Research Articles (Johann Kirsten)

Permanent URI for this collectionhttp://hdl.handle.net/2263/1125

Browse

Now showing 1 - 20 of 94

Integrating agricultural input expenditure into a partial equilibrium model of the South African agricultural sector
(Routledge, 2011-06) Gebrehiwet, Yemane Fisseha; Meyer, Ferdinand; Kirsten, Johann F.; Yemane.gebrehiwet@up.ac.za
Most partial equilibrium models of the agricultural sector have not incorporated a dynamic and interlinked module for agricultural input expenditure. The South African Bureau for Food and Agricultural Policy (BFAP) model, which models a major share of agricultural output in South Africa, has also up to now not integrated input expenditure into the modelling framework. In most models, input costs are treated as exogenous and the recursive link between the input and output sides of the sector is overlooked in the models that attempt to incorporate input expenditures. This article addresses both issues by integrating agricultural input expenditures into the South African sectoral partial equilibrium model by endogenising input costs and recursively linking both the input and output sides of the agricultural sector. Thus, the impact of increasing the input cost may not only signal a fall in the gross value added and net farming income, but also a growth in subsequent years when the recursive effect of the impact is fully accounted for.
Agricultural economics scholarship in South Africa at the crossroads : is it time for a national institute of food, agricultural and resource economics?
(Routledge, 2011-09) Kirsten, Johann F.; johann.kirsten@up.ac.za
This paper reflects on the standing and impact of the work of agricultural economists in South Africa to illustrate the critical decisions faced by the profession as it contemplates its future. The focus is on the agricultural economic scholarship per se and not on the policy and practice issues of the discipline. Following the review of agricultural economic research output in South Africa the paper then also raises questions about relevance and impact of the discipline and the quality of training. Given these concerns the paper makes the case for improved coordination and perhaps consolidation of the discipline and presents a proposal for the establishment of a national institute that will consolidate and improve training at the various universities as well as adequately fund and direct research.
Market efficiency and welfare effects of inter-sectoral water allocation in South Africa
(IWA Publishing, 2011) Juana, J.S. (James Sharka); Strzepek, Kenneth M.; Kirsten, Johann F.
The need for increased agricultural production to meet the growing demand for food, coupled with concerns for environmental sustainability, economic growth and poverty reduction has increased demand on the already scarce water in South Africa. At the same time, because of agriculture’s minimal contribution, compared to the industrial and mining sectors, to South Africa’s GDP and employment, the call to reallocate water from agriculture to non-agricultural use has been intensified. This study updates the 1998 Social Accounting Matrix (SAM) for South Africa and uses the computable general equilibrium model to analyze the impact of water reallocation from agriculture to the non-agricultural sectors on output growth, value added at factor cost, which captures the payments from the production sectors to the factors of production, and households’ welfare. Using different water reallocation scenarios, the simulation results indicate that water reallocation from agriculture to non-agricultural sectors beyond the level of a market allocation scenario will lead to a decline in sectoral output and a significant deterioration in the welfare of poor households. It thus undermines development efforts aimed at reducing the existing level of poverty in the country.
The new landscape of global agriculture
(Wiley-Blackwell, 2010-11) Kirsten, Johann F.; johann.kirsten@up.ac.za
There are strong indications and evidence that the agricultural and food system as well as the rural areas across the world are experiencing major change. Increased urbanization and the increased affluence in emerging economies combined with the demand for agricultural commodities for biofuels is changing the landscape of global agricultural and food systems and rural landscapes as we used to know it. The recent crisis in the global financial system and the sharp volatility in food prices also provides further evidence that the global agricultural landscape is indeed likely to be totally different.
When probability distributions miss the point : using scenario thinking and stochastic modelling in conjunction
(Agricultural Economics Association of South Africa, 2010-06) Strauss, P.G. (Petrus Gerhardus); Meyer, Ferdinand; Kirsten, Johann F.
Abstract available in article.
Profit efficiency of small and medium scale maize milling enterprises in South Africa
(Taylor & Francis, 2009-09) Abu, Orefi; Kirsten, Johann F.; johann.kirsten@up.ac.za
Despite the reported large margins between producer prices for maize and retail prices for maize meal and the fact that maize meal is a staple food for most of the South African population, there have been only limited investments in small and medium scale maize milling in South Africa since the deregulation of the maize markets. The apparent failure of small and medium scale maize millers to emerge and compete effectively in the maize milling industry in South Africa raises questions about their scale and level of efficiency. Against this background, this paper analyses the profit efficiency of these enterprises, using a translog stochastic profit frontier model. Findings from the profit efficiency analysis show an average profit efficiency score of 80.6 per cent for the small-scale and 87.4 per cent for the mediumscale mills. There is therefore a significant unexplored potential in these categories of mills.
