Cape Town - A doctoral study conducted by Kandas Cloete from Stellenbosch University looked at what the determining factors were in farmers staying in their field for a longer time and looked at considerations such as land supply and demand, land availability and financial turnovers.
Cloete received her PhD from the University of Stellenbosch’s Faculty of AgriSciences. Her dissertation, titled “Investigating farm-level exit decisions and exit rates in commercial agriculture in South Africa: An agent-based approach”, is the largest of its kind to investigate farm-level exits and rates in the country.
She considered the responses of 450 participants in a survey on land-use patterns, including producers with plans to expand, those who want to maintain their farming operations as they are, and those who plan to exit the sector.
Respondents fit into one of four groups – “retrievers”, “ambitious”, “persistent” and “remainer”. One in five farmers had plans to leave the industry within the next decade, with mainly “retrievers” making up those numbers.
The research found that the average producer who was likely to exit farming over the next decade was a third-generation, 54-year-old individual with 26 years of experience and a college or university degree.
Farming exit decisions are affected by investment cost, financial constraints and producers’ age. While there is no link between turnover and exit plans, a larger turnover (of more than R10 million a year) would mean more producers would stay in the industry.
Cloete’s results show there is enough land available in the market due to exit plans among certain producers to accommodate others who want to either enter the sector or expand their existing operations.
The recent floods in KZN have had a devastating impact on the farming industry. The South African Cane Growers Association said damages to fields and on-farm infrastructure cost the industry more than R222m in losses.
For agriculture, the focus on the network industries is important for expansion and growth of the rural economy. The investment by agribusinesses into agricultural value chains and linkages of small or emerging farmers or new-entrant and commercial farmers into markets require functional road networks and water infrastructure.