Masters Degrees (Agricultural Economics)

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Open Access
Access to credit and agricultural production in Lesotho
(University of the Free State, 2012-01) Motsoari, Charmaine; Van Schalkwyk, H. D.; Cloete, P. C.
English: One of the factors hindering development in Lesotho is the limited access to credit. The development of the rural economy in developing countries depends on growth and development in the agricultural sector and other small and medium enterprises. These enterprises constitute the engine of growth, employment and income for the rural community. In an effort to make the landscape of rural finance more attractive and to fulfil the national objectives of increased production, policy makers and donors adopted the conventional approach of advancing credit, where all practices and operational procedures were geared towards the interests of the borrower. The initiatives to advance credit include amongst others, an emphasis on project appraisals, relaxing collateral requirements and the charging of close to market interest rates. Despite the changes, the problem of limited access to financial services still exists. In fact, these approaches (policies) invariably resulted in distortions in the financial markets, and reduced the number of financial products and services to which farmers have access. The purpose of this study therefore, was to examine factors that influence small-scale farmers’ access to credit, thereby affecting their productivity and to make suggestions for government interventions and for the reduction of market failures in the rural financial markets of Lesotho. The study was conducted in two agro-ecological zones in Lesotho, namely; the Lowlands and the Highlands regions. A random sample of districts in the regions was done to select representative districts in each region. Leribe, Mafeteng, and Berea districts represented the Lowlands while Mohale’s Hoek and Thaba-Tseka districts represented the Highlands region. Stratified random sampling was employed to select borrowers and non-borrowers for the study. The study employed the logistic regression model (logit) within the principal component regression (PCR) framework to assess factors affecting small-scale farmers’ access to credit. PCR was used to take care of the multicollinearity between the variables. Firstly, the variables included in the logit model were subjected to principal component analysis (PCA) in order to reduce the variables into a few uncorrelated principal components (PCs). After principal components (PCs) were calculated, PCs with the smallest eigenvalues were eliminated and then PCR was fitted using standardised variables to improve the estimation power of the logit model. The empirical evidence of the study indicates that non-farm income, savings and remittances and pensions confirmed that increasing the household’s total income reduces the probability of a household being credit constrained. This shows that a better household situation affects the decision of the lender to ration the loan or that the household has less demand for loans because of its own equity capital accumulated through past income earnings. Farm income on the other hand, is positive, confirming that a higher farm income may improve the farmer’s creditworthiness and in some cases create a demand to expand production, thus increasing the demand for credit. The study revealed that farm income values of borrowers are higher than those of nonborrowers but lack of baseline data makes it difficult to associate the differences to the loans obtained by borrowers. However, the changes in income among borrowers are linked to the use of credit, confirming the hypothesis that credit has a positive effect on income and improvement of living conditions of credit users. Research into the behaviour of credit institutions in Lesotho will help to explain some of the actions taken by credit institutions, and at the same time assist policy-makers in formulating appropriate interventions.
Open Access
Agricultural credit models: identifying high risk applications
(University of the Free State, 2017) Bougard, Dominique Alyssa; Henning, J. I. F.; Jordaan, H.
The objective of the research was to explore the performance of various statistical credit-scoring models, in order to identify a model that will minimise the misclassification of high-risk applicants, and identify the characteristics that influence repayment ability. The study was conducted in South Africa, with the use of a case study of a South African financial organisation serving the agricultural sector. The data gathered for this study was gathered through a formal agreement with a commercial financial organisation. Logistic regression (LR), probit analysis (PA) and neural network (NN) were used to construct the credit-scoring models that can be used to classify credit applications in the agricultural sector. Results of the LR indicate significance at 10% of the following variables, which may have an impact on classification: medium-term loan, credit history, debt to assets (DTA), net farm ratio, diverse 2, high risk, ownership and experience. The PA results demonstrate the following variables at 10% significance: credit history, DTA, net farm ratio, diverse 2, ownership and experience. The identification of characteristics provides confirmation of characteristics that are of importance to credit research. Financial organisations can use the identification of important characteristics as a method to provide guidance to applicants who apply for loans. Doing so will ensure that the organisation will identify characteristics that ensure that the applicant is accepted by the financial organisation. Applicants for loans can ensure that they possess characteristics that correspond to important characteristics identified by the statistical model. The results from the NN are not easily interpretable; due to “black-box” qualities it was not easy to identify the variables that have an influence on the predicted outcome. The NN did, however, outperform the LR and PA in terms of classification accuracy. Neural networks achieved the highest correctly predicted overall accuracy and a lower percentage of Type II error classifications. Logistic regression and PA have overall classification percentages of 96.06% and 3.94% respectively for classifying Type II errors. The NN had an overall classification accuracy of 98.43% and Type II classification error of 1.54%. The main conclusion from this research is that the statistical methods are able to classify credit applications in the agricultural sector and have the ability to improve accuracy in correctly classifying agricultural applicants. Further research is need to ensure that the correct variables are included in the classification. The classification results of the models are tested and monitored over a period of time to ensure that the accuracy and prediction are acceptable according to the financial organisations. Further research is needed to select the correct variables to be used when supplying credit to smallholder farmers and financial organisations can use the identified important characteristics to provide recommendations and guidance when evaluating applications for loans. Credit applicants can also use these identified important characteristics as a point of reference before applying for the loan at the financial organisation.
Open Access
Analysis of factors affecting technical efficiency of smallholder maize farmers in Ethiopia
(University of the Free State, 2014-04) Deme, Sorsie Gutema; Matthews, N.; Henning, J.
