wide selection of variables had to be tested in this study due to the absence of previous studies. Logit and multinomial logit models are used to select predictors of adoption of five different livestock veterinary technologies. Of the 34 possible predictors, 20 were selected in one or more of the seven different logit models. The suspension of veterinary surgeon services provided by the government at sheering sheds and farmer days before 1994, contributed to an increase in the costs of services, inputs and information. Together with the deterioration of infrastructure and institutions, this caused a collapse of the livestock veterinary technology transfer process in Qwaqwa. Farmers who want to adopt this technology (potential adopters), cannot do so because it became too expensive (increased transaction costs). When the assumption of elastic supply of services or inputs, and increased transport costs due to the farm's location is violated (traditional definition of adoption - potential adopters grouped with non-adopters), potentially misleading conclusions can be made regarding the significance of variables (predictors) which contribute to technology adoption. It is for this reason that an adapted definition of adoption (potential adopters grouped with adopters) should be used in future research. The results of medication technology indicate that grouping of livestock medication is essential if research on the characteristics of farmers using these technologies have to be estimated. The fact that former homeland farmers react on what they see when it comes to usage of veterinary medication technologies, making it more likely for them to adopt therapeutic medication for treatment (external, internal remedies and antibiotics) rather than prophylactic medication for prevention (vaccines), is evident throughout this study. Vaccine technology showed the lowest adoption level of the four medication groups studied. The high adoption rates of external parasite remedies (no non-adopters) and internal parasite remedies (two non-adopters) confirm this conclusion. However, there is a severe lack of basic knowledge amongst farmers on the correct application of these remedies as the majority (86%) of the farmers applied these remedies incorrectly. The most important predictors of the adoption of antibiotics is access to roads. This medication technology is urgently needed when an animal is sick and access to roads decreases the cost of obtaining the drug. Small ruminant farmers in this study tend not to be full adopters of all the different livestock veterinary technologies simultaneously. The fact that only 20 per cent of the farmers were adopters of veterinary surgeon services as well as full adopters of external parasite remedies and partial adopters of internal parasite remedies, antibiotics and vaccines, confirms this conclusion. The efficiency of the present extension services in Qwaqwa on veterinary livestock technologies is very poor. Extension visits did not emerge as a significant predictor of adoption of any of the livestock veterinary technologies. The reappointment of a state veterinary surgeon, the retraining of inexperienced extension officers, the improvement of infrastructure and the development of farmer-to-farmer extension programmes, using the sheering association chair persons and young, educated and progressive farmers, must receive the highest priority in agricultural policymaking. The implementation of an affordable minimum herd health prophylactic package can contribute to the correct adoption of medication technologies resulting in higher farming efficiency, better profits and contribute to the alleviation of poverty of former homelands and rural areas of South Africa.Item Open Access Die gebruikswaarde van besluitnemingsondersteuningsmodelle vir trekkervervanging in die Vrystaat(University of the Free State, 2000-11) Coetzee, Koos; Viljoen, M. F.; Heyns, A.English: The replacement of farm tractors and availability of decision support models for assisting farmers in taking replacement decisions were studied. A literature survey, postal survey of farmers and interviews with various persons were used to gain information on the available replacement models, replacement policies, information availability and farmers' decision making processes. This information was used to model the replacement decision and develop different decision support systems. Different replacement optimising techniques were studied. Minimum-cost models are unpractical for modelling replacement decisions. An extended version of the minimum discounted cost model can be used as a decision support model for advising farmers. A simulation model for establishing replacement strategies was also developed and used to determine optimal replacement strategies. Both models indicate an economic life for tractors in excess of 10 years. An increase in the tax rate results in replacement at an earlier life than with lower tax rates.Item Open Access Possible predictors determining the adoption of potatoes (solarum tubercosum) into the wheat (triticum aestivum) based cropping system in Mokhotlong, Lesotho(University of the Free State, 2000-12) Serage, Kgadiko Lucas; Nell, W. T.No abstract availableItem Open Access Modelling the potential impact of a water market in the Berg River Basin(University of the Free State, 2001-01) Louw, Daniël Barend; Van Schalkwyk, H. D.; Backeberg, G. R.English: An increasing number of economists believe that market mechanisms should be incorporated in water allocation policies. It is widely recognised that central planning as an economic system has been inefficient. In fact, it is impossible to plan efficiently from the centre, and the bigger and more open the economy is, the more impossible it becomes. The literature abounds with models for analysing alternative water allocation mechanisms. However, the positive mathematical programming (PMP) technique, which was introduced in this study, to calibrate the regional water market, is a relatively new approach. Modelling of water markets in South Africa has received very little interest in the past. This is probably because formal water markets