On t.p.: Masters of Agricultural management. / Thesis (MAgricAdmin)--Stellenbosch University, 2002. / ENGLISH ABSTRACT: The need to take account of risk in agriculture must be part of every decision taken in agriculture. Yet risk is nothing to be too afraid of Risk is a choice rather than a fate. The actions we dare to take, which depend on how free we are to make choices, are what the theory of risk is all about. The task is rather to manage risk effectively, within the capacity of the farmer, business or group in order to withstand adverse outcomes. Some methods of managing risks are feasible for all types of farms. Others are only feasible for certain sizes and types of farms. Therefore, farmers in general need a systematic technique that will enable them to choose an efficient investment strategy from among all feasible strategies. Specifically, given n risky assets (such as the different enterprises in the PaarlIBerg River region), it is essential to seek a diversification strategy which yields a portfolio lying on the efficient frontier. The research question was whether different diversification models (Markowitz diversification model, Single Index Model and the Capital Asset Pricing Model) that are normally applied in capital markets for the construction of optimal diversified portfolios consisting out of different shares, are also applicable on risky portfolios in agriculture comprising different enterprises in the PaarlIBerg River region. The efficient frontier can be seen as the graphical representation of a set of portfolios that maximize expected return for each level of portfolio risk. The Microsoft Excel portfolio optimiser (SOLVER) programme was used to illustrate the investment proportions, expected returns, and standard deviations of the portfolios ofthe efficient frontier. The Single Index Model (SIM) can be used as an alternative to Markowitz diversification model. It drastically reduces the number of parameters needed to be estimated and yields the efficient set relatively easily without the technical difficulties characterising the fullrank solution. However, if the SIM assumptions are in contradiction to the actual data, the simplification of the calculations is achieved at the cost of getting imprecise results. The simplicity of SIM calculations was attained at a cost of constructing a sub-optimal portfolio, which does not lie on the corresponding efficient frontier. The Capital Asset Pricing Model (CAPM) reveals that there is a great deal of systematic risk in relation to the portfolio enclosed in this study. By using the CAPM it is possible to determine which part of the risk the producer can control (non-systematic risk) and which part the producer has no control over (systematic risk). The proportions of systematic risk that can be diversified away are small, relative to the total risk of the Farm Sector Portfolio. The success of these models depends on the efficiency of the market, as weU as a large, up-to-date and reliable data source. Many younger cultivars could not be included in this study, due to the limited availability of data. In the next few years as data become available, it will be possible to construct efficient frontiers out of a wider range of enterprises. Different enterprises and cultivars will increase the number of alternative uses for natural resources in the PaarlIBerg River region through diversification. This will result in more choices for the farmer, and more flexibility in the decision-making process. Without reliable data, the result will be "garbage in, garbage out." / AFRIKAANSE OPSOMMING: In elke besluit wat geneem word in landbou moet risiko as 'n faktor in ag geneem word. Tog is risiko nie iets om te vrees nie. Dit is eerder keuse as noodlot. Die stappe wat ons waag om te neem, wat afhang van hoe vry ons is om keuses te maak, is waaroor die teorie van risiko gaan. Die doel van die tesis is om risiko effektief te bestuur binne die vermoëns van die boer om sodoende negatiewe resultate die hoof te bied Sommige metodes van risikobestuur is lewensvatbaar vir alle soorte plase. Ander is slegs lewensvatbaar vir sekere groottes en tipes plase. Daarom benodig boere in die algemeen 'n tegniek wat dit vir hulle moontlik maak om 'n effektiewe beleggingstrategie te kies uit die verskillende uitvoerbare strategiee. Gegewe n as riskante aktiwiteite (soos die verskillende gewasse in die PaarllBergrivierstreek) is dit noodsaaklik om 'n diversifiseringstrategie te vind wat 'n portefeulje sal lewer wat raak aan die effektiewe grens. Die navorsingsvraag was of verskillende diversifiseringsmodelle (Markowitz diversifiseringsmodel (MVC), "Single Index Model" (SIM) en die "Capital Asset Pricing Model" (CAPM)) wat gewoonlik toegepas word in kapitaalmarkte vir die samestelling van optimale gediversifiseerde portefeuljes bestaande uit verskillende aandele, ook van toepassing sal wees op riskante portefeuljes in die landbou in die PaarlJBergrivierstreek, wat verskillende gewasse insluit. Die effektiewe grens kan gesien word as die grafiese voorstelling van 'n stel portefeuljes wat die verwagte winste vir elke vlak van portefeuljerisiko vermeerder. Die Microsoft Excel portefeulje