CMAAE Thesis

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An econometric analysis of spatial market integration and price formation in the Namibian sheep industry
(African Economic Research Consortium, 2017-12) Ijambo, Bertha Deshimona
The Namibian government introduced the Small Stock Marketing Scheme (SSMS) for the sheep market in 2004. The SSMS is a quantitative export restriction. Quantitative export restriction policies decrease the tradable quantity of a commodity, and increases domestic supply of a commodity, causing a lack of equilibrium in spatial markets. This, therefore, has the capacity to hinder market integration. Moreover, a quantitative export restriction disrupts the domestic supply and demand, and ultimately the equilibrium prices. A policy such as the quantitative export restriction therefore determines the domestic price levels. The effect of the SSMS on spatial market integration and price formation remains unclear. A lack of empirical evidence on spatial sheep market integration and domestic price levels can create challenges for policy makers. This is because a lack of evidence could prevent policy makers from implementing evidence-based policies, which might buffer poor consumers and producers from adverse price shocks, and lead to improved resource allocation.
Scope effects in contingent valuation: an application to the valuation of irrigation water quality improvements in Infulene Valley, Mozambique
(African Economic Research Consortium, 2018-02) Graça, Manjate
This study uses the double-bounded bid elicitation format to test whether the willingness to pay (WTP) of 244 randomly selected residents of Maputo and Matola cities for wastewater quality improvements in the Infulene Valley is sensitive to internal and external scope. The Infulene Valley was selected because its wastewater is used as an input in vegetable irrigation. WTP was elicited and compared when the level of wastewater treatment was 100 % and when it was 50 %. The results show that the majority of those interviewed display high levels of knowledge regarding the risks associated with poor quality irrigation water, and that they have attitudes and perceptions receptive to a policy that aims to improve irrigation water quality. The WTP responses passed the bottom up (t= 15.28, p=0.000) and top down (t=14.07, p=0.000) internal and external (t=13.43, p=0.000) scope tests, suggesting that the level of wastewater treatment significantly influences households’ WTP. The following variables were statistically significant in the WTP model: income, age, education level, household size, gender, whether the household considers water scarcity as a priority issue, knowledge of the unsuitability of Infulene Valley water for vegetable irrigation, and whether the household is aware that the Infulene Valley is an important supplier of fresh vegetables to Maputo and Matola residents. The study concluded that the level of water treatment (high quality of treated wastewater) is a significant factor of preference over the alternative policy in wastewater treatment. The following recommendations derive from the study: policy makers should consider wastewater treatment planning and they should develop an irrigation water pricing system, as well as conservation practices to manage pollution problems at Infulene Valley. While this study provides an estimate of household values for irrigation water quality improvements in the Infulene Valley, is ultimately up to policy makers at the city and country levels to implement any changes.
The use of information sharing systems to address opportunistic behaviour between tomato farmers and brokers in Zambia
(2018-05) Munsaka, Eustensia
Small-scale farmers are often unable to profitably participate in agricultural output markets due to the challenges engendered by their inability to access agricultural market information. The main horticulture output market in Zambia, the Soweto market, is characterised by such challenges. In 2010, it was found that brokers on the Soweto market inflate fresh produce prices to extract an extra commission (hidden commission) without the farmers’ consent. On the Soweto market, brokers take advantage of the existing information asymmetry to increase their financial gains when they transact with farmers by providing false price information to the farmers. The slow sales resulting from this behaviour leads to the deterioration and spoilage of tomatoes on the Soweto market. This behaviour deprives farmers of their profits and ultimately leads to reduced livelihoods of the rural population.
