IDEAS home Printed from https://ideas.repec.org/p/ags/cmpart/265579.html
   My bibliography  Save this paper

An economic evaluation of the National Red Meat Development Programme in the Eastern Cape Province, South Aftrica

Author

Listed:
  • Fakudze, Bhekiwe Delisile

Abstract

There are substantial and unexploited market opportunities for communal farmers in the Eastern Cape, yet they own 3.3 million head of cattle. ComMark embarked on the Eastern Cape Red Meat Project in 2005 with the aim of increasing participation in formal markets by communal farmers. With the closure of ComMark in 2008, the National Agricultural Marketing Council (NAMC) was approached to take over the project since it had made a significant contribution to communal farmers through improved participation in the formal markets. NAMC embraced the opportunity by accepting the proposal, and that was the birth of the National Red Meat Development Proframme (NRMDP). NRMDP was established to improve income from animal husbandry and to create opportunities for communal farmers to commercialise, as well as participate in the formal markets. Theis research therefore 1) assesses the factors that contribute to improved market participation of communal farmers as a result of the NRMDP; 2) estimate household income of communal red meat farmers since the implementation of the NRMDP and 3) determine if the programme has a positive economic and social return. Using primary data obtained from 150 farmers, both purposively and randomly sampled in the Eastern Cape of South Africa, the analysis of the performance of the programe showed an increase in market participation over the years since the inception of the NRMDP. The results of the study suggested that incomes received by farmers have increased, which means that the farmers are beginning to understand the requirements of the market, and they have increased their asset bases. From the analysis, it can be deduced that farmers with larger livestock herds are more likely to sell their livestock to formal markets that those with smaller herds. The off-take rate has increased after the implementation of the NRMDP from 5% to an approximated average of 12.5%. However, this rate is still far below the 25% for commercial farmers. In determining the factors that influence household incomes of communal farmers, participating in the NRMDP was found to be statistically significant at 5% level. It was observed that most of the farmers that participate in the NRMDP are aware of the requirements of the market, and that they produce high-value products and comply by delivering cattle of good quality. For that reason, the programme is essential in improving household incomes for communal farmers, and in consequence, improving rural livelihoods. A cost-benefit analysis was also performed to test the viability and worth of the programme. The calculated NPV was found to be positive, suggesting that the public funds invested in the programme have a good social and economic return. Nevertheless, there are some hurdles that influence participation of communal farmers in high-value markets. To improve the impact of the programme, it was recommended that such programmes should be aligned with other initiatives implemented by government to maximise formal market participation and prevent duplication of similar programmes. It is envisaged that this alignment will enable farmers to be competitive in formal markets and enjoy the benefits of participating in high-value markets.

