Masters Degrees (Agricultural Economics)

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Adoption and willingness to pay for organic fertiliser: a case of smallholder potato (solanum tuberosum L.) farmers in KwaZulu-Natal, South Africa.
(2020-03-12) Bhekani, Sandile Zondo.; Baiyegunhi, Lloyd James Segun.
Potato cultivation involves intensive soil tillage throughout the cropping season, which often results in soil degradation, erosion, and leaching of nitrates. Literature suggest that efforts to produce sufficient food necessitate an increase in agricultural production per unit of inputs by adopting fertility-enhancing techniques (both organic and inorganic fertilisers) to replenish soil nutrients required by crops. However, inorganic fertiliser as a soil ameliorant is known for causing soil degradation, environmental pollution, and it is associated with escalating costs. As a result, smallholder farmers are constrained in realizing their maximum yield potential. One of the ways to boost productivity without degrading the environment is to adopt a more sustainable, low-cost, and efficient integrated nutrient management system, which also suit their socioeconomic status. Although there is sufficient advocacy in the adoption of sustainable agricultural inputs such as organic fertiliser, the economic linkage between farmers' socioeconomic factors and adoption has not been adequately explored. Moreover, there is a dearth of empirical evidence regarding the willingness of farmers to pay a price premium for organic fertilisation of their soil. The aim of this study was to evaluate socioeconomic factors influencing the adoption and use intensity of organic fertiliser among smallholder potato farmers’ as well as to estimate their willingness to pay (WTP) a price premium for organic fertiliser. Primary data was collected from 189 smallholder farmers in three municipal areas in KwaZulu-Natal Province, South Africa, through a multi-stage sampling technique. The analytical framework incorporated descriptive statistics, double-hurdle, and ordered probit models. The double-hurdle model was used to identify the factors influencing the adoption and use intensity of organic fertiliser, under the assumption that the decision to adopt and the intensity of adoption are separate. The contingent valuation method (CVM) was used to elicit information for the WTP, and after that, the ordered probit model was employed to estimate the determinants of farmers' WTP for organic fertiliser. Empirical results indicate that factors such as household head gender, household size, access to credit, access to extension, knowledge of organic fertiliser usage, land ownership, livestock size and access to social grants significantly influenced the decision of organic fertiliser adoption. In contrast, factors such as the age of farmer, knowledge of organic fertiliser usage, farm size and livestock size significantly influenced the use intensity of organic fertiliser. In addition, results revealed that factors such as marital status, access to extension services, and knowledge of organic fertiliser usage, land ownership, livestock size and distance to the source of organic fertiliser were also statistically significant in determining the farmers’ WTP a price premium for organic fertiliser. The study found that the rate of organic fertiliser adoption is very high among the sampled potato smallholder farmers even though there is still a notably large number of farmers who are not using organic fertiliser. This result leads to the conclusion that organic fertiliser is the most popular soil nutrient ameliorant among smallholder potato farmers in KwaZulu-Natal Province, South Africa. This study also found that WTP a price premium for organic fertiliser was very high and this lead to a conclusion which justify the prospect of commercialization of organic fertiliser to facilitate the availability of organic fertiliser to those that are willing to pay for it. This study recommends improved access to extension services to improve technical information dissemination and knowledge of organic fertiliser usage among smallholder farmers. There is also a need to develop policies that strive to institute security of land tenure among smallholder farmers, which will encourage smallholder farmers WTP and also adopt and intensify organic fertiliser. Keywords: Organic fertiliser, smallholder farmers, adoption, use intensity, willingness to pay, Contingent valuation, Craggs’ Double Hurdle model, Ordered logit model.
Causality analysis and physio-economic impacts of climate change on maize production in South Africa.
(2019) Magodora, Tatenda Lysias.; Baiyegunhi, Lloyd James Segun.
