In the literature there are mixed results on the link between credit and agricultural output growth. Some authors argue that credit leads to growth in agricultural output. Others view growth as one of the factors that influence credit supply, thus growth leads and credit follows. By and large, studies have not endeavoured to establish the short-run impact of agricultural credit on output. They are generally limited in establishing the long-run relationship between credit and agricultural output and thus present a research gap in this respect. This study contributes to the existing body of literature by focusing on the finance-growth nexus at sectoral level as a departure from extant literature that has focused on the macroeconomic level. Using South African data, the study investigated the causal relationship between the supply of credit and agricultural output as well as whether the two are cointegrated and have a short-run relationship. The study found that bank credit and agricultural output are cointegrated. Using the error correction model (ECM), the results showed that, in the short-run, bank credit has a negative impact on agricultural output, reflecting the uncertainties of institutional credit in South Africa. However, the ECM coefficient shows that the supply of agricultural credit rapidly adjusts to short-term disturbances, indicating that there is no room for tardiness in the agricultural sector. The absence of institutional credit will immediately be replaced by availability of other credit facilities from non-institutional sources. Conventional Granger causality tests show unidirectional causality from (1) bank credit to agricultural output growth, (2) agricultural output to capital formation, (3) agricultural output to labour, (4) capital formation to credit, and (5) capital formation to labour, and a bi-directional causality between credit and labour. Noteworthy and significant for South Africa is that for the agricultural sector, the direction of causality is from finance to growth, in other words supply-leading, whereas at the macroeconomic level, the direction of causality is from economic growth to finance, in other words, demand-leading. Applying a structural equation modelling approach to survey data of smallholder farmers, the positive relationship between bank credit and agricultural output observed from analysis of secondary data was confirmed. / Business Management / D. Com. (Business Management)

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This study attempts to identify factors responsible for determining differences in the productivity of cattle managed by communal and private livestock farmers in the southern region of Botswana during 1999/2000. It is hypothesised that herd productivity and investment in southern Botswana are higher on private ranches than on open access communal grazing land. This study is important because livestock, especially cattle, contribute significantly to the livelihood of farmers in Botswana. Cattle are a major source of meat, milk and draught power, and provide a store of wealth that protects against inflation and which can easily be converted into cash. Cattle production is also an important source of employment in the rural economy of Botswana. Furthermore, the export of beef is a major source of foreign exchange earnings, and cattle account for 80 percent of agriculture's contribution to Botswana's gross domestic product. A stratified random sample survey of communal and private livestock farmers was conducted in the southern region of Botswana from August 1999 to May 2000 with the assistance of four enumerators. The sample survey data were used to compute descriptive statistics and to estimate the parameters of a block recursive regression model. The model postulated relationships between agricultural credit, investment in fixed improvement, investment in operating inputs and herd productivity. Some of the equations are estimated with Ordinary Least Squares (OLS) and some with Two-Stage Least Squares (2SLS) to account for likely correlation between endogenous explanatory variables and the error term. Descriptive statistics show that levels of investment and herd productivity are higher on private farms than on open-access communal grazing. Private farmers are also better educated, more liquid, and have larger herd sizes, but do not differ from their communal counterparts in terms of age, gender, race or household size. The regression results show that (a) respondents with secure tenure and larger herds use more agricultural credit than those who rely on open access communal grazing land to raise cattle; (b) secure land tenure, higher levels of liquidity and use of long-term credit promote investment in fixed improvements to land; (c) liquidity from short-term credit and wage remittances supports expenditure on operating inputs; and (d) herd productivity increases with greater investment in fixed improvement and operating inputs. Herd productivity is therefore positively (but indirectly) influenced by secure land tenure. It can therefore be inferred that government should (a) uphold private property rights to land where they already exists; (b) privatise open access grazing to individual owner operators where this is politically, socially, and economically feasible; and (c) where privatisation to individuals is not feasible, government should encourage users to convert the grazing into common property by subsidising the costs of defining user groups and the boundaries of their resources, and enforcing rules limiting individual use of common property. This first-step in a gradual shift towards more secure tenure should be followed by the conversion of user groups to non-user groups organized along the lines of investor-owned firms where members exchange use rights for benefit and voting rights in a joint venture managed by an expert. / Thesis (Ph.D.)-University of KwaZulu-Natal, Pietermaritzburg, 2006.

