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The distortions to incentives in South African agriculture: a case study of the wheat industry

Michael Day and Nick Vink ()

Agrekon, 2019, vol. 58, issue 3, 292-307

Abstract: The aggregate distortions to the incentives of South African agricultural producers have been estimated, but these measures have not been disaggregated to reveal individual agents’ incentives in a vertical value chain. In order to do this, the aggregate distortion estimates were first updated to account for the past decade, and then the wheat value chain was disaggregated for the marketing years starting in October 2000 and ending in September 2014. The results highlight how aggregate distortion estimates as developed by Anderson et al. (2006) and calculated by Kirsten, Edwards, and Vink (2009) for South African agriculture in essence mask the inter agent distortion differences in a vertical value chain. The focus in this article is on the measurement of the disaggregated distortions, while further research on the structure of the industry (its competitiveness at all levels of the value chain) and the role of the exchange rate is required to increase our understanding of the real incentives that confront these agents.

Date: 2019
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Working Paper: The Distortions to Incentives in South African Agriculture: A Case Study of the Wheat Industry (2018) Downloads
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DOI: 10.1080/03031853.2019.1627226

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