were not permitted in the old Water Act (1956). The new National Water Act (1998) makes explicit provision for the transfer of water rights. However, the rules and procedures for introducing water markets have not been stipulated. To date no attempt has been made in South Africa to develop methodologies to simulate water markets. According to the new National Water Act one of the most important tasks of Catchment Management Agencies (CMA's) will be to design water allocation strategies for each of the major catchments in South Africa. This study contributes to enhance the capacity of water authorities to make economically sensible water allocation decisions. Without a market price, there is little or no incentive to use water efficiently. True pricing will lead to highest-value uses (e.g. drinking water and the production of high value products). Creating incentives for the most-valuable economic use of water will provide certainty; increase supply for more efficient uses, and create an even playing field for all water users including natural systems. There are legitimate concerns that the market mechanism per se will not guarantee equity. Government therefore has an important role to play in ensuring that the rules and procedures exist to deal with externalities. The secret is to achieve a balance that involves interfering in the market mechanism without jeopardising the proper functioning of water markets. The functional organisation for policy-making, water allocation, water management, and monitoring of users, plays an important role in the implementation of a sustainable water development system.Item Open Access Taxing agriculture: an analysis of a possible land and capital gains tax(University of the Free State, 2001-02) Dannhauser, Andries Petrus; Van Schalkwyk, HermanEnglish: The South African agricultural sector has experienced a lot of deregulations over the past decade. This process marked the end of state subsidies, favourable commercial agricultural policy and border control measures that, in the past, provided a safety net for commercial farmers. Together with the transformation process, various policy changes occurred and included the transformation of agricultural policy to the benefit of emerging, small and subsistence farmers. Commercial farmers lost their once held favourable position and had to adapt in a globally exposed sector with very little state support. Today, the agricultural sector is challenged with the possible introduction of two new taxes. Since 1992, a South African land tax has been under intensive investigation. This prospect gave rise to divergent opinions and arguments regarding the effect of a land tax on farm operating costs, farmland values, productivity, financing of local governments and other possible effects. During February 2000, the 30-year old possibility of a South African capital gains tax (CGT) gained momentum with the announcement by Minister Trevor Manuel that such a tax will be imposed on April 1st 2001. The past incapacity of the tax administration to handle CGT was supposedly overcome with the introduction of the New Income Tax System (NITS). SARS is confident that they can now handle the administration behind a capital gains tax. With the aim of obtaining some information with regard to the possible effects that a land tax may have, it was necessary to simulate the agricultural sector. Satisfying this need involved the use of static and dynamic linear programming techniques. Different agricultural regions in South Africa were identified for data gathering and subsequent inclusion in the analysis. Specific case studies were chosen and are situated in the Mpumalanga area, the Great Karoo area, the Olifants River irrigation scheme, Potchefstroom area, Bloemfontein area and the Kwazulu-Natal area. Various scenarios were constructed and the effect of the land tax at different rates, different land tax bases and different deductibility rates from income tax were tested. With these results at hand it was possible to provide some guidelines in terms of the effect of a land tax regarding different implementation strategies. In terms of capital gains tax, a thorough literature study indicated that CGT reduces the amount of savings and investments. It furthermore discourages investment in risk-bearing investments such as agriculture. In the CGT analyses, a case study is used to determine the effect of land and capital gains tax on the repayment ability of a farm. With the aim of obtaining some information with regard to the possible effects that a land tax may have, it was necessary to simulate the agricultural sector. Satisfying this need involved the use of static and dynamic linear programming techniques. Different agricultural regions in South Africa were identified for data gathering and subsequent inclusion in the analysis. Specific case studies were chosen and are situated in the Mpumalanga area, the Great Karoo area, the Olifants River irrigation scheme, Potchefstroom area, Bloemfontein area and the Kwazulu-Natal area. Various scenarios were constructed and the effect of the land tax at different rates, different land tax bases and different deductibility rates from income tax were tested. With these results at hand it was possible to provide some guidelines in terms of the effect of a land tax regarding different implementation strategies. If a land tax is introduced on South African agricultural land, market values for farmland would decrease, which implies lower solvency ratios. A land tax will furthermore increase overhead costs, lead to higher financial risk, and result in the production of high-income products (but also higher risk products). The demand for short-term credit will also increase. Levying a land tax simultaneously with a capital gains tax, will lead to a decline in the repayment ability of farms as well as decreases in the security value of the concerned land. The combination of these taxes will increase the risk involved in agriculture.Item Open Access Economic implications of trade liberalisation on the South African red meat industry(University of the Free State, 2001-05) Jooste, André; Van Schalkwyk, Herman; Von