Suggested Citation

  • Fakudze, Bhekiwe Delisile, 2015. "An economic evaluation of the National Red Meat Development Programme in the Eastern Cape Province, South Aftrica," Research Theses 265579, Collaborative Masters Program in Agricultural and Applied Economics.
    • Handle: RePEc:ags:cmpart:265579
    DOI: 10.22004/ag.econ.265579
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/265579/files/Fakudze_Economic_2016.pdf
    Download Restriction: no
    File URL: https://ageconsearch.umn.edu/record/265579/files/Fakudze_Economic_2016.pdf?subformat=pdfa
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.265579?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Magingxa, Litha Light & Kamara, Abdul B., 2003. "Institutional Perspectives Of Enhancing Smallholder Market Access In South Africa," 2003 Annual Conference, October 2-3, 2003, Pretoria, South Africa 19077, Agricultural Economics Association of South Africa (AEASA).
    2. Homann, Sabine & Rooyen, Andre van, 2008. "Unexploited Agricultural Growth: The Case of Crop–Livestock Production Systems in Zimbabwe," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52186, African Association of Agricultural Economists (AAAE).
    3. Baiphethi, Mompati N. & Jacobs, Peter T., 2009. "The contribution of subsistence farming to food security in South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(4), pages 1-24, December.
    4. Barrett, Christopher B. & Bellemare, Marc F. & Hou, Janet Y., 2010. "Reconsidering Conventional Explanations of the Inverse Productivity-Size Relationship," World Development, Elsevier, vol. 38(1), pages 88-97, January.
    5. Jacobs, Elne & Punt, Cecilia & Buthelezi, D.J., 2009. "A Profile of the KwaZulu-Natal Province: Demographics, Poverty, Income, Inequality and Unemployment from 2000 till 2007," Background Paper Series 58054, PROVIDE Project.
    6. Irini Maltsoglou & Aysen Tanyeri-Abur, 2005. "Transaction Costs, Institutions and Smallholder Market Integration: Potato Producers in Peru," Working Papers 05-04, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    7. Jacobs, Elne & Punt, Cecilia & Ramathoka, Mabu & Masekoameng, Abel, 2009. "A Profile of the Limpopo Province: Demographics, Poverty, Income, Inequality and Unemployment from 2000 till 2007," Background Paper Series 58059, PROVIDE Project.
    8. Robin Boadway, 2006. "Principles of Cost-Benefit Analysis," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 2(1), pages 1-44, January.
    9. Jacobs, Elne & Punt, Cecilia & Uchezuba, David Ifeanyi & Bashi, Molao, 2009. "A Profile of the Northern Cape Province: Demographics, Poverty, Income, Inequality and Unemployment from 2000 till 2007," Background Paper Series 58052, PROVIDE Project.
    10. Jacobs, Elne & Punt, Cecilia & Bothloko, Constance, 2009. "A Profile of the North West Province: Demographics, Poverty, Income, Inequality and Unemployment from 2000 till 2007," Background Paper Series 58055, PROVIDE Project.
    11. Reardon, Thomas & Barrett, Christopher B., 2000. "Agroindustrialization, globalization, and international development: An overview of issues, patterns, and determinants," Agricultural Economics, Blackwell, vol. 23(3), pages 195-205, September.
    12. Jacobs, Elne & Punt, Cecilia & Scheepers, Kabelo, 2009. "A Profile of the Mpumalanga Province: Demographics, Poverty, Income, Inequality and Unemployment from 2000 till 2007," Background Paper Series 58058, PROVIDE Project.
    13. Ruhangawebare, Godfrey Kalemera, 2010. "Factors Affecting The Level Of Commercialization Among Cattle Keepers In The Pastoral Areas Of Uganda," Research Theses 117797, Collaborative Masters Program in Agricultural and Applied Economics.
    14. Kelly, Valerie & Adesina, Akinwumi A. & Gordon, Ann, 2003. "Expanding access to agricultural inputs in Africa: a review of recent market development experience," Food Policy, Elsevier, vol. 28(4), pages 379-404, August.
    15. Jacobs, Elne & Punt, Cecilia, 2009. "A Profile of the Western Cape Province: Demographics, Poverty, Income, Inequality, and Unemployment from 2000 till 2007," Background Paper Series 58050, PROVIDE Project.
    16. Nkosi, S. A. & Kirsten, J. F., 1993. "The Marketing Of Livestock In South Africa'S Developing Areas: A Case Study Of The Role Of Speculators, Auctioneers, Butchers And Private Buyers In Lebowa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 32(4), December.
    17. Upton, Martin, 2004. "The Role of Livestock in Economic Development and Poverty Reduction," PPLPI Working Papers 23783, Food and Agriculture Organization of the United Nations, Pro-Poor Livestock Policy Initiative.
    18. Maltsoglou, Irini & Tanyeri-Abur, Aysen, 2005. "Transaction costs, institutions and smallholder market integration: potato producers in Peru," ESA Working Papers 289074, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    19. Lorenzo Cappellari & Stephen P. Jenkins, 2003. "Multivariate probit regression using simulated maximum likelihood," Stata Journal, StataCorp LP, vol. 3(3), pages 278-294, September.
    20. Jacobs, Elne & Punt, Cecilia, 2009. "A Profile of the Gauteng Province: Demographics, Poverty, Income, Inequality and Unemployment from 2000 till 2007," Background Paper Series 58056, PROVIDE Project.
