Capacity building strategies for sustainability farming SMMEs in South Africa

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Date
2009-11
Authors
Mmbengwa, Victor Mbulaheni
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Publisher
University of the Free State
Abstract
English: South Africa’s land reform programme is faced with many challenges associated with its sustainability. It is widely believed that one of the major causes of the collapse/failure of farming SMMEs is lack of capacity in many aspects of running farming as a business. Critical success factors for these SMMEs are capacity, market accessibility, business management skills, effective extension services, adequate support programmes as well as adequate financial injection. Therefore, any entrepreneur in this business must have skills in both marketing and management, coupled with adequate support systems. To address the above-mentioned problems, a comprehensive study of farming small, micro, medium enterprises (SMMEs), pre- and post-settlement support, the involvement of youth and women, accessibility of markets, linkages, small, micro, medium enterprises (SMMEs’) institutional structures and other support services, was carried out. An intensive desktop study which included amongst others reports from government, consulting agencies, development and training institutions was used. Workshops with experts, farming stakeholders, agricultural economics departments from universities, government officials and farming small, micro, medium enterprises (SMMEs) were conducted. Participatory action research methodologies were employed during workshop sessions. Empirical evidences were drawn from eighteen case studies and surveys conducted by both Land Bank and National Department of Agriculture. Various tools of analysis were used to analyse different data sets used in this study. For instance, case studies used narrative coupled with strength, success, weakness, failure, opportunities and threats (SSWFOT) and ridge regression (RR). The data set from the Land Bank survey was analysed using GENMOD, MEAN, frequency (FREQ) and multiple logistic regression models. The data set from National Department of agriculture was analysed using frequency (FREQ) and multiple regression analysis. Case studies revealed that micro and small scale farming enterprise severely lack important key success indicators such as sustainable markets, input supply; increased income, sustainable production, skills development and professional business operation. On the contrary, it was found that medium sized enterprises have adequate levels of important key success factors that are lacking in micro and small scale farming enterprise, but also shows a need to improve on sustainable markets and input supply. These cases also revealed that financial capacity depends on marketing capacity. Consequently unit increases in marketing capacity have a corresponding increase in financial returns. The Land Bank survey revealed that perceptions of emerging farmers portray a lack of capacity and exposure. It also showed that skills, financial support, and infrastructure are important requisites for sustainable farming small, micro, medium enterprises (SMMEs). Extension support and sustainable production were found to be crucial for farming success in the emerging farming sector. It was also found that lack of understanding of the importance of formal markets; benefit of training and extension support may be the main contributors to the unsustainable nature of the emerging farming sector in South Africa. Therefore, this sector requires access to formal markets, extension support services and training in order to be profitable. The National Department of Agriculture data set revealed that there are many more micro enterprises compared to their small and medium counterparts. In addition, women are most beneficiaries for agrarian development; their involvement surpasses that of men, youths and disabled people. The results also indicate the training received to be insufficient, with much of the training being inappropriate for farming. There is a need to devise strategies to convert micro enterprises into small and medium enterprises with since a high conversion rate to small and medium levels can help to reduce poverty, unemployment and above all increase women’s empowerment and thereby improving the socio-economic impact of these farming enterprises. The results have good implications for the present and future owners of small, micro, medium farming enterprises. The study has formulated comprehensive and sustainable strategies as a guideline for agribusiness entrepreneurs, with the overall objective of eradicating poverty in rural areas and commonages through increased agricultural production.