This study explores the perceptions of the value of community gardens by members and the relationship between this activity and homestead farming activities in Ogagwini, Umbumbulu District, KwaZulu-Natal. Establishing and supporting community gardens is consistent with the strategies adopted by South African national and provincial government to alleviate poverty, address food security and improve livelihoods for rural people. However, there is a lack of literature available on why rural people choose to involve themselves in community garden projects and whether these reasons are those intended by policy makers. There is abundant research on community gardening – most of it either urban or not specific as to setting. This literature is useful for the generic information it provides, but does not provide the scope of understanding that is unique to rural community gardening in South Africa. Thus this study contributes to understanding rural community gardens and possible adjustments needed by extension workers and development strategies to ensure effective food gardening practices in rural KwaZulu-Natal. The first extension facilitated community garden activities in Ogagwini were established in 1993 with the support of the provincial DAEA. Some community garden members are also members of the Ezemvelo Farmers Organisation (EFO), a group of farmers engaged in commercial small-scale farming. This research attempted to find out how community gardening activities were related to small-scale commercial homestead activities. Specifically, the study sought to investigate issues such as preferences among farmers between community gardens and homestead farming; the social and economic benefits derived from community gardens; and perceptions around environmental/ecological issues surrounding community gardens and homestead farming. A survey questionnaire on community garden activities and perceptions was given to EFO members and used to identify participants for this study. Committee members of the EFO (also members of community gardens) arranged for five gardens to be investigated. In-depth data was collected at the actual garden sites using semi-structured focus group discussions and participant observation. The data from the survey questionnaire was verified and clarified by semi structured probing during these discussions. A spiral approach was used to organise responses and make sense of the data within social, economic, and environmental themes. After three garden visits, no new knowledge was forthcoming and due to time constraints the study was limited to these three groups. The study found that there were no distinct linkages between homestead farms and community gardens, but that the systems operated on different principles. Community gardens were used to produce cabbages, carrots, beetroot, onions, green peppers and spinach mainly for consumption, whereas homestead farms produce field crops such as maize, amadumbes (taro), sweet potato, potatoes, pumpkins and peanuts. The study further identified social and economic benefits and environmental impacts and reinforces the importance of knowledge sharing amongst participants. The main benefits identified were income generation, sharing of knowledge and technical support The Department of Agriculture should carefully address sustainability issues when planning and implementing community gardens. This would include being able to carry on in the absence of an agricultural extension officer. Training programmes need to ensure that learning is transferable; that it is not overly commodity or technology specific and includes promotion of environmental awareness. This study has highlighted a number of potentially valuable issues for further situated research in the area of farming protocols, markets and the social value of community gardening within rural communities.

