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Entrepreneurship And The Bottom Line: How Much Of Agriculture'S Profits Is Due To Changes In Price, How Much To Productivity?

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  • van Zyl, J.
  • van Schalkwyk, H. D.
  • Thirtle, C.

Abstract

Conventional financial analysis shows that profit comes from the difference between revenues and costs. A sector can generate profit growth through productivity growth or price over-recovery, or both. The course that is taken, however, has important implications for its longer-term competitive positioning. The South African agricultural sector showed a steady decline in its performance since 1973. The decline is attributed to the cost-price squeeze; increases in productivity did not compensate for decreases in price recovery. The decline reached its lowest in 1983 when the growth in productivity overtook the negative effect of the terms of trade.

Suggested Citation

  • van Zyl, J. & van Schalkwyk, H. D. & Thirtle, C., 1993. "Entrepreneurship And The Bottom Line: How Much Of Agriculture'S Profits Is Due To Changes In Price, How Much To Productivity?," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 32(4), December.
    • Handle: RePEc:ags:agreko:267603
    DOI: 10.22004/ag.econ.267603
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    References listed on IDEAS

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    1. Groenewald, J. A., 1985. "South African Agriculture And Inflation Phenomena," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 24(1), April.
    2. Unknown, 1980. "Measurement of U.S. Agricultural Productivity: A Review of Current Statistics and Proposals for Change," Technical Bulletins 157718, United States Department of Agriculture, Economic Research Service.
    3. V. Eldon Ball, 1985. "Output, Input, and Productivity Measurement in U.S. Agriculture 1948–79," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 475-486.
    4. C. Thirtle & P. Bottomley, 1992. "Total Factor Productivity In Uk Agriculture, 1967‐90," Journal of Agricultural Economics, Wiley Blackwell, vol. 43(3), pages 381-400, September.
    5. Thirtle, Colin, et al, 1993. "Agricultural Productivity in Zimbabwe, 1970-90," Economic Journal, Royal Economic Society, vol. 103(417), pages 474-480, March.
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    Cited by:

    1. Groenewald, J. A., 1996. "Transformation: The Challenge To Commercial Agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 35(4), December.
    2. Schimmelpfennig, David & Thirtle, Colin & van Zyl, Johan & Arnade, Carlos & Khatri, Yougesh, 2000. "Short and long-run returns to agricultural R&D in South Africa, or will the real rate of return please stand up?," Agricultural Economics, Blackwell, vol. 23(1), pages 1-15, June.
    3. Khatri, Y. & Schimmelpfennig, D. & Thirtle, C. & van Zyl, J., 1996. "Refining Returns To Research And Development In South African Commercial Agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 35(4), December.
    4. Peng, Y. & Turvey, C. & Kong, R., 2018. "An Analysis of China s Reforms on Mortgaging and Transacting Rural Land Use Rights and Entrepreneurial Activity," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277308, International Association of Agricultural Economists.

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