Afrikaans: Die Suid-Afrikaanse grondhervormingsprogram het te kampe met vele uitdagings t.o.v. volhoubaarheid. Daar word wyd aanvaar dat een belangrike oorsaak van die ineenstorting/mislukking van boerdery klein-, mikro - en medium ondernemings (SMMEs) bestaan uit die gebrek aan kapasiteit in vele aspekte van die bedryf van boerdery as ‘n besigheid . Kapasiteit, marktoegang, sakebestuursvaardighede, effektiewe voorligtingsdienste, voldoende ondersteuningsprogramme sowel as finansiele inspuiting tel as kritieke suksesfaktore vir hierdie SMMEs. Aldus moet enige entrepreneur in hierdie besigheid beskik oor vaardighede beide in bemarking en bestuur, gepaard met voldoende ondersteuningssisteme. Ten einde bogenoemde probleme aan te spreek is ‘n omvattende studie uitgevoer van boerdery SMMEs, voor-en na-vestiging ondersteuning, die betrokkenheid van jong mense en vrouens, toeganklikheid van markte, skakelings, die institusionele strukture van SMMEs en ander ondersteuningsdienste. ‘n Intensiewe lessenaarstudie wat onder andere verslae uit regerings instansies, konsultasieagentskappe, ontwikkelings - en opleidingsinstansies ingesluit het, is gebruik. Werkswinkels met deskundiges, boerdery-belanghebbendes, landbou-ekonomie departemente van universiteite, regeringsamptenare en boerdery SMMEs is uitgevoer. Deelnemende aksie navorsingsmetodieke is gebruik tydens werkswinkel sessies. Empiriese getuienisse is gehaal uit agtien gevallestudies en opnames uitgevoer beide deur die Landbank en Nasionale Departement van Landbou. Verskillende analitiese metodes is gebruik om veskillende datastelle wat vir die studie gebruik is, te ontleed. Die gevallestudies het byvoorbeeld narratiewes gekoppeld met SSWFOT en randregressie benut. Die data stel van die Landbank is ontleed met gebruik van GENMOD, MEAN, FREQ en veelvuldige logistiese regressiemodelle. Die datastel van die Nasionale Departement van Landbou is ontleed met behulp van FREQ en veelvuldige regressie analise. Gevallestudies het getoon dat mikro- en kleinskaalse ondernemings ernstige tekorte openbaar in sleutel suksesfaktore soos volhoubare markte, beskikbaarheid van insette, verhoogde inkomste, volhoubare produksie , vaardigheidsontwikkeling en professioneel - kundige sake -optrede. In teenstelling hiermee is bevind dat medium -grootte ondernemings beskik oor voldoende peile van belangrike sleutelfaktore wat by die mikro- en kleinskaalse ondernemings skort, maar die mediumgrootte ondernemings toon ook ‘n nodigheid om te verbeter in terme van volhoubare markte en insetbeskikbaarheid. Hierdie gevalle het verder aangetoon dat finansiele kapasiteit van bemarkingskapasiteit afhang. Aldus gaan eenheids verhogings in bemarkingskapasiteit gepaard met ooreenkomstige verhogings in finansiele opbrengs. Die Landbank-opname het getoon dat die persepsies van opkomende boere ‘n gebrek aan kapasiteit en blootstelling openbaar. Dit het ook getoon dat vaardighede, finansiele ondersteuning en infrastruktuur belangrike vereistes is vir volhoubare boerdery SMMEs. Dis bevind dat voorligtingsondersteuning en volhou bare produksie krities belangrik is vir boerderysukses in die opkomende boerderysektor. Dis ook bevind dat ‘n gebrek aan besef van die belangrikheid van formele markte, voordele van opleiding en voorligtingsondersteuning die grootste oorsake mag wees van die onvolhoubare aard van die opkomende landbousektor in Suid-Afrika. Aldus benodig hierdie sector toegang tot formele markte, voorligtingsdienste en opleiding om winsgewend te kan wees. Die datastel van die Nasionale Departement van Landbou het aangetoon dat daar baie meer mikro-ondernemings as klein en medium-ondernemings is. Verder is die meeste bevoordeeldes vir agrariese ontwikkeling vrouens ; hul betrokkenheid oortref die van mans, jong mense engestremdes . Die resultate wys ook dat die opleiding ontvang onvoldoende is, met heelwat opleiding onvanpas vir boerdery. Daar bestaan ’n behoefte om strategiee daar te stel om mikroondernemings om te skep in klein - en medium-grootte ondernemings aangesien ‘n hoe peil van omskakeling na klein- en medium-grootte ondernemings kan bydra tot die verlaging van armoede, werkloosheid en veral die verhoging van vroue se bemagtiging, en sodoende kan die sosioekonomiese impak van hierdie boerdery-ondernemings verbeter word. Die resultate het goeie gevolge vir huidige en toekomstige eienaars van klein, mikro en medium (SMME) landboubedrywe. Die studie het uitvoerige en volhoubare strategie gefindeer wat kan dien riglyn vir landboukundige entrepreneurs. Die hoofdoelwit hiervan is die uitwissins van armoede in plattelandse gebriede en gemeenslaaplike gronde deur middle van verhoogde landbouproduksie.
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Keywords
Thesis (Ph.D. (Agriculture Economics))--University of the Free State, 2009, Land reform -- South Africa, Sustainable agriculture -- South Africa, Agriculture -- Economic aspects -- South Africa, Skills, Land reform, Strategy, Markets, Unsustainability, Sustainability, Capacity, SMMEs
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