Agriculture is the dominant sector of the Ethiopian economy which typically consists of smallholder rain fed farming systems. Low production and productivity characterises Ethiopian agriculture resulting in the country being unable to meet the increasing food demand of its population. As a result, the country continuously faces food insecurity and to some extent relies on food aid and food imports. The key to growth of agricultural production in Ethiopia lies in increasing the productivity and efficiency of smallholder farmers. The Ethiopian government has given substantial policy emphasis to increased productivity of smallholder crop farmers through the Agricultural Development Led Industrialization (ADLI) strategy. The ADLI strategy emphasises on increasing the adoption and intensification of yield enhancing inputs such as fertilisers and improved seeds to boost crop productivity, especially maize which is the principal crop. In response to the efforts of the development strategy, substantial improvements in the adoption and utilisation of the yield enhancing inputs have been observed in maize production; however the maize yield is not showing expected improvements. The low levels of maize productivity might be the result of technical inefficiencies existing in smallholder production. Information about the technical efficiency of smallholder maize farmers at farm level is important for improvements in productivity. However in Ethiopia this information is limited making an empirical study of the technical efficiency necessary. The research investigated the factors affecting the technical efficiency of smallholder maize farmers in Ethiopia with the aim of generating reliable information about the level of technical efficiency and the factors affecting technical inefficiency of smallholder maize production. Stochastic Frontier Analysis technique was employed and the data for the research was secondary data obtained from the Central Statistical Agency of Ethiopia consisting of 438 observations. From the empirical estimation, it is found that nitrogen is an important input that can increase maize productivity significantly. Seed and labour inputs are found statistically insignificant in explaining maize production. The estimated value of y, which is a parameter used to indicate the proportion of total variance that is attributed to technical inefficiency is 0.99 and significant. The value of y revealed that about 99% of the random variation in output of maize production is attributed to the technical inefficiency component which indicates the importance of examining technical inefficiencies in maize production. The estimated mean technical efficiency score of the sample is 77% with the minimum and maximum efficiency scores of 3 to 96%, respectively. The mean technical efficiency implies that on average, the sampled maize farmers are able to obtain 77% of their potential output using the current production inputs. The finding suggested the presence of considerable levels of technical inefficiency that contributed to decreased maize productivity. The farmers have the potential to increase their maize production by about 23% by using their existing resources and technology more efficiently. While examining the determinants of technical efficiency, age, gender, household size, oxen, extension, irrigation, credit, seed type and soil protection were found to be important factors affecting the technical efficiency of the sampled maize farmers. The study revealed the possibility of improving the current low maize productivity by removing the technical inefficiencies. The current level of low technical efficiency can be addressed through increasing farmers’ access to rural credit and extension services, promoting soil and land conservation practices and by promoting small-scale irrigation schemes.
Open Access
An analysis of the production and marketing practices of the wool industry in Lesotho
(University of the Free State, 2004-11) Jordaan, Andries Johannes; Van Schalkwyk, H. D.
English: Lesotho is a small country with, apart from abundant water, very few significant natural resources. The countries' economy is mainly based on limited agriculture and manufacturing. Most of the labour force depends on subsistence agriculture, yet this sector only contributes 15% to the Gross Domestic Product (GDP). Wool is one of Lesotho's largest export commodities and (together with mohair) is the only agricultural earner of foreign capital. The continuous decline in national wool production during the past three decades, coupled with a drastic deterioration in the quality of the rangelands, has become a serious predicament for the Lesotho government. The competitiveness of the wool industry in Lesotho is in question, and wool farmers remain poor despite the export earnings of wool. The Lesotho government is also under pressure to privatise the shearing shed system, and it is seeking alternative solutions to substitute or increase the efficiency cif the present system. These factors and remedial actions to increase competitiveness have necessitated an analysis of the wool production system. This study forms part of a larger study focussing on the wool and mohair industries in Lesotho. The main objective of the study is to analyse the wool system in Lesotho, including the production, trade, and marketing processes of the industry and to recommend the necessary remedial actions. The problem conceptualisation method was used to analyse the research problem. Both deductive logic and inductive reasoning were used to analyse the data and to form conclusions. The study relies heavily on a comprehensive literature study for the gathering of secondary data. The Rapid Rural Appraisal (RRA) technique was used to obtain the necessary primary data, and the basic principles of action research were applied during the research. The study highlighted the lack of proper feeding, low reproduction rates, high mortality, and stock losses as the major reasons for low yields. Emphasis is placed on the importance to improve the quality of rangelands and to introduce efficient production systems. Also highlighted in the study is the crucial role of the shearing shed system and the need to privatise the shearing sheds through the establishment of producer-owned cooperatives. Computerisation and streamlining of the administration process during marketing should coincide with the privatisation process. The development of micro-cooperatives at the shearing sheds can also serve as a structure to bring services such as the availability of inputs closer to the producer. The development of a rural banking system supported by microcooperatives as a basis should also be exploited. The present trade and marketing system through the South African marketing structures should be treasured. The system of licensed traders, though, should be liberalised because of its monopolistic nature and the lack of law enforcement and proper policing of the system. An empirical estimation by means of a policy analysis matrix indicates that the wool system in Lesotho is not competitive and efficient at all. It shows that the economy is losing foreign exchange from local production because the opportunity cost of its domestic resources is more than the foreign exchange it gains. This is in total contrast to what the industry and government believe since they regard wool production as the flagship of all the agricultural systems in the country. The study, however, shows that an increase of 15% in wool production output is sufficient enough to ensure competitiveness. The study therefore concluded that the wool system, as a vital supplier of income at household level in the rural areas, should increase productivity at the production level to increase its competitiveness.