Analysis of main determinants of soya bean price volatility in Malawi
(African Economic Research Consortium, 2018-11) Chimaliro, Aubrey Victor
The study primarily focuses on analysing the extent of soybean price volatility in Malawi. The interest in the study was triggered by the findings from literature noting soybean prices in Malawi as being particularly volatile. Soybean is one of the most important oilseed crops in Malawi and has the potential to become a major export crop. It offers good export prospects to neighbouring countries in Southern Africa, but has also been prioritised for its potential domestic contribution in Malawi. It is regarded as one of the value chains that promotes better nutrition in Malawi since most diets are dominated by maize, which contributes to malnutrition in Malawi. The study empirically estimates soybean price volatility using a GARCH (1,1) model and results indicate that both the lagged squared residual and the lagged conditional variance have an effect on the conditional variance of soybean prices. GARCH terms are significant, indicating some volatility clustering in monthly returns of soybeans in Malawi, South Africa and the world. The study confirms that soybean prices in Malawi have been more volatile relative to South Africa and the USA. To evaluate the extent to which domestic soybean price volatility can be attributed to regional and global market volatility, the Engle-Granger procedure was employed to estimate long-run co-integration between soybean prices in Malawi, South Africa and the world. The prices are categorised into six pairs and testing the long-run co-integration between these pairs involve both directions. Five out of the six pairs of prices exhibit long-run co-integrating relationships. An error correction model (ECM) is also employed to estimate the speed of adjustment to the equilibrium for five co-integrated price series. South Africa is the fastest in responding to the USA price changes, taking two months. Malawi is the second fastest since it takes about four months for soybean prices to respond to shocks in South African markets. However, it takes about seven months for the USA soybean prices to respond to price shocks in the South African markets which is longer than the period that Malawi takes to respond. South Africa takes nine months to respond to the shocks that occur in the Malawian markets. USA is the lowest in terms of the speed of adjustment since it takes about sixteen months to respond to the Malawian market shocks. Therefore, this study agrees with expectation that changes in the international markets affect the domestic markets. This is so because South Africa is a small nation in the international soybean market and Malawi is even much smaller – the volumes traded in these markets are considered too small to have any meaningful impact on world market prices. Lastly, to evaluate the influence of shocks on the South African prices, as well as selected macro-economic variables in Malawi on soybean price volatility in Malawi, the study employs a vector error correction model (VECM) to evaluate the long- and short-run relationship between soybean prices and explanatory variables (South Africa soybean prices, exchange rates and consumer price index). The error correction coefficient of -0.2089 is negative and highly significant which is in line with expectations. The Johansen test points to the possibility of 1 or 2 cointegrated relationships between variables. The Wald test results show that the probability values of the joint F-statistics for South African soybean prices and Malawi exchange rate are significant at 10% and 5% levels respectively. Based on the significance of both the error correction term and the joint F-statistics of the two lagged variables in the Wald test results, the study concludes that South Africa soybean prices and Malawi exchange rate are significant drivers of volatility in Malawi soybean prices.
Economic returns of the Agricultural Research Council’s Table Grape Cultivar Development Programme in South Africa
(African Economic Research Consortium, 2019) Mazwane, Sukoluhle
The table grape industry, in line with national policy imperatives such as the National Development Plan (NDP), plays an important role in the South African (SA) economy through employment creation, rural development and foreign currency earnings. The industry has continued to expand over the years. The yields of table grapes have increased considerably in South Africa. For continued growth and sustainability, research and development (R&D) initiatives, among other factors, are important. The Agricultural Research Council’s (ARC) Table Grape Cultivar Development Programme (TGCD) is an R&D initiative that supports the industry with breeding of table grape cultivar varieties suitable for SA conditions. It was established in 1952, and has successfully bred 37 table grape cultivar varieties. However, the impact of the programme on yields and contribution to the economy remains unknown. Therefore, the study sought to estimate the economic returns of the ARC’S TGCD to the South African economy. The impact of the ARC TGCD programme was estimated using a two-stage approach. In the first stage of analysis, the impact on yield of table grapes was estimated using the Just-Pope production function. The first stage of analysis addressed two specific objectives: to determine the yield gains attributable to the ARC’s TGCD Programme; and to determine whether attempts to increase yields and quality of table grapes has compromised yield stability. The second stage of analysis employed a benefit-cost analysis to quantify the benefits in monetary terms. Specifically, BCR and MIRR were estimated. Expert advice was used to select seven ARC popular varieties for which data was available in complete form, for the period 2008 to 2017.
