Abstract
Small-scale commercial farmers are regarded as the strategic avenue to achieve meaningful development in rural areas of South Africa. The government acknowledged that the inclusion of small-scale commercial farming in its development strategies. The paper aims to measure the efficiency of small-scale commercial farming enterprises in Vhembe District in Limpopo Province. Quantitative data were collected from 217 small-scale commercial farmers using structured questionnaires. The data were standardized using a farming enterprise budget system and analysed using the maximum likelihood and stochastic frontier analysis. The results revealed that aggregate output was positive and significantly influenced by age, education level, farm experience, farm labour, and government grants. However, the projected stochastic production frontier model combined with the efficiency parameters showed that labour and credit computed a negative effect on technical efficiency. The results indicated that the average level of technical efficiency ranged between 20% and 96% with a mean of 54%. This indicates that there is potential to increase production among small-scale commercial farmers in the study area by 46 % through efficient use of existing resources. As such, the local government should provide necessary supports such as formal agriculture training, access to credit and information to increase productivity.
Highlights
South African agriculture sector is dual, dominated by a well developed commercial farming sub-sector on the one hand and the communal farming sub-sector mainly practised by resourcepoor small-scale commercial farmers (Gwebu, 2018:56)
As envisioned in South Africa’s National Development Plan Vision 2030, Sustainable Development Goals 1 and 2, and Agenda 2063, small-scale commercial farming can play a significant role in rural development (Casazza & Chulu, 2016:5; Dhlamini, 2017:8; Agriculture Outlook, 2018:3)
The study revealed several outcomes regarding the efficiency of small-scale commercial farming in VDM
Summary
South African agriculture sector is dual, dominated by a well developed commercial farming sub-sector on the one hand and the communal farming sub-sector mainly practised by resourcepoor small-scale commercial farmers (Gwebu, 2018:56). Small-scale commercial farming is, dominating in rural areas where about 70% of the most impoverished population are found (Gwebu, 2018:58). As envisioned in South Africa’s National Development Plan Vision 2030, Sustainable Development Goals 1 and 2, and Agenda 2063, small-scale commercial farming can play a significant role in rural development (Casazza & Chulu, 2016:5; Dhlamini, 2017:8; Agriculture Outlook, 2018:3). The maximising output produced using the least amount of inputs (technical efficiency) can be a congruent avenue to achieve meaningful development. The paper used an input-output approach to identify the variables which would best estimate productivity and efficiency based on methods developed to estimate frontier production using Stochastic Frontier Analysis (SFA) as described by (Abdul-Salam & Phimister, 2016:6). The two-error component stochastic frontier production function suggested to represent technical inefficiency was employed as shown below: n)
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