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Research Note: Peasant Farmer Supply Response To Maize Price Changes In The Middledrift District

Author

Listed:
  • Fraser, G. C. G.
  • Belete, A.
  • Jack, B. S.

Abstract

Arguments of irrational response of peasants to changes in product prices have been put forward, as have arguments for rational economic behaviour. The paper investigates whether the fanners ' behaviour complies with economic theory - if they respond in an economically rational manner - when they produce a crop both as a staple and cash crop. A Nerlovian partial adjustment Jagged model was used to estimate the maize supply response of fanners in the Middledrifi district of the Eastern Cape to changes in product prices. The results indicate that producers are responsive to price incentives and their response is elastic in both the short (1,23) and long run (1,41). The coefficient of adjustment which measures the speed of adjustment is 0,87. The prices of maize and the competing crop (sorghum) and the areas under maize in the preceding season are found to be important factors to the producers in their land allocation decision making process. The model therefore shows that fanners to cl1anges in product prices to product price changes to changes in product prices.

Suggested Citation

  • Fraser, G. C. G. & Belete, A. & Jack, B. S., 1996. "Research Note: Peasant Farmer Supply Response To Maize Price Changes In The Middledrift District," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 35(2), June.
    • Handle: RePEc:ags:agreko:267870
    DOI: 10.22004/ag.econ.267870
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    References listed on IDEAS

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    1. Jones, William O., 1960. "Economic Man in Africa," Food Research Institute Studies, Stanford University, Food Research Institute, vol. 1(2), pages 1-28.
    2. S. Daniel Neumark, 1958. "Economic Development And Economic Incentives," South African Journal of Economics, Economic Society of South Africa, vol. 26(1), pages 55-63, March.
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    Cited by:

    1. Pavitra Dhamija, 2020. "Economic Development and South Africa: 25 Years Analysis (1994 to 2019)," South African Journal of Economics, Economic Society of South Africa, vol. 88(3), pages 298-322, September.

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