The relationship between financial inclusion and agricultural development in Southern Africa Development Community (SADC)
(African Economic Research Consortium, 2019-02) Langwenya, Nomfundo Noncedo
An inclusive financial system has been widely recognized by most policy makers around the world and is becoming a priority in policy making globally. An inclusive financial system is one that creates economic opportunities along with ensuring equal access to them. Agriculture, on the other hand, continues to be renowned as an engine for growth in many poor economies and thus the importance of financial inclusion for agricultural development cannot be ignored. This research work sought to examine the relationship between financial inclusion and agricultural development in Southern African Development Community (SADC). The main objective of the study was to establish the relationship between financial inclusion and agricultural development in the SADC region. The study determined the level of financial inclusion in the SADC region by calculating the index of financial inclusion. The index gathers information from the World Bank G20 financial inclusion indicators using methodological inputs from the research works of Sarma (2008). An agricultural development index was also calculated to determine the level of agricultural development in the SADC region using secondary data from the African Development Bank, an open Africa database. To determine the relationship between financial inclusion and agricultural development, secondary data were extracted from the African Development Bank’s open data for Africa database. These data were analyzed using descriptive statistics, correlation and regression analysis. Excel software was used to transform the variables into a format suitable for analysis, after which STATA version 14 was used to provide the basis of analysis and the findings of the study. For the basis of analysis and because of the unavailability of data on agricultural development measured as a single number, the Agricultural Production Index (API) was used as a proxy for agricultural development. A period of ten years was covered, from 2005 to 2014, for all 15 SADC countries and the panel fixed effects regression model was confirmed by the Hausman test as appropriate for the study. The regression analysis established that the usage of financial services (amount of bank loans as a proportion of total deposits) has a statistically significant relationship with agricultural development. The number of bank branches (per 1000 km2 ) and ATMs (per 100 000 people) have a positive relationship with agricultural development and thus an increase in access to financial services is associated with an increase in agricultural development in the SADC region. Therefore, this study confirmed the hypothesis that agricultural development and financial inclusion are positively related. Hence, high financial inclusion is associated with high agricultural development in the SADC region.
Determinants of climate smart agricultural technology adoption inthe Northern Province of Zambia
(African Economic Research Consortium, 2019-02) Lungu, Harad Chuma
Our world, as we know it, is changing faster than what scientific evidence has thus far predicted. Globally, we see an increased occurrence of indeterminate and unpredictable climatic events changing the daily livelihood of people across the planet. Particularly, such impacts include the frequent occurrences of droughts, the increased incidences of pests and diseases in farmer fields (such as the fall army worm in Zambia), the reduced annual rainfall and shrinking freshwater supplies, the increased number of forest wild fires, and the reduction of farmers’ yields. This calls for the need to adapt and build resilience. To support the adaptation and resilience agenda, various global initiatives have been undertaken and include the Intergovernmental Panel on Climate Change (IPCC), the Kyoto Protocol, the Sustainable Development Goals (SDGs), and the Paris Agreement.
