R. Townsend

Determining the contribution of agricultural production to household nutritional status in KwaZulu-Natal South Africa

Strategies for alleviating nutritional deficiencies in households have been a topic of continued debate in academic and political discussion. A common argument, in the case of rural households, is that an increase in food production could improve household nutrition, and this reasoning has been used to motivate programmes aimed at improving agricultural productivity in less-developed and poverty-stricken areas. In the former homeland areas of South Africa households are highly susceptible to malnutrition and programmes for improving agricultural productivity have been implemented. The regions poverty and low agricultural production justified the focus on agriculture. Farmers in these areas have been excluded (almost exclusively) from the mainstream agricultural sector, and agricultural development programmes have had limited success in bringing about the required increase in agricultural productivity. This has led to a change in the nature of development programmes by increasingly focusing on improved access to inputs, markets and other agricultural services for empowering farmers to improve their agricultural productivity. Several studies were commissioned to evaluate the success of these programmes in different regions (Kirsten et al, 1993; Lyne & Ortmann, 1992). Mixed results were reported but, in general, improved availability of inputs (seeds and fertilisers), access to credit, and extension and training services led to a sharp rise in yields and productivity in many regions (Kirsten, 1994; Chikanda & Kirsten, 1996; Van Rooyen & Nene, 1996; Lyne & Ortmann, 1992). The link between this increased productivity and reduced malnutrition was, however, never firmly established.

Testing the Induced Innovation Hypothesis: An Error Correction Model of South African Agriculture

This paper applies cointegration techniques to a model of induced innovation based on the two-stage constant elasticity of substitution (CES) production function. This approach results in direct tests of the inducement hypothesis, which are applied to data for South African commercial agriculture for the period 1947-1991. South African data is used because the policy changes have been substantial enough that the factor and price ratios have turning-points, rather than being monotonic. The time series properties of the variables are checked, cointegration is established, and an error correction model (ECM) constructed, allowing factor substitution to be separated from technological change. Finally, the ECM formulation is subjected to causality tests, which show that both the factor price ratios and R&D and extension expenditures are Granger-prior to the factor-saving biases of technological change. Thus, each stage of the analysis corroborates the inducement hypothesis. However, straightforward price-inducement is only part of the explanation of changes in factor ratios. Policy-induced innovation, in response to tax concessions and subsidised credit, is also present.

THE RATE OF RETURN ON EXPENDITURES OF THE SOUTH AFRICAN AGRICULTURAL RESEARCH COUNCIL (ARC)

All the rate of return estimates, regardless of methodology or the level of aggregation, are entirely consistent and logical. The returns show that the ARC has been extremely successful economically and has followed a sound strategy of exploiting spillovers from foreign R&D systems. However, there must be a strong socio-economic component to the ARCs efforts if it is to reach the disadvantaged.

The rise and fall of public sector plant breeding in the United Kingdom: a causal chain model of basic and applied research and diffusion

This paper examines the barley and wheat breeding programmes of the Plant Breeding Institute (PBI), which was the most successful public plant breeding institute in the UK, until privatization in 1987. The PBIs shares in barley and wheat seed sales are explained, showing that the success with barley was largely a matter of serendipity, whereas the wheat programme followed a more normal pattern. For wheat, the causal chain, or recursive, model decomposes the well-documented link between research expenditures and increases in agricultural productivity into three stages. These are the effects of R&D expenditures on basic research output, measured by publications, the effect of publications and applied R&D expenditures on trial plot yields, and the diffusion of the trial plot technologies, which raises yields on farms. Applying the model to the PBIs wheat varieties allows estimation of the lag structures. In contrast to the results for aggregate agricultural research, for a single plant breeding programme alone there is a considerable lead time before there is any response, followed by a lag distribution only a few years long. The returns to the R&D investments are calculated from the causal chain model, from single equation estimates and by evaluating the yield advantage of the PBI varieties. All three approaches give consistent results, which show that the returns to barley and wheat alone were sufficient to support the entire PBI budget and still give rates of return to applied research of between 14 and 25%. The return to the basic science expenditures of the John Innes Institute has a lower bound of 17%, but must have been even higher than for the PBI if the other Institutes were taken into account. The paper concludes by commenting on the effects of the privatization of the PBI.

