Agricultural public spending, growth and poverty linkage hypotheses in the Eastern Cape Province of South Africa
- Authors: Ndhleve, Simbarashe
- Date: 2012
- Subjects: Poverty -- Economic aspects -- South Africa -- Eastern Cape , Rural poor -- South Africa -- Eastern Cape , Sustainable development -- South Africa -- Eastern Cape , Rural development -- South Africa -- Eastern Cape , Agricultural industries -- South Africa -- Eastern Cape , Government spending policy -- South Africa -- Eastern Cape , Finance, Public -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Doctoral , PhD (Agricultural Economics)
- Identifier: vital:11157 , http://hdl.handle.net/10353/493 , Poverty -- Economic aspects -- South Africa -- Eastern Cape , Rural poor -- South Africa -- Eastern Cape , Sustainable development -- South Africa -- Eastern Cape , Rural development -- South Africa -- Eastern Cape , Agricultural industries -- South Africa -- Eastern Cape , Government spending policy -- South Africa -- Eastern Cape , Finance, Public -- South Africa -- Eastern Cape
- Description: The adoption of the Millennium Development Goal 1 (MDG1) of reducing the rate of poverty to half of the 1990-level by 2015, the advent of democracy in South Africa, among other things, have raised concerns over the potential role of the agricultural sector. There is a belief that the sector has the capacity to successfully reduce poverty among the rural masses and contribute to addressing the problem of inequality in South Africa. In line with that thinking, South Africa‘s agricultural sector has attracted considerable fiscal policy interest. For instance, South Africa‘s statistics show that public investments in agricultural development programmes have been growing. In spite of this, rural poverty is still a major concern on an overall basis. However, this might not be the case in the Eastern Cape Province and the situation might be different for each district municipality. This study assesses the linkages between public agricultural investment, agricultural growth and poverty reduction in the Eastern Cape Province. The study also addresses the question whether Eastern Cape Province is on course to meet several regional development targets. The study also aims to provide an estimate of the amount of agricultural investment required to attain the agricultural productivity growth rate which is sufficient to meet MDG1. The study reviewed the various theories of public spending, linkages between public investment and agricultural growth and how these components affect the incidence of poverty. The conventional wisdom that public expenditure in agriculture positively affects economic growth and this growth consequently reduces poverty was noted. The reviews also revealed that in many developing countries, the current level of public agricultural investment needs to be increased significantly for countries to meet the MDG1. This study employed the decomposition technique and growth elasticity of poverty concept to estimate the response of poverty to its key determinants. The size of public spending, prioritization of public spending and the intensity in the use of public funds emerged as important in increasing agricultural production. The relationship between government investment in agriculture and agricultural GDP shows iv that public funds were largely behind the province‘s success in increasing agricultural production throughout the period from 1990s to 2010. Agricultural spending went to sustainable resource management, administrative functions and then farmer support programme. Exceptional growth in the size of spending was recorded in respect to agricultural economic function, structured agricultural training, sustainable resource management and veterinary services. Overall output from the agricultural sector fluctuated, and the sector contributed less than 5 per cent to the total provincial GDP. Correlations between growth in agricultural sector and changes in the incidence of poverty in Eastern Cape show that during the period 1995 to 2000, increases in the agricultural GDP per capita may have failed to benefit the poor as poverty increased in all the reported cases.–However, for the period between 2005 and 2010, the situation was different and it was observed that increases in agricultural GDP per capita and were associated with reduction in the incidence of poverty. Growth elasticity of poverty (GEP) estimates reveal that agricultural GDP per capita was more important in reducing poverty in 5 out of the 7 district municipalities. Non-agricultural GDP per capita was only important in two district municipalities. It emerged that most of the district municipalities are not in a position to meet any of the regional set goals. This situation is largely attributable to the province‘s failure to boost agricultural production which is an outcome of low and inefficient public expenditure management, inconsistent and misaligned policies and failure to fully embrace the concept of pro-poor growth. Varied provisional estimates for the required agricultural growth rate and the increase in public spending on agriculture required in order to reach MDG1 were calculated for each district municipalities. All the district municipalities of Eastern Cape will need to increase public investment in agriculture for them to achieve MDG1.