optimeringsprogram (SOLVER) word gebruik om die beleggingsverhoudings, verwagte winste en standaardafwykings van die portefeuljes aan die effektiewe grens te illustreer. Die "Single Index Model" (SIM) kan gebruik word as 'n alternatief vir die Markowitz diversi:tikasiemodel. Dit verminder drasties die getal parameters en lewer maklik die effektiewe reeks, sonder die tegniese probleme wat ondervind word met die oplossing by die Markowitz model. Nietemin, indien die SIM die werklike data weerspreek sal die vereenvoudiging van die berekenings bereik word ten koste van onakurate resultate. Die eenvoud van die SIM is verkry ten koste van die samestelling van 'n suboptimale portfeulje, wat nie aan die ooreenstemmende effektiewe grens lê nie. Die "Capital Asset Pricing Model" (CAPM) wys dat daar baie sistematiese risiko gekoppel is aan die portfeulje ingesluit in hierdie studie. Deur gebruik temaak van die CAPM is dit moontlik om vas te stel watter deel van die risiko (nie-sistematies) die produsent kan beheer en watter deel die produsent nie kan beheer nie (sistematiese risiko). Die verhouding van sistematiese risiko wat weggediversifiseer kan word is klein in verhouding tot die algehele risiko van die boerderysektor portefeulje. Die sukses hang afvan die doeltreffendheid van die mark, sowel as 'n groot tot-op-datum en betroubare bron van data. Baie van die jonger aangeplante kultivars kan nie ingesluit word in hierdie studie nie as gevolg van beperkte data In die volgende paar jaar, soos data beskikbaar word, sal dit moontlik wees om effektiewe grense van 'n wye reeks gewasse saam te stel. Verskillende gewasse en kultivars sal die hoeveelheid alternatiewe gebruike van natuurlike hulpbronne in die PaarllBergrivierstreek vermeerder deur diversifikasie. Dit sal lei tot meer keuses vir die boer en meer buigsaamheid in die besluitnemingsproses. Sonder betroubare data kan betroubate resultate nie verkry word me.

The study was done in Adaa district which is one of the 12 districts in East Shoa zone in Oromia regional state of Ethiopia. It is located southeast of Addis Ababa at 38o51’ 43.63’’ to 39o04’ 58.59’’ E and 8o46’ 16.20’’ to 8o59’ 16.38’’ N, on the western margin of the Great East African Rift Valley. The altitude ranges from 1 500 to ≥ 2 000 meters above sea level. The district has a high potential for mixed livestock and crop production systems. The purpose of this study was to make up for the paucity of information on livestock and environment interaction by assessing the relationship of livestock, soil, water, land, climate and crops under mixed crop-livestock production systems in central Ethiopian highlands. The objectives of the study were: (a) to assess the effect of change in land management on carbon storage and the contribution of livestock to carbon storage; (b) to examine the impact of livestock on natural resources and the environment; (c) to assess the effects of the change in traditional agricultural practices, expansion of factories, slaughter houses, greenhouses and flower farms on water and soil quality; (d) to evaluate the effect of climate change on livestock production under small-scale agriculture; and (e) to recommend options for mitigation and adaptation to environmental changes. The research design was non-experimental and did not involve the manipulation of the situation, circumstances or experiences of the interviewees. The design was comparative research that compared two or more groups on one or more variables, such as the effect of agricultural land use management, tillage type etc. on carbon storage in the soil. This research also applied a longitudinal design that examined variables such as the performance exhibited by groups over time. Purposive sampling was often used to measure the effect of agricultural, industrial effluent and human interferences on the environment by measuring nutrient contents at sources in the soil, water and manure. Biological data were complemented by key socio-economic survey by interviewing individual farmers and focus groups from sampling sites. Secondary data were also reviewed to measure soil degradation and run-off attributed to livestock. Results showed that animal waste and farmyard manure had the highest contribution in the addition of carbon in the soil. This implied that for most of carbon inputs livestock products and by-products had a greater place in the carbon sink. Therefore, livestock production could be considered as one of the major agricultural production systems in soil carbon storage. Similarly, livestock production systems also play an important role in maintaining the eco-system balance through nutrient recycling. On the average, the number of livestock per household for most species increased during the Derge regime in the 1990s compared to the Haile Sellassie regime in the 1970s when people did not own land; and then the number declined in the 2000s except for equines, crossbreeds and oxen. The change to crop intensification led to the change in the purpose for livestock keeping. Farmers started keeping certain types of animals for specific purposes unlike before when livestock was kept for prestige and economic security. The major drive for