Agricultural market liberalization : a case study of the Western Cape Province in South Africa

This paper attempts to estimate the production, price, welfare and employment effects of some of the changes in the agricultural marketing system on the Western Cape Province of South Africa, utilizing a regional linear programming model of the agricultural sector of the region. The model includes supply, demand and production risk, and simulates the present agricultural production structure well. Market and trade liberalization have major impacts on the structure of Western Cape agriculture, particularly the grain and livestock sub-sectors, with only marginal and mostly insignificant effects on horticultural products.

The Effects of Macroeconomic Policy on South African Agriculture: Implications for Exports, Prices and Farm Incomes

Cointegration techniques were used to identify valid long-run relationships between macroeconomic variables and agriculture. Then, identifying restrictions were imposed on a VAR system and three long-run equilibrium relationships were found, with exports, the real price of outputs and net farm income as the dependent variables. Some of the elasticities had perverse signs that could be explained by the activities of the Marketing Boards and other distortionary policies. Tests shows that the macroeconomic variables were causally prior to the agricultural variables and that the system was becoming more responsive later in the period, as some of the distortion was removed.

ESTIMATION OF THE RATE OF RETURN TO WINE GRAPE RESEARCH AND TECHNOLOGY DEVELOPMENT EXPENDITURES IN SOUTH AFRICA / BEPALING VAN DIE OPBRENGSKOERS VAN NAVORSING EN TEGNOLOGIE-ONTWIKKELING IN DIE WYNDRUIFINDUSTRIE

This article evaluates the impact of research and technology development in the wine grape industry in order to determine the rate of return (ROR) to these investments, and to make specific recommendations on funding. The analysis illustrates the applied and adaptive nature of the research conducted in the industry, with RORs of roughly 40 percent for R&D and extension. This is high, providing excellent motivation for increased investment in R&D.

ASSESSING THE BENEFITS OF RESEARCH EXPENDITURES ON MAIZE PRODUCTION IN SOUTH AFRICA / RAMING VAN DIE VOORDELE VAN NAVORSINGSBESTEDINGS OP MIELIEPRODUKSIE IN SUID-AFRIKA

This paper focuses on assessing the benefits of research expenditures on maize production in South Africa. Both the production and supply function approaches are used to calculate elasticities of research expenditure on output and yield. Cointegration is used to establish long-run relationships between variables in these models. The lag structure of R&D expenditures on output is examined making use of the unrestricted, polynomial, beta and gamma distributions. The coefficients of these lag distributions were then used to calculate a rate of return to maize research expenditure, which was estimated as being between 28% and 39% per annum. These rates of return are high, mitigating in favour of more research expenditure rather than less.

ECONOMIC EFFECTS OF MARKET AND TRADE LIBERALIZATION ON AGRICULTURE IN THE WESTERN CAPE PROVINCE OF SOUTH AFRICA / EKONOMIESE EFFEKTE VAN MARK- EN HANDELSLIBERALISERING OP DIE LANDBOU IN DIE WES-KAAP PROVINSIE

This paper attempts to estimate the effects of some of the changes in the marketing system on the Western Cape Province of South Africa, utilizing a regional linear programming model of the agricultural sector of the region. The model includes supply, demand and production risk, and simulates the present agricultural production structure well. Market and trade liberalisation have major impacts on the structure of Western Cape agriculture, particularly the grain and livestock sub-sectors, with only marginal and mostly insignificant effects on horticultural products.

MACROECONOMIC IMPACTS ON COMMERCIAL FARM INCOMES IN SOUTH AFRICA

This paper examines the impacts of interest rates, exchange rates and money supply on real net fm incomes in South Africa from 1947–1994. A vector autoregression framework is used for the analysis which places minimal restrictions on the model so the true structure of the relationship can be observed. Long run relationships were established using cointegration and time varying parameters estimated to analyze the macroeconomic impacts at various stages of financial sector reform. The results indicate that the interest rate had the most significant effect on real net farm income which was exacerbated during the reform process. Exchange rates have played a role as a cost of production through imported inputs with the marketing boards being fairly successful at insulating farmers from external demand.