IDEAS home Printed from https://ideas.repec.org/p/ags/ifma05/24276.html
   My bibliography  Save this paper

South African Grain Farmers in Dire Straits: Scenarios for Sustainable Farming

Author

Listed:
  • Bisschoff, Christo

Abstract

Traditionally, the South African farmer has always been an entrepreneur, running his/her farming activities as a business to support lifestyle, provide a future for the children (as successors to the family farm or by providing education for a career) and to provide for comfortable retirement one day. However, a number of climatic- and economic environmental issues has resulted in severe constraints to farmers as entrepreneurs, creating a situation where farming are on the brink of collapse and maize farmers are struggling to survive. The production years 2005/6 and 2006/7 are critical. This paper focuses specifically on the summer grain production areas in South Africa where, in addition to the main crop maize, they also plant crops such as sunflower, peanuts, dry beans, sorghum and grazing for livestock). The objective of this paper is to report on the viability of possible scenarios that could assist the farming entrepreneur to sustain his/her farming activities beyond the following two years. A number of specific constraints impact on the grain farmer, namely the overproduction of almost all grain types, the free market system of pricing grain internationally, the Rand/Dollar exchange rate, the capital investment trap and the current government assistance policy, to name but a few. All of these constraints have resulted in a situation where it is no longer viable for farmers to produce the main crop (in excess of 80% of farming activities) namely maize. This situation calls for drastic intervention in entrepreneurial decision-making, and farmers must consider other viable options to service debt and to maintain a positive cash-flow. The analyses show that, ultimately (and most unfortunately), no favourable solution is at hand. From the possible scenarios evaluated in the paper, it is evident that maize farmers should discontinue production of maize on a large scale for the immediate future until the market environment improves. The farming community is faced with a situation of minimising losses and not with any real positive solution pertaining to the scenarios evaluated. The final conclusion is that current economic situations for maize production are unfavourable and the resulting recommendation is that farmers should not plant maize in the 2005/6 production year, that they should ride out the market and then revisit the production decision for the production year 2006/7.

Suggested Citation

  • Bisschoff, Christo, 2005. "South African Grain Farmers in Dire Straits: Scenarios for Sustainable Farming," 15th Congress, Campinas SP, Brazil, August 14-19, 2005 24276, International Farm Management Association.
  • Handle: RePEc:ags:ifma05:24276
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/24276
    Download Restriction: no

    References listed on IDEAS

    as
    1. Ehmke, Cole & Ernst, Stanley C. & Hopkins, Jeffrey W. & Tweeten, Luther G., 2001. "The Market For E-Commerce Services In Agriculture," 2001 Annual meeting, August 5-8, Chicago, IL 20523, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Thompson, Shelley J. & Hayenga, Marvin L. & Hayes, Dermot J., 2000. "E-Agribusiness," Staff General Research Papers Archive 1850, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Crop Production/Industries;

    Statistics

    Access and download statistics

    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:ifma05:24276. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/ifmaaea.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.