http://ageconsearch.umn.edu/handle/33782 Search the Channel search http://ageconsearch.umn.edu/simple-search http://ageconsearch.umn.edu/handle/7047 Title: Economic Analysis of Phosphorus Applications under Variable and Single-Rate Applications in the Bothaville District <br/> <br/>Authors: Maine, N.; Nell, W.T.; Lowenberg-DeBoer, J.; Alemu, Z.G. <br/> <br/>Abstract: Variable-rate (VR) application of inputs in South African cash crop production is mainly concerned with fertilizer and lime, and this indicates the importance of these inputs in cash crop production. However, the profitability of VR application of inputs has not yet been investigated under South African conditions. This paper studies the maize yield response to variable-rate application of phosphorus (P) and the profitability thereof in South Africa, on the basis of data collected on a 104-hectare experimental field on a farm in the Bothaville district. The strip-plot design of 180 strips was used for this on-farm research experiment. This design involved treatments that run in the same direction across the field as planting and harvesting. The objective is to determine the maize crop response functions under different P rates and to estimate the profitability of VR relative to the single-rate (SR) application of P. The methodology involves modelling maize yield response functions for P under VR and SR treatments, and for different management zones. A spatial quadratic regression model is developed, according to which yield is estimated as a function of applied P, the treatment and management zones. The results indicate that yield response to P varies between VR and the SR application methods, as well as between management zones. Variable-rate treatment results in higher profits than the SR treatment. http://ageconsearch.umn.edu/handle/7048 Title: A Stochastic Budgeting Analysis of Three Alternative Scenarios to Convert from Beef-Cattle Farming to Game Ranching <br/> <br/>Authors: Grove, B.; Taljaard, P.R.; Cloete, P.C. <br/> <br/>Abstract: The main objective of this paper is to evaluate the profitability and financial feasibility of three alternative scenarios to convert from beef-cattle farming to game ranching. The analyses acknowledge the importance of quantifying the probability of failure or success when making investment decisions. Risk is incorporated into a standard net present value analysis using risk simulation. De-trended historical auction prices of live game and on-the-hoof prices of weaner cattle were used to quantify price variability. The stochastic net present value analyses indicate that game ranching is more profitable than cattle farming. Although an investment in a limited number of common game species is financially feasible, the cash flow analysis indicates a decreasing probability of making more money with game when annual cash flows are compared to those generated by means of cattle farming. Both the high-value game species scenarios are financially unfeasible during the first five years. These infeasibilities stem from a high probability of not covering instalments to finance game purchases, the extent to which these instalments are not covered, and the high probability of shortfalls in consecutive years. http://ageconsearch.umn.edu/handle/7049 Title: Factors Affecting Maize Producers Adoption of Forward Pricing in Price Risk Management: The Case of Vaalharts <br/> <br/>Authors: Jordaan, H.; Grove, B. <br/> <br/>Abstract: Logistic regression is employed to analyse the factors which influence the decision of whether or not the respondent used forward pricing methods during the 2004/05 maize production season. Forward pricing methods include cash forward contracting and hedging with futures contracts and/or options, through the South African Futures Exchange (SAFEX). Based on the results, the use of forward pricing is associated with lower levels of risk aversion and higher levels of human capital. Factor analysis is employed to reduce the dimensionality of the personal reasons which help to interpret the underlying, common factor of the personal reasons why farmers are reluctant to use forward pricing methods. Three factors were extracted and were labelled “Lack of capacity”, “Distrust of the market”, and “Bad experiences”. The results from the factor analysis confirm the finding that farmers need higher levels of human capital to use forward pricing methods and that farmers do not believe that the forward pricing market is effective. Education should furthermore, focus more on the practical application of alternative forward pricing methods and not purely on the benefits of the use of forward pricing methods. http://ageconsearch.umn.edu/handle/7051 Title: Expenditure elasticities for rural households in the Embo ward, Umbumbulu, KwaZulu-Natal <br/> <br/>Authors: Browne, M.; Ortmann, G.F.; Hendriks, S. <br/> <br/>Abstract: Household consumption patterns were investigated to determine the impact of an income shock on household expenditure and to establish the potential for demand-led growth in a rural area of KwaZulu-Natal. Household consumption data were collected from sample households in the Embo ward of Umbumbulu, KwaZulu-Natal during October 2004 and March 2005. Budget shares and expenditure elasticities were estimated for household consumption categories for the two study periods, allowing for a comparison of expenditure elasticities between the two seasons. Results suggest that expenditure elasticities for consumer expendables, durables and transport were highly elastic, while expenditure elasticities for the aggregate food category were negative (October) and highly inelastic (March). Analysis of the expenditure categories of tradable and non-tradable goods and services showed expenditure on tradable non-farm goods and services to have the greatest potential for demand-led growth with expenditure elasticities of 2.88 and 2.91, respectively. The category of non-tradable non-farm goods and services was not statistically significant for both periods and the category non-tradable farm goods and services was not statistically significant for October. A seasonal difference in expenditure patterns was apparent, suggesting