Thesis (MSc)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: The financial decision-making environment within which wine-grape producers function is challenging because of the complex interrelationships between yield, product price and input requirements. The complexity of farm systems is increased because production and financial decisions are necessarily made under uncertainty. Various issues influence the resilience of the wine industry. The goal of this study is to determine the financial implications of irrigation, integrated with canopy management practices on red wine cultivars in the Robertson area. Canopy management and irrigation cost play an important role within the multi-faceted farm system regarding yield, quality and input cost. This necessitates that research be carried out within the context of a systems approach. In this manner the interdependence among the various components of the farm system, and the associated synergies can be captured. Farm management, as a field of research, is dependent on other disciplines that present an alternative perspective to the research problem. Viticulture trials specifically focused on the impact of various irrigation and canopy management activities is being done on Wansbek farm. Nine treatments were tested at various combinations of soil water depletion levels and canopy management strategies. The farm is situated in Agterkliphoogte, an area in the Robertson valley. A multi-disciplinary group discussion was held to firstly obtain insight in the complex working of a farm. Secondly the group discussion was used to gain insight into the application of the Wansbek trial data and the setting of guidelines as to its application to determine the expected farm level financial implications of the treatments. Dealing with complexity necessitates insight form various areas of expertise, which is achieved time efficiently within expert group discussions. A quantitative method is required to reflect the interrelatedness and dynamics of a whole farm system in a user-friendly manner. Multi-period budget models present the ability to accommodate the complexity associated with a farm through a sequence of mathematical and accounting equations. The physical/biological interrelations and structure of the farm can be modelled while the financial performance of various irrigation and canopy management strategies can be determined. Farm-level profitability is especially sensitive to yield and price of farm products. The treatments that showed the highest expected profitability, return relatively high yields and prices at relatively low production costs. The sprawling canopy management treatment at c. 60% and c. 30% plant available water depletion levels returned the highest and second highest profitability at both gross margin per hectare and whole farm level. Scenarios were incorporated to illustrate the expected impact of key variables and the capability of the model. Key factors associated with the success of specific treatments could be identified. Results showed throughout that the balance between yield, price and input cost are the determining factor to profitability, rather than a focus on any particular one of these factors. / AFRIKAANSE OPSOMMING: Die finansiële besluitnemingsomgewing waarbinne wyndruifprodusente funksioneer, is uitdagend weens die komplekse verwantskappe tussen oesopbrengs en -kwaliteit en gepaardgaande insetbehoeftes. Die kompleksiteit van die boerderystelsels word verhoog deurdat produksie- en finansiële besluite noodwendig op grond van onvolmaakte inligting geneem word. Verskeie kwessies beïnvloed die voortbestaan van die wynbedryf. Die doel van hierdie studie is om die finansiële implikasies te bepaal van besproeiing, geïntegreer met lowerbestuur, vir rooi wyndruifverbouing in die Robertson-wynvallei. Lowerbestuur- en besproeiingkoste speel ʼn belangrike rol binne die multifasettigheid van ʼn boerderystelsel ten opsigte van opbrengs, kwaliteit en produksiekoste. Dit vereis dat die navorsing binne die konteks van die stelselsbenadering aangespreek word. Sodoende word die interafhanklikheid tussen die onderskeie boerderystelselkomponente, gekoppel aan die sinergistiese effek wat daarmee gepaardgaan, in ag geneem. Boerderybestuur as navorsingsveld, is gevolglik afhanklik van ander vakdissiplines wat ‘n alternatiewe perspektief verleen aan die navorsingsprobleem. Wingerdbouproewe wat spesifiek fokus op die impak van verskillende besproeiing- en lowerbestuursaksies word uitgevoer op die Wansbek-plaas. Die plaas is geleë te Agterkliphoogte, ʼn area in die Robertson-vallei. Nege behandelings is getoets teen verskillende kombinasies van plant beskikbare water (PBW)-onttrekkingspeile en lowerbestuurstrategieë. ʼn Groepsbespreking met multidissiplinêre deskundiges is gehou om eerstens, insig in die kompleksiteit van die werking van ʼn plaas te verkry. Tweedens, is die groep van multidissiplinêre deskundiges gebruik om insig te verwerf aangaande die hantering van die Wansbek-proefdata. Die groep het riglyne daargestel om die proefdata prakties aan te wend sodat die verwagte finansiële implikasies op plaasvlak geëvalueer kan word. Die hantering van kompleksiteit vereis insig vanuit verskeie gebiede van kundigheid wat tydsdoeltreffend binne ʼn groepsbespreking van multidissiplinêre deskundiges geakkommodeer kan word. ʼn Kwantitatiewe tegniek is nodig om die wisselwerking en dinamika van ʼn geheelboerderystelsel op ʼn gebruikersvriendelike en toepaslike manier te weerspieël. Multiperiode-begrotingsmodelle gee die vermoë om die kompleksiteit, wat met ʼn tipiese plaas geassosieer word, te akkommodeer deur die toepassing van basiese wiskundige en rekeningkundige beginsels. Die fisies-biologiese wisselwerking en struktuur van die plaas kan sodoende gemodelleer word, terwyl die finansiële prestasie van die kombinasies van verskillende besproeiing- en lowerbestuurstrategieë bepaal kan word. Die plaasvlakwinsgewendheid is veral sensitief vir die opbrengs en prys van produkte gelewer. Die behandelings wat die beste verwagte winsgewendheid getoon het, produseer teen ʼn relatiewe hoë produksie en prys en ’n relatiewe lae produksiekoste. Die oophanglowerbestuurbehandeling teen c. 60% en c. 30% plant beskikbare water-onttrekkingspeile is die mees en tweede mees winsgewende strategieë op per hektaar bruto marge en geheelplaasvlak. Die gebruik van scenario’s is geïnkorporeer om die impak van sleutelveranderlikes uit te wys en die vermoë van die model te illustreer. Sleutelfaktore tot die sukses wat aan sekere strategieë verbind word, kan sodoende uitgewys word. Deurgaans wys die resultate dat die balans tussen opbrengs, prys en produksiekoste belangriker is as die fokus op enige enkele een van die faktore.