- Full Text:
- Date Issued: 2012
- Authors: Ndhleve, Simbarashe
- Date: 2012
- Subjects: Poverty -- Economic aspects -- South Africa -- Eastern Cape , Rural poor -- South Africa -- Eastern Cape , Sustainable development -- South Africa -- Eastern Cape , Rural development -- South Africa -- Eastern Cape , Agricultural industries -- South Africa -- Eastern Cape , Government spending policy -- South Africa -- Eastern Cape , Finance, Public -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Doctoral , PhD (Agricultural Economics)
- Identifier: vital:11157 , http://hdl.handle.net/10353/493 , Poverty -- Economic aspects -- South Africa -- Eastern Cape , Rural poor -- South Africa -- Eastern Cape , Sustainable development -- South Africa -- Eastern Cape , Rural development -- South Africa -- Eastern Cape , Agricultural industries -- South Africa -- Eastern Cape , Government spending policy -- South Africa -- Eastern Cape , Finance, Public -- South Africa -- Eastern Cape
- Description: The adoption of the Millennium Development Goal 1 (MDG1) of reducing the rate of poverty to half of the 1990-level by 2015, the advent of democracy in South Africa, among other things, have raised concerns over the potential role of the agricultural sector. There is a belief that the sector has the capacity to successfully reduce poverty among the rural masses and contribute to addressing the problem of inequality in South Africa. In line with that thinking, South Africa‘s agricultural sector has attracted considerable fiscal policy interest. For instance, South Africa‘s statistics show that public investments in agricultural development programmes have been growing. In spite of this, rural poverty is still a major concern on an overall basis. However, this might not be the case in the Eastern Cape Province and the situation might be different for each district municipality. This study assesses the linkages between public agricultural investment, agricultural growth and poverty reduction in the Eastern Cape Province. The study also addresses the question whether Eastern Cape Province is on course to meet several regional development targets. The study also aims to provide an estimate of the amount of agricultural investment required to attain the agricultural productivity growth rate which is sufficient to meet MDG1. The study reviewed the various theories of public spending, linkages between public investment and agricultural growth and how these components affect the incidence of poverty. The conventional wisdom that public expenditure in agriculture positively affects economic growth and this growth consequently reduces poverty was noted. The reviews also revealed that in many developing countries, the current level of public agricultural investment needs to be increased significantly for countries to meet the MDG1. This study employed the decomposition technique and growth elasticity of poverty concept to estimate the response of poverty to its key determinants. The size of public spending, prioritization of public spending and the intensity in the use of public funds emerged as important in increasing agricultural production. The relationship between government investment in agriculture and agricultural GDP shows iv that public funds were largely behind the province‘s success in increasing agricultural production throughout the period from 1990s to 2010. Agricultural spending went to sustainable resource management, administrative functions and then farmer support programme. Exceptional growth in the size of spending was recorded in respect to agricultural economic function, structured agricultural training, sustainable resource management and veterinary services. Overall output from the agricultural sector fluctuated, and the sector contributed less than 5 per cent to the total provincial GDP. Correlations between growth in agricultural sector and changes in the incidence of poverty in Eastern Cape show that during the period 1995 to 2000, increases in the agricultural GDP per capita may have failed to benefit the poor as poverty increased in all the reported cases.–However, for the period between 2005 and 2010, the situation was different and it was observed that increases in agricultural GDP per capita and were associated with reduction in the incidence of poverty. Growth elasticity of poverty (GEP) estimates reveal that agricultural GDP per capita was more important in reducing poverty in 5 out of the 7 district municipalities. Non-agricultural GDP per capita was only important in two district municipalities. It emerged that most of the district municipalities are not in a position to meet any of the regional set goals. This situation is largely attributable to the province‘s failure to boost agricultural production which is an outcome of low and inefficient public expenditure management, inconsistent and misaligned policies and failure to fully embrace the concept of pro-poor growth. Varied provisional estimates for the required agricultural growth rate and the increase in public spending on agriculture required in order to reach MDG1 were calculated for each district municipalities. All the district municipalities of Eastern Cape will need to increase public investment in agriculture for them to achieve MDG1.
