ANALYSIS OF PROFITABILITY OF SMALLHOLDER IRRIGATED FOOD PLOTS IN THE EASTERN CAPE PROVINCE OF SOUTH AFRICA
Abstract
Smallholder irrigation farming is transformative to poor households as they improve livelihoods and alleviate poverty but little has been done to quantify their profitability. The present study assessed the profitability of smallholder irrigated crop farmers in the Eastern Cape Province of South Africa and ascertained their determinants. A multi-stratified technique was employed to select 120 smallholder irrigated crop farmers. Data were analysed using gross margin and multiple regression models. Results showed that crop production is profitable. Farm experience, years spent in school, access to credit, distance to markets, and tractor use were found to have a bearing on the profitability of the irrigated crop farmers. Based on the results, crop farming is identified as crucial for jobs and poverty reduction.
Keywords
smallholder; profitability; irrigated; Eastern Cape
References
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Adesina A. and Djato, K. K. 1997. Relative efficiency of women as farm managers: Profit function analysis in Cote d‘Ivoire. Agricultural Economics, 16.pp. 47-53.
Balana, B., Mul, M., Williams, T. O., Ghansa, B., Gyamfuah-Owusu, A. and Amarnath, G. 2015. Analysis of Historical Flood Inundation and Recession Patterns: Implications for Flood Recession Agriculture in Northern Ghana. Unpublished project progress report.
Baiyegunhi, L. J. S. and Fraser, G. C. G. 2009. Profitability in Sorghum Production in Three Villages of Kaduna State Nigeria. Journal of Applied Sciences Research, (10). pp. 1685- 1691.
Berger, A. N. and Mester, L. J.1997. Inside the black box; what explains differences in the efficiencies of financial Institutions. Journal Banking Finance. Vol 21. pp. 895-947.
Coelli, T. J. 1995. Estimators and hypothesis tests for a stochastic frontier function: A Monte Carlo analysis. Journal of Productivity Analysis, 6. pp.247–268.
Chidi, I., Anozie, R.O. and Nneji Chinaza, Priscilia, N. C. 2015. Analysis of socio-economic factors and profitability of rice production among small-scale farmers in Ebonyi State. Journal of Agriculture and Veterinary Science, 8 (2). pp. 20-27.
Christian, M. 2015. Assessing the impact of primary agricultural co-operative members on smallholder farm performance (crops) in Mquma Local Municipality in the Eastern Cape Province. Published MSc Dissertation, University of Fort Hare, Alice, South Africa.
Cousins B., 2013. Smallholder Irrigation Schemes, Agrarian Reform and ‗Accumulation from Above and from Below‘in South Africa‖. Journal of Agrarian Change, 13 No. 1, January 2013, pp. 116–139.
Eastern Cape Department of Rural Development and Agrarian Reform (ECDRAR). 2012. Annual Operation Plan 2012-2013. Bisho, Eastern Cape Provincial Government.
Economic Development, Environmental Affairs and Tourism (EDEAT). 200-2010. The Eastern Cape, Adventure province essence of Province’s heart. Available on: http://www.dedea.gov.za/Lists/About%20the%20Eastern%20Cape/AllItems.aspx#. (Accessed on 23 November 2018).
Eastern Cape Development Corporation (ECDC). 2007. Introduction to the Eastern Cape. http://www.ecdc.co.za/easterncape. (Accessed on 10 April 2017).
Ergano, K. & Nurfeta, A. 2006. Economic performance of case study dairy farm in
Southern Ethiopia. Livestock Research for Rural Development, 18 (8). Available on: http://www.lrrd.org/lrrd18/1/erga18008.htm. (Accessed 6 November 2018).
Fanadzo M., Chiduza, C. and Mnkeni, P. N.S. 2009. Comparative response of direct seeded and Transplanted Maize (Zea mays l.) To Nitrogen Fertilization at Zanyokwe Irrigation Scheme, Eastern Cape, South Africa. African Journal of Agricultural Research, 4 (8). pp. 689-694, August, 2009: ISSN 1991-637X © 2009 Academic Journals.
Gabaye, P. 2013. An Assessment of the Profitability of Small Holder Commercial Egg Production in Zimbabwe. A Case Study of Goromonzi, UMP and Mutasa Districts. Published MSc Dissertation, University of Zimbabwe, Zimbabwe.
Gidi L. S. 2016. Paths for establishing entrepreneurship with livelihood strategies to enhance food security, profitability and employment opportunities of rural households on smallholder irrigation schemes in Eastern Cape Province, SA. Unpublished PhD Thesis, University of Fort Hare, RSA.
Gujarati, D., 1992. Essentials of Econometrics. McGraw-Hill.
Kay, R. D. 1986. Farm Management, Planning, Control and Implementation. London: McGraw Hill. pp. 65-126.
Kebede, B. 2016. The analysis of productivity and the profitability of smallholder potato growers in bore district, Guji Zone, Oromia Region, Ethiopia. Published MSc Thesis, Haramaya University, Haramaya, Ethiopia.
Kibirige, D. 2013. The impact of human dimensions on smallholder farming in the Eastern Cape Province of South Africa. Published Thesis, University of Fort Hare, Alice, South Africa.
Kolawole, O. 2006. Determinants of profit efficiency among small scale rice farmers in Nigeria: a profit function approach. Poster paper prepared for presentation at the International Association of Agricultural Economists Conference, Gold Coast, Australia, August 12-18, 2006.
