Doctoral Degrees (Agricultural Economics)

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Browsing Doctoral Degrees (Agricultural Economics) by Subject "Agricultural industries -- South Africa"

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    An institutional economics approach to agribusiness in development : South African case studies
    (Stellenbosch : Stellenbosch University, 2006-04) Karaan, Abolus Salam Mohammad; Vink, N.; Stellenbosch University. Faculty of AgricSciences. Dept. of Agricultural Economics.
    ENGLISH ABSTRACT: This dissertation is a sojourn into institutional economics and its application to contemporary economic and development issues in South Africa. Economic development initiatives in agribusiness have much to gain from the theories and approaches advanced by the new institutional economics. Institutions are considered essential to the functioning of economies, markets and organizations, despite its neglect in neoclassical economics The study intends to prove that 'institutions matter', especially when social and economic transformation is necessary. The cases studied exhibit how institutions matter and shape economic outcomes. The theoretical basis established in this thesis was applied to economic development challenges such as contracting, organizational innovation, economic empowerment, land reform, building social capital, organizational design, supply chain management, entrepreneurial development, and modes of constructive engagement. The thesis is a compilation of academic papers applied to the various selected developmental challenges prevalent in South African agriculture. The study begins by delving into the more popular New Institutional Economics literature and specifically transaction cost economics. Somewhat unexpectedly, this leads to a greater appreciation for the insights generated by the Old Institutionalists in investigating the nature of institutions. Hence, the old institutional economics gains prominence in the latter part of this work, contrary to contemporary approaches followed in agricultural economics. The acknowledgement given to aspects like social capital and embeddedness is consistent with Williamson's proposed framework for the economics of institutions and this is used as the conceptual framework in this thesis. Whereas the new institutional economics was found to be useful in yielding knowledge through analysis and remediable outcomes, the old institutional economics retains its advantage in promoting understanding of problems especially in the face of complexity. This inclination has influenced the thesis in two ways. First, it diverted the latter part of the work towards the old institutional economics and the role of social capital in shaping institutions and economic behaviour. Second, it reverts to theories on the nature of the firm that complements the transaction cost approach. The transaction costs approach is thus only used where it is found most effective i.e. analysing vertical integration between firms and the relevant ex ante incentives and the ex post governance aspects Most studies are motivated by a general recognition of the role of institutions in framing economic outcomes and end up in the new institutional economics and subsequently transactions cost economics. This favouring of the transaction cost approach has found appeal due to its ability to predict structural and organisational outcomes such as the efficient boundaries of firms, internal organisation, contractual relations, incentives, etc. Methodologically, it enables analysts to employ the empirical and mathematical rigour that has become a feature, but too often the purpose, of economic research. Three papers are devoted to this approach and elicit organisational designs that best contend with identified transaction costs. The study confirms that several aspects matter in institutional analysis when applied in an economic developmental context such as South Africa. Historical context is acknowledged as a critical facet of institutional analyses in the sense that institutions are shaped by the forces of history. Social capital is established as an important component of institutional economic analysis and particularly relevant in situations where social capital has been eroded by political economic manipulations. Attending to social capital require (inter alia) insight into the nature of the societal context, implied path dependency, the extent of trust, enforcement mechanisms, and agency relations. Three of the papers attend to these aspects.
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    Investigating farm-level exit decisions and exit rates in commercial agriculture in South Africa, an agent-based approach
    (Stellenbosch : Stellenbosch University, 2022-04) Cloete, Johanna Cecilia; Hoffmann, Willem H.; Greyling, Jan C.; Mann, Stefan; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Agricultural Economics.
    ENGLISH SUMMARY : Land supply is an undeniable but neglected component in the agriculture transformation debate, with discussions on and research in the field of structural change in the sector considered overdue. The structural transformation of the agricultural sector rests on the interplay between exogenous and endogenous decisions in the agricultural sector that feed back into the sector’s operations, as a collective, and the role players within it as individuals. Ignoring the factors that motivate commercial producers to exit farming has resulted in a substantial gap in the literature regarding this important component of land reform. This study aimed to uncover the reasons that lead to decisions to exit or stay by making use of an analytically rigorous process to bridge the land supply literature gap. Considering the ex-post review of commercial agriculture over the last 100 years and its learnings, this study explores how an ex-ante modelling analysis approach to the planned and potential effects on producer numbers over the next ten years can enhance land-use planning. A core outcome of this study is the creation of a baseline projection for remaining in or exiting from primary agriculture, and how the exploration of the underlying factors in individuals’ strategic decision-making can inform policy and affect structural change. Three methods are applied in this study. The characteristics of producers planning to exit were identified through clustering. A consequent regression analysis determined the drivers of the ex-ante decision to exit or remain in agriculture, highlighting the interplay between business climate and capital invested. An agent-based model was constructed to create a virtual laboratory in which the output provides insight into how the structure of the sector – demographics, land use, production output, farm size and numbers – will change as the aggregate of the decisions made at the individual farm level drives the structural change at a sector level. Findings from the cluster analysis show that farm exit decisions are affected by financial problems, access to dependable labour, uncertainty regarding land reform policy and concerns about rural safety. In the subsequent regression analysis that was performed to order the key drivers, age (as a categorical variable), cost of investment and financial constraints feature most prominently in the decision to exit, whilst the presence of production loans and business confidence are significant in countering the decision to exit. From the cluster and regression analyses, two alternative scenarios were constructed in which some factors that appear to keep producers locked in were removed. The outcomes thereof were then compared to the baseline exit rate from the extrapolated and upscaled survey data. The baseline and two alternative scenarios in the agent-based model provided exit rates of 22.43%, 25.63% and 34.81%, respectively over ten-year periods, with the structural effects of the different rates discussed at a sub-sector level. Consideration is given to the barriers to exit, which subsequently limit the opportunities and scope for new entrants into commercial agriculture. This output is a critical element in the continued interaction between demand for and supply of land in the land reform debate.