Lampe, MartinEnglish: Successful agricultural trade relations have to a large extent become a function of how well countries are able to measure the possible impact of increased trade liberalisation. Many studies worldwide have attempted to gauge the impact of agricultural trade liberalisation on world production, consumption, trade and prices by means of mathematical programming models. Given the importance of the red meat sector in South Africa's agricultural economy, it is of the utmost importance that the red meat industry understands the implications and consequences of trade liberalisation. Such knowledge would enable this industry to pro-actively provide input to Government on the possible 'effects of trade liberalisation on the domestic red meat industry, that could be used in multi- or bilateral trade agreements. Furthermore, the industry would be in a position to identify threats and opportunities and make the necessary strategic decisions. In South Africa many studies have investigated various different issues of economic importance pertaining to the red meat industry. None of them have attempted to investigate the impact of trade liberalisation within the mathematical programming framework. This study employs a spatial partial equilibrium model embedded in the mathematical programming framework to analyse the possible effects of a reduction of tariffs, increases in world prices of red meat, changes in the exchange rate, the abolishment of the Lomé Convention and changes in population size. The model includes two-stage spatially separated markets for red meat products in South Africa that encompass behavioural parameters to gauge the impact of exogenous changes related to trade liberalisation. In the case where all tariffs on red meat imports are abolished, changes in prices of red meat products will be substantial. Producer prices for cattle, sheep and pigs will decline by 21.11 per cent, 13.90 per cent and 11.99 per cent, respectively. Beef, sheep meat and pork prices will, on average, decline by 27.88 per cent, 28.56 per cent and 13.16 per cent, respectively. Demand will increase substantially for all three meat types. From a welfare point of view consumers will experience welfare increases. Producers, on the other hand, will experience a drop in welfare. In monetary terms the welfare gains by consumers are greater than the welfare losses by producers, which constitutes a net welfare gain to society. Furthermore, the red meat industry in South Africa should carefully consider preferential access granted to third countries under FTA's. Preferential access could easily lead to a reduction in the marginal tariff rate which, in turn, would result in lower domestic prices of red meat. In the case where the world price increases more than 10 per cent for beef, 18 per cent for mutton and 6 per cent for pork, zero imports would result. The losses in welfare to consumers are greater than the gains in welfare by producers. The impact of a 40 per cent depreciation in the exchange rate is very similar to the situation when world prices are assumed to increase, whilst the effect of a possible abolishment of Lomé on the South African beef market would be minimal. Finally, an increase in the population size combined with an increase in world prices will only partly offset the impact of a total reduction in tariffs. Also, increases in demand due to lower prices will largely be met by higher imports.Item Open Access Marketing tea for Uganda's smallholder sector(University of the Free State, 2001-05) Balyamujura, Hans Natson; Van Schalkwyk, H. D.English: Literature shows that consumers and processors demand a particular good or product based on the utility they are able to derive from it, or on its ability to meet processing requirements. A riumber of studies have been conducted to model the relationship between price and the various quality attributes for a number of products such as vegetables, pork, beef, pineapples, etc. However, no such studies have previously been conducted on a product like tea, whose price determination is greatly dependent on the physical appearance and savoury. The quality of the various tea grades implicitly determines the price received by the producer. It is widely recognised in the tea fraternity that a good tea fetches a higher price. It is therefore of utmost importance to fully understand the impact of change in various quality attributes on the price of a particular tea grade. The absence of the ability to estimate the impact of change in quality attributes causes tea producers to make decisions without all the necessary information, which could in turn lead to losses in terms of price. Market research has tended to concentrate on seller concentration and has paid little attention to buyer concentration. Literature shows that buyer concentration exists commonly in agricultural markets due to the nature of the products. This study has shown that the level of buyer concentration at the Mombasa auction market is high. Therefore, there are legitimate concerns that the market will not guarantee an efficient price to the producer. The East African Tea Trade Association has an important role to play in ensuring that these concerns are dealt with by seeing to it that the rules and regulations do not encourage this to happen. Producers, on the other hand, may find the balance through increased market access, which will entail exploring other market alternatives and not being too dependent on the Mombasa auction market. There are a number of export opportunities in already established tea markets, which can easily be explored by the tea producers through increased promotional activities and trade alliances. Growth prospects are still greatly limited by the infrastructure, provision of financial and extension services, research, etc. The feeder road networks still remain in a very poor state, at times necessitating repairs by the factories so as to be able to collect green leaf. The government is still unable to provide an adequate agricultural extension service and the smallholder factories have had to start their own extension services. The government has recently