H. D. van Schalkwyk

Agricultural development policies of Ethiopia since 1957

Agriculture is the backbone of the Ethiopian economy. It constitutes over 50 per cent of the Gross Domestic Product (GDP), accounts for over 85 per cent of the labour force and earns over 90 per cent of the foreign exchange. Studies on agricultural development policies of Ethiopia are very few. A frequently quoted article, which is one of the basic reference materials in this study, is the article by Dejene.

The informal food marketing system in urban environments: Case studies of Kagiso and Orange Farm

The rapid development of urban townships and the failure of the formal sector to meet the township demand have led to the emergence of informally organised marketing systems, which have certain advantages over their formal counterparts. This note presents the findings of a study on the informal marketing of vegetables and fruit in two townships of Gauteng Province, namely Kagiso and Orange Farm. The data collection procedures are discussed first and then the results are presented with regard to the kinds of vegetables and fruit sold, their pricing, supply and transport, and the constraints faced by informal traders.

Contribution Of Agriculture In The Ethiopian Economy: A Time-Varying Parameter Approach

Abstract The objective of this study was to perform causality tests between agriculture and the rest of the economy using a Granger (1969) causality test procedure. Years of bi-directional causality were found between agriculture and manufacturing and services sectors before 1975. During this period, markets were major actors of economic activity and various positive measures, which encouraged the participation of the private sector in economic activity, were implemented. The contribution of agriculture to growth in the manufacturing and services sectors was not significant between 1978 and 1998. This can be attributed to two factors. Firstly, various policies that discouraged private sector participation in economic activity were implemented during the socialist era (between 1978 and 1992). Secondly, although markets were major actors of economic activity between 1992 and 1998, the economy was in a process of transition. Thus little can be expected in such a short time. The contribution of agriculture to growth in the manufacturing sector has been improving since 1989. It is concluded that the freer agriculture is from policy constraints, the higher its contribution becomes to growth in the manufacturing and services sectors.

Tariff and Tariff Rate Quota Liberalization in the South African Livestock Industry: Approaches to Welfare Measurement

Abstract The liberalization of the agricultural sector and phasing out of past protection mechanisms in South Africa saw the introduction of a process of tariff reform. Furthermore, a system of tariff rate quotas was introduced in compliance with WTO regulations. This study uses a partial equilibrium comparative static model to measure the welfare effects of further liberalization in the livestock industry of South Africa, particularly in meat products using four policy scenarios. The traditional method of welfare analyses using the CS and PS was applied, while the EV was used to integrate a well-behaved objective function. Although the CS and PS could have over-estimated welfare due to the fact that the demand system used in this study is non-linear, they still gave useful information sufficient to compare the impact of trade liberalization on consumers and producers of livestock products. Furthermore, the EV explains the income change necessary to attain the welfare level resulting from trade liberalization given the current prices. When expressed as a percentage of the real gross national income and real disposable income, the values are quite marginal. The results from both methods of welfare measurement suggest that it is worth considering the effects on producers if further trade liberalization is envisaged in the South African livestock industry.

THE TRUE VALUE OF IRRIGATION WATER IN THE OLIFANTS RIVER BASIN: WESTERN CAPE / DIE WERKLIKE WAARDE VAN BESPROEIINGSWATER IN DIE OLIFANTSRIVIERKOM: WES-KAAP

The true value of irrigation water in the Olifants river irrigation system is determined using a static deterministic linear programming model. This paper illustrates that a water market will generate price signals which will reflect the true scarcity of water. If the water market is left to operate pareto optimality will be reached and the general welfare of the nation will increase. What is more, water which is a true scarce resource in South Africa will be used more effectively.

THE IMPACT OF TRANSACTION COSTS ON WATER TRADE IN A WATER MARKET ALLOCATION REGIME

The costs involved in the transfer of property, or transaction costs, and the costs of transporting water, can significantly affect the capacity of any market to operate efficiently. If water marketing is to achieve its full potential, markets must be designed to minimise these costs. A water allocation model was used to determine the effect of transaction costs on trade. The model includes whole farm non-linear programming models embedded in a spatial equilibrium framework to simulate a water demand function for agriculture in the Berg River as well as demand functions for urban water users in the larger Cape Town region. Positive mathematical programming (PMP) is included to calibrate the regional model to the exact observed base year resource use. The results clearly demonstrate the negative impact of high transaction costs on water trade.

The influence of demand and supply shift factors on the South African red meat industry

In this paper a spatial partial equilibrium (SPE) model is used to determine the impact of changes in population from a “with” and “without” HIV/AIDS point of view, as well as changes in per capita income. The possible impact of abolishing the Lomé Convention is also investigated. In a “Without HIV/AIDS” population growth scenario demand for beef, sheep meat and pork will increase by 12.01 per cent, 12.22 per cent, and 11.92 per cent, respectively. In a “With HIV/AIDS” population growth scenario demand will only increase by 7.19 per cent, 7.31 per cent and 7.28 per cent for beef, sheep meat and pork, respectively. Most of the increase in demand is met by overseas imports. When per capita income increases the increase in pork consumption is lower than the increases in demand for beef and sheep meat. This can be attributed mainly to the fact that the aggregated income elasticity is considerably lower for pork than it is for the other two red meats. The weifare analysis shows, firstly that HIV/AIDS will have a considerable impact on the general welfare of the country, and secondly the important role government has to play in setting the table for improved economic conditions that will result in increases in the per capita income of people. Finally, the study shows that the abolishment of the Lomé Convention will not have any severe repercussions for the beef sub-sector in South Africa.

NATURE CONSERVATION VERSUS HUMAN NEEDS: THE CASE OF THE MANYELETI GAME RESERVE

Tourism in any country whether developed or developing involves a wide range of economic activities. Its development in most countries is undoubtedly to earn foreign exchange though tourism is particularly good at creating job opportunities. The future of African wildlife continues to lie in the hands of the local communities. It is important for African governments to stress the importance of wildlife through education and increased direct participation. The survival of public wildlife facilities will also be greatly influenced by their ability to generate profits which can in turn be slimed with the local communities adjacent to these wildlife facilities, so as to demonstrate the relevance of wildlife to the local community and case the burden on the tax payer.

THE IMPACT OF A REDUCTION IN TARIFFS ON THE SOUTH AFRICAN RED MEAT INDUSTRY: A SPATIAL PARTIAL EQUILIBRIUM APPROACH

In this article a spatial partial equilibrium (SPE) model is used to quantify the effects of a reduction in tariffs on the red meat industry. This model is used to determine spatial equilibrium prices, consumption, production and geographical flows from a multi-commodity point of view, provided that linear functions are acceptable approximations of regional demand and supply functions. The results show that prices of livestock and meat will drop substantially, whilst increased demand will be met largely by imports from overseas. In total welfare gains by consumers due to a total reduction of tariffs will amount to R2 829 million. This translates into a 0.49 per cent increase in the real gross national income. In respect of real disposable income, a total reduction of tariffs would add 0.75 per cent. The total loss in producer welfare would amount to R868 million. The loss in producer welfare amounts to 2.71 per cent of real gross farm income and 10.72 percent of real net farm income, which is substantial.