Koranteng, K. Y. 2010. Contract farming model of financing smallholder farmers in South Africa: The case of the IDC-Kat river citrus development scheme. Published Masters Dissertation, University of Stellenbosch, RSA.
Makhura, T. M. 2001. Overcoming transaction costs barriers to market participation of smallholder farmers in the Northern Province of South Africa, Unpublished PhD. thesis, University of Pretoria. South Africa.
Mmbando, F. E. 2014. Market participation, channel choice and impacts on household welfare: The case of smallholder farmers in Tanzania. Published PhD Thesis, University of KwaZulu-Natal, Pietermaritzburg, South Africa.
Maudos, J., Pastor, J. M., Perez, F. and Quesada, J. 2002. Cost and Profit Efficiency in European Banks. Journal of International Financial Markets, Instit utions and Money, 12. pp. 33-58.
Mokgalabone, M. S. 2015. Analyzing the technical and allocative efficiency of small-scale maize farmers in Tzaneen Municipality of Mopani District: A Cobb-Douglas and Logistic Regression Approach. Published M Dissertation, University of Limpopo, Limpopo, RSA.
Mujuru, N. M. 2015. Modeling irrigated smallholder crop enterprises in the Eastern Cape Province of South Africa with emphasis on profit efficiency and food security. Unpublished PhD Thesis, University of Fort Hare, Alice, South Africa.
Nyekanyeka, T. 2011. Analysis of Profitability and Efficiency of Improved and Local Smallholder Dairy Production: A Case of Lilongwemilk Shed Area. Published MSc Thesis, University of MalawI, Bunda College, Malawi.
Obi, A. and Pote, P. 2012. Technical constraints to market access for crop and livestock farmers in Nkonkobe Municipality, the Eastern Cape Province‖, In, Obi, A., Van Schalkwyk, H. D., Groenewald, J. A., Fraser, G. C.G and Van Tilburg, A. (eds), Unlocking markets to smallholders: Lessons from South Africa. Mansholt publication series-volume 10, Wageningen Academic Publishers, Netherlands.
Oluwatayo, I. B., Machethe, T. A. and Senyolo, M. P. 2016. Profitability and efficiency analysis of smallholder broiler production in Mopani district of Limpopo Province, South Africa. Journal of Agribusiness and Rural Development, 1(39). pp.145–154.
Onoja, A. O., Deedam, N. J. and Achike, A. I. 2012. Profitability and yield determinants in Nigerian cocoa farms: Evidence from Ondo State. Journal of Sustainable Development in Africa. Vol14 (4).
Osondu C. K. and Ijioma, J. C. 2014. Analysis of profitability and production determinants of fish farming in Umuahia Capital Territory of Abia State, Nigeria. World Journal of Agricultural Sciences, 2 (7). pp. 168-176.
Ramaila, R., Mahlangu, S. and Toit, T. 2011. Agricultural productivity report in South Africa literature review. Department of Agriculture, Forestry and fisheries, Directory Economic Service, Production Economics Unit.
Samboko, P. C. 2011. An assessment of factors influencing the profitability of bean production in Zambia. Published Dissertation, University of Zambia, Zambia.
Samuelson, P. A. and Nordhaus, W. A. 2005. Economics. Tata Mc-Graw-Hill: New Delhi.
Shalma, H. J. 2014. Economic analysis of soya bean production under Sasakawa Global 2000 Project in Kaduna State, Nigeria. Published MSc Dissertation, Ahmadu Bello University, Zaria, Nigeria.
Statistics South Africa (Stats SA). 2012. General Household Survey Series Volume IV. Food Security and Agriculture (2002–2011): In Depth analysis of General Household Survey. Pretoria: Statistics South Africa.
Statistics South Africa (Stats SA). 2012. Census 2011 Provinces at a glance, Pretoria: Statistics South Africa.
Tshiame, M. I. 2013. Productivity and profitability measures of emerging farm enterprises in the Mpumalanga Province. Published M. Dissertation, Tshwane University of Technology, RSA.
Xaba, B. G. 2013. Factors Affecting the Productivity and Profitability of Vegetables Production in Swaziland. Journal of Agricultural Studies, 1 (2).
Young, J. 2013. Investing in the Eastern Cape.
Available: http://www.southafrica.info/business/investing/opportunities/ecape.htm#.VTjVK8KKDIV. (Accessed on 15 October 2019).
Zulu, E. T. 2011. Profitability of Smallholder Cowpea Production in Zambia. Published Thesis, University of Zambia, Zambia.
Mdoda, L., & Obi, A. (2019). ANALYSIS OF PROFITABILITY OF SMALLHOLDER IRRIGATED FOOD PLOTS IN THE EASTERN CAPE PROVINCE OF SOUTH AFRICA. Journal of Agribusiness and Rural Development, 53(3), 225–232. https://doi.org/10.17306/J.JARD.2019.01265
Lelethu Mdoda
lelethu.mdoda@gmail.com
University of Fort Hare South Africa
https://orcid.org/0000-0002-5402-1304
University of Fort Hare South Africa
https://orcid.org/0000-0002-5402-1304
Ajuruchukwu Obi
University of Fort Hare, South Africa South Africa
University of Fort Hare, South Africa South Africa
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