Milk production and marketing channel decisions of smallholder farmers in the Zambian milk value chain
(African Economic Research Consortium, 2019-07) Cheelo, Tulumbe
Dairy farming is a source of livelihood and a major income source for many of the rural Zambian farmers. The importance of the dairy sector cannot be overemphasised as its development has capacity to increase job creation and wealth generation. The sector makes insurmountable contributions to the nutrition status of the country and to the financial gains to the various value chain stakeholders. In an attempt to further develop these financial gains, several initiatives have been developed to encourage smallholder farmers’ participation in the sector, and more so, for women and the youth. Nonetheless, there is still low participation by these interest groups. This study aims to understand the factors that influence smallholder farmers’ decisions to participate in the Zambian dairy value chain, and particularly in terms of milk production and the selection of different marketing channels. The objectives of the study are therefore to: (i) determine the factors that influence smallholder farmers’ decisions to participate in milk production and the factors that influence milk volumes or milk production in Zambia, (ii) identify the factors influencing the choice of milk marketing channels among smallholder farmers in the Zambian milk value chain, and (iii) examine the characteristics of the youth and women in the milk production, as they compare with the characteristics of the control groups (non-youths and men).
Determinants of commercial orientation and the level of market participation by women maize farmers in Eswatini
(African Economic Research Consortium, 2019-07) Dlamini, Lucinda Nosizo
With Sustainable Development Goal 5 focusing on the role of gender in sustainable development, developing countries like Eswatini are promoting the role of women in agriculture to drive their sustainable development agenda. This entails promoting women empowerment through agricultural commercialisation as it has the potential to improve women-led farming households’ income and living standards. Eswatini’s government has initiated programs such as Rural Development Areas programs to assist farmers in agricultural production, especially maize as it is the country’s main staple food. Women’s contribution to the agricultural sector has been limited by several constraints. These range from limited access to credit sources to poor infrastructure and high transaction costs which make it difficult to enter the market. In addition, development polices have been biased against addressing challenges faced by women as well as integrating them into development strategies. As such, women farmers’ access to agricultural markets and commercialisation of their maize operations market, is constrained and scanty. This study aims to highlight agricultural commercialisation activities of women farmers in Eswatini. The specific objective of the study is to identify the factors influencing participation of women farmers in the maize market. The study focused on the Highveld region where six communities, namely, Maphalaleni, Nsingweni, Endlozini, Sitseni, Kasiko and Motjane were purposively selected based on their ability to produce maize surplus. A multi-stage sampling technique was employed to select respondents which resulted in 191 farm households being surveyed. Since the study focuses more on women, the majority (131) of respondents were women farmers with the remaining being men farmers. Men participation was explored and presented as supplementary data. The Heckman two-stage procedure was used to identify the factors that influence commercialisation. In the first stage, the Probit regression model was used to identify factors that influence farmers’ decision to participate in the maize market. The factors; household size, farm size, livestock, radio, off-farm income, savings, credit, farmers’ group, extension services and fertiliser increased the probability to enter the market while age, education and ownership of a mobile-phone reduced the probability of participation. The first stage also generated the Inverse Mills Ratios used to test selectivity bias in the second stage. In the second stage, the Ordinary Least Squares model identified factors that influence the level of commercialisation. Education, household size, farm size, vehicle, off-farm income, extension services, fertiliser and commercialisation index positively influenced the level of market participation, while price had a negative influence. The negative price relationship may underscore women farmer’s risk management behaviour where they could sell less in lieu reducing the cost of purchasing maize meal at higher prices. Evidence from the study shows that women farmers in Eswatini face several market barriers when participating in commercial agriculture. This study, therefore, recommends the need for effective and efficient policies and programs to encourage and improve participation of women farmers in maize marketing. Policies should be geared towards improving rural infrastructure, prices, extension and financial services which will help overcome barriers to market participation thus improving engagement in the sector.