Open Access
Analysis of trade structure and pattern of wool and mohair export of Lesotho
(University of the Free State, 2015-01) Mokhethi, Nkhala Isdorinah; Bahta, Yonas T.; Ogundeji, Abiodun
Lesotho has been a Southern African Custom Union (SACU) member from the inception of SACU, and most of its trade policies have been shaped at the SACU level. Lesotho’s trade related policies are mainly the responsibility of the Ministry of Trade and Industry, Co-operatives and Marketing. Lesotho is a founding member of the World Trade Organization (WTO); as such it took commitments on trade at the multi-lateral level for the first time during the Uruguay Round. Lesotho agreed to undertake very extensive commitments for the trade liberalization. The main objective of this study is to analyze trade structure and pattern of wool and mohair export commodities of Lesotho. The study set out to determine whether the trade policies has more protection on the agricultural products than needed and whether the policy provides more trade openness. The study further indicated trade performance of wool and mohair in the international markets. Most of the data collected were the secondary data. For the analysis of this study, different sources of data and methodologies have been used to achieve the objectives of this study, it includes: Revealed Comparative Advantage Index, Hirschman Index, Effective Rate of Protection, Nominal Rate of Protection and Trade Map. Findings from the Revealed Comparative Advantage Index indicated clearly that Lesotho enjoys Revealed Comparative Advantage of wool and mohair during the study period 2003 to 2012. The results also revealed that Lesotho is specializing with these agricultural commodities in the agricultural industry. The results indicated that market concentration of wool and mohair is low meaning that Lesotho is having few trade partners as indicated in the Hirschman Index theory. A country with few trade partners has low index values. All the values of wool and mohair are closed to zero. Lower concentration reduces the impact of international trade risk due to the possibility of price fluctuation of wool and mohair products. Trade Map results revealed that Lesotho’s wool and mohair are distributed to a couple of large trade partner countries which is China, South Africa and India. This indicates that there is low market concentration for Lesotho’s wool and mohair, therefore Lesotho needs to diversify the geographical destination of its trade. The study also shows that Effective Rate of Protection calculation is lower than the Nominal Rate of Protection for both wool and mohair in Lesotho. This means that the protection for input is higher than that of the output in both wool and mohair. The sub-sector is not subsidized by the government, but it is taxed by the government tariff policies.
Open Access
Analyzing the impact of EU trade policy reform on the sustainability of smallholders sugarcane farming in Swaziland
(University of the Free State, 2014-01) Hlophe, Linda Cedric; Ogundeji, A. A.; Jordaan, H.
This study seeks to determine the impact of EU trade policy on the sustainability of smallholder sugarcane farming in Swaziland. Using the policy analysis matrix, the study analysed impacts of policy change on the profitability of smallholder sugar cane farmers of the Komati region in Swaziland. It also measured the level of government intervention in the area. Agriculture plays a major role in the lives of the majority of Swazis since most households rely on this sector as a major source of income, either as smallholder producers or as recipients of income from employment on medium and large-scale farms, and estates. Most rural Swazis participate in the sugar industry where they grow sugarcane, either as smallholder or medium-scale commercial farmers. The sugar industry is the largest in the agriculture sector in terms of income generation. Recent developments indicate that sustainability of the sugar industry in Swaziland is under threat due to developments in the world sugar market. Specifically, the European Union (EU) is reforming its sugar trade regime to conform to its obligation in the World Trade Organization. Such reforms will result in removal of all preferential trade agreements with all its trading partners including Swaziland, and this paints a bleak future for Swaziland smallholder sugarcane farmers who benefit from the high prices received from this market. Impacts of the EU sugar sector reforms on the sustainability of smallholder sugarcane farmers of Swaziland were investigated using the policy analysis matrix (PAM). Three PAMs were constructed; one analyzing the base case scenario; the second and third providing sensitivity analysis taking into account price changes. The results of the PAM base case scenario indicate that farmers were generally competitive (positive private profitability) and had potential for growing the industry. However, farmers were discovered to be inefficient (negative social profitability), indicating that there existed wastages in terms of resource use. The positive net policy transfers suggested heavy presence of government support, as a result; farmers made positive private profits. The other incentive indicators; subsidy ratio to producers (SRP), effective protection coefficient (EPC), nominal protection coefficient on inputs (NPCI) and nominal protection coefficient on output (NPCO) are positive, also confirm that farmers received some incentives from government to produce sugar cane during the year under review. The second and the third PAM, analyzing future impact of the EU reforms both show devastating consequences of the reforms. Both predict negative private and social profits. This is an indication that smallholder sugarcane farming in the Komati region will be unsustainable after the EU reforms. In fact, the second and third PAMs indicate that smallholder farmers of KDDP will not be able to survive without government support. Therefore, considering the contribution that smallholder sugarcane farming makes in the economy of Swaziland, and direct intervention in poverty reduction, it is important that Government consider various ways that can be employed to keep smallholder sugarcane farming viable in this area. Considering the fact that preferential trade with the European Union is coming to an end soon, it is imperative that Government explore alternative markets where Swaziland sugar can be sold at favorable prices. Smallholder farmers must also be assisted to improve efficiency so as to reduce production costs and improve revenue.
Open Access
Assessing the impacts of SADC Free Trade Agreements (SADC FTA) on South African agricultural trade
(University of the Free State, 2013-01) Fadeyi, Oluwatoba Akinsuyi; Bahta, Yonas; Ogundeji, A. A.