Rwanda, in its transition phase since 1994, has had the support of major international development organizations, including the World Bank, the International Monetary Fund (IMF), the United Nations Development Program, the US Agency for International Development (USAID), and other development organizations. The aim of this support is to promote Rwandan agriculture in which 45 percent of the Rwandan GDP and 90 percent of employment share originate. The possible role that farmers can play in this process through their small-scale farmers' associations is well recognized by the Ministry of Agriculture in Rwanda. Farmers in Gikongoro province, the study area, are constrained by many factors, such as soil infertility, small land areas, and lack of access to modern inputs (e.g., seed, fertilizer and lime) and agricultural credit. In addition, land degradation in the form of soil erosion, soil acidity, and nutrient depletion undermines soil productivity leading to poor crop yields, and keeps farmers dependent on potential support from government and non-governmental projects. Between 2000 and 2004, farmers in Gikongoro province received support from the Development Activity Program (DAP) under the umbrella of World Vision International, Rwanda. The DAP supports farmers mainly in land terracing for soil erosion control, and supported farmers also receive modern inputs (fertilizer, seed and lime), storage facilities, and training. This study analyzes the impact of agricultural assistance afforded by the DAP and socioeconomic characteristics of households on agricultural production in Gikongoro province. Data for this study were collected from July to August 2004 using a stratified multistage sample of 204 household heads who are members of 24 farmers' associations of which 10 are supported by the DAP in the three districts; Mudasomwa, Kivu, and Nyamagabe. The study compares DAP supported and unsupported farmers in terms of differences in household incomes and crop yields. Descriptive statistics indicate that DAP supported farmers have significantly higher yields, household income, and better access to modern inputs and terraced land than unsupported farmers. These results seem to indicate that DAP support has had a significant impact on agricultural production and household incomes in Gikongoro province. However, these results are based only on a univariate analysis. The relationship between socioeconomic characteristics and household potato production in Gikongoro province was also analyzed to identify other factors that affect food production. A recursive system of linear and log-linear equations was estimated to analyze the effects of DAP, cultivated potato area, liquidity, gender of the household head (producer), years of schooling, family size, and age of the producer on farmers' productivity as measured by potato yields. Investment in operating inputs (fertilizer, seed, and lime) was used as a determinant of potato yields. Results indicate that cultivated potato area, liquidity, family size, and age (greater experience and lower transaction costs) of the household head significantly increase the use of operating inputs, which in turn has a significant positive impact on potato yield. The study suggests that DAP may need to be more selective in supporting farmers, focusing more on the farm size, education and family size profile of association members when deciding where to channel support. The study also recommends more research into the efficiency of land rental and credit markets to better understand land and liquidity constraints to improved household production in Gikongoro province. A networking model for supporting farmers' associations is proposed, in which a joint role for the Rwandan government, academic and research institutions, NGOs, and the private sector is expected to lead to sustainable agricultural development in Gikongoro province, Rwanda. / Thesis (M.Sc.)-University of KwaZulu-Natal, Pietermaritzburg, 2005.

This study investigates the potential economic impact of a land tax implemented in terms of the Local Government Municipal Property Rates Act No. 6 of 2004 (“the LGMPRA”) on selected commercial farms in KwaZulu-Natal (KZN) using individual farm data for the period 2001-2006. The study first presents a brief history of land taxes around the world, describing the origins, prevalence and rates of land tax in the United States of America (USA), Australia, Britain and some Nordic countries. This sets the background for a brief history of land taxation in South Africa up to the implementation of the LGMPRA. The study then identifies the economic effects of a land tax, highlighting issues such as the capitalization of a land tax, relevant views of this tax, valuation methodologies, the advantages and disadvantages of a land tax, and the effects of a land tax on future capital investment on farms. Thirdly, the study presents key provisions in the LGMPRA pertaining to farmers with regard to land tax rebates, reductions and exemptions, farmland valuations and the determination of a land tax rate. The effect and applicability of these rebates, reductions and exemptions on the effective land tax rate are also discussed. Fourthly, the study uses a Residual Income Methodology (RIM) framework to estimate the annual economic profit (return to risk and land excluding capital gains) for five different case study farms in the Mtonjaneni and Umgeni municipal districts of KZN. This RIM framework makes allowance for the opportunity cost of management in estimating annual economic profit. These case studies are typical of the main farming enterprises in KZN such as sugarcane, timber, intensive poultry, intensive dairy, cattle, maize and potatoes. Sensitivity analysis is then applied to assess the effect of land tax rates ranging from 0.5% to 5% of the market value of land and fixed improvements on the five farms’ ability to pay a land tax after accounting for rebates proposed by the Department: Provincial and Local Government (DPLG). The estimated mean annual rate of return to risk and land (excluding capital gains) prior to the land tax for the five case study farms during 2001-2006 ranged from -8.50% to 2.94%, with an average of -1.74%. The case farms’ ability to pay a land tax rate of 1% on the value of improved land with and without proposed DPLG rebates from annual current operating returns ranged from zero to five out of five years, with an average of two out of five years. A 2% land tax rate with such rebates could be financed using annual current operating returns also only in two out of five years on average. These results suggest that land taxes at the proposed rates of 1.5% (Mtonjaneni) or 1% (Umgeni) on these specific farms would markedly reduce the incentive to invest in farm improvements These results also indicate that further research in KZN and other provinces in South Africa needs to be conducted to help ascertain the effects of the implementation of the LGMPRA in other municipalities. / Thesis (M.Agric.Man.)-University of KwaZulu-Natal, Pietermaritzburg, 2007.