The effect of access to finance on commercialisation of smallholder maize farmers in Eswatini
(African Economic Research Consortium, 2020) Phiri, Isaac
Agricultural commercialisation is defined as the increase in the amount of produce sold relative to the amount produced. Therefore, agricultural commercialisation leads to more efficient production, economic growth, food security, and urbanisation in the agricultural sector. Agricultural commercialisation plays an important role in the sustainability of any country’s economy. However, financial investment and support is necessary for commercialisation to be achieved. Finance is one of the major key economic factors that can boost agricultural commercialisation. Understanding the effect of finance on the commercialisation of the agricultural sector is important for all relevant stakeholders; and specifically among smallholder farmers who produce under difficult conditions. The study determined the effect of finance on the commercialisation of rural smallholder farmers in Eswatini. The main focus was on agricultural finance and the commercialisation of smallholder farmers. The main hypothesis of the study was that access to finance positively influenced the commercialisation decision of smallholder farmers. The data used in this study was collected from 150 households in the Hhohho and Lubombo regions of Eswatini. Due to the simultaneous causality of the financial variables, the study faced a potential endogeneity bias problem. There were other smallholder farmers who chose not to access any form of finance, but still managed to commercialise. This attribute revealed the endogeneity bias problem; thus it was important to address it using the endogenous switching regression method.First, the analysis of variance (ANOVA) results suggested that only farmers who accessed credit and household savings were significantly associated with a commercialisation decision. Further analysis using the endogeneity switching model revealed that credit was not significant; off-farm income, household savings, and insurance were significant in the commercialisation decision. When financial instruments were combined, the effect of finance on commercialisation became weaker and not statistically significant enough to influence the commercialisation activities of smallholder farmers. The key findings of the study showed that financial instruments were partially correlated and interdependent, and affected the commercialisation of smallholder farmers. This implied that finance alone could not bring about agricultural commercialisation, and it might not be enough to make agriculture sustainable and resilient. Any financial investment in agriculture needs to be accompanied by other factors – such as adequate farm size, conducive climate, adequate farm training, available and affordable labour, and smaller households – to significantly influence the commercialisation of smallholder farmers. The study also identified the problem of endogeneity and how it could produce false results if not considered. The study recommends that different combinations of financial instruments should be implemented when stimulating commercialisation of smallholder farmers. The financial instruments should be implemented together with other non-financial interventions.
An assessment of South Africa’s non-genetically modified maize export potential
(2020-02) Mawasha, Joseph Leshasha
The study endeavoured to determine South Africa’s export potential in non-genetically modified maize markets using a three pronged methodological approach. The Genetically Modified (GM) status of South African maize has been observed as a challenge restraining the extent of South Africa's maize exports to major maize importing markets. The study thus sought to quantify South Africa's maize export potential to non-GM maize markets. Firstly, the study identified South Africa’s non-GM maize markets using a growth share matrix. Secondly, South Africa’s non-GM maize export markets with high trade potential were identified using an Indicative Potential analysis. A gravity model was then used to determine potential export markets with trade stimulating and restraining effects. The study finds that Italy, Angola, Zimbabwe, Venezuela, Greece, Zambia and Austria exhibited the highest trade potential among the identified potential non-GM maize markets. Based on the three pronged approach employed by the study, it was concluded that despite the limited scope for non-GM maize market penetration, there are markets which displayed greater potential for expansion as they were part of the most desirable markets, exhibited high trade potential and had trade stimulating effects. These markets include; Italy, Zimbabwe, Kenya and Angola. It was recommended that farmers who choose to engage in large scale non-GM maize production should thus be guided by the forces of demand and supply in the non-GM maize export market and react to favourable opportunities as presented. Moreover, the government of South Africa needs to maintain a regulatory system that enables for segregation of non-GM and GMO maize along the maize value chain to allow for preference for South African non-GM maize by major non-GM maize importers.
The impact of public agricultural investment on food security and nutrition in ECOWAS
(African Economic Research Consortium, 2020-05) Kamenya, Madalitso A.