English: In today’s economically integrated world, trade matters more than ever before. Nations are signing various bilateral trade agreements and are engaged in various form of economic integration. Developing countries are also involved in economic integration for vital developments. Free trade areas (FTA), which is a form of economic integration, is formed by removing tariffs on trade among member nations leaving the autonomy in setting their tariffs on trade with non-members. The Southern Africa Development Community (SADC) became a Free Trade Area in 2008 for the economic integration of members. Literature reviews revealed that econometric models (gravity model in particular) have not been extensively used to estimate the impact of free trade agreements on South African agricultural trade at commodity level using disaggregated data. This study, therefore, evaluates the impact of Southern Africa Development Community Free Trade Agreements (SADCFTA) on South African agricultural trade using gravity model. The study focuses on South African data for agricultural exports and imports with SADC member countries and EU-15 countries for meat of bovine, maize and wheat commodities from 2000 to 2011. These products were selected based on their sensitivity, relative importance in terms of their contributions to the gross value of agricultural production, consumption and their tradability. The study used the gravity modeling technique to analyse the impact of SADC free trade agreement. The applied regression method used is the Poisson Pseudo Maximum Likelihood (PPML) estimator to determine the significance of variables within the model. The PPML was preferred to the ordinary least square (OLS) method of estimation. In the presence of heteroskedasticity the standard OLS methods can severely bias the estimated coefficients, casting doubt on the empirical findings. The PPML is robust to different patterns of heteroskedasticity and provides a natural way to deal with zero values in data. The result shows that there has been a significant increase in trade for meat of bovine and maize among SADC members. There has been a net trade creation and an increasing intra-SADC bloc bias for meat of bovine. The intra-regional trade in maize has also been stimulated by the implementation of the free trade agreements. The study cannot identify any strong bloc effect in wheat trade. Therefore a trade diversion effect was established. The empirical findings of this study can be considered as an intermediate step to address the relative trade creation and trade diversion effects. The study also signifies the importance of analyzing the effects of SADCFTA for major agricultural commodities. In order to assess the progress of the SADCFTA scheduled of full liberalization up till the end of 2012, it is imperative that the study recommends carrying out further studies to assess the full liberalization of trade in the agricultural sector.
Open Access
Assessing the performance of smallholder farmer cooperatives ‒ a member’s perspective: a case study of Mogalakwena Municipality (Limpopo Province)
(University of the Free State, 2015-06) Masango, Richard; Jordaan, H.
The main objective of the research was to assess the performance of agricultural cooperative from the members’ perspective, using the tool model that will assist my research with the cooperative internal and external factors affecting the performance of the smallholder agricultural cooperative. The state and other stakeholders considered cooperative as the strategy that will stimulate economic development and reduce poverty, which was supported also by other policy documents like (NDP) National Development Commission and (CRDP) Comprehensive Rural Development Programme. Internationally evidence shows that cooperative are among institutions that can help farmers to address numerous challenges that include economies of scale and market participation. Nationally, some studies were done by other researchers on cooperative performance and the results indicate that accountability and lack of transparency (poor governance) were the cause of poor performance of the smallholder agricultural cooperatives. Other researchers have discovered that stringent marketing requirements and limited provision of inputs are the cause of smallholder cooperative poor performance. Various approaches were done to address the challenges which include the performance of agricultural cooperative and the approach to analyse the member’s satisfaction in smallholder agricultural cooperatives. Smallholder cooperatives reputation is not convincing or with poor return on investment especially in South Africa, which necessitate studies to explore the level of member’s satisfaction of the smallholder agricultural cooperative as expected from the board of directors. The questionnaire was developed to assist in the research and a sample of eight collective actions in Mogalakwena Municipality (Limpopo Province) involved in small livestock; vegetable production; grain crops and mixed farming were interviewed. Questionnaire had ratings from 1 to 5. The questions were translated to farmer’s home language and given an opportunity to respond on questionnaire by crossing the relevant score. The questionnaire used was based on the FORCE (Farmer Organisation Reviewing Capacity and Entrepreneur) tool model and the areas of study include: the membership base; governance and internal democracy; management of human and financial resources; collaboration and alliance; service provision to members; production and production risk, and the relationship between farmers and buyers and default with supporting statements per area of study or performance area. The results on members’ perception of the Mapela smallholder agricultural cooperative were analysed from the cooperative members and the board of directors/management. The results of the eight performance areas indicate that governance, collaboration and alliance, Production and production risk, relationship among farmers and buyers and default scored above the average and membership, management of human and financial resources and service provision to members scored below the average. Despite that government have spent resources to develop cooperatives and there was no research conducted before in Mogalakwena that focus internal factors affecting the performance of the cooperative. The performances of the cooperative in all the assessed areas have scored below 50%, which means unhealthy business feedback for cooperative members and members of the cooperative not enjoying the benefits smallholder collective actions.
Open Access
Chain management and marketing performance of the banana industry in Eritrea
(University of the Free State, 2006-06-17) Zereyesus, Yacob Abrehe; Jooste, André
English: The current marketing of agricultural products in general, and of bananas in particular, poses special problems for Eritrean farmers. Poor climatic conditions coupled with crude and inefficient agricultural technologies render agricultural output sub-optimal. The major production problems include shortage of capital and scarcity of land; shortage of farming materials; spoilage of bananas during harvesting due to inappropriate harvesting techniques and facilities and lack of technical know how. In addition, the main marketing problems comprise transport problems to stores; general storage problems; lack of information and spoilage during transport. Taking the above into account it should be noted that current trends towards the increased globalization of markets, trade liberalization, advances in information technology, consumer preferences and improved logistics means that the competitiveness of fruit industries in various regions and countries, as affected by the performance of their supply chains, is becoming increasingly important and will be even more important in the future. Cognisance should also be taken of the fact that much confusion exists regarding the exact meaning of the term competitiveness. Comparative advantage and competitiveness are related, but are often mistakenly exchanged for one another. Comparative advantage explains how trade benefits nations through more efficient use of their resource base when trade is totally unrestricted. Competitive advantage defines trade patterns as they exist in the real world, including all the barriers to free trade ignored by comparative advantage (Worley, 1996). Vitally important is to take cognizance of the fact that the establishment of a competitive supply chain is a prerequisite for an industry’s competitiveness and success. Based on this analysis, this study proposes what should be done to achieve a workable SCM for the banana industry in Eritrea. In its broader sense, the proposed structure of the SCM involves the introduction of horizontal strategic alliances between existing banana producers and the marketing group and a vertical relationship along the supply chain. Given that bananas comprise a considerable portion of the international trade makes it significant to this study. Bananas are also symbolic of the wide range of injustices present in international trade today. The Lomé Convention, which placed certain Latin American banana exporting countries at a disadvantage, was the root cause of trade disputes, and the eventual replacement of this Convention will have an impact on the future banana export prospects of ACP countries. Eritrean producers, like those of other ACP countries, therefore have little time to adjust and become competitive against “dollar” bananas on the European market, which at this point enjoy a production cost and quality advantage
Open Access
Climate change and vulnerability to food insecurity among smallholder farmers : a case study of Gweru and Lupane districts in Zimbabwe
(University of the Free State, 2010) Mutsvangwa, Eness P.; Viljoen, M. F.; Kundhlande, G.
