Moving products is a costly exercise for most companies in South Africa. These high logistics costs impede the country from achieving some developmental goals such as creating more jobs and growing the economy. The horticulture sector is particularly ham-strung by this. Small business is more severely affected than big business. There are numerous, multi-faceted reasons for these high costs. The analysis and potential solutions are drawn from New Institutional Economics theory, political economy thinking, business process applications and economic geography thinking. It is clear that the solution goes beyond what is normally advocated by institutions that have done work in this area, e.g. the World Bank, which tends to focus on infrastructure investment. Issues typically overlooked that need greater attention include improving competition in the logistics sector and firm collaboration. Policy choices would have to be based on an understanding of the cyclical nature of some cost drivers (e.g. fuel costs) and the structural nature of some cost drivers (e.g. infrastructure) / Thesis (M.Dev.Studies)-University of KwaZulu-Natal, Durban, 2010.

Lesotho has a land area of about 30.340 square kilometers and is completely surrounded by the Republic of South Africa. Much of the country is mountainous. Its agricultural sector is characterized by low productivity due to erratic climatic conditions, limited arable land and fragile soils with a low water holding capacity. These conditions have proved very detrimental to crop production, rendering agriculture a risky economic activity. Numerous efforts have been made over the years to address the technical constraints confronting the sector, but nothing seems to be changing. The implication is that the technical/climatic factors mentioned above may be only part of the problem. The current situation whereby Lesotho imports nearly 95% of its domestic food requirements is unsustainable, but this desperate picture looks set to worsen with the continuing threats of contracting farm sizes and further declines in farmer participation rates. But this sector has continued to be an important source of household survival and existence. A study was designed and conducted during 2008 and 2009 to identify the institutional constraints to horticulture production in Lesotho, looking specifically at the obstacles to effective production and marketing of horticultural products. A total of 100 farming households were enumerated in four districts of the country, namely Butha Buthe, Berea, Mafeteng, and Thaba-Tseka. A range of institutional and non-price factors in the farming and marketing environment were incorporated in a binary choice model to investigate the degree of satisfaction of the farming households with their previous year’s farming results. To avoid selection bias in the sample, a probit model was chosen, and the Stata-10 software was used to estimate probit coefficients. The results provide indications that property rights, the agricultural extension service, the condition of the physical infrastructure, and distance to markets may be crucial elements threatening the existence of this sector in Lesotho. The difficulties in accessing markets and land remain important institutional constraints to horticulture production and marketing in Lesotho. Recommendations made on these issues include providing more policy support to homestead gardening and for these issues to be incorporated into the Vision 2020 process. Also to be included is the issue of addressing the growing national food insecurity and enhancing Basotho livelihoods in general.