An evaluation of the performance of small scale agribusinesses in Vhembe District of Limpopo Province, South Africa

Abstract

The main purpose of this study was to evaluate the ability of small scale agribusinesses to create employment and generate income. A total of 50 agribusinesses comprising 33 primary production businesses and 17 agro-processing businesses were randomly selected for the study. A set of both closed and open-ended questionnaires was used to collect data on agribusinesses. The results from the study revealed that primary production was creating more employment opportunities as compared to agro–processing. However, gross margin analysis showed that the mean gross margin was higher in agro-processing when compared with primary production businesses. The main constraints facing agribusinesses were: lack of working capital, lack of management skills, and marketing related problems. Financial support and skills training were identified as necessary strategies to overcome lack of working capital, management skills, while the problem of marketing could be solved by the creation of a marketing co-operative in the area. The study findings revealed that performance of agribusinesses depended on the management style, capital invested, final product produced, income generated and employment generated. Policy makers need to formulate policies accordingly for success and sustainability of agribusinesses as poverty reduction strategies. Key words: Agribusinesses, income-generation, self-employment, entrepreneurship.