Public agriculture expenditure is an important growth catalyst. According to Comprehensive Africa Agriculture Development Programme and its Malabo Declaration, a 10% increase in public expenditure in agriculture should stimulate a 6% productivity growth in agriculture, leading to widespread development benefits including improving food security and nutrition. However, evaluation of the impact of public agriculture expenditure on food security and nutrition remains scanty. This study evaluated the impact of public agriculture expenditure on food security and nutrition using panel data of nine ECOWAS countries, which are Benin, Burkina Faso, The Gambia, Ghana, Mali, Niger, Nigeria, Senegal and Togo. This was achieved by evaluating the trends of public agriculture expenditure and food security and nutrition in the nine countries between the year 2000 and 2017. Further, assessing the impact of public agricultural expenditure on food security and nutrition using panel data from 2000 and 2016, controlling for other factors that affect food security and nutrition at the national level. The trends revealed that public expenditure has improved in the nine ECOWAS countries as several countries have met the Comprehensive African Agriculture Programme’s target of investing at least 10% of the national budget on the agricultural sector in several years. Likewise, food supply has improved and the levels of undernourishment has reduced. However, stunting, underweight and wasting are still high in these nine countries. Using the fixed effect generalised least squares model, it was found that a one-unit increase in public agriculture expenditure reduced undernourishment and improved average dietary energy supply adequacy each by 0.2%. The study concluded that public agriculture expenditure had an impact on food security. However, the impact may lag depending on the type of expenditure on agriculture. The study recommended disaggregating public expenditure data to isolate their impact. The analysis could be conducted in the design of national food security investment plans and to help identify strategies to accelerate improvements in food security and nutrition in African countries.
Coordination strategies in the South African egg value chain: A review of chain performance and fragility
(African Economic Research Consortium, 2020-07) Setene, Letlama
The chain players in the South African egg industry pursue increased coordination which results in strategies that are lean and vertically integrated. These strategies include contracts specifications, vertical integration, the formation of alliances based on equity and relation. The strategies reduce transaction costs and risks the industry’s value chain to improve its chain performance. These strategies improve chain performance and competitive advantage of business only under certain environmental circumstances. This dissertation argued that under uncertainty the strategies become fragile due to the interdependencies between chain players. The interdependencies expose the industry’s role players to unforeseen disruptive events that are detrimental to business continuity. The events are seemly rising and are associated with uncertainty which has a low probability of occurring but a large impact if it occurs. The uncertainty drives the chain vulnerability which accelerates throughout the whole chain as a harmful stressor, and that is referred to as chain fragility. This study aimed to display the most common strategies of coordination in the South African egg industry and the map of its egg value chain. The strategies were divided into two configurations based on the levels of interdependencies between their chain players, which were either high levels or low levels. Then, the fragility measure of both configurations was performed, together with their comparative fragility analysis. The aim was reached by using the heuristic stress-testing approach, which represented 17 chain fragility factors. A questionnaire was sent to the chain players in the South African egg industry and got completed by a sample size of 73 respondents, mainly retailers, egg producers and pullet rearers. The respondents were required to rate fragility factors as adverse events against their business continuity as they progressively deteriorated. The results showed the fragility scores of each factor and their imperativeness to each chain player. Hence, factors such as information visibility and relationship with the supplier are imperative for retailers, while factors such as training of human resources and chain complexity are imperative to pullet rearers. Additionally, the factor that is imperative for egg producers is quality and safety performance requirements. The fragility scores per factor were combined into a fragility composite index of each chain player. Subsequently, the composite index of fragility per chain players was combined into a final composite index that represents the fragility of each of the two configurations. The comparative fragility analysis of the configurations was performed using unequal variance t-test to determine the significant difference of the fragility means of the strategies. The performed t-test resulted in the rejection of the null hypothesis that statistically, there is no significant difference in the chains’ fragility means of the two configurations. Precisely, the difference between the chains’ strategies is associated with a variety of differences at the factor and chain player level that led up to 21% greater overall chain fragility of the chain with higher levels of interdependency. The results concur with literature that considers lean and highly integrated strategies result in interdependencies due to increased coordination. Which in return act as catalysts or causes of agri-food chains fragility because they expose them to uncertainties that are disruptive and detrimental. The affirmation of the results of the analysis with the literature put down the central point of this dissertation that there is a trade-off between the chain performance and fragility. The practical implication of the trade-off is that strategies of increased vertical coordination improve chain performance by reduction of transaction costs and risks within agri-food chains. However, the strategies multiply the fragility of the chains, under uncertainty. Hence, the important strategic choice for chain players of the South African egg industry and their value chains, is to attain a suitable coordination strategy that balances chain performance and fragility. This study concluded that the increased vertical coordination strategies improve chain performance under certain environment. But as uncertainty increases the strategies become fragile and contribute to the closure of businesses. Therefore, the following recommendations are made for the stockholders in the South African egg industry; First, a chain structure and its coordination strategies be decentralised in an organisation’s value chain management. Second, developing a “layered organisational” structure, which allows for containment of adverse impacts within the system and facilitates learning within and across different layers to drive survivorship. Third, planning for spare capacity. Last, considering which value chain strategy an organisation should pursue to improve chain performance and contain fragility.
