NPR - The Cash Cows, Dogs, Stars And Problem Children Of The South African Agricultural Sector. (p283-293)

J.C.N. Joubert, A. Jooste and R. Lotriet

No 345618, 18th Congress, Methven, New Zealand, 2011 from International Farm Management Association

Abstract: The South African agricultural sector liberalised in 1995 (complied by 2000) and deregulated in 1997. The South African agricultural sector is also one of the least supported sectors in the world as measured with the Producer Support Estimate by the Organisation for Economic Co-operation and Development (OECD). This created an environment where agribusiness managers, other decision makers in the agro-food chains and policy makers face many new and complex dynamics and challenges. As in many other parts of the world, South Africa faces challenges pertaining to food security and poverty. The agricultural sector can play a vital role in addressing these challenges if one considers that it has some of the stronger forward and backward multipliers (including labour multiplier) in the South African economy. This becomes even more important from a rural development point of view where approximately 60 % of the poor reside. This paper aims to investigate the development path of different agricultural sectors over the past 10 years in order to identify those sub-sectors that can contribute significantly towards reducing poverty and increasing national food security. This will provide the basis for public-private sector intervention in those sub-sectors that require intervention to unlock potential, while investing more in those sub-sectors that are already making a significant contribution. The Boston Consulting Group (BSG) Matrix was used to analyze the South African agricultural sector. By using this methodology certain patterns in the behaviour of a sub-sector can be deducted. Moreover, sub-sectors are classified as cash cows, dogs, problem children and stars. The outcome of this study can also been use as an important indicator for further sub sector analysis. The results show that the real average growth for agricultural over the last ten years was 5.64 %. Of the 44 agricultural sub-sectors a total of 9 sectors of the 44 sectors show a negative growth and 10 sectors show a below average growth. The BSC matrix indicates 1 cash cow industry, 14 stars, 21 problem children and 8 dogs. Although some of these industries do not have a big market share the industries is important, it contribute much towards the value of agriculture, it is imperative to stimulate and protect these industries. Some of these industries have a very high labour multiplier and the socio impact can be immense. Therefore it is important to analyse movement of sectors in term of growth and market share.

Keywords: Community/Rural/Urban; Development (search for similar items in EconPapers)
Pages: 11
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ifma11:345618

DOI: 10.22004/ag.econ.345618

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