Agriculture, as part of the human ecological footprint on climate change, has become a serious concern because climate change has an impact on agriculture. For instance, when crop production is considered, climatic elements are influenced by greenhouse gas emissions that come from agricultural activities such as the application of synthetic fertilizers, herbicides and pesticides, as well as the use of heavy machinery in modern crop production. This study analyzed the possible causalities between climatic variables and maize production in South Africa using time series data for the period 1924 to 2016. The analysis was done using VAR Granger causality analysis to ascertain if there are feedback loops between climatic elements and maize production in South Africa. The results from the Granger analysis suggest a bidirectional causality that runs between maize production and temperature. Rainfall alone was found not to be significant in influencing maize production but a combination of both temperature and rainfall affects maize production in South Africa. The results from variance decomposition of the future forecasts suggest a relatively large magnitude of impact (13.37%) of temperature on maize production in the 3rd year of the forecast with the highest effect of 27.43% in the 15th year of forecast. The forecasted impact of rainfall on the other hand remained relatively low (below 10%) throughout the forecast period. Continued current production activities (use of synthetic fertilizers and agricultural chemicals, for example) will affect climatic variables both in the short term and in the long term, and the effects of these changes in climatic elements on maize production will be realized in the long term as revealed by the variance decomposition result. The study further investigated the impacts of global warming on maize production in South Africa using meta-analysis (for physical impacts) and the Ricardian analysis (for economic impacts). The meta-analysis made use of studies that investigated and reported percentage changes in maize yield owing to climate change in South Africa. The average estimated percentage change in maize yield was calculated from 34 studies using the bootstrapping sampling technique. Results from the meta-analysis suggest that maize yield will drop by more than 15% owing to temperature increase of about 20C to be realized between 2081 and 2100. The Ricardian analysis made use of time series data for the period 1987 to the end of 2018. The results from the Ricardian analysis also show that climate change is a significant threat to the South African maize industry, as it is estimated to lose an average of 38% of revenue owing to plus 20C warming. Given these outcomes, the study suggested the adoption of sustainable farming activities such as minimum tillage, balanced fertilization and biochar amendments at a much faster rate in order to ensure a sustainable increase in maize production, while at the same time reducing the human ecological footprint on climate change. The study also recommends the recognition of the agricultural sector as one of the sectors that should be targeted by the carbon emission reduction systems.
Comparative analysis of the impact of food prices on household food security : evidence from the North-West and KwaZulu-Natal Provinces, South Africa.
(2015) Phali, Lerato.; Mudhara, Maxwell.; Baiyegunhi, Lloyd James Segun.
The prevalence of household food insecurity in South Africa is not a result of a shortage of food but of a lack of access to food. Contributing to this are the rising food prices that adversely affect the rural poor, as most of them are net buyers of food. Due to the higher food prices, poor households are forced to spend a large proportion of their income on food. The objectives of this study are to determine socio-economic characteristics that influence household perceptions of food prices and to evaluate the impact of food prices on rural household food security in South Africa. The study considers two rural areas that have different food price regimes, namely, Jericho in the North-West Province and Swayimane in the KwaZulu-Natal Province. The results are based on household level data collected from a sample of 300 households using structured questionnaires. The Ordered Logit Regression (OLR) model was used to evaluate the impact of food prices on rural household food security status, using the Food Expenditure Income (FEI) ratio as a household food security indicator. The ratio indicates the proportion of household income spent on food. Its components are directly linked to two of the four aspects of food security, namely food stability and food accessibility. According to Engel’s Law, the proportion of income spent on food declines as income increases. This implies that low income households spend a large proportion of their income on food, resulting in a high FEI ratio. The findings of the study indicated that households in Swayimane are more likely to be “well-off”, compared to those in Jericho. Location, gender of household-head, number of permanently employed household members and total household income significantly influenced household food security. Food price perceptions influence buying and consumption patterns of households. Using the Tobit regression model, households’ socio-economic characteristics that determine household perceptions of food prices were identified. A Food Price Perception (FPP) index was generated using principal components analysis and was used to evaluate the relationship between food price perceptions and household food expenditure patterns. The results showed that households in Jericho had higher perceptions of food prices and that location, total household income and the number of permanently employed household members influence a household’s perception of food prices. Another finding was that households with a higher perception of food prices were low-income households that spend a large proportion of their incomes on food. The study recommends that policy priorities should be focused on the establishment of retail outlets in rural communities. Establishment of new employment opportunities and increased wages will also help improve household food security through increased food affordability.
