ECONOMIES OF SCALE FOR SMALL AND LARGE SUGAR CANE FARMS IN KWAZULU-NATAL

S. Mbowa and W.L. Nieuwoudt

Agrekon, 1999, vol. 38, issue 3

Abstract: This paper gives a profile of a sample of a small and large sugar cane farms in the North coast region of the KwaZulu-Natal sugar cane belt. The survey was conducted during May 1995. Farms studied varied between one and 600 hectares. Values for small farms were significantly lower than large farms for human capital resources, farm resource utilisation, rate of search and utilisation of farm information, and adoption of appropriate and improved cultural farm practices. Such differences may account for the differences in farm productivity between small and large farms that exist in the South African sugar industry. A linear discriminant function model shows that small and large farms studied differ significantly on lines of human resources and cost of borrowed capital (market related). The findings of the study show that large cane farms face lower market related interest rates, are relatively better equipped in human resource capital, and are in a position to implement appropriate and recommendable farm practices (soil analysis and use of certified seedcane) compared to small farmers.

Keywords: Crop Production/Industries; Industrial Organization; Production Economics (search for similar items in EconPapers)
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:ags:agreko:245975

DOI: 10.22004/ag.econ.245975

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