that responses to income changes vary at different times of the year. http://ageconsearch.umn.edu/handle/7052 Title: Strategic focus areas and emerging trade arrangements in the South African agricultural industry since the demise of the marketing boards <br/> <br/>Authors: Doyer, O.T.; D'Haese, M.F.C.; Kirsten, J.F.; Van Rooyen, C.J. <br/> <br/>Abstract: This paper investigates the responses of agribusiness managers to drastic changes in the policy and marketing environment of South African agriculture. The process of deregulation and liberalisation of agricultural markets exposed agribusiness managers to international trends, which required new institutions and relationships. Based on a survey conducted among business managers, we explored emerging growth strategies, strategic focus areas and coordination preferences. Results suggest that managers prefer a growth strategy based on market penetration and market development. Important strategic drivers are value-adding and power drive. Managers expressed their preference for increased coordination and cooperation resulting in relation-based contracts and equity-based alliances. http://ageconsearch.umn.edu/handle/8016 Title: The Effect of Monetary Changes on Relative Agricultural Prices <br/> <br/>Authors: Asjaha, T.A.; Jooste, A. <br/> <br/>Abstract: Relative change in agricultural prices determines farmers` investment decisions, productivity and income. Thus, understanding the factors that influence agricultural prices is fundamental for sustainable growth in this sector and the rest of the economy. This paper investigates the short- and long-run impacts of monetary policy changes on relative agricultural prices in South Africa by employing Johansen cointegration analysis and the Vector Error Correction Model (VECM) respectively. The results of Johansen cointegration analysis reject the long-run money neutrality hypothesis which suggests that the rate of increase in prices is not unit proportional to the rate of increase in money supply. On the other hand, the results of the dynamic relationships provide evidence of agricultural prices being overshot. Therefore, when a monetary shock occurs, the agriculture sector will have to bear the burden of adjustment, increasing farmers’ financial vulnerability. Consumers also have to absorb short-run price volatility and overshooting of prices which in turn impacts on their ability to manage their cash flow optimally; this could be a substantial challenge in poor households. Due to the linkages between monetary policy variables and relative agricultural prices, it is recommended that agricultural policy makers and monetary authorities work closely in designing and implementing monetary policy in the country. This is important because monetary policies meant to stabilize the economy may have less desirable impacts on farmers and consumers, especially in the short run. http://ageconsearch.umn.edu/handle/8017 Title: Distortions in farmer prices since 1950s: South Africa in international perspective <br/> <br/>Authors: Anderson, K.; de Nicola, F.; Jara, E.; Kurzweil, M.; Sandri, D.; Valenzuela, E. <br/> <br/>Abstract: For decades, earnings from farming in many low-income countries have been depressed by a pro-urban bias in own-country policies, as well as by governments of richer countries favoring their farmers with import barriers and subsidies. Both sets of policies reduce national and global economic growth. They also add to inequality and poverty in developing countries, since most of the world’s billion poorest people depend on farming for their livelihood. Over the past two decades numerous developing country governments have reduced their sectoral and trade policy distortions, while some high-income countries also have begun reforming their protectionist policies. Drawing on results from a new multi-country research project, this paper examines the extent of South Africa’s reforms relative to those of other temperate-zone Southern Hemisphere countries, of Northern Hemisphere rich countries, and of other developing countries. It concludes by pointing to the scope and prospects for further pro-poor policy reform at home and abroad. http://ageconsearch.umn.edu/handle/8018 Title: Will consumers pay less for fat on beef cuts? The case in Bloemfontein, South Africa <br/> <br/>Authors: Shongwe, M.A.; Jooste, A.; Hugo, A.; Alemu, Z.G.; Pelser, A. <br/> <br/>Abstract: There is increasing evidence that most of the fear expressed by consumers in terms of the link between cholesterol in the diet and heart disease is, amongst others, related to the amount of fat in red meat and dairy produce. The result is that many consumers are cutting back on, if not avoiding, red meat products. A major challenge ahead of the beef industry is to supply a product that complies with the demands of more sophisticated and health conscious consumers. But, even if the beef industry could respond positively to consumers’ needs, it is uncertain whether consumers would pay more for beef containing less fat. In this paper the willingness of consumers to pay for less fat in selected beef cuts (T-bone and rump) was investigated with a log-linear hedonic price model. The results showed that more affluent consumers in Bloemfontein were (i) willing to pay for additional external fat (this was contrary to expectations). This was attributable to the culture of food consumption and traditional cooking style (braai). The result does not imply that the amount of external fat can be unlimited, but rather that current external fat levels are desired by consumers; (ii) seam fat had a negative impact on prices of the selected beef cuts in Bloemfontein indicating that reducing the amount of a less desired attribute could shift the demand curve outward; (iii) marbling fat did not have a significant impact on prices of selected cuts in Bloemfontein; and (iv) cuts classified as bone-in was discounted by consumers in Bloemfontein. The study further found that one can’t merely assume that international trends are applicable to the South African situation, but this needs further research. It is hence proposed that a similar study is conducted for South Africa as a whole.