the change of attitude towards the purpose of keeping livestock was scarcity of resources, mainly feed and water. Equine ownership has significantly increased due to their low off-take rate and their feeding habits which allowed them to survive in harsh environments where feed resources were extremely scarce. There was a significant difference in crop response to manure application. Vegetables produced higher yields with manure than chemical fertilizers. Cereals on the other hand responded more to chemical fertilizers than to manure. Therefore, combining manure and chemical fertilizers was the best option for the sustainability of crop production in the study area. Some of the limitations to the use of manure as an organic fertilizer were inadequate manure production, high labour cost, bulkiness and high cost of transport to the fields and weed infestation. Manure management systems in the study area were affected by livestock husbandry practices. Only crossbred cattle (5%) were zero-grazed and used; and manure was stored in pits as slurry. Indigenous cattle were grazed outdoors in the fields during the day and at night they were kept in kraals near homesteads. There was a substantial loss of nutrients during the day when animals were grazing in the fields through leaching and trampling of dung and urine patches. Indoor or zero grazing of livestock could reduce nutrient losses. The use of manure as fuel in the study area had no significant effect on CO2 emissions at household or local level, but had a negative impact on soil organic carbon storage and soil fertility. Therefore, for improved yield and balanced eco-systems manure burning has to be replaced by other alternative energy sources such as bio-gas and kerosene. The largest carbon equivalent emissions were from CH4 (72.6%), N2O (24%) and CO2 (3.4%) which indicated the need to improve livestock and manure management systems under smallholder agriculture. Overall, there was an indication of a decline in water resources on per capita basis. The major contributing factors were combined pressure of human and animal population on natural resources that led to excessive deforestation, loss of biological diversity, overgrazing, soil degradation and various forms of pollution and contamination. The global climate change also played a role in the decline in water resources due to the decrease in annual precipitation and increasing temperatures. Urbanization and economic growth increased the demand for milk and meat, which required additional water use for each unit of increased animal protein. The demand for milk and meat is expected to double in the next 20 years with an annual growth rate of between 2.5 to 4%. From the sixty-year meteorological data (1951-2009) there was an established increase in rainfall by 2% per annum; and maximum and minimum temperature by 0.08oC per decade, which amounted to a cumulative temperature increase of 0.5oC in the last decade. The increase in precipitation and temperature favoured the adaption of lowland crops like maize and sorghum to highland agro-ecology. Climate prediction models forecasted that most of the highlands in Ethiopia will remain suitable for cereals like wheat and Teff for the next 50 to100 years. However, the perception of farmers indicated that they felt more heat and warm weather than they have experienced before. They reported that rainfall is now more erratic or comes late and stops earlier before plants completed their vegetative growth. / Environmental Sciences / D. Litt. et Phil. (Environmental Science)

The study was done in Adaa district which is one of the 12 districts in East Shoa zone in Oromia regional state of Ethiopia. It is located southeast of Addis Ababa at 38o51’ 43.63’’ to 39o04’ 58.59’’ E and 8o46’ 16.20’’ to 8o59’ 16.38’’ N, on the western margin of the Great East African Rift Valley. The altitude ranges from 1 500 to ≥ 2 000 meters above sea level. The district has a high potential for mixed livestock and crop production systems. The purpose of this study was to make up for the paucity of information on livestock and environment interaction by assessing the relationship of livestock, soil, water, land, climate and crops under mixed crop-livestock production systems in central Ethiopian highlands. The objectives of the study were: (a) to assess the effect of change in land management on carbon storage and the contribution of livestock to carbon storage; (b) to examine the impact of livestock on natural resources and the environment; (c) to assess the effects of the change in traditional agricultural practices, expansion of factories, slaughter houses, greenhouses and flower farms on water and soil quality; (d) to evaluate the effect of climate change on livestock production under small-scale agriculture; and (e) to recommend options for mitigation and adaptation to environmental changes. The research design was non-experimental and did not involve the manipulation of the situation, circumstances or experiences of the interviewees. The design was comparative research that compared two or more groups on one or more variables, such as the effect of agricultural land use management, tillage type etc. on