This thesis assesses the vulnerability of smallholder farmers to food insecurity in Gweru and Lupane districts of Zimbabwe and links this to climate change. Current changes in climate for most parts of Zimbabwe have resulted in increased frequency of droughts, dry spells and erratic rainfall. This has resulted in loss of food production and smallholder farmers are most vulnerable to these climatic catastrophes as they affect the food security status of the household. Few studies have been done at local and household levels, most climatic studies have been done at global and national levels. This study seeks to contribute to this knowledge gap. Poverty and food security studies have proved that poor and food insecure households are more vulnerable to climate change, considering that they have limited options to curb against climate change. Using data obtained from a survey carried out in Gweru and Lupane districts in Zimbabwe, descriptive statistics analysis was undertaken to characterize the households, in terms of gender, education of the household head, cropping patterns of the household, perceptions to climate change and also organizations working within the communities and how they help reduce vulnerability to climate change. Results show that cereal crop production is common and important in these two districts, considering that the largest pieces of land are allocated to cereals. Thus cereals constitute a large proportion to the household’s food security. Chuadhuri’s model of measuring vulnerability to poverty was used to measure vulnerability to food insecurity for households in Gweru and Lupane districts. Results show about 88% of the households in both districts are vulnerable to food insecurity thus, have more chances of being negatively impacted by climate change.
Open Access
The comparative advantage of long-term crops in Lesotho
(University of the Free State, 2005-06) Makosholo, Malefu L.; Jooste, A.; Van Schalkwyk, H. D.
This study is one of several investigations undertaken over the years to determine the Comparative Economic Advantage of agricultural production in selected Southern African countries. The specific purpose of the Lesotho study was to generate information required to guide decision-makers in agriculture towards productive allocation of resources and identify feasible infrastructure investment options to take advantage of available trade opportunities within and beyond the region. It was also required to analyse the factors involved in the structure and development of inter- and intra-industrial trade (Gini and IIT) for the SACU region of which Lesotho is a part. The inter-industry analysis shows that there is concentration in the market of apples, asparagus, cherries and peaches. On the other hand, the intra-industry analysis with respect to apples, asparagus, cherries and peaches suggests that the SACU countries exported more than they imported during the period 1994-1998. The study also evaluated the comparative economic advantage of irrigated longterm crops in the four agro-ecological zones of Lesotho based on analyses of profitability coefficients and domestic resource costs. For these, the analysis was carried out using the net present value (NPV) approach. Further, economic efficiency and policy distortions were examined by the use of such a measure as the nominal protection ratio (NPR), effective policy ratio (EPR), and net policy effect (NPE). The CEA analysis based on the NPV approach yielded higher private returns relative to economic returns for the measures of economic efficiency and policy distortions in the Lowlands, Foothills, the Senqu River Valley and the Mountains of Lesotho for all the crops examined. It was revealed that apples were dominant and were more profitable in all zones. These results suggest that in the presence of government intervention, Lesotho could exploit comparative advantage in contracting production of apples and peaches in the Lowlands and Foothills so that other activities can expand. In the Mountains, the protection policies have raised the price of apples by 61 per cent above the social price for importing the commodity, i.e. Mountain farmers received 61 per cent more than the export parity prices. In the Senqu River Valley and Mountains, only apples could be contracted. Thus, should economic values of inputs prevail; farmers would receive lower returns, meaning that they may not compete effectively in the world market. The results of DRC based on the returns to land when NPV was employed, indicate that apples, asparagus, cherries and peaches for the Lowlands have comparative economic advantage, with asparagus production being the highest followed by peaches. However, in the Foothills apples are more efficient than peaches although the dominance is weak. However as the majority of farmers lack easy access to land in Lesotho, it is doubtful if results based on the prevailing land prices can have much predictive value. The absence of a clear policy and law enforcement also leads to lack of land price market, which in turn affects the impact of capital gains and losses. In this case, it may be necessary to conduct detailed studies to determine the economic prices of land in Lesotho on the basis of which reliable CEA analysis can be conducted. The study concludes that in the short-term, the commodities examined could contribute to the attainment of food security in Lesotho. For the future, Lesotho producers would benefit to a greater extent from expanding production for the international markets. It must be noted however that the coefficients of the CEA analyses do not provide sufficient information to guide future decisions for investment. For more long-term investment decisions, it is recommended that detailed cost-benefit analyses be carried out for each agro-ecological zone and location identified for any future project aimed at expanding the production of longterm crops in Lesotho.
Open Access
The comparative advantage of long-term crops in Lesotho
(University of the Free State, 2005-06) Makosholo, Malefu L.; Jooste, André; Van Schalkwyk, H. D.
