Abstract
Using data collected from 200 rural farm households in Umbumbulu district of KwaZulu-Natal in South Africa, the stochastic linear programming model is used to model the farm family crop production enterprise incorporating risk with a view of developing the optimal enterprise combination that would enable households maximize their utility. The model incorporates farmers’ risk preferences, revenue fluctuations and resource restrictions. The results show that (1) changes in risk preference do affect optimal crop combinations and (2) the typical cropping pattern is rational under the present level of farmer’s risk preference estimated in the study site; however, slight differences exist between the three groups of farmers studied. Effective extension programmes that will educate the farmers on efficient allocation of resources are pivots upon which the various smallholders’ development programmes initiated by the government and/or other stakeholders should be built.
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