The impact of public agriculture expenditure on food security and nutrition in the Southern African Development Community (SADC)
(African Economic Research Consortium, 2021) Emmillian, Chifundo Kasililika-Mlagha
Food insecurity and malnutrition have worsened despite numerous commitments by African governments and their leaders to end hunger and all forms of malnutrition as captured in the Sustainable Development Goals and Africa's Agenda 2063. Africa's 2014 Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods set out the need to increase agricultural expenditure to reduce food insecurity and malnutrition. However, analyses of the impact of public expenditure on agriculture in Africa have focused on poverty reduction and economic growth, with very little analysis of the impact on food security and nutrition. This study sought to fill this gap with respect to countries in the Southern African Development Community (SADC). A panel data analysis for the years 2000 to 2016 was employed using a fixed-effect generalised least squares estimation. Four food security indicators were used, namely, the average dietary energy supply adequacy; the prevalence of undernourishment; the prevalence of stunting; and per capita food production variability. The share of public agriculture expenditure in total public expenditure was used as a proxy for government expenditure on agriculture. The results showed that public expenditure on agriculture was associated with a significant positive impact on the average dietary energy supply adequacy and per capita food production variability. In the study, increased government expenditure on agriculture was associated with a decline in the prevalence of undernourishment over this period. There was no sufficient evidence to show that government agriculture expenditure on agriculture was associated with changes in the prevalence of stunting. The nine SADC countries included in the analysis need to put more effort into acting on their commitments, strengthening strategies to address the issue of food insecurity and malnutrition. The nine SADC countries need to promote nutrition-sensitive agriculture and the diversification of agricultural production to improve nutrition. They also need to increase the development and use of biofortified food crops. As food security is essentially a public good, public resources are needed to stimulate research and development, the adoption of technologies and practices and sharing the knowledge of the benefits of these practices among communities.
Identifying possible misspecification in South African soybean oil future contracts
(African Economic Research Consortium, 2021-01) Nordier, Jean-Pierre
Soybean crushing¹ plants operate on a crush margin, which is the monetary difference between the combined sales value of mainly soybean meal and soybean oil and the cost of raw soybeans. However, given the high volatility in the prices of these three products, crushing plants normally secure these prices simultaneously. If not, they are vulnerable to the relative price variation between these three products.