This study is one of several investigations undertaken over the years to determine the Comparative Economic Advantage of agricultural production in selected Southern African countries. The specific purpose of the Lesotho study was to generate information required to guide decision-makers in agriculture towards productive allocation of resources and identify feasible infrastructure investment options to take advantage of available trade opportunities within and beyond the region. It was also required to analyse the factors involved in the structure and development of inter- and intra-industrial trade (Gini and IIT) for the SACU region of which Lesotho is a part. The inter-industry analysis shows that there is concentration in the market of apples, asparagus, cherries and peaches. On the other hand, the intra-industry analysis with respect to apples, asparagus, cherries and peaches suggests that the SACU countries exported more than they imported during the period 1994-1998. The study also evaluated the comparative economic advantage of irrigated longterm crops in the four agro-ecological zones of Lesotho based on analyses of profitability coefficients and domestic resource costs. For these, the analysis was carried out using the net present value (NPV) approach. Further, economic efficiency and policy distortions were examined by the use of such a measure as the nominal protection ratio (NPR), effective policy ratio (EPR), and net policy effect (NPE). The CEA analysis based on the NPV approach yielded higher private returns relative to economic returns for the measures of economic efficiency and policy distortions in the Lowlands, Foothills, the Senqu River Valley and the Mountains of Lesotho for all the crops examined. It was revealed that apples were dominant and were more profitable in all zones. These results suggest that in the presence of government intervention, Lesotho could exploit comparative advantage in contracting production of apples and peaches in the Lowlands and Foothills so that other activities can expand. In the Mountains, the protection policies have raised the price of apples by 61 per cent above the social price for importing the commodity, i.e. Mountain farmers received 61 per cent more than the export parity prices. In the Senqu River Valley and Mountains, only apples could be contracted. Thus, should economic values of inputs prevail; farmers would receive lower returns, meaning that they may not compete effectively in the world market. The results of DRC based on the returns to land when NPV was employed, indicate that apples, asparagus, cherries and peaches for the Lowlands have comparative economic advantage, with asparagus production being the highest followed by peaches. However, in the Foothills apples are more efficient than peaches although the dominance is weak. However as the majority of farmers lack easy access to land in Lesotho, it is doubtful if results based on the prevailing land prices can have much predictive value. The absence of a clear policy and law enforcement also leads to lack of land price market, which in turn affects the impact of capital gains and losses. In this case, it may be necessary to conduct detailed studies to determine the economic prices of land in Lesotho on the basis of which reliable CEA analysis can be conducted. The study concludes that in the short-term, the commodities examined could contribute to the attainment of food security in Lesotho. For the future, Lesotho producers would benefit to a greater extent from expanding production for the international markets. It must be noted however that the coefficients of the CEA analyses do not provide sufficient information to guide future decisions for investment. For more long-term investment decisions, it is recommended that detailed cost-benefit analyses be carried out for each agro-ecological zone and location identified for any future project aimed at expanding the production of longterm crops in Lesotho.
Open Access
Consumer preferences and willingness to pay for beef attributes in Ghana
(University of the Free State, 2014-06) Owusu-Sekyere, Enoch; Jordaan, H.; Ogundeji, A. A.; Owusu, V.
As Ghana makes transition into a developed economy, a greater percentage of the population is demanding and eating high quality and safe food products. The demand surge for beef needs to be met by increasing supply and an efficient supply-chain. Using a survey and choice experimental data collected from 400 beef consumers in the Kumasi Metropolis and Sunyani Municipality of Ghana, this study examines consumers‟ preferences and willingness to pay for beef product attributes. The results show that, Ghanaian consumers‟ in general prefer and rate shopping environment, packaging, leanness, certification, tenderness, steak colour and freshness as the most important attributes considered in purchasing beef products respectively. The empirical results show that, young, low and middle income consumers are more concerned with origin, steak colour and certification of beef products. Female consumers place high importance on beef leanness, origin, certification and freshness as key attributes compared to males. It is suggested that beef and other livestock distributors should focus on Ghanaian consumers with particular attention to shopping environment, packaging, leanness, inspection and certification, tenderness, colour and freshness attributes of beef products. The results further suggest that beef and other livestock distributors should focus on Ghanaian female consumers and young consumers considering origin, certification leanness and freshness as a key attributes. Ghanaian consumers with less formal education placed higher importance on product certification, shopping environment and tenderness. Larger Ghanaian households placed less importance on product leanness, slaughter men, certification and packaging. Creating attractive packaging, making products easy to cook, provision of certification label, specification of method of production and creating a suitable shopping environment are marketing strategies to be considered by investors. The empirical results from random parameter logit indicate preference heterogeneity for beef product attributes, and higher willingness to pay exist for pasture-raised beef, certification label and low fat content (lean beef) respectively. Consumer characteristics including age, income, gender and education significantly influence preferences and willingness to pay for beef products. Further evidence suggests that, the beef investors such as importers and exporters could use selective demographic targeting to maintain or build its own market share among competing beef products.
Open Access
The cost of predation on small livestock in South Africa by medium-sized predators
(University of the Free State, 2010-11-30) Van Niekerk, Hermias Nieuwoudt; Taljaard, P. R; De Waal, H. O.; Grové, B.