Labour legislation was introduced into agriculture in the early 1990s with the Basic Conditions of Employment Act (BCEA) being gazetted in 1992. Since the mid-1990s "new" labour legislation pertaining to agriculture has been implemented in South Africa, and includes the Basic Conditions of Employment Act 75 of 1997 (amended), the Unemployment Insurance Act 63 of 2001 (amended), the Labour Relations Act (LRA) 66 of 1995, the Land Reform (Labour Tenants) Act 3 of 1996, the Extension of Security of Tenure Act 62 of 1997, the Employment Equity Act 55 of 1998, the Skills Development Levies Act 9 of 1999, and the Sectoral Determination (an amendment of the BCEA 75 of 1997) which includes the imposition of minimum wages. This study examines the legislation in detail as well as the implications of this legislation for agricultural labour employment in South Africa. A relative increase in the cost (transaction and wage) and risk associated with labour motivates farmers to replace labour with machinery, machinery contractors, labour contractors or new technologies that are labour-saving. This results in a decrease in the demand for unskilled workers and higher levels of poverty and unemployment in South Africa. This study estimates long-run price elasticities of demand for regular labour in South African (SA) agriculture using both Ordinary Least Squares (OLS) regression and a Two-stage Least Squares (2SLS) simultaneous equations model. The 2SLS model includes a labour supply equation. Secondary data obtained over a 43 year period (1960-2002) from Statistics South Africa and the Abstract of Agricultural Statistics were used in this study. Both models were estimated for the period 1960-2002, and included a piecewise slope dummy variable for wages with the threshold year taken as 1991 to reflect expected changes in farm labour legislation. Study results show that the estimated long-run price elasticity of demand for labour for the pre-1991 (i.e., 1960-1990) period was -0,25 for the OLS model and -0,23 for the 2SLS model suggesting that the demand for regular labour was jnelastic during this period. For the post-1991 period (1991-2002), the long-run elasticity was estimated as -1,32 for the OLS model and -1,34 for the 2SLS model. This shows a structural change in demand that questions the appropriateness of minimum wage and other labour legislation that has raised the cost of regular farm labour in South Africa. Labour legislation introduced in the early 1990s encouraged farmers to substitute casual workers for regular workers. However, the inclusion of all casual workers in minimum wage legislation from 2006 is expected to slow the casualisation of agricultural labour as farmers turn to labour contractors, chemicals and machinery as the next best substitutes. The study found that an increase (decrease) in the price of chemicals (pesticides and herbicides for crops, and labour saving dips and sprays for animals) result in an increase (decrease) in the demand for regular labour. The demand for labour is also sensitive to changes in real interest rates (used as a proxy for machinery costs). The cost of capital would decrease (increase) as interest rates fall (rise), resulting in farmers adopting more (less) machinery and equipment, causing a decrease (increase) in the demand for regular labour, ceteris paribus. In order to reverse the regular labour unemployment trend in SA agriculture, government could choose to adopt more flexible labour market regulations (i.e., legislation regarding the hiring and dismissing of farm workers, and increases in wages and benefits for the farm worker could be based on the individual performance of each worker as opposed to increasing the wages of the entire workforce through minimum wages) which would reduce labour costs and encourage farmers to employ more labour. / Thesis (M.Agric.Man.)-University of KwaZulu-Natal, Pietermaritzburg, 2006.

