LAND RENTS AS INDICATORS OF PROFITABILITY IN MAIZE AND WHEAT PRODUCTION

W. L. Nieuwoudt and J. J. de Jong

Agrekon, 1985, vol. 24, issue 2

Abstract: Land rents can be used to monitor anticipated changes in farm profitability of a long-run nature. Rents also provide information on the relative profitability of various enterprises (opportunity cost principle) i.e. maize versus livestock. During 1983/84 rents on grazing land in the Maize Triangle averaged at R6,85 per ha, maize land R31,28 while wheat land in the Eastern Free State rented at R24,14. Data show that the expected profitability of maize was substantially higher than livestock during the period studied. Using the concepts of economic rent and transfer earnings, data indicate that the comparative advantage of maize versus livestock production in the three principal maize producing areas is the same. As rents are determined by market forces they could provide insight into the dynamic and anticipated changes in farming profitability

Keywords: Agricultural Finance; Crop Production/Industries; Land Economics/Use (search for similar items in EconPapers)
Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:ags:agreko:267084

DOI: 10.22004/ag.econ.267084

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