embarked on a programme for the modernisation of agriculture, but this will only show tangible results if a conducive environment for agricultural trade in the country is created.Item Open Access The economic effects of poor and fluctuating irrigation water salinity levels in the lower Vaal and Riet Rivers(University of the Free State, 2002-05) Armour, Robert Jack; Viljoen, M. F.English: In the Lower Vaal and Riet Rivers, changing irrigation water quality has raised concern about the long-term sustainability of irrigation due to reduced yields of certain crops and the withdrawal of some very profitable crops. The main aim of this study is to develop and apply models to determine the long-term financial and economic viability of irrigation farming in the Lower Vaal and Riet Rivers, with specific aims to: evaluate the relationship between changing water quality, soil conditions and crop production; determine the impact on yield, crop choice, agronomic and water management practises, expected income and costs; develop models for typical farms in different river reaches, and apply these models to test the outcome of alternative scenarios regarding internal water quality management practises and external policy measures. Five case study farmers were selected, one from each of the different sub-areas of the OVIB study area. The case study farmers were representative of their sub-areas with regards to the hectares of irrigation water rights held, and jointly, also sufficiently representative of the OVIB region. With the contradicting aims of improved water use efficiency and increased leaching for salinity management, the importance of a financial optimisation model was evident to solve the apparent paradox between saving water due to it’s scarcity value and “wasting” water to leach out salts that build up in soils through the process of irrigation. SALMOD was constructed using GAMS and consists of a simulation and optimisation section that calculate the optimal crop enterprise, management and resource use combination that maximises farm returns under different water quality, management and policy scenarios. The management options built into SALMOD are the appropriate leaching fraction to implement and crop yield to accept for the optimal crop / resource combination calculated. The fixed capital management options included in SALMOD are the installation of artificial drainage, the change of irrigation system and the building of on-farm storage / evaporation dams for return-flow management. The % reduction in TGMASC from the long-term average ECiw (74 mS/m) to the worst expected Vaal River ECiw as predicted by Du Preez et al, (2000) for 2020 (159 mS/m), is 84% and 58% for the small farmers from Bucklands and Atherton respectively, between 13% and 16% for the Olierivier farmer, depending on whether the Vaal River of the Riet River has the major impact, 1% for the large and financially strong Vaallus farmer and 3% for the small yet resource strong New Bucklands farmer (see Table 5.38). These results clearly show that the small and resource poor farmers will be the most affected by irrigation water salinity deterioration. Scenario results from SALMOD further show that: - Leaching is financially viable for all case study farmers - Accepting lower yields on soils with insufficient leaching capacity is also financially viable - For farmers with limited area of well drained soils it can be financially viable to install artificial drainage - The option of building on-farm storage dams when returnflows are constrained to 100 mm per hectare water rights held, is financially infeasible for all case-study farms and for all scenarios - It is not financially viable for farmers to replace their current irrigation systems with more efficient water saving systems, but in some instances to replace them with systems that can apply a greater leaching fraction - At the worst-case scenario salinity conditions, farmers with below 60 ha water rights, and who don’t grow cotton, will go out of production. SALMOD has proved to be a valuable farm level salinity management tool. SALMOD is also potentially useful at regional and national level for determining the farm level financial impacts of various water quality and quantity scenarios where the farmers are affected by irrigation water salinity.Item Open Access Rabbit production and consumption in South Africa(University of the Free State, 2002-11) Bashi, Molao John; Balyamujura, H. N.; Van Schalkwyk, H. D.English: The needs, perceptions and attitudes of potential consumers and producers with regard to consumption and production of rabbit products in Moqhaka, Ngwathe and Matjhabeng local municipalities are analysed in this study. The consumers in aforementioned local municipalities consume common livestock meats such as chicken, mutton, beef and pork. The consumers prefer lean meat. Pork is the most disliked meat by the majority of the surveyed consumers due to stomach problem that it causes when consumed. Pension and casual forms of employment are common sources of income among the African households surveyed. The African and Coloured communities showed more interest in the consumption of rabbit products than the White communily. The main attribute that will encourage the African and Coloured communities to consume rabbit products is its lean meat that is suitable for heart disease patients and people who are over weight. The members of the White population will use rabbit products mainly in the form of rabbit fur apparels and manure. The 'White community showed to have more knowledge about the potential attributes of rabbit products such as meat rich in protein, low on fat, manure suitable for vegetable growing as well as the ability of rabbit fur to make clothes. Rabbit meat was subjected to sensory taste analysis in a bid to determine consumer preference and taste with regard to meat consumption. Rabbit meat was compared to chicken, mutton and beef. Mutton was the most preferred meat by the panelists. However, the differences in the rank sums were all not statistically significant to justify preference of one meat over the other. This could be attributed to the tasting panel