@article{Ofentse:334751,
      recid = {334751},
      author = {Ofentse, Goetswamang Phankie},
      title = {Evaluation of the prospects of hedging Botswana's maize  prices against the Johannesburg Stock Exchange Commodity  Market Derivative},
      address = {2022-07},
      pages = {105},
      year = {2022},
      abstract = {Maize is an important source of food consumed in Botswana  and it helps the country to achieve food security status.  Food security refers to everyone always having access to  healthy, dependable, and adequate food to meet their  dietary requirements and live a healthy life. Botswana  imports maize primarily from South Africa and is a net  importer. The study evaluated how maize prices in Botswana  are linked with maize prices in South Africa. To explain  hedging opportunities in minimising price risk in Botswana,  cointegration and vector error correction models were used  in this study. Secondary data on monthly white and yellow  maize prices from 2008 to 2019 were used in this study. The  empirical data show that maize prices in South Africa and  Botswana have a long-run equilibrium relationship. In the  short run, results indicate that the previous years’ maize  prices in the Botswana market positively impact all  Botswana maize prices at a 1% significance level on average  ceteris paribus. South Africa’s maize market does not  respond to any market changes in Botswana for white maize  prices lagged for one and two periods. The Botswana maize  market, on the other hand, reacts to price fluctuations in  the South African market for both white and yellow maize.  The adjustment speed in the Botswana maize market ranged  from 17% to 29% while the adjustment speed in the South  African market ranged from 13% to 17%. Overall, the  empirical data show that the two markets have a positive  long-run equilibrium relationship and a shortrun asymmetric  relationship. The empirical findings prompted the Botswana  maize value chain assessment to understand how it operates  as well as the existence of relationships among the actors.  The study ascertained that Botswana’s maize value chain  faces an array of challenges that limit the country’s food  sufficient. The assessment of the Botswana maize value  chain was vital to promote policy formations that will  promote the development of the Botswana maize sector. The  study focused on the interaction between smallholder  farmers and the intermediaries focusing on the challenges  and opportunities therein. The Agency and Social Network  theories were used to assess the economic behaviour of the  two farmers and middlemen. The investigative methods used  included a thorough assessment of the literature and key  informant interview. The challenges identified from the  investigation included poor coordination, lack of trust,  information asymmetry, lack of cooperatives, and inadequate  access to finance. The study thus recommended contract  farming, prioritisation of training programmes for farmers  and extension workers, third-party enforcement of  regulations, and revival of cooperatives to III improve the  quality of the relationship between the middlemen and the  smallholder farmers, and thus improve the overall  performance of the chain.},
      url = {http://ageconsearch.umn.edu/record/334751},
      doi = {https://doi.org/10.22004/ag.econ.334751},
}