Integrating Agricultural Input Expenditure into a South African Agricultural Sector’s Partial Equilibrium Model

Abstract

Agricultural inputs expenditure has not been widely incorporated in most partial equilibrium models. Moreover, input costs are treated exogenous and the recursive link between input and output side of the sector is overlooked in few of the models that attempts to incorporate input expenditures. The study has addressed both issues by integrating agricultural input expenditures into the South African sectoral partial equilibrium model by endogenising input costs and recursively linking both input and output side of the agricultural sectors to enhance the results of a standard partial equilibrium model in analysing the effect of policies on agricultural sector.