Department of Agricultural Economics

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https://scholar.sun.ac.za/handle/10019.1/25

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Browsing Department of Agricultural Economics by browse.metadata.advisor "De Lange, Willem"

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    Assesing measures for agroecological competitive advantage
    (Stellenbosch : Stellenbosch University, 2023-12) Naicker, Keenan Nathaniel; De Lange, Willem; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
    ENGLISH SUMMARY: The evaluation of agroecological farming practices is a subject of current interest in the field of sustainable agriculture. While agroecology has gained attention as a potential solution for sustainable food systems, assessing its economic performance relies on measuring its competitive advantage. Traditional metrics, including Total Factor Productivity (TFP), Private Cost Ratio (PCR), Profit Margin (PM), and Return on Assets (ROA), are commonly used to evaluate competitive advantage in various sectors, but their applicability to agroecological farming remains unclear. This master's thesis explores the applicability of traditional competitive advantage measures when applied to agroecology principles within the agricultural sector. The study applies the Analytical Hierarchy Process (AHP) to two Delphi panels to assess agroecological principles' priority and competitive advantage measures' alignment. Results indicate soil health as the most crucial agroecological principle, closely followed by fairness and biodiversity. Total Factor Productivity (TFP) emerges as the preferred measure of agroecological competitive advantage, followed by Profit Margin (PM) and Production Cost Ratio (PCR). While TFP is favoured, it presents limitations such as data requirements and the inability to capture certain externalities. The study underscores the need for new measures aligned with agroecology's holistic nature and acknowledges limitations, including the inclusive and context-specific nature of agroecology. This master's thesis contributes to the discourse on agroecological competitive advantage, emphasizing the importance of reevaluating traditional measures within the context of agroecology. It underscores the potential for sustainable agricultural practices to reshape competitive strategies, ultimately fostering a more resilient and equitable food system.
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    Financial implications of electricity tariff increases, loadshedding, and photovoltaics on irrigated potato-maize and soybean crop rotation farming
    (Stellenbosch : Stellenbosch University, 2024-03) Mouton, Victor David; De Lange, Willem; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
    ENGLISH SUMMARY: The state of the South African electricity provider Eskom has caused an electricity crisis in the country. Hence, loadshedding is implemented, decreasing the surety of the electricity supply in the country. For Eskom to meet the demand for electricity in South Africa, drastic changes in governance as well as repairs need to take place meaning the country will experience increasing electricity tariffs. This thesis describes the financial implications of loadshedding and increased electricity tariffs on irrigated potato-maize and soybean crop rotations in South Africa. It also tests the financial viability of migrations towards photovoltaic technology to address these constraints. The theoretical foundation of the study is based on the theory of constraints as well as components of the farm problem theory. The study uses a base whole farm budget model to develop and create an inflated model to test the set-out scenarios. Potatoes are produced in 16 different geographical regions in South Africa. Given that contextual differences such as climate affect design solutions, it is not desirable to design a single generic solution for all the potato production areas of South Africa. A farm in the North West province of South Africa producing mainly processing (Innovator®) potatoes planted under contract with crop rotation of maize and soybeans has been chosen as a case study. The study tests a loadshedding and tariff increase scenario in which the assumption is made that loadshedding will be present for the next ten years, and a tariff increase forecast is also developed. The study identified that stage 4 loadshedding is the threshold at which farmers can manage their irrigation systems depending on the design of their irrigation infrastructure. The study continues to test scenarios on yield decreases due to loadshedding stages 5 and 6 and what financial implications this holds on production and profitability. The study also tests two photovoltaic design scenarios, one grid-tied and one off-grid system. The results of this study based on the set assumptions indicate that the implications of increased electricity tariffs will significantly affect producers' profitability in the specified area and that insolvency would be a possibility. The tested scenarios indicated that if either sustained stage 5 or 6 loadshedding is implemented, this would mean that these farmers will either divert into different crops or practices or will be insolvent before Eskom has resolved the electricity problem. The study indicated that, in the effect of using photovoltaic technology to possibly address these constraints, a grid-tied PV system would be the most viable and would, in effect, be the solution for the situation these farmers are in. Loadshedding in effect will not be fully addressed. However, electricity input costs will be lower and make irrigation schedules more manageable, allowing these farmers to keep producing and managing possible losses.