Impact evaluation of conservation agriculture on smallholder farmers’ livelihood in Zambia and Tanzania
(African Economic Research Consortium, 2021-01) Sankhulani, Linda
Based on cross-sectional data drawn from 135 treated and 68 control farmers in Tanzania, and 133 treated and 71 control farmers in Zambia, this study uses propensity score matching to test whether conservation agriculture (CA) improves smallholder farmers’ welfare, in response to the policy objective of enhancing their resilience in the face of climate change. Farmers in Tanzania assess CA as having statistically significant impacts on increasing total agricultural yield, adaptation to climate change impacts, resilience to droughts, increasing maize production, enhancing household food security, increasing number of meals per day, increasing household income, accumulation of productive assets , addressing gender disparity and social cohesion, and improving soil health . However, CA had no impact on reducing the forest area cleared per year and total agricultural costs. Farmers in Zambia assess CA as having statistically significant impacts on increasing total agricultural yield , adaptation to climate change impacts, resilience to droughts, increasing maize production, enhancing household food security, increasing number of meals per day, decreasing number of food insecure months, increasing household income, accumulation of productive assets, addressing agricultural calendar bottlenecks, increasing total agricultural costs, addressing gender disparity and social cohesion, and decreasing soil health. However, CA had no impact on reducing forest area cleared per year. Policy could use such evidence to leverage CA adoption in support of the sustainable development goals (SDGs) and Africa Agenda 2063, although its potential to sequester carbon and provide ecosystem services comes into question.
The impact of conservation agriculture adoption on farmer welfare: a comparative assessment of Kenya and Tanzania
(African Economic Research Consortium, 2021-05) Mpande, Brian
This paper used propensity score matching (PSM) technique and pooled cross-sectional data from 407 observations with 256 conservation agriculture (CA) adopters and 151 non-adopters from Kenya and Tanzania, to test whether CA causally improves smallholder farmer’s welfare. We find mixed results showing that CA has a statistically significant and positive impact on climate change adaptation, drought resilience, total maize production, food security, number of meals per day, household income, accumulation of productive assets, reduction of gender inequalities, improving social cohesion, reduced forest area cleared and soil health improvement. CA has a negative and statistically significant impact on total agricultural yield, agricultural production costs, and number of food insecure months, CA has no impact on addressing agricultural calendar bottlenecks. Since the cross-country analysis showed higher CA adoption rates in Tanzania relative to Kenya, policy could increase adoption rates in the latter by focussing on the less educated farmers, increasing access to input markets, demonstrating benefits from CA projects, and improving farmer mastery of CA technologies. The findings shed light on the role of sustainable agricultural practices and highlight cross-country experiences of CA technologies in improving the welfare of smallholder farmers.
The impact of climate-smart technology adoption on farmers’ welfare in Northern Zambia
(African Economic Research Consortium, 2021-07) Maseko, Sulinkhundla
A profitability and risk assessment of market strategies for potato producers in South Africa
(African Economic Research Consortium, 2021-08) Vosloo, Jodie
With 2.67 million tonnes of potatoes produced in 2019 (DALRRD, 2019), South Africa contributes only 1% of global potato production (FAOSTAT, 2021). China (91 million tonnes, 25% of world production), India (50.2 million tonnes, 14%), the Russian Federation (22.1 million tonnes, 6%), Ukraine (20.2 million tonnes, 5%) and the United States (19 million tonnes, 5%) were the top potato producers and consumers in 2019 (FAOSTAT, 2021). Even though South Africa, compared globally, is a small potato producing country, potatoes are one of the most important vegetable crops in South Africa. It is not only one of South Africa's staple foods, but it also provides livelihoods for producers and labourers with significant upstream and downstream effects throughout the potato value chain (van der Westhuizen, 2013). Potatoes form part of the fresh produce industry, which is a unique sector within agriculture, with higher time turnover than any other sector (Du Preez, 2011). Its uniqueness is characterised by high perishability, susceptibility to shocks, and seasonality, giving grounds for price volatility. The uniqueness combined with price volatility has led to an increase in its marketing complexity, forcing producers to rely on spot market prices rather than list prices like other sectors (Louw et al., 2004). Spot markets are defined as a public financial market where commodities are traded for immediate delivery whereas listed markets are for delivery at a future date (Geyser, 2013).
The influence of large-scale investments in agricultural land on household food security in the Gurue' and Monapo districts of Mozambique
(African Economic Research Consortium, 2022) Dawana Mawoko, Zaka
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