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Smallholder agriculture in South Africa has been identified as the vehicle through which the goals of poverty reduction and rural development can be achieved. To fulfill such potential, the need arise to understand diversity among these households to formulate effective policy interventions. This paper develops a farm typology of smallholder households according to their dominant livelihood strategies. Using multivariate statistics, Principle Component Analysis (PCA) and Cluster Analysis (CA), farming households are grouped in 7 distinct, homogeneous clusters. Results show the importance of social grants, specifically old age pensions and child support grants, in determining livelihood strategies of many smallholder farmers in the former homeland regions. Further evidence suggests that only a small number of households are able to market their produce. Essential characteristics of this group are the prevalent labor market attachment, higher usage of family labor and access to credit.


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