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The comparative advantage of commercial wheat production in the Western Cape

Thesis (MAgricAdmin)--Stellenbosch University, 2000. / ENGLISH ABSTRACT: Agriculture is heavily subsidised and protected in most of the major industrial
countries. Some of the effects are obvious through the heavy costs imposed on
national budgets. Other effects, such as those on consumers or on overall economic
efficiency, are less obvious but are nonetheless extremely important. In South Africa
there has never been an attempt to calculate total government intervention in
agriculture. However, this changed at the time of the negotiations for the Uruguay
Round of multilateral trade negotiations under the auspices of the GATT, and the
greater importance of the consumer in the designing of agricultural policies.
The aim of this study is to determine whether the production of wheat in the Western
Cape is economically optimal under the current policy environment. The study
investigates if there was a comparative advantage in the production of wheat as of
April 1999. The technique used to calculate the various indicators of comparative
advantage is the Policy Analysis Matrix. This technique is used to identify the effects
of policy measures on the social profitability of wheat production.
The analysis used data from eight areas, and seventeen varying enterprise budgets
were constructed in order to compile a representative picture of the industry's
condition. The results of the analysis indicate that Western Cape wheat producers do
not have a strong comparative advantage in the production of wheat for the selected
areas. The reasoning behind this is complex, but is primarily a result of high levels of
input use. Input prices are inflated by policy distortions in input markets, partly
because of tariffs on imported inputs. The net effect of the total policy environment
also had a negative effect on producers, in the sense that sub-normal profits were
achieved.
The future of the Western Cape and South African wheat farmer is uncertain. What is
certain is that, if the wheat farmer in South Africa does not take immediate and swift
action, directed at improving efficiency in current management and production
techniques, and implementing some form of crop diversification, farm debt will
ultimately be the demise of the farmer. As interest rates rapidly increase, and producer prices remain constant or decrease, the farmer begins to farm more for the
bank than for private remuneration. / AFRIKAANSE OPSOMMING: In die meeste groot industriele lande word landbou grootliks gesubsidieer en beskerm.
Sommige van die effekte word weerspieël in hoë kostes in die nasionale begroting.
Ander effekte soos die op verbruikers is minder vanselfsprekend, maar steeds baie
belangrik. Voorheen is daar geen poging aangewend om die totale
owerheidsinmenging in landbou in Suid-Afrika te bereken nie. Dit het egter verander
met die onderhandelinge rondom die Uruguay Ronde van die AOTH, en die groter
belangrikheid van die verbruiker in die ontwerp van landboubeleid.
Die doel van hierdie studie is om te bepaal of dit ekonomies optimaal is om koring in
die Wes-Kaap te produseer onder die huidige beleidsomgewing. Met ander woorde,
die studie poog om te bepaal wat die vergelykende voordeel, indien enige, is by
koringproduksie. Die tegniek wat gebruik is om die verskillende indikatore van
vergelykende voordeel te bereken, is die Beleidsanalise Matriks of PAM. Die tegniek
word gebruik om die effek van die beleid met betrekking tot koringproduksie te
identifiseer.
Agt produksiestreke in die Wes-Kaap is ontleed vir die doeleindes van hierdie analise.
Sewentien verskillende bedryfsvertakkingsbegrotings is hiervan afgelei om sodoende
'n goeie verteenwoordigende beeld van die bedryfstoestande te kry. Die resultate van
die analise toon aan dat koringproduksie in die Weskaap nie 'n sterk vergelykende
voordeel het nie. Die rede hiervoor is kompleks, maar die hoë vlak van inset gebruik
kan beskou word as hoofrede. Hoër insetpryse, na aanleiding van die
beleidsversteuringe in insetmarkte, is deels die gevolg van invoerbeskerming in die
vorm van tariewe op ingevoerde insette. Die netto effek van die totale
beleidsomgewing het ook 'n negatiewe effek op die produsente gehad, veral in die sin
dat subnormale winste behaal is.
Die toekoms van koringboere in die Wes-Kaap en Suid-Afrika is onseker. Wat wel
seker is, is dat as koringboere in Suid-Afrika nie daadwerklike en vinnige hul bestuurs- en produksieeffektiwiteit verbeter me, sal skuld toeneem en sal dit
koeringboerdery se einde beteken. Soos rentekoerse vinniger toeneem en die
produsenteprys konstant bly of afneem, sal boere meer aan skuld afbetaal as wat hulle
uit koringboerdery kan verdien.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/51948
Date12 1900
CreatorsVan Rooyen, Ray (Ray Glen)
ContributorsVink, N., Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
PublisherStellenbosch : Stellenbosch University
Source SetsSouth African National ETD Portal
Languageen_ZA
Detected LanguageUnknown
TypeThesis
Format128 p.
RightsStellenbosch University

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