The role of social networks in development of small-scale enterprises in the Chimanimani district of Zimbabwe
(Agricultural Economics Association of South Africa, 2010-03) Zuwarimwe, J.; Kirsten, Johann F.; johann.kirsten@up.ac.za
The past decade has witnessed an increased interest in the concept of social networks after the seminal theses of Coleman (1988) and Putnam (1993). An area that has attracted a great deal of interest is the value of social networks in small-scale enterprise development. This paper interrogates the role of social networks in the establishment and expansion of rural non-farm enterprises in the Chimanimani district of Zimbabwe and established that rural non-farm entrepreneurs resort to their social networks for information and other resources needed to establish and expand their enterprises, and that there are some gender differences in the use of the various social networks.
The impact of South African supermarkets on agricultural development in the SADC : a case study in Zambia, Namibia and Botswana
(Agricultural Economics Association of South Africa, 2009-03) Emongor, Rosemary Akhungu; Kirsten, Johann F.; johann.kirsten@up.ac.za
Supermarkets have expanded rapidly in SADC during the last decade, leading to fears that small-scale farmers and food processors could be excluded from access to urban markets. To assess the impact of supermarket chains on various participants in the supply chain, a survey was carried out in Botswana, Namibia and Zambia in 2004, 2005 and 2007. To determine the factors that influence the choice between the supermarket or traditional market channel and the impact of participation in the supermarket supply chain, a two-step treatment model was used. The results showed that over 80% of all processed food products in Botswana, Namibia and Zambia were imported from South Africa, and that supermarkets used a mixture of procurement systems for fresh fruit and vegetables and processed food products. Participation in the supermarkets channel had a positive impact on small-scale farmers’ incomes. Farmers who supplied fresh fruit and vegetables to supermarkets had a significantly higher income than those who supplied to traditional markets in Zambia. The expansion of South African supermarkets into the SADC countries may be beneficial to small-scale farmers and therefore efforts should be made to incorporate them into the supermarkets’ fresh fruit and vegetable supply chain.
Facilitating decision-making in agriculture by using a system of models
(Agricultural Economics Association of South Africa, 2008-09) Strauss, P.G. (Petrus Gerhardus); Meyer, Ferdinand; Kirsten, Johann F.; pg.strauss@up.ac.za
This article presents a deterministic farm-level model developed to link to an existing partial equilibrium sector-level model of the grain and livestock sectors of South Africa. The objective is to create a linked system of models consisting of a sector- and farm-level model with the capability to analyse the likely effects of changes in policies and markets at both the sector and representative farm level in South Africa. A representative farm in the Free State Province is used to validate the farm-level model. The farm-level model is used to simulate a baseline as well as two scenarios of the representative farm for the period 2003 to 2010. Results indicate that the farm-level model simulates the representative farm rather accurately compared to historical data. The baseline and scenario results indicate that the linked system of models can be useful for policy and business decision-makers to analyse the impact of change in policies and markets at both the sector- and farm level.
Households’ welfare analyses of the impact of global change on water resources in South Africa
(Agricultural Economics Association of South Africa, 2008-09) Juana, J.S. (James Sharka); Strzepek, Kenneth M.; Kirsten, Johann F.
Most of the climate change models for South Africa predict a reduction in freshwater availability by 2050. Population growth is projected at 3% per annum, implying increased domestic water use. In addition to these factors, the concern for ecological sustainability and increased water pollution due to increased industrial, mining and agricultural activities, water availability for sectoral production activities is expected to decline. This decline has an impact on sectoral output, value added and households’ welfare. Using a computable general equilibrium approach, this study investigates the possible impact of global change on households’ welfare. The simulation results show that water scarcity due to global change can potentially lead to a general deterioration in households’ welfare. The poor households, whose incomes are adversely impacted, are the most vulnerable to the consequences of the impact of global change on water resources in South Africa. This vulnerability can only be reduced if welfare policies that maintain food consumption levels for the least and low-income households are implemented.
