IMPACT ON LAND PRICES OF EXPORT DEMAND FOR SOUTH AFRICAN DECIDUOUS FRUIT: 1972–1992/ Invloed van die vraag na uitvoere van Suid-Afrikaanse sagte vrugte op grond pryse: 1972–1992

Abstract

Abstract This is the first local study of the linkage between export demand for deciduous fruit and South African deciduous fruit farm incomes and land prices. Export demand is expected to affect land prices through the derived demand relationship and capitalization formula. By analyzing the relative role of export demand, the study extends past research by van Wyk (1967), Behrmann and Collett (1970), Nieuwoudt (1980), Janse van Rensburg (1983) and Kassier (1985) which showed a close relationship between land prices and expected returns to farming. Ordinary Least Squares analysis of real annual farm income and land price data for the major apple producing area of Elgin in the Cape Province during 1972—1992 supported a priori expectations of the linkage between export demand, farm income, and land prices. Lagged net revenue (total revenue less marketing costs) per hectare and lagged farmland prices per hectare had positive effects on land prices, while land prices were negatively related to lagged interest...