which was selected from a broad socioeconomic background and was familiar with at least seventy five percent of the tested meat types. Some members of the tasting panel were familiar with all the meat types. The small-scale farmers in Moqhaka, Ngwathe and Matjhabeng local municipalities are currently involved in both Ianning and non-farming activities which they depend upon for survival. The farming activities include livestock and vegetable production while the non-farming activities include sewing, selling of fat cakes and so forth. The majority of producers and consumers have superficial knowledge about the potential of rabbit production and its products. The surveyed producers are faced with a number of problems such as lack of financial resources, lack of storage facilities and reliable form of transport in order to run their activities efficiently. This condition necessitates the formulation of a well co-ordinated support programme. The formulated programme would determine what form of production credit would be best suited for the rabbit producers in the different production areas. The enterprise budgets formulated indicate that the rabbit enterprise is not only a cost-effective enterprise but also profitable. This is shown by the low cost production ratio and high returns to investment when compared to other enterprises. An investigation of the international market. shows Europe as the most attractive and largest market for rabbit products.Item Open Access Optimal allocation of water resource in irrigated farming at the Ramah Canal Vanderkloof Dam(University of the Free State, 2002-12) Mahlaha, Jacinta Mamaleke; Nwonwu, F. O. C.; Viljoen, M. F.The flood plain in the Orange River at Vanderkloof Dam is classified as semi-arid. Natural rainfall in the area is very low and cannot support crop production. Therefore, the feasible way of producing crops is through irrigation. Agriculture must be prepared to respond to limited water by becoming efficient in water use. Increase in efficiency requires that the demand and supply management by individual water users be optimised and the value of water derived as measures to achieve efficiency in water use. The first part of the study involved a survey conducted at the Ramah Canal to ascertain the current farming situation and to determine whether economies of size existed in the area. Irrigated farms in the area were classified based on irrigation water rights into three average farm sizes of 75, 180 and 240 ha. Income and balance sheet statements were compiled to determine the financial situation of the three farm groups. From the statements, different financial ratios including solvency, liquidity, profitability and efficiency were calculated. The financial analysis showed that 180 ha farm group had the best solvency, liquidity, profitability and efficiency ratios. In the second position was 240 ha farm group. The analysis indicated that economies of size exists between farm groups with 180 ha farm being the optimal farm size to operate and 75 ha being the least efficient farm group. In the second part of the study, optimal cropping mixes at the Ramah Canal were determined under constrained and unconstrained irrigation water supply. Five crop mixes were formulated for each farm group. Crops under investigation were maize, wheat, lucerne, groundnuts, cotton and potatoes. A Linear Programming (LP) model was developed to determine optimal cropping mix that gives maximum returns under unconstrained water supply (100 percent). The objective function of the model was to maximise total gross margin subject to the following constraints: total available water and land during summer and winter seasons, maximum area under each crop, labour and tractor power required by the crop mixes. From the LP results, the total value product (IVP) functions presented as linear segments showing gross margin as a function of water applied were developed for each crop mix. The TVP functions indicated the sequence by which crops would be irrigated based on their contribution in maximising gross margin. Results showed that in summer season, potatoes would be irrigated first because of high profitability relative to other crops. As irrigation water becomes abundant, groundnuts, cotton, lucerne and maize will be irrigated in that order. Wheat was the only winter crop dealt with. From the TVP functions, Marginal Value Product (MVP) for water was derived. The MVPs were RO.09, RO.18, RO.25, RO.38, RO.39 and R3.64 for maize, lucerne, cotton, groundnuts, wheat and potatoes, respectively. Sensitivity analysis was carried out by reducing the full water application level to 75, 50 and 25 per cent water availability to determine the response of different crop mixes under restricted irrigation water supply. Results showed that in summer season, maize is the first to be affected by water limitations. Next is lucerne, then cotton, and groundnuts. Potatoes are the last to be affected by water restrictions. Furthermore, under severe water restrictions, farmers could lose more than half of their potential income. Water" management strategies which farmers would follow in future when irrigation water is limited were determined. Farmers in 75 and 180 ha groups indicated that they would completely change crop mix under severe water restrictions. Farmers in the 240 ha group with lots of farm investments, are very sensitive to reductions in water supply and are prepared to quit farming if water limitation persists. In conclusion, the study provided information and guidelines for choosing the best cropping strategies based on available irrigation water and other production resources. It is recommended that the study be done for a reasonable period of time since production is a continuous process. Furthermore, the potential of the area in producing high value crops should be investigated.Item Open Access Effect of farm size on technical efficiency: a case study of the Moretna-Jirru district in Central Ethiopia(University of the Free State, 2003-05) Bekele, Abate; Viljoen, M. F.; Ayele, GezahegnEnglish: The main objective of the study is to analyze the effect of farm size on farm efficiency