The impact of outsourced extension services on the performance of smallholder farmers in Msinga, KwaZulu-Natal, South Africa.
(2018) Majokweni, Zipo-zihle Pilela.; Baiyegunhi, Lloyd James Segun.; Ferrer, Stuart Richard Douglas.
Smallholder farmers are considered the potential drivers of growth and poverty eradication in Africa. Agricultural extension services play a vital role in linking farmers to information, adoption of new technologies, access to markets and so on. In recent years, there has been a shift from purely public extension to a more pluralistic approach, with the private sector providing extension services in specific project areas. The aim of this study was to assess the impact of outsourced extension services on the performance of smallholder farmers in Msinga, KwaZulu-Natal. The study also sought to estimate the indirect impact of outsourced extension services by investigating the presence of positive externalities among the sampled farmers. A random sampling technique was used to sample 300 smallholder farmers in the study area. Descriptive statistics were used to compare the differences between farmers who are beneficiaries of Lima Rural Development Foundation extension services and those who are non-beneficiaries. Factors such as years of farming experience, years of formal schooling, the amount of labour available to a household, livestock value, ownership of an irrigation tool and access to credit influenced participation in Lima extension services. The Propensity Score Matching (PSM) method was employed to estimate the impact of the outsourced extension services provided by Lima Rural Development Foundation on the farmers’ performance, measured by farm income per smallholder farmer. Various estimators, namely the Kernel, nearest neighbour and stratification, were used to ensure the robustness of the obtained results. Also, a Rosenbaum bounds sensitivity analysis test (rbounds) was done to test the data’s level of sensitivity to unobserved heterogeneity. The results of the econometric model indicated that outsourced extension services have a positive impact on smallholder farmers’ performance. Private extension services have a positive and significant impact on household crop income, net crop income and the inputs and services purchased. When compared to farmers who were not beneficiaries of Lima extension services, Lima beneficiaries received R3000 and R2600 more for total crop and net crop income per year respectively. Further analysis showed an evidence of positive externalities of outsourced extensions, due to farmer-to-farmer interactions and contact. Farmers who had received help or advice from a Lima beneficiary appeared to have an income that was an average R2 400 higher than the income of non-Lima beneficiaries. The results suggest that private extension services play a crucial role in improving the performance of smallholder farmers, and highlight the need for improved access to inputs and markets. The study recommends that the involvement of the private sector in smallholder support programmes is encouraged and sustained. Furthermore, the formation of structures such as co-operatives that encourage farmer interactions should be promoted and should be farmer led and farmer driven.
Improved rice varieties adoption and technical efficiency of smallholder rice farmers in Ogun State, Nigeria.
(2019) Olalekan, Bello Lateef.; Baiyegunhi, Lloyd James Segun.