Farmers have been protecting their livestock for centuries by fencing and kraaling to prevent the risk of losses due to predators. The black-backed jackal (Canis mesomelas) and the caracal (Caracal caracal) are two important medium-sized predator species among the South African wildlife, but they have a negative impact on the livestock industry in South Africa, especially among sheep and goats. A small number of studies have been done to estimate losses due to predators. Local producer organisations estimated a loss of 8% of small livestock per year. However, no countrywide study has been done to quantify the monetary impact of predation on the livestock industry. Predation losses are not the only direct economic losses because there are also additional direct and indirect costs involved. The primary objective of this study was to quantify the economic losses due to predation on small livestock and further to analyse the effect of various managerial aspects on the occurrence and level of predation on small livestock farms. The five major small livestock producing provinces (Eastern Cape, Northern Cape, Free State, Western Cape and Mpumalanga) were used to collect primary data on predation. Telephonic interviews were used to collect data from 1 424 farmers in the five major small livestock producing provinces. The questionnaire included questions on farm name, location and size, flock size, topography, surrounding land uses, livestock losses due to predators, predator control and various managerial aspects. The majority of losses in these five provinces were small livestock younger than one month, where the black-backed jackal was responsible for the majority of the predation. Losses due to caracal were not as high compared with black-backed jackal. This is mainly ascribed to lower population levels of caracals and also that these damage-causing animals are not found in every region within a province. Losses due to caracal were associated with lambs or kids older than a month, as well as older small livestock. Predation losses due to predators was estimated at R 1 390 453 062 when extrapolating predation losses for the five provinces to the rest of South Africa. The Northern Cape Province reported the highest predation losses, namely R 540 847 496. The reported predation losses for the other four provinces were R 412 810 143 for the EC province, R 247 141 016 for the FS province, R 84 673 440 for the MP province and R 104 980 967 for the WC province. The physical monetary value attached to predation in this study was only the direct cost of predation and do not include indirect cost of controlling damage-causing animals. The monetary losses as presented previously were based on biological information provided by respondents for the five major small livestock producing provinces. For example in the NC province 426 farmers were surveyed, representing 6.9% of commercial farmers in the province. These farmers were farming on 3 290 790 ha and lost on average 6.14% of their total small livestock and 13% of production animals (lambs between 0 – 6 months). The majority of losses were associated with predation by the black-backed jackal (65%) and to a lesser extent predation by the caracal (30%). Other losses experienced on farms were attributed to stock theft (3%) and vagrant dogs (1%). There are a number of variables affecting predation in small livestock producing areas in South Africa. These variables differ between provinces according to the main agricultural practices in the area and the management practices used. It was hypothesised that the variables affecting the occurrence of predation and the variables that affected the level of predation was not the same, therefore, it was necessary to use the Probit and Truncated regression models. It was assumed that factors affecting the occurrence of predation are usually associated with management aspects and normally will be negatively correlated with predation losses. Variables affecting the level of predation can be seen as factors reducing the level of predation and these factors will usually include non-lethal and lethal control methods. The non-lethal control methods usually do not stop predation, but will reduce the level of predation on a farm. However, when success is associated with a certain control method, this variable will be significant in effecting the occurrence of predation on a farm and at a specific point in time. The information collected in this study showed that predation is a serious problem for the South African small livestock sector and there is also no indication that the level of predation is decreasing. This study does not answer all questions on predation, but provides valuable information in understanding the magnitude or extent of predation and some of the factors influencing predation on farms. The information collected can be used to select, evaluate and focus intensively on smaller areas in their efforts to manage predation and develop strategies to reduce the impact.
Open Access
Demand relations of oilseed products in South Africa
(University of the Free State, 2003-07) Van Schalkwyk, Hendrik P.; Van Schalkwyk, Herman
English: 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).
Open Access
Determinants of resource use productivity and efficiency of Ghana’s rice industry
(University of the Free State, 2015-01) Donkor, Emmanuel; Matthews, N.; Ogundeji, A. A.
Rice is one of the staple crops that has been targeted the government as a food security crop for addressing hunger and poverty issues in Ghana. However, the rice industry is performing below the climatic potential due to low productivity and efficiency levels of the rice producers. Therefore, there is high reliance on rice importation to meet the ever increasing demand. Self-sufficiency in rice can be achieved by improving the productivity and efficiency levels of rice production in Ghana. Some studies have been done on efficiency of rice production in Ghana. However, none of these studies attempted to fit a metafrontier and to estimate the technology gap ratio, and technical efficiency relative to the metafrontier. These efficiency measures are necessary to compare the performance of rice production between districts. The study therefore analyses the determinants of productivity and efficiency of rice production in Bawku Municipal and Kassena Nankana East district of Ghana using a metafrontier analysis. The dataset used for the study was obtained from the Ghana Agricultural Production Survey conducted in 2011/2012 cropping season. A sample size of 470 rice farmers comprising 350 from Kassena Nankana East and 120 Bawku farmers were used for the study. The empirical results show that land, seed, labour and fertiliser have significant positive impacts on rice output in Kassena Nankana East district, indicating that these variables are essential inputs in promoting rice production in the district. Conversely, land, seed and fertiliser have significant positive effects on rice production in Bawku Municipal, suggesting that these inputs are necessary in enhancing rice production in the district. Generally, the variation in rice production for the study areas is primarily as a result of technical inefficiency on the part of the rice farmers. The stochastic frontier analysis further indicates that the average technical efficiency of Kassena Nankana farmers is 76.90% which is higher than that of Bawku Municipal with mean technical efficiency of 59.10%. Some of the variables of influencing the efficiency level of Kassena Nankana farmers are extension contact, access to credit, household size and row-planting. Extension contact, land renting, education and row-planting had significant negative impacts on technical inefficiency of rice farmers in Bawku Municipal while irrigation and market distance have a significant positive influence on technical inefficiency. The results of the hypothesis test that was performed using the estimated metafrontier indicate that a distinct production frontier exists for both districts implying that separate production frontiers are needed for the two districts. The average technical efficiency scores estimated relative to the metafrontier (TEm) for Kassena Nankana is 0.525 while the average TEm for Bawku is 0.587. Comparing the average TEm of the two districts relative to metafrontier, Bawku farmers have higher efficiency scores than Kassena Nankana farmers suggesting that Bawku farmers are performing better than Kassena farmers at a regional level. The results furthermore indicate that a regional or national production frontier cannot be estimated and used to advise farmers at a district level. Hence, specific district information is needed to advise farmers on how to improve their productivity and efficiency of rice production.