carbon storage in the soil. This research also applied a longitudinal design that examined variables such as the performance exhibited by groups over time. Purposive sampling was often used to measure the effect of agricultural, industrial effluent and human interferences on the environment by measuring nutrient contents at sources in the soil, water and manure. Biological data were complemented by key socio-economic survey by interviewing individual farmers and focus groups from sampling sites. Secondary data were also reviewed to measure soil degradation and run-off attributed to livestock. Results showed that animal waste and farmyard manure had the highest contribution in the addition of carbon in the soil. This implied that for most of carbon inputs livestock products and by-products had a greater place in the carbon sink. Therefore, livestock production could be considered as one of the major agricultural production systems in soil carbon storage. Similarly, livestock production systems also play an important role in maintaining the eco-system balance through nutrient recycling. On the average, the number of livestock per household for most species increased during the Derge regime in the 1990s compared to the Haile Sellassie regime in the 1970s when people did not own land; and then the number declined in the 2000s except for equines, crossbreeds and oxen. The change to crop intensification led to the change in the purpose for livestock keeping. Farmers started keeping certain types of animals for specific purposes unlike before when livestock was kept for prestige and economic security. The major drive for the change of attitude towards the purpose of keeping livestock was scarcity of resources, mainly feed and water. Equine ownership has significantly increased due to their low off-take rate and their feeding habits which allowed them to survive in harsh environments where feed resources were extremely scarce. There was a significant difference in crop response to manure application. Vegetables produced higher yields with manure than chemical fertilizers. Cereals on the other hand responded more to chemical fertilizers than to manure. Therefore, combining manure and chemical fertilizers was the best option for the sustainability of crop production in the study area. Some of the limitations to the use of manure as an organic fertilizer were inadequate manure production, high labour cost, bulkiness and high cost of transport to the fields and weed infestation. Manure management systems in the study area were affected by livestock husbandry practices. Only crossbred cattle (5%) were zero-grazed and used; and manure was stored in pits as slurry. Indigenous cattle were grazed outdoors in the fields during the day and at night they were kept in kraals near homesteads. There was a substantial loss of nutrients during the day when animals were grazing in the fields through leaching and trampling of dung and urine patches. Indoor or zero grazing of livestock could reduce nutrient losses. The use of manure as fuel in the study area had no significant effect on CO2 emissions at household or local level, but had a negative impact on soil organic carbon storage and soil fertility. Therefore, for improved yield and balanced eco-systems manure burning has to be replaced by other alternative energy sources such as bio-gas and kerosene. The largest carbon equivalent emissions were from CH4 (72.6%), N2O (24%) and CO2 (3.4%) which indicated the need to improve livestock and manure management systems under smallholder agriculture. Overall, there was an indication of a decline in water resources on per capita basis. The major contributing factors were combined pressure of human and animal population on natural resources that led to excessive deforestation, loss of biological diversity, overgrazing, soil degradation and various forms of pollution and contamination. The global climate change also played a role in the decline in water resources due to the decrease in annual precipitation and increasing temperatures. Urbanization and economic growth increased the demand for milk and meat, which required additional water use for each unit of increased animal protein. The demand for milk and meat is expected to double in the next 20 years with an annual growth rate of between 2.5 to 4%. From the sixty-year meteorological data (1951-2009) there was an established increase in rainfall by 2% per annum; and maximum and minimum temperature by 0.08oC per decade, which amounted to a cumulative temperature increase of 0.5oC in the last decade. The increase in precipitation and temperature favoured the adaption of lowland crops like maize and sorghum to highland agro-ecology. Climate prediction models forecasted that most of the highlands in Ethiopia will remain suitable for cereals like wheat and Teff for the next 50 to100 years. However, the perception of farmers indicated that they felt more heat and warm weather than they have experienced before. They reported that rainfall is now more erratic or comes late and stops earlier before plants completed their vegetative growth. / Environmental Sciences / D. Litt. et Phil. (Environmental Science)