at household level in cereal based farming systems and to suggest policy recommendations. The survey was conducted in the Moretna-Jirru district of Ethiopia during the 2000/2001 cropping season. The district was selected for this study on the basis of the relatively longer experience of farmers to use new technology, the number of crop growers and the high potential for crop production. As part of the methodology, a structured questionnaire was developed and used during personal interviews with farmers. The collected data was analyzed using statistical package SPSS Version 10.1. The empirical model used for the estimation of technical efficiency of smallholders in this study was the stochastic production function. The stochastic frontier model results revealed that land area and seed application rate contributed the most to growth in wheat yield whereas increase in land size and application of urea led to statistically significant increases in tef yield. In view of the research objectives the major results/findings of the study were: • The stochastic frontier model analysis revealed that large farms were technically more efficient than small farms regarding both wheat and tef production; • The mean technical efficiency of wheat was calculated to be 0.83 for large farms and 0.79 for small farms (P= .001). The mean technical efficiency of tef for large and small farms was calculated to be 0.74 and 0.68, respectively (P= .001); • The average technical efficiencies of wheat and tef were calculated to be 80.85 % and 70.72 %, respectively. Under the current technology, farmers can thus increase the actual output levels of wheat and tef by about 19.1% and 29.3%, respectively, to become 100% efficient. The challenge remains to decrease technical inefficiency factors and to raise the production level towards the frontier production level. According to the model analysis, land size remains a key variable explaining differentiation in output, especially in keeping farmers near to or on the production frontier. Reduction in farm size and land fragmentation have contributed to technical inefficiencies. From the disaggregated data by size of holding, the conclusion is that larger size holdings perform better with regard to technical efficiency, food production and income generation than smaller size holdings, irrespective of the extension program. The results that emerged from the technical efficiency differentials between small and large farm groups in the Moretna-Jirru district of central Ethiopia have policy implications. A number of policy interventions need to be made by government if smallscale farmers are to improve technical efficiency. These include, among others, that policies on land size and land distribution must be revisited and that further studies are needed to determine the minimum farm size to support farm households. Frequent redistribution and allocation of land has resulted in fragmentation, tenure insecurity, and in too small farms to support livelihood. This in turn contributed to decrease in farm productivity and efficiency. It is important to note that small farms can make a difference in food self-sufficiency schemes, but they will never be big providers of food and fiber for the fast growing population. Small farm producers will fill niche consumer markets. Providing solutions for the root causes of rural poverty and changing the gloomy situation of Ethiopian farmers requires multiple strategies. Therefore, future work in this area should begin by posing questions differently. For example, What is the best path to sustainable agricultural development? What characteristics must a farm possess for it to be sustainable, socially responsible, environmentally sound and economically viable? What is the optimal farm size and how could size be measured in the sustainable era? Such questions do not have easy answers. They do, however, reveal some of the shortcomings of this analysis and can guide further work in this area.Item Open Access Econometric estimation of the demand for meat in South Africa(University of the Free State, 2003-05) Taljaard, Pieter R.; Van Schalkwyk, HermanIn this study the demand relations for meat in South Africa are estimated and interpreted. Two demand model specifications, namely the Rotterdam and Linearized Almost Ideal Demand System (LA/AIDS), were estimated and tested in order to determine which model provide the best fit for South African meat data. Tests for separability included an F and Likelihood ratio version. Both tests rejected the null hypothesis of weak separability between meat, eggs and milk as protein sources, indicating that the demand model for meat products should be estimated separately from eggs and milk. Consequently, separability tests between the four meat products fail to reject the null hypothesis, confirming that the four meat products should be modelled together. According to the Hausman exogeneity test, the expenditure term is exogenous. As a result, a Restricted Seemingly Unrelated Regression (RSUR) was used to estimate both models. Annual time series data from 1970 to 2000 were used. Both models were estimated in first differenced format, whereafter the estimated parameters were used to calculate compensated, uncompensated and expenditure elasticities. In a non-nested test, the Saragan’s and Vuong’s likelihood criterion, selected the LA/AIDS model. In terms of expected sign and statistical significance of the elasticities, the LA/AIDS also proved to be more suitable for South African meat data. Although the magnitudes of most own price and cross-price elasticities were significantly lower than previous estimates of demand relations for meat in South Africa, several reasons, including estimation techniques and time gaps, were offered as explanations for these differences. The uncompensated own price elasticity for beef (-0.7504) is the largest in absolute terms, followed by mutton (-0.4678), pork (-0.36972) and chicken (-0.3502). In terms of the compensated own price elasticities, which contain only the pure price effect, pork (-0.30592) was the most elastic, followed by mutton (-0.27713), chicken (-0.1939) and beef (-0.16111). The