An Economic Analysis of Farm Profitability Related to New Deciduous Fruit Cultivar Choice
Date
2024-12
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : Stellenbosch University
Abstract
South African deciduous fruit production makes a significant economic contribution both to the Western Cape Province and the national agricultural sector. The profitability of this industry affects the livelihoods of many South Africans. Typical to commercial agriculture, deciduous fruit production is exposed to various forms of risk of both natural and social origin. Cultivar diversification is a prominent form of risk management employed by deciduous fruit producers. Varying phenological cycles, i.e. time of flowering and harvest, of different cultivars mitigate risk in both the production and market environment. Although market fluctuations and adverse natural conditions heavily impact the performance of a single cultivar, a diversified cultivar composition ensures the resilience of the farm system. Choosing a cultivar composition suited to managing the specific risk profile of a farming operation, is vital to profitability.
Deciduous fruits are perennial crops requiring a substantial initial capital investment. This demands consideration of all aspects of the environments influencing cultivar success over the long-term. Apples (Malus domestica Borkh.) and Japanese plums (Prunus salicina Lindl.) are the crops used in this study. A coherent decision-making process that acknowledges the complexity of all that influences cultivar profitability of apples and plums had not yet been developed in South Africa. This study set out to determine which profitability drivers for apple and plum cultivars are necessary to consider during a planting decision in specific South African production environments.
Accommodation of complexity and uncertainty was necessary to satisfy the research problem. A systems approach in the form of a whole-farm budget model met this requirement. Four different models were constructed, namely for apples in the Koue Bokkeveld, apples in Elgin, Japanese plums near the town of Robertson, and Japanese plums in the Boland near the town of Wellington, respectively. Model compilation had to consider the unique challenges of the South African deciduous fruit industry. South Africa’s climate and geographical location from main markets creates distinct production and logistical trials. Therefore, a participatory modelling method was used, wherein 27 industry stakeholders participated in interviews regarding the problem of cultivar choice. Discussions were guided by established literature.
After model construction, model validation took place in the form of a multidisciplinary focus group discussion held for apples and plums, respectively. A group of industry stakeholders with diverse backgrounds were asked to evaluate and confirm the logic supporting the incorporation of each cultivar decision-making consideration in the models. Participants of the two discussion groups had to reach consensus regarding the validity of the logical basis of the model. Consensus was achieved in both cases.
The study concluded that a cultivar’s adaptability to an area’s climate is essential for a cultivar to be profitable. Furthermore, a wide range of marketing opportunities lowers the risk associated with profit generation. Participants in this study in both the participatory model development phase and the group discussions strongly agreed that any cultivar characteristic impacting income generation, was far more important in the decision-making process than characteristics affecting production cost.
Description
Thesis (MAgric) --Stellenbosch University, 2024.