Agricultural land tax and farm-level land-use changes and output supply response
AbstractPurpose – The purpose of this paper is to contribute to land redistribution policy which is presently not only one of the most defining political and development issues, but also perhaps the most difficult in South Africa. Design/methodology/approach – The paper develops a programming model for farm-level land-use changes and output supply response to estimate the effects of agricultural land tax in South Africa. The modeling approach is based on baseline statistics from a descriptive analysis. Findings – The results indicate that changes in land use and output supply response are marginal. The highest effects are observed on irrigated areas of sunflower seed (0.23 percent) and wheat (0.17 percent). This results to declines in supply of 0.07 percent for sunflower seeds; 0.06 percent for wheat; 0.04 percent for soya beans; 0.03 percent for each of white maize and sorghum; and 0.02 percent for yellow maize production. Therefore, levying a land tax may discourage investment on irrigation facilities and consequently irrigated farming. Originality/value – The programming modeling approach captures the significant differences in the farm characteristics and the overarching profit-maximizing behaviour of farmers, which an econometric approach may not easily capture
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Bibliographic InfoArticle provided by Emerald Group Publishing in its journal China Agricultural Economic Review.
Volume (Year): 2 (2010)
Issue (Month): 1 (January)
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Web page: http://www.emeraldinsight.com
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
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