expenditure elasticities of beef (1.243) and mutton (1.181) are greater than one, indicating that beef and mutton are luxury goods in South Africa. The expenditure elasticity for beef is the most elastic; indicating that South African consumers as a whole, will increase their beef consumption as the total expenditure on meat products increase.Item Open Access Demand relations of oilseed products in South Africa(University of the Free State, 2003-07) Van Schalkwyk, Hendrik P.; Van Schalkwyk, HermanEnglish: In this study demand relations for primary oilseeds in South Africa is estimated and interpreted with the use of econometric models. Two different models, namely the Linear Approximate Almost Ideal Demand System (LA/AIDS) and the two-step Error Correction Model (ECM), were applied to annual oilseed data for the years 1971-2002. The F ratio test for separability failed to reject the null hyp othesis of weak separability in most cases, indicating that sunflower seed, soybeans, groundnuts and cotton could be included in the same system and modeled together. The Hausman test for exogeneity was conducted and proved that the expenditure variable included in the estimated equations is indeed exogenous. The exogeneity of the expenditure variable provides assurance that the Restricted Seemingly Unrelated Regression (RSUR) method of estimation will provide efficient parameter estimates. Both the short run models are estimated in differenced form, from where the parameter estimates obtained were used to calculate compensated, uncompensated and expenditure elasticities of demand. The compensated own price elasticity of soybeans is the largest in absolute terms, with coefficients ranging from -0.579 in the LA/AIDS to -0.666 in the ECM. Seed cotton has the second largest compensated own price elasticity with -0.399 and -0.542 respectively in the two models. The compensated cross product elasticities indicate a predominantly substituting relationship between these oilseeds, even though not all of them are significant. According to the calculated uncompensated own price elasticities, seed cotton is the most price responsive i.e. (-0.745) in the ECM and soybeans (-0.617), in the LA/AIDS. According to the expenditure elasticities sunflower seed (1.105) and cotton (1.064) can be regarded as luxury oilseeds in South Africa. Soybeans, with expenditure elasticities of between 0.454 and 0.493 in the two respective models, can be regarded as a normal good. Groundnuts can also be regarded as a luxury commodity even though it has an expenditure elasticity of just below one. The fact that the compensated own price elasticity of groundnuts is smaller in absolute terms than the expenditure elasticity is also an indication of a luxury product, as proved by Hicks and Juréen (1962).Item Open Access Economic analysis of land use: the case of East Hararghe administrative zone in Ethiopia(University of the Free State, 2004-02) Worseme, Hassen Ibrahim; Viljoen, M. F.; Groenewald, J. A.This study aimed at developing and applying a methodology for land use analysis through looking for a form of land use that provides sufficient and rising incomes to the agricultural population of East Hararghe Administrative Zone, and at the same time maintains the productive capacity as well as other environmental services of the land resources of the zone. The study starts with the elaboration of the problem statement, objectives, hypothesis and significance of the study. This is followed by the explanation of the approaches pursued in conducting the present study. The study area is also thoroughly described. The problem statement and the objectives of the study indicate that there exists a huge gap between zonal crop production and the population growth despite a substantial expansion of eropland in the zone. This implies the existence of numerous set backs in the land use system of the zone and necessitated a close investigation of the land use systems of the farming community of the study area in order to come up with an improved and efficient land use pattern that will overcome the acute land shortages as compared to the everincreasing population of East Hararghe Administrative Zone. The most important findings and results of this study are based on the literature study; the development of the research methodology; the description of the surveyed data that is obtained through questionnaire survey; and the analysis of the land use model of the study area. Land resource and land use was assessed from a global point of view. The problems that are associated with the use of the land resource in the developing countries were investigated. An extensive study was also carried out to introduce the agricultural sector of Ethiopia. The agricultural sector in Ethiopia is almost entirely dominated by small-scale, resource-poor farmers who produce 90 to 95 percent of all agricultural outputs. The role of economics within land use analysis is also reviewed. This role is elaborated through the discussion of a skeletal model of the agricultural sector; the concepts of regional agricultural planning, land evaluation and farming system analysis; the concepts of resource economics and land economics; and the issues of property rights and sustainable development. A linear programming model for the economic appraisal of the land use in the study area was presented following the description of the conceptual framework of the model. The different parts of the zonal linear programming model were discussed under the headings of objectives, variables and constraints. This was followed by the general formulation of the land use model of the zone called EASTHAR. The matrix of the model includes three sub-matrices each representing a different farm type. The farm types are distinguished on the basis of agro-ecological classification of the surveyed districts and peasant associations. The EASTHAR model was analyzed by using the GAMS software after it was extensively written in the GAMS programming language. Three land use scenarios are analysed to assess the effects of changes in factors that influence land use decisions and whether incomes of farms (fan increase