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.
Open Access
Econometric estimation of Armington elasticities for selected agricultural products in South Africa
(University of the Free State, 2007-11) Ogundeji, Abiodun Akintunde; Jooste, A.
English: The economic evaluation of, for example, trade liberalisation requires complex models that can take different forms and which are based on economic theory. Of particular importance in partial and general equilibrium models is the behavioural function that governs the interactions between different variables. For example, in these models changes in trade regimes and tariffs alter the domestic price of imported goods relative to that of domestically produced goods, and such changes in relative prices affect the fraction of the demand supplied by imports. If such behaviour is not modelled correctly, trade impacts can be either under- or overestimated. Estimates of the elasticity of substitution between goods differentiated by their place of origin are therefore required. A review of the literature revealed that estimates of Armington elasticities are not available for agricultural products in the majority of countries, including South Africa, in spite of the importance of including Armington elasticities when evaluating the impact of trade policies. The focus of this study was on the estimation of Armington elasticities for selected agricultural products in South Africa. In this study, non-nested CES Armington elasticities were estimated using the econometric approach for the following agricultural products: Meat of bovine animals (fresh or chilled); meat of bovine animals (frozen); meat of swine (fresh, chilled or frozen); maize or corn; wheat and meslin; soybeans (broken or not broken); and sunflower seeds (broken or not broken). Three econometric models, namely geometric lag, single-equation error correction, and ordinary least square, were estimated based on the time series properties of the data. All the products considered in this study have significant Armington elasticities at 10 percent level of significance. All the products except soybeans have short and long-run elasticities. The estimates of Armington elasticities range between 0.60 and 3.31 for the short-run elasticities, and between 0.73 and 3.21 for the long-run elasticities. These values suggest that imported and domestic agricultural products are not perfect substitutes. The long-run elasticity estimates show that meat of bovine animals (frozen) is the most import sensitive product followed by maize, meat of bovine animals (fresh or chilled) and sunflower seeds, while wheat and meat of swine (fresh, chilled or frozen) are the least import-sensitive products. The short-run elasticities show that soybeans is the most import-sensitive product followed by meat of bovine animals (fresh or chilled), while meat of swine (fresh, chilled or frozen) is the least import-sensitive product. The dummy variables representing seasonality were found to be statistically not significant for livestock products, with the exception of the fourth quarter for meat of swine (fresh, chilled or frozen). However, dummy variables for the grain products were statistically significant. The results show that seasonality is an important factor in determining import demand for grain products. Dummy variables included to control for outliers were not significant, nor was the dummy variable included for trade liberalisation. The value of this study is that the estimated Armington elasticities will allow researchers to evaluate more precisely the economic impacts of trade liberalisation and changes in tariffs, as well as other trade policies, in partial and general equilibrium models that include South African agriculture.
Open Access
Econometric estimation of the demand for meat in Namibia
(University of the Free State, 2017-02) Andjamba, Hiltrudis N.; Geyer, A.; Ogundeji, A. A.
This study estimated the Rotterdam and the LA/AIDS model with the reason to determine an appropriate model for Namibian meat products. The data used in the study are prices and quantity demanded for Namibian meat products, such as beef, mutton, pork and chicken, for the period from January 2001 to December 2013. The data were analysed using Eview 7 by Seemingly Unrelated Regression Estimation (RSURE) method that produces four separate equations, namely beef, mutton, pork and chicken equations. The data used in predicting both models were first tested to determine whether they are stationary. As a result, the data employed were integrated of order one (I(1)). The parameters of the models were estimated using the RSURE method. The econometric restrictions, such as homogeneity and asymmetry, were imposed during the estimation of both the models. Because the mutton equation was dropped during the regression process, the adding-up restriction was used to recover the parameters for the mutton in both the models. As for the Rotterdam model, the system R2 for the Rotterdam modes is 19.1 per cent. All expenditure coefficients are positive, which is in line with the a priori expectations. With the exception of chicken, the expenditure coefficients for beef (0.007), pork (0.014 and mutton (0.027) are very close to zero, implying that these products are normal goods. The beef share equation further indicates that an increase in the price of chicken (-0.004), pork (-0.003) and mutton (-0.007) reduces their share in the budget because consumers prefer to spend their income on beef. Unlike the Rotterdam model, all three sets of restrictions in the LA/AIDS model were satisfied during the regression. Nine out of twelve estimated parameters are statistically significant at one per cent level of confidence. One is significant at ten per cent level of significance, while only two parameters are insignificant. The system R2 (39.4) for the LA/AIDS model is higher than that of the Rotterdam model. The estimated expenditure elasticities for beef, chicken, pork and mutton are 0.60, 1.46, 0.41 and 1.06, respectively. Beef and pork are relatively inelastic, while chicken is more elastic than mutton is. The expenditure elasticity result for the LA/AIDS model implies that chicken and mutton are regarded as luxury products, while beef and pork are normal goods in the Namibian purchasing basket. Based on the performance of the two models on Namibian meat data, the LA/AIDS model, compared with the Rotterdam model, performed better in terms of the model’s ability to meet the econometric restrictions of homogeneity and asymmetry, the highest adjusted R2, and the results that are in conformity with the a priori expectation in terms of compensated own-price and cross-price elasticities. It is therefore concluded that the LA/AIDS models are a better fit for the Namibian meat data.
Open Access
Econometric estimation of the demand for meat in South Africa
(University of the Free State, 2003-05) Taljaard, Pieter R.; Van Schalkwyk, Herman
In 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.