Contracting arrangements in agribusiness procurement practices in South Africa
(Agricultural Economics Association of South Africa, 2008-06) Vermeulen, Hester; Kirsten, Johann F.; Sartorius, Kurt
This paper presents an overview of contracting arrangements in agribusiness procurement practices in South Africa. The objective of this paper is to contribute to a better understanding of the structures and issues of raw commodity procurement in South African agribusiness supply chains. The results suggest that a wide range of institutions are employed to procure raw commodities for the South African agro-processing sector and that companies are increasingly moving away from the open market as a source of supply for raw commodities, and are utilising contractual arrangements instead. According to the main findings, 78.5% of the total volume of fruit and vegetables procured by agribusiness companies for processing is based on some form of contracting arrangement. The balance is procured through a combination of the open market, own estates, agents and imports. It is only in the case of potatoes, onions, beans and peanuts that a stronger reliance on the spot market is evident. South African retailers source 70% to 100% of their fresh produce directly from farmers (usually through growing programmes). The procurement of meat, poultry and eggs appears to favour vertical integration (and in some cases own production), medium- to long-term contracts and long-term ‛informal’ supply arrangements with selected groups of farmers.
Alternative marketing options for small-scale farmers in the wake of changing agri-food supply chains in South Africa
(Agricultural Economics Association of South Africa, 2008-09) Louw, Andre; Jordaan, Daniel Du Plessis Scheepers; Ndanga, Leah Z.B.; Kirsten, Johann F.; andre.louw@up.ac.za
With South Africa’s urban population approaching 60%, supermarkets and fast food chains have become important players in the South African food system. These large players in the food sector have systematically modified their procurement practices especially with regard to fresh fruit and vegetables and are now circumventing spot markets in favour of sourcing via in-house sourcing companies who mainly procure from preferred supplier producers. This paper draws extensively from a global research programme which seeks to highlight the market changes that potentially contribute to continued exclusion of the small producers from mass consumer markets. This paper illustrates, through a series of case studies, how integration of small-scale farmers into the urban retail market can be facilitated and how the challenges posed by the changing food system could possibly be overcome. The case studies illustrate various initiatives through which small-scale farmers and agribusinesses can be integrated into mainstream agri-food systems and may be used as models for an innovative approach to include small-scale farmers while still maintaining profitable business operations. They highlight the need for a multi actor approach for the successful participation of smallholder farmers in rder to allow them to join the supply chain at any point within the channel.
Investigating alternative governance systems for the South African mohair supply chain
(Agricultural Economics Association of South Africa, 2008-06) Jordaan, Daniel Du Plessis Scheepers; Kirsten, Johann F.; danie.jordaan@up.ac.za
Mohair is an exclusive natural animal fibre with niche market appeal. It is, however, questionable whether it is inherently suited to a commodity-based marketing system in a marketing environment that requires marketing systems to convey far more information than commodity-based systems do. Historically, mohair has been considered a commodity and the marketing system for mohair has been structured accordingly. It is, however, argued that, the exchange between mohair growers and the buyers of greasy mohair requires increased levels of coordination to govern the exchange in a transaction costs efficient manner. The inefficiencies created by an inappropriate or incomplete marketing system for South African mohair are expected to lead to a loss of consumer value and a loss of potential profit throughout the mohair supply chain if a more coordinated governance structure is not implemented to curb these costs and augment the current spot market exchange.
Quantifying the trade effect of sanitary and phytosanitary regulations of OECD countries on South African food exports
(Agricultural Economics Association of South Africa, 2007-03) Gebrehiwet, Yemane Fisseha; Ngqangweni, Simphiwe Syneon; Kirsten, Johann F.; johann.kirsten@up.ac.za
Stringent sanitary and phytosanitary standards (SPS) have proliferated in the aftermath of the Uruguay Round Agreement on Agriculture (URAA). These standards are currently becoming a major stumbling block in agricultural trade for developing countries. Limited by inadequate resources and expertise, among other things, these countries also have poor participation rate in discussions related to SPS that impedes the representation of their interests and concerns in setting international standards for agricultural products. Using a gravity model, this paper estimates the trade effect of total aflatoxin level set by five OECD countries (Ireland, Italy, Sweden, Germany and USA), on South African food exports. The findings support the hypotheses that stringent SPS standards are limiting trade markedly. The trade elasticity of aflatoxin standard is 0.41 and statistically significant. Moreover, the simulation result based on the assumption that these five OECD countries adopt the total aflatoxin level recommended by CODEX, shows that South Africa would have gained an estimated additional amount of US$ 69 million per year from food exports to these countries from 1995 to 1999.
