F. Bostyn

Measuring perceived black economic empowerment in the South African wine industry

Abstract The aim of this study is to develop a scale to measure perceived black economic empowerment (BEE) as reported by beneficiaries themselves. Two scale development procedures were carried out on randomly selected samples of 213 and 322 previously disadvantaged individual respondents within 14 and 11 wine business that cover the larger part of the wine industry chain. The results led to a ‘feeling’ self-report scale (5-dimensions) and an ‘evolution’ self-report scale (6-dimensions). The emerged dimensions are: Business ownership and control (BOC), Access to finance (ATF), Employment and Human Resources Management (EMP) [internal and external], Social capital/enabling environment (SOC) and Lobbying power and collective action (LOB). First measurement results indicate that respondents feel less empowered with respect to BOC and ATF as compared to EMP, SOC and LOB. There appears to be no gender or age differences, but there are geographical differences. The latter is mostly per farm, that is, a lot of variation in BEE is observed at the firm level. The scale can be used at the firm and industry level as a diagnostic tool to monitor BEE progress as a complementary and not a substitutive framework to the wine industry scorecard as an objective measure of BEE. Future research should focus on the gap between the two definitions and assessment tools in order to comprehensively capture BEE in its entirety. The scale can also be adapted to fit the context, for example, its use in the agricultural sector at large.

THE STRATEGIC CHALLENGES CONFRONTING AGRICULTURAL CO-OPERATIVES IN SOUTH-AFRICA: THE GROWING NEED FOR TRANSFORMATION INTO AGRICULTURAL COMPANIES

South-African agricultural policy has taken major steps towards liberalisation in the past seven years. This has had two immediate effects on the sector. First, agricultural co-operatives have lost their institutional role. Second, most of the sector is now confronted with fundamental changes in the competitive environment in which they operate. As a consequence, agricultural cooperatives should consider whether or not there is any economic argument for their survival within this emerging competitive environment.

EFFICIENCY ANALYSIS OF SMALL-SCALE WOOL PRODUCTION IN THE FORMER TRANSKEL SOUTH AFRICA

A non-parametric data envelopment analysis (DEA)is used to measure the relative efficiency of wool production on farms in the former Transkei. The agricultural activities on the farms are merely non-commercial. Wool is considered as a by-product of keeping sheep, which are slaughtered on special family occasions or sold live. A sample of farmers in three villages of the former Transkei (Mhlahlane, Xume and Luzie) was interviewed. In Luziea shearing shed was built to organise the marketing of the wool, leading to a higher revenue from wool. The farmers however are not able to convert this into a positive gross margin. A small number of farms succeeds in maximising the production of wool given the relative large investment. The negative result of wool farming on the other farms is partly compensated by high benefits from the sales of live sheep. Also in Xume a shearing shed was built, and extension on production practices is provided. But no marketing of wool through the shearing shed was done at the time of the survey. The existence of a shearing shed should be essential for a higher retail price for wool and extension does have a positive influence on the benefits of the farms. However, the production practices are not adapted to the production of wool only, so that the use of inputs is too high for the generated output.