through an improved land use. The results of the base scenario indicated that the incomes of farms can increase with improved land use pattern as the value of the objective function, or the economic surplus, is positive for the entire zone and for the different farm types. The model showed, how land has to be assigned to the different crops at zonal level and at each farm types level for maximizing farm incomes under proper and improved resource use. The most important staple food crops of the population of the zone are all incorporated in the optimum land use and the potential for specialization that can exist among the different farm types of the zone has also been indicated. A comparison of the results of the base scenario with the results of an opportunity cost scenario represented an important outcome of the model. The zonal economic surplus in the opportunity cost scenario is 33% lower than the base scenario. The valuation of the on-farm household labour thus has a negative effect on the incomes of the farm households. However, land use as well as labour, current input and draft power uses did not change from that of the base scenario. This shows that the mere valuation of the onfarm household labour will not automatically disturb land use decisions. An interesting outcome was observed when comparing the results of the base scenario with the results of a scenario of an assumed drought condition. The drought case scenario analyzes the consequences for land use in case drought occurs in the study area. Drought is a recurring problem of Ethiopians especially the rural population. The results of the analysis indicated that almost every land use defining variable was subject to change when drought occurs. According to these results, in a subsistence agriculture which is solely rain fed, a decline in the annual rainfall will undoubtedly lead to large reductions in the income of the farming population. Based on the results of the study important policy recommendations were outlined. The implementation of the envisaged improved land use patterns can have important impact in altering the poor income earning capacity of the farm households in the zone and have a better environmental impact. For farmers to produce the amount of grains required for home consumption and ensure their food security, there is a need to subsidize them to the amount of their lost gross margins during drought periods. Farmers must also be encouraged to save and have financial reserves for unforeseen adverse production conditions through the establishment of appropriate saving institutions to limit the subsidy. It may also be necessary for the government to approach donors to contribute to the subsidy, as this contribution will hopefully be lower than the cost of food aid in monetary terms. However, the dependence on food aid cannot be a preferable alternative and to supply enough food to the growing population of the region more food needs to be produced by the zone itself. This is because although other zones can produce food cheaply, for subsistence farmers who are producing crops mainly for home consumption (and not for the market) it is extremely hard (if not impossible) to engage in trade and rely on outputs produced in other zones.Item Open Access The effect of the South African trade policy regime on the beef and maize sub-sectors(University of the Free State, 2004-07) Bahta, Sirak Teclemariam; Jooste, A.Trade policies form the main economic “buffer” between one national economy and another, i.e. the general and specific elements of each nation’s trade policy interact directly or indirectly with those of other nations in all economic transactions across international borders. A nation’s trade policy involves specific actions to encourage and promote or discourage foreign trade through the legal, financial and institutional environment within which foreign transactions occur. This study evaluates the trade policy applicable to the beef and maize sub-sectors in South Africa. Issues that are investigated include whether trade policy provides more or less protection than needed, whether it creates more openness for trade and the revealed comparative advantage of beef and maize. According to the RCA and RCA# the beef sub-sector in South Africa shows a revealed comparative disadvantage for 17 out of the 22 years since 1980. The maize sub-sector, on the other hand, shows a revealed comparative advantage for 18 out of the 22 years since 1980. It appears as if both the beef and maize sub-sectors have adjusted favourably since the implementation of the Marrakesh Agreement and subsequent deregulation of the domestic market. Favourably in this context means that both sub-sectors appear to have discounted the changing trade and regulatory environments into their respective supply chains. It is however important to take note that the results do not show the real state of competitiveness that exists in these sub-sectors. The reason for this is that the RCA measures should not be used to make definite conclusions whether an industry, sector or sub-sector in a country is competitive nor whether it uses scare resources in an efficient manner. The RCA measures explain in more accurate ways, relative to a simple analysis of export trends, how a country features in the context of word trade. Hence, one possible application of RCA measures is to deduct the impact of changes in trade policies on an industry, sector or sub-sector. Cognisance should also be taken that the RCA measures fail to distinguish between a region’s factor endowments. The study also shows that the ERP calculation is lower than the NRP for beef and higher for maize. This means that the protection for inputs is higher than that of the output in the case of the beef sub-sector and vice versa in case of the maize sub-sector. The results from the ERP calculations show that the beef sub-sector is taxed, whilst the maize sub-sector are subsidized. Furthermore, this study recommends the market niche should be exploited more. However it is necessary to give attention to: (i) Small scale farmers (ii) Increased efficiency and (iii) Considering issues such as food safety.