    21. Birthal, Pratap Singh & Jha, Awadhesh K. & Singh, Harvinder, 2007. "Linking Farmers to Markets for High-Value Agricultural Commodities," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 20(Conferenc).
    22. Jacobs, Elne & Punt, Cecilia & Phaladi, Sepitle Frans, 2009. "A Profile of the Free State Province: Demographics, Poverty, Income, Inequality and Unemployment from 2000 till 2007," Background Paper Series 58053, PROVIDE Project.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thondhlana, Gladman & Muchapondwa, Edwin, 2014. "Dependence on environmental resources and implications for household welfare: Evidence from the Kalahari drylands, South Africa," Ecological Economics, Elsevier, vol. 108(C), pages 59-67.
    2. Wanjala, Bernadette, 2016. "Can the big push approach end rural poverty in Africa? : Insights from Sauri millennium village in Kenya," Other publications TiSEM 5a686b22-6749-4e9e-8bf4-4, Tilburg University, School of Economics and Management.
    3. Husmann, Christine, 2015. "Transaction Costs on the Ethiopian Formal Seed Market and Innovations for Encouraging Private Sector Investments," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 54(1), pages 1-18, February.
    4. Justin Kyalo & Lawrence Njoroge, 2015. "Market Integration as a Determinant of Household Decision-Making in the Production of Roselle Plant in Mwea Sub-County," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(10), pages 249-259, October.
    5. Meilin Ma & Richard J. Sexton, 2021. "Modern agricultural value chains and the future of smallholder farming systems," Agricultural Economics, International Association of Agricultural Economists, vol. 52(4), pages 591-606, July.
    6. Asfaw, Solomon & Cattaneo, Andrea & Pallante, Giacomo & Palma, Alessandro, 2017. "Improving the efficiency targeting of Malawi's farm input subsidy programme: Big pain, small gain?," Food Policy, Elsevier, vol. 73(C), pages 104-118.
    7. Nyein Nyein Kyaw & Soojung Ahn & Sang Hyeon Lee, 2018. "Analysis of the Factors Influencing Market Participation among Smallholder Rice Farmers in Magway Region, Central Dry Zone of Myanmar," Sustainability, MDPI, vol. 10(12), pages 1-15, November.
    8. Ke Liu & Zhenhong Qi & Li Tan & Caiyan Yang & Canwei Hu, 2023. "Mixed Use of Chemical Pesticides and Biopesticides among Rice–Crayfish Integrated System Farmers in China: A Multivariate Probit Approach," Agriculture, MDPI, vol. 13(8), pages 1-17, August.
    9. Marina Rybalka, 2015. "The innovative input mix. Assessing the importance of R&D and ICT investments for firm performance in manufacturing and services," Discussion Papers 801, Statistics Norway, Research Department.
    10. Abdoul G. Sam & Babatunde O. Abidoye & Sihle Mashaba, 2021. "Climate change and household welfare in sub-Saharan Africa: empirical evidence from Swaziland," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(2), pages 439-455, April.
    11. Fernandez-Cornejo, Jorge & Wechsler, Seth James, 2012. "Fifteen Years Later: Examining the Adoption of Bt Corn Varieties by U.S. Farmers," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124257, Agricultural and Applied Economics Association.
    12. Langyintuo, Augustine S. & Mungoma, Catherine, 2008. "The effect of household wealth on the adoption of improved maize varieties in Zambia," Food Policy, Elsevier, vol. 33(6), pages 550-559, December.
    13. Jianglin Lu & Keqiang Wang & Hongmei Liu, 2022. "Residents’ Selection Behavior of Compensation Schemes for Construction Land Reduction: Empirical Evidence from Questionnaires in Shanghai, China," Land, MDPI, vol. 12(1), pages 1-29, December.
    14. Chavez, Holcer & Nadolnyak, Denis A. & Saravia, Miguel, 2013. "Socioeconomic and Environmental Impact of Development Interventions: Rice Production at the Gallito Ciego Reservoir in Peru," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 16(1), pages 1-16, February.
    15. Klaus Deininger & Denys Nizalov & Sudhir K Singh, 2013. "Are mega-farms the future of global agriculture? Exploring the farm size-productivity relationship for large commercial farms in Ukraine," Discussion Papers 49, Kyiv School of Economics.
    16. Gómez, Miguel I. & Ricketts, Katie D., 2013. "Food value chain transformations in developing countries: Selected hypotheses on nutritional implications," Food Policy, Elsevier, vol. 42(C), pages 139-150.
    17. Aragón, Fernando M. & Restuccia, Diego & Rud, Juan Pablo, 2022. "Are small farms really more productive than large farms?," Food Policy, Elsevier, vol. 106(C).
    18. B Kelsey Jack, "undated". "Market Inefficiencies and the Adoption of Agricultural Technologies in Developing Countries," CID Working Papers 50, Center for International Development at Harvard University.
    19. David W. Olivier, 2018. "A Cropping System for Resource-Constrained Urban Agriculture: Lessons from Cape Town," Sustainability, MDPI, vol. 10(12), pages 1-12, December.
    20. Cinzia Di Novi, 2007. "An Economic Evaluation of Life-Style and Air-pollution-related Damages: Results from the BRFSS," JEPS Working Papers 07-001, JEPS.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:cmpart:265579. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: http://www.agriculturaleconomics.net .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.