Factors distinguishing low turnover emerging farmers from high turnover emerging farmers in South Africa

Abstract

The main objective of this study is to identify the socio-economic factors associated with the level of annual farm turnover of emerging farmers in South Africa. This study defines emerging farmers as those farmers that are participating in the market and have intentions to produce and sell more. The study is based on a randomly selected quota sample of 500 emerging farmers surveyed from the nine provinces of SA in 2005. Descriptive statistics, factor analysis and logistic regression are used to analyse the data. Factor analysis is used to determine the emerging farmers’ access and utilization of agricultural infrastructure and support services. The logistic regression is used to predict the likely positioning of emerging farmers in the high and low farm turnover groups. Farm turnover is based on how a farm household organizes and manages its resources and how it is able to interact with the outside stakeholders. The level of annual farm turnover is categorized into four groups, low turnover group 1 (LTG1), low turnover group 2(LTG2), high turnover group 1 (HTG1) and high turnover group 2(HTG2). Whilst many studies on constraints to production in agriculture in South Africa have identified infrastructure as such a constraint, few have attempted to study the extent to which emerging farmers are able to access and utilize output markets infrastructure. The results show that the local output markets are generally more accessible to emerging farmers. Access to external markets is absent. The implication of this is that it is important for policymakers to know that farmers access output markets in a package form and that the role of locating output markets in centers can stimulate agricultural and rural development. The creation of favourable environments for the participation of emerging farmers in the mainstream of the economy has been the most significant initiative in promoting structural change, away from subsistence farming towards commercialization of agriculture in South Africa. Despite the new opportunities that have been created to facilitate participation of emerging farmers in the first economy, emerging farmers continue to face a host of challenges ranging from socio-economic to farm based constraints. These constraints have made some emerging farmers to fall in the high farm turnover group and others in the low farm turnover group. Logistic regression analysis is used to identify socio-economic factors that place emerging farmers in one group versus the other and to identify constraints faced by emerging farmers. Six logistics models are developed to distinguish emerging farmers in one group from another. Model 1 compares the HTG2 and the LTG1. The factors that increase the likelihood of being in an HTG2 rather than in an LTG1 are farm size, level of education, sugar farming, tarred road to the local fresh produce market, distance to the output market, being NAFU (National African Farmers Union) membership, and access to ground water. Horticulture and livestock farming decrease the chances of being in the HTG2. Factors that increases the likelihood of being in the HTG2 rather that LTG2 are farm size, level of education, sugar farming, road conditions to the local fresh produce market and access to ground water. Farm structure decreases the chances of being in the HTG2. The main factors affecting most of the emerging farmers in South Africa are the size of farm, level of education, distance to output market which leads to lack of transport and that most of the emerging farmers uses surface water for irrigation. Some of the farmers face poor road condition to the output market and they produce less to the output market. Access to high value commodities such as sugar does increase. The policy required to encourage commercialization must be tailored to the needs of the different categories of emerging farmers in South Africa. The low turnover group of farmers appears to contain community garden farmers. These farmers will require the comprehensive set of programmes that are commonly recommended. The programmes include land reform, educational programmes, infrastructural services, marketing and