A survey of 186 commercial farmers from three Zobas (provinces) of Eritrea was conducted between November 2002 and February 2003 to examine farmers' perceptions of risk, to determine the most important sources of risk affecting farmers' decisions, to identify managerial responses to risks and to identify information use. As part of the main survey, 74 randomly selected commercial dairy farmers were also interviewed to identify factors that affect the purchase of livestock insurance. Findings show that whilst some risks are of concern to most farmers, others are more enterprise or region specific. In general, changes in weather, changes in the labour force, and diseases, pests and weeds were identified as being important sources of risk for most farmers. Factor analysis was used to analyse heterogeneity amongst farmers' perceptions of various risks. Results indicate that programmes designed to assist farmers in Eritrea to manage production and price risks should vary between enterprises and between regions. Policy implications of this research include that the government of Eritrea should disseminate information to clarify agricultural tax and land policies, and its demobilization and rehabilitation programmes. Relaxing foreign exchange rate controls may reduce price risks in agricultural input markets. Increased use of information sources, choice of production system, keeping production records, and diversification of farm enterprises were found to be the main production responses to risk. Important marketing responses included indirect selling (e.g. to the grain board or wholesalers) and use of marketing information, while important financial responses were keeping financial records and investing off-farm. Factor analysis was used to analyse heterogeneity amongst farmers' managerial responses to risk. Results indicate that farmers respond differently to different types of risk attributed to enterprise type. Policy implications of this research include that the government of Eritrea should create a more conducive environment for business, train farmers with appropriate record keeping skills and improve road and communication infrastructure. Results also show that farmers' sources of information vary according to farm type. While poultry and dairy farmers depend largely on information provided by the government, horticulture and crop farmers rely mostly on their own sources of information or non-governmental sources. Policy recommendations include additional and appropriate record-keeping training for farmers, improving the road and communication infrastructure, promoting commercial information providers, and periodically publishing an agricultural magazine by the Ministry of Agriculture in a way that farmers can understand the information. The results of a logit model of the adoption of livestock insurance indicate that formal education of the farmer and the farmer's awareness of livestock insurance increase the probability of insurance adoption, whereas farming experience, poor location and use of alternative risk management strategies, such as off-farm investments and farm enterprise diversification, reduce the probability of livestock insurance adoption. Further insight into the socioeconomic factors influencing farmers' adoption of livestock insurance may assist policy makers and the National Insurance Corporation of Eritrea in their future plans. Results of this study have some policy implications, such as the need for a variable rather than fixed insurance premium, improving the know-how of farmers concerning risk assessment, improving Zobas' infrastructure and a need for a thorough study to be conducted on the demand for agricultural insurance in Eritrea. / Thesis (M.Sc.Agric.)-University of KwaZulu-Natal, Pietermaritzburg, 2004.