Rice (Oryza sativa) is an essential food crop and the most consumed staple crop in the majority of the urban and rural households in Nigeria. Rice consumption in Nigeria is the highest in Africa; also, the country is one of the largest producers of rice on the continent and simultaneously one of the largest rice importers in the world (FAO, 2016). The high importation is due to the inconsistency and variability in production of rice in Nigeria. Rice yield in irrigated and rain-fed land is 3.0–3.5 mt/ha and 1.5-3.0 mt/ha which is below the potential output of 7-9 mt/ha and 3-6 mt/ha respectively. Low adoption of improved rice varieties (IRVs) is one of the major constraints leading to this low yield encountered by the resource-poor smallholder farmers. The main objective of this study was to examine the factors influencing adoption of IRVs and its impact on productivity and to estimate the differences in technical efficiency among adopters and non-adopters of IRVs in Ogun State, South West, Nigeria. A multi-stage random sampling technique was used to select 250 rice farmers and data was collected through a well-structured questionnaire. The Probit regression model was used to analyse the determinants of IRVs adoption while the stochastic frontier production function was used to model the determinants of rice output and technical efficiency. The results of the probit model showed that education, rice farming experience, access to extension services, access to credit and seed access had a significant influence on adoption of IRVs. The estimates of the average treatment effect (ATT) from the PSM method indicated that the adoption of IRVs increases productivity of smallholder rice farmers by 452kg/ha. The implication of the results suggests that priority must be given to the use of improved agricultural technology such as IRVs in order to enhance rice production. The estimate of the stochastic frontier analysis (SFA) indicates that smallholder rice farmers are producing below their potential output, however, adopters of IRVs are more technically efficient than the non-adopters. The mean technical efficiency of adopters and non-adopters of IRVs is 0.97 and 0.84, respectively. The study determined the sources of farmers’ technical inefficiency from a combined effect of farm-specific, socio-economic, socio-institutional factors and predicted probability of IRVs. The findings of the study suggest that adoption of IRVs plays a crucial role in improving the technical efficiency of smallholder rice farmers. The study, therefore, recommends an agricultural policy aimed at promoting farmers’ education, through effective extension services, providing sustainable credit facilities and efficient relationship between farmer-based organizations and seed companies (private, NGOs and government) to enhance easy accessibility of IRVs by the rural smallholder rice farmers.
Mopane worms and household food security in the Limpopo Province, South Africa.
(2013) Oppong, Beatrice Bosompemaa.; Baiyegunhi, Lloyd James Segun.; Senyolo, Granny Mmatsatsi.
The main objective of this study is to examine the potential contribution of households’ involvement in mopane worm activities (harvesting, commercialisation and consumption) to households’ food security in the Mopani District of the Limpopo Province. Data was collected using a structured questionnaire from a stratified sample of 120 households, 60 of which are mopane worm harvesters. The Binary Logit Model was used to determine households’ socio-economic factors affecting participation in mopane worm harvesting. The results revealed that gender of the household head, age of the respondent, households’ size and the level of income per month increases the probability of households participating in mopane worm harvesting whilst distance to the market and food expenditure as well as religion (belonging to the Zion Christian Church) decreased the probability of being mopane worm harvester. The Ordinary Least Square (OLS) model was used to identify households’ socio-economic factors that determine the rate of commercialisation of mopane worms within harvesting households. 53 percent of the households commercialized their harvest. The model identified that gender, harvesting experience and income from mopane worm sales are the main factors determining commercialisation within harvesting households. The Household Food Insecurity Access Scale (HFIAS) was used to determine household food security status. The result revealed that about 20 percent of the harvesters were food secure, while 80 percent where food insecure. In addition, about 12 percent of the non-harvesters were food secured. An OLS model was also used to examine the impact of mopane worms in the food security status of the households in the Limpopo Province. The results revealed that age, education level of a household head, level of income, income from mopane worm sales and frequency of consuming mopane worm/day improve the food security status of households whilst households’ size and the distance to the market worsens the food security status of the households. The study found that about 48 to 60 percent of the households to be adopting less pervasive strategies like asking neighbours/family relatives for help, borrowing money for food and selling mopane worms for cash to protect their food consumption and over 70 percent adopted strategies like reducing food intake, portion size and eating less preferred food were adopted to modify their food consumption. The findings indicated that policy priorities should be focused on the promotion of harvesters associations for collective marketing and creating an enabling environment for sustainable harvesting and commercialisation.

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Browsing Masters Degrees (Agricultural Economics) by Author "Baiyegunhi, Lloyd James Segun."