The main aim of this study was to assess the impact of the Best Management Practices (BMP) project on social and economic wellbeing at Zanyokwe Irrigation Scheme (ZIS) in central Eastern Cape Province. The BMP project is a knowledge-based initiative aimed at introducing management practices (mainly soft skills) in order to improve production and livelihoods in the study area. The study employed a survey to collect socio-economic data amongst farming households. The 2005 situation analysis, which was conducted amongst the same respondents before the introduction of the new practices allowed for comparisons in order to track changes or impacts after the implementation of the project. Also, the social and economic impact assessment (SEIA) framework was used to assess the impacts. The results of the impact assessment showed the BMP project to have an impact on social and economic well being of households. The skills introduced were in the areas of water management, agronomic practices, marketing and institutional arrangements. More than 90% indicated that there was improvement in agronomic practices and water management and 68% in marketing. More than half of farmers worked in their farms on a daily basis, which is a big change as none of the farmers worked during weekends in 2005. The average time spent on the farms also increased from four (in 2005) to seven hours (this investigation) on average per day. The BMP project also had a positive impact on social relationships and networks between farmers and the BMP project team as well as well as farmers and non-farmers. Land use intensity improved due to increases in acreage of main crops as well as cultivating at both seasons. More than 40% of farmers cropped their land at both seasons (winter and summer). In 2005, most of the land was fallow in winter. While some of the new practices introduced had a negative impact on input expenditures, the returns were positive. These extra efforts and expenditures resulted in improvement in incomes. Agricultural contribution to household income increased from 71% in 2005 to 81% in 2007. The increase in household incomes had a positive effect on poverty and food security status of households. The proportion of households earning incomes that are below poverty line dropped from 61% in 2005 to 38% in 2007. Changes in the diet of the households were noticed. In addition to the consumption of staples such as samp, maize meal and rice, people added a variety of vegetables. Own production was the main source of these vegetables as was indicated by 66% of respondents compared to only 25% in 2005. Food remained the main expenditure category though, as was the case in 2005. Improvements in marketing such as performing extra marketing functions and adopting a marketing strategy (collective action) also led to improvements in economic wellbeing.

Irrigation farmers in the Lower Orange (Kakamas and Boegoeberg) and Lower Crocodile rivers (between Nelspruit and Komatipoort) areas in South Africa were surveyed during October 2003 in order to study whether water marketing has promoted efficiency in water use. This study is a follow-up on research undertaken by Armitage (1999) in the Lower Orange River area and Bate et al. (1999) in the Lower Crocodile River area. Factors associated with future investment in irrigation farming were also studied in the Lower Orange River Irrigation Scheme. Econometric procedures used included principal component analysis, and logit and ridge regression. Results from the two areas will be discussed separately. Econometric results for the Lower Orange River farmers indicate that purchasers of water rights produce lucrative export grapes and horticultural crops with relatively less raisin, wine or juice grapes and less field crops; are more specialised in production (table grapes); have more livestock (probably liquidity factor) and have a less negative view of the five-year water license review period. The water market has facilitated a transfer of water use from relatively lower value crops to relatively higher value crops, and also promoted the use of more advanced irrigation technology. An investment model using Ridge Regression indicates that the following variables are associated with increased future investment in irrigation farming; higher expected profitability and lower levels of risk perception and risk aversion (Arrow/Pratt). Results confirm that farmers who are more risk averse are likely to invest less in the future as can be expected from theory. Policies that increase risk in agriculture will have a significant negative effect on future investment in irrigation. What is significant from the results is that irrigation farmers in the Lower Orange River area are highly risk averse (down-side). Results also show that farmers who feel that water licenses are not secure expect to invest less in the future. The latter effect is thus amplified, as farmers appear to be highly risk averse. This has important policy implications, and measures should be taken to improve the perceived security of water licenses. This could be achieved by keeping farmers more informed about the practical implications of the New Water Act (NWA) (Act 36 of1998) and, specifically, water licenses. In the Lower Crocodile River area, almost all the water trades (permanent and rentals) observed in this study were from farmers above the gorge to farmers below the gorge. It is concluded that in the transfer of water some attributes in the purchasing area such as lower production risk (sugar cane) and lower financial risk and better cash flow (bananas and sugar cane) were more important than the expected income per cubic meter of water. Water supply in this area is highly irregular, while sampled farmers were again found to be extremely risk averse especially as far as down-side risk is concerned. The average water price in this area in recent years (2002 to 2003) was between R2000 and R3000 per ha (l ha = 8000 cubic meters). Buyers have large farms and are progressive farmers that purchase (and rent) from many sellers (or lessors). It is concluded that information on water transfers (sale prices and rents) is asymmetrical. Few permanent transfers have taken place in the Crocodile River in recent years. It is concluded that there are reasons why transfers at present are not processed, such as excess demand for water (due to the irregular flow of the Crocodile River, and role players should discuss these reasons and possible solutions before further action is taken. / Thesis (M.Sc.Agric.)- University of KwaZulu-Natal, Pietermaritzburg, 2004.