In South Africa commercial agriculture employs approximately 8.5% of the national workforce. Therefore, information about commercial farmers’ perceptions of and management responses to the HIV/AIDS pandemic are likely to be of interest to policy makers and non-governmental organisations (NGOs) in the health sector, as well as practitioners in rural development and commercial agriculture. HIV/AIDS affects businesses such as commercial farms by decreasing productivity, increasing costs and therefore decreasing overall profitability. Farm business’ responses to the challenges posed by HIV/AIDS may advantage or disadvantage farm workers. For example, farm workers are highly vulnerable to burden-shifting activities (practices which reduce the cost of HIV/AIDS to the employer, such as the outsourcing of low-skilled jobs). However, farm businesses may also play a substantial role (e.g., by providing formal adult education or access to clinics) in addressing the HIV/AIDS epidemic in rural commercial farming areas of KwaZulu-Natal and in South Africa generally. This study presents an analysis of KwaZulu-Natal commercial farmers’ perceptions of and management responses to the HIV/AIDS pandemic. This analysis identifies the farm, business and personal characteristics of the various respondents. It is important to know this information because it assists in understanding why commercial farmers are responding as they are, which will in turn assist in future HIV/AIDS policy planning. The analysis is based on a postal census survey of Kwanalu (KwaZulu-Natal Agricultural Union) commercial farmer members in April and May 2007. Results suggest that, on average, Kwanalu members are highly concerned about the impact of HIV/AIDS on their businesses. A majority of respondents perceived HIV/AIDS to negatively affect the current and future profitability of farming, increase labour absenteeism and staff turnover rates, and reduce labour productivity. An analysis of variance (ANOVA) of the data shows that respondents’ management responses to the HIV/AIDS pandemic varied by farm size and enterprise type, but include paying higher than average wage rates to attract and retain healthy and productive workers, multi-skilling staff to provide back-up skills, and mechanisation to defer costs of HIV/AIDS. Respondents tended to believe that effective HIV/AIDS treatment and prevention programmes require an integrated approach between government, employers and employees. Two response indexes were calculated: (1) ranking by adopters only (only those who use a certain response are included) and (2) ranking by all respondents (a response is not used by a respondent automatically scores zero). The response indexes showed that resource-intensive HIV/AIDS services such as provision of antiretrovirals (ARVs) and nutritional supplements are ranked high by actual adopters, but relatively low overall (as only a small proportion of respondents are adopting these strategies) in the ranking by all respondents. Burden-shifting practices (e.g. mechanisation) are ranked relatively high in both rankings, indicating that respondents rate them as important in managing HIV/AIDS, and that many respondents are utilising them. Relatively inexpensive HIV/AIDS services (e.g. informal communication) are ranked low by actual adopters but high on the overall index as many respondents are using them (but doubt their effectiveness). A linear regression analysis was conducted on principal components from the response indexes to identify characteristics of “high” and “low” responders and of those who utilise burden shifting activities or HIV/AIDS services. The characteristics of “high” responders are that they perceive HIV/AIDS to impact on costs; they employ a high proportion of skilled labour; and they have high turnovers and high debt servicing obligations. Responders who employ large amounts of labour (particularly permanent labour); who perceive HIV/AIDS as the responsibility of the employer; who are older and more experienced; and who have a relatively high debt: asset ratio tend to use HIV/AIDS services to manage the impacts of HIV/AIDS. Many respondents already play an important but inexpensive role in HIV/AIDS prevention and treatment through encouraging voluntary HIV testing and providing staff with information and transport to clinics. Policy makers should take this into consideration when formulating HIV/AIDS policies to combat the pandemic.

This research was undertaken to determine the extent to which share equity schemes have been successful. The research also investigated the possible causes of failure of the established share equity projects and sought to determine the feasibility requirements that may be put in place to ensure success and sustainability of the ventures in support of land reform. The methodology used involved comparing the data gathered from business plans, valuation reports and other project documents from the Department of Land Affairs (DLA) with the information gathered through interviews and observations. The results revealed causes of failure to include the fact that beneficiaries of the investigated equity schemes did not participate in business plan development or implementation and therefore had no sense of ownership in the intended joint ventures. It was also found that none of the business plans included any form of training for capacity building and therefore no mechanism for empowering beneficiaries existed to participate effectively at all levels of the farming enterprise. Furthermore, original farm owners as the majority shareholders tended to re-invest profits into farm assets rather than paying dividends. It was concluded that the inclusion of a training programme in every business plan is crucial to the success of farm share equity ventures as this may enable beneficiaries to be sufficiently empowered to participate effectively at all levels of the business. / Thesis (M.Env.Dev.) - University of KwaZulu-Natal, Pietermaritzburg, 2006.