'N EKONOMIESE ONTLEDING VAN DIE GRONDOMSKAKELINGSKEMA: 'N GEVALLESTUDIE IN DIE WES-TRANSVAAL

F. J. de Jager and J. van Zyl

Agrekon, 1991, vol. 30, issue 2

Abstract: The financial position of farmers in the summer grain areas deteriorated drastically over the past decade. The Soil Conversion Scheme was introduced to help farmers to withdraw low potential crop land by establishing perennial pastures. The purpose of this article is to evaluate the conversion of low potential crop land from cash crop production to perennial pastures in terms of a number of objectives. Dynamic linear programming was used as analyzing technique. Typical characteristics for Western Transvaal namely budgets and other coefficients, were used as inputs to assemble a model over an eight year planning horizon. The optimal enterprise combination was determined by taking into account constraints such as quarterly cash flow, fodder flow, and tractor and labour requirements in the maximization of net operating surplus. The "Target MOTAD" approach was used so that the effect of risk could be considered. The results show that given the assumptions and constraints of the model and when risk is taken into account, the net operating surplus is more stable with the conversion to pastures than that with maize production. Risk thus declines, but then the farmers' ability to meet his fixed obligations deteriorates to such an extent that he cannot survive. The above shows that the Soil Conversion Scheme decreases risk but, given the assumptions and constraints of the model, it is not necessarily at present a general economically viable alternative for maize production on low potential soils.

Keywords: Agricultural and Food Policy; Land Economics/Use (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:ags:agreko:267364

DOI: 10.22004/ag.econ.267364

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