Strategic focus areas and emerging trade arrangements in the South African agricultural industry since the demise of the marketing boards
(Agricultural Economics Association of South Africa, 2007-12) Doyer, O.T.; D'Haese, M.F.C. (Marijke); Kirsten, Johann F.; Van Rooyen, C.J. (Cornelius Johannes); johann.kirsten@up.ac.za
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.
A framework to facilitate institutional arrangements for smallholder supply in developing countries : an agribusiness perspective
(Elsevier, 2007) Sartorius, Kurt; Kirsten, Johann F.; johann.kirsten@up.ac.za
The industrialization of agriculture and the potential problem of small-scale farmer marginalization calls for a fresh approach to the design of agribusiness supply chain arrangements in developing countries. The objective of the paper is to contribute to a better understanding of institutional arrangements that can promote stable smallholder agribusiness contracting arrangements in a developing country context. A case study approach, incorporating a transaction cost framework, is used to test whether trust can significantly change the contract characteristics of supply. The results suggest that although the presence of trust can influence the contract characteristics of a supply arrangement, it may not be significant because of other factors in a developing country context. Bearing this in mind, a number of institutional arrangements are recommended in order to promote more stable contract conditions.
The cost efficiency of small farm inclusion in agribusiness supply chains
(Independent Regulatory Board for Auditors (IRBA), SA Institute of Chartered Accountants (SAICA) & SA Association of Accountants (SAAA), 2004-06) Sartorius, Kurt; Kirsten, Johann F.; johann.kirsten@up.ac.za
The inclusion of small-scale commercial farmers in South African agribusiness supply chains is a national priority and there is an urgent need for managerial accounting (MAS) inputs to successfully accomplish this objective. This paper explores ways that small farmers can be cost effectively incorporated in modern agricultural supply chains. A case study methodology is used to test the research questions. The results demonstrate that small-scale farmers can successfully compete with larger growers with respect to production and cost efficiency. The results also illustrate that small-scale farmers generate higher levels of transaction cost than medium and large scale suppliers. A series of proposals are then developed in order to reduce the transaction cost of small farm supply. In conclusion, small-scale farmers can be successfully incorporated in agribusiness supply chains but only if special measures are taken to reduce differential transaction cost.
The effect of policies on food security and rural development in South Africa
(Economic Society of South Africa, 2006-05) Hendriks, Sheryl L.; Kirsten, Johann F.; Vink, Nick; johann.kirsten@up.ac.za
Shifts in agricultural policy over the past two decades, and farmers' reactions to these shifts, have not undermined national food security, yet many South Africans do not live lives free of food insecurity. A review of the empirical literature shows that agricultural production must develop beyond the subsistence level to have a significant impact on the food security and nutritional status of rural people. To this end, there are four conditions necessary for reaping benefits from agriculture in South Africa's rural communities. First, benefits from agriculture are most likely only to accrue if the supply of nontradables is price elastic. Second, incentives are needed to encourage households to participate in production of farm tradables. Third, it is necessary to ensure that markets exist for the sale of smallholder produce. Fourth, the nutritional benefits of agriculture will only remain positive if the dietary changes that do occur comply with dietary guidelines.
The role of extension in traditional agriculture : evidence from the Farmer Support Programme
(South African Society for Agricultural Extension, 1993) Kirsten, Johann F.; Van Zyl, Johan; Sartorius von Bach, Helmke Jens; johann.kirsten@up.ac.za
This paper evaluates the extension and training element of the FSP as implemented in the farmer support programmes of Venda and Lebowa. The importance and contribution of extension and training in the success of the programme can be judged from this paper. The general conclusion of the paper is that extension and training play an important role in FSPs. They are closely associated with increased production. However, to what extent it contributed towards increased production remains a point of contention. Some analysts and observers argue that only the rural elite has access to FSP related services. Results from the analysis in the paper, however, show that comparable households achieve higher yields when they get appropriate extension. Training and extension thus at least partly contribute to higher maize yields in FSP areas.
South African agriculture in the 1980s
(Economic History Society of Southern Africa, 1994-09) Kirsten, Johann F.; Van Zyl, Johan; Van Rooyen, Johan; johann.kirsten@up.ac.za
The paper gives an overview of the political, economic and agricultural environment in South Africa during the 1980s. This review points out that vital changes took place during this period in general growth, farming costs, farm income, profits, yields and related variables. There were also changes in natural factors (climate, disease, disasters). Changes in agricultural policy made farming more market orientated and somewhat weakened the power of the monopolistic marketing boards, while paving the way to end the traditional division along racial lines.

Browse

Recent Submissions