- Full Text:
- Date Issued: 2012
Analysis of food value chains in smallholder crop and livestock enterprises in Eastern Cape Province of South Africa
- Authors: Muchara, Binganidzo
- Date: 2011
- Subjects: Agricultural industries -- South Africa -- Eastern Cape , Food industry and trade -- South Africa -- Eastern Cape , Food supply -- South Africa -- Eastern Cape , Farms, Small -- South Africa -- Eastern Cape , Stochastic processes , Agriculture -- South Africa -- Eastern Cape , Business enterprises -- South Africa -- Eastern Cape , Livestock -- South Africa -- Eastern Cape , Crops -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Masters , MSc Agric (Agricultural Economics)
- Identifier: vital:11158 , http://hdl.handle.net/10353/d1000983 , Agricultural industries -- South Africa -- Eastern Cape , Food industry and trade -- South Africa -- Eastern Cape , Food supply -- South Africa -- Eastern Cape , Farms, Small -- South Africa -- Eastern Cape , Stochastic processes , Agriculture -- South Africa -- Eastern Cape , Business enterprises -- South Africa -- Eastern Cape , Livestock -- South Africa -- Eastern Cape , Crops -- South Africa -- Eastern Cape
- Description: The study was conducted in Mbozi and Ciko villages in Mbhashe Local Municipality of the Eastern Cape Province of South Africa. Two irrigation projects in the area were studied. Consumers and agricultural commodity traders in Willowvale Town, Dutywa, Butterworth and East London were also interviewed. The major objective of the study is to profile and map cabbage, maize and cattle food value chains broadly, and to understand their nature, constraints and opportunities in smallholder agriculture. A multi-stage random sampling procedure was used in which the first stage involved selecting the local government areas. This was followed by the selection of the district and then the respondents. A total of 168 participants were sampled in the proportion of 82 smallholder farmers, 41 consumers, 26 hawkers and 20 agricultural commodity traders. Focus group discussions and key informant interviews were also used during the data collection process. Value Chain mapping was done using the commodity based approach. All value chains under study indicated that they are short and commodities were transacted in unprocessed form. As cabbages and maize move from the farm to retail outlets, value addition start to take place through transportation to the market and processing in supermarkets. The cattle value chain however does not have a forward linkage beyond the two administrative boundaries of the two communities. Less than 3% of the farmers traded livestock, and this was mostly through private sales to neighbours. The farmers‘ major goal in agricultural production is assumed to be an important aspect in lengthening the value chain. As such, results of a Pearson‘s correlation exercise indicated that there is a significant relationship at 0.05% level between goals of the farmers and the village of origin. Some factors that showed significance (p=0.05) in influencing farmers‘ goals are membership of an irrigation project and household sources of income. An analysis of determinants of technical efficiency at farm level was performed using the stochastic frontier model for cabbage, maize and cattle enterprises. The results showed that rainfall adequacy, input costs, market channels and quantity sold are important determinants of cabbage production efficiency. On the other hand, maize production efficiency is positively determined by market price, area under production and rainfall adequacy. Market related variables are major drivers of the cattle value chain efficiency and these include cattle prices, market satisfaction, market channel and farm labour.
- Full Text:
- Date Issued: 2011
- Authors: Muchara, Binganidzo
- Date: 2011
- Subjects: Agricultural industries -- South Africa -- Eastern Cape , Food industry and trade -- South Africa -- Eastern Cape , Food supply -- South Africa -- Eastern Cape , Farms, Small -- South Africa -- Eastern Cape , Stochastic processes , Agriculture -- South Africa -- Eastern Cape , Business enterprises -- South Africa -- Eastern Cape , Livestock -- South Africa -- Eastern Cape , Crops -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Masters , MSc Agric (Agricultural Economics)
- Identifier: vital:11158 , http://hdl.handle.net/10353/d1000983 , Agricultural industries -- South Africa -- Eastern Cape , Food industry and trade -- South Africa -- Eastern Cape , Food supply -- South Africa -- Eastern Cape , Farms, Small -- South Africa -- Eastern Cape , Stochastic processes , Agriculture -- South Africa -- Eastern Cape , Business enterprises -- South Africa -- Eastern Cape , Livestock -- South Africa -- Eastern Cape , Crops -- South Africa -- Eastern Cape
- Description: The study was conducted in Mbozi and Ciko villages in Mbhashe Local Municipality of the Eastern Cape Province of South Africa. Two irrigation projects in the area were studied. Consumers and agricultural commodity traders in Willowvale Town, Dutywa, Butterworth and East London were also interviewed. The major objective of the study is to profile and map cabbage, maize and cattle food value chains broadly, and to understand their nature, constraints and opportunities in smallholder agriculture. A multi-stage random sampling procedure was used in which the first stage involved selecting the local government areas. This was followed by the selection of the district and then the respondents. A total of 168 participants were sampled in the proportion of 82 smallholder farmers, 41 consumers, 26 hawkers and 20 agricultural commodity traders. Focus group discussions and key informant interviews were also used during the data collection process. Value Chain mapping was done using the commodity based approach. All value chains under study indicated that they are short and commodities were transacted in unprocessed form. As cabbages and maize move from the farm to retail outlets, value addition start to take place through transportation to the market and processing in supermarkets. The cattle value chain however does not have a forward linkage beyond the two administrative boundaries of the two communities. Less than 3% of the farmers traded livestock, and this was mostly through private sales to neighbours. The farmers‘ major goal in agricultural production is assumed to be an important aspect in lengthening the value chain. As such, results of a Pearson‘s correlation exercise indicated that there is a significant relationship at 0.05% level between goals of the farmers and the village of origin. Some factors that showed significance (p=0.05) in influencing farmers‘ goals are membership of an irrigation project and household sources of income. An analysis of determinants of technical efficiency at farm level was performed using the stochastic frontier model for cabbage, maize and cattle enterprises. The results showed that rainfall adequacy, input costs, market channels and quantity sold are important determinants of cabbage production efficiency. On the other hand, maize production efficiency is positively determined by market price, area under production and rainfall adequacy. Market related variables are major drivers of the cattle value chain efficiency and these include cattle prices, market satisfaction, market channel and farm labour.
- Full Text:
- Date Issued: 2011
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