Abstract
Smallholder farmers in South Africa have not been linked successfully to sustainable agro-processing value chains. This study aimed to identify factors influencing smallholder farmers’ decision to participate in the agro-processing industry, as well as the extent of their participation in the Gauteng Province. Data was collected through a structured questionnaire that was administered face-to-face to respondents in a randomly purposive selected sample of 102 smallholder farmers. A double-hurdle model was used to analyse factors influencing the decision to participate and the level of participation in agro-processing. The results show that very few (19%) smallholder farmers participate in the agro-processing industry of the Gauteng Province. The results also revealed that factors such as educational level, land tenure, agro-processing training and information have a positive influence on the decision to participate. Distance to market and off-farm income negatively influence the decision to participate. The level of participation is influenced by socio-economic factors such as age, household size, level of education, grain and livestock producers, farm size and access to training. The study recommends that smallholder agro-processing policy instruments be adjusted to facilitate effective participation in the agro-processing industry and participation in other high market value chains. There is a need to build up local agro-processing plants as a strategy of lowering the costs of transportation and storage when farmers take their farm produce to distant manufacturers or processors.
Highlights
South African agriculture is highly dualistic, characterised by a small number of commercial agricultural operations that are managed mainly by successful commercial farmers and a large number of smallholder agricultural enterprises consisting mainly of black struggling farmers (DAFF [Department of Agriculture, Forestry and Fisheries], 2012)
Characteristics of smallholder farmers in Gauteng province The results revealed that participation in agro-processing by smallholder farmers in the Gauteng Province is minimal
The results show that a typical smallholder farmer participating in agroprocessing is younger than a non participant, in average, they both consist of six people
Summary
South African agriculture is highly dualistic, characterised by a small number of commercial agricultural operations that are managed mainly by successful commercial farmers and a large number of smallholder agricultural enterprises consisting mainly of black struggling farmers (DAFF [Department of Agriculture, Forestry and Fisheries], 2012). Smallholder farmers are confined to economic participation within the informal sector with a focus on primary agriculture, whereas commercial farmers are located within the formal economy with footprints along the agriculture and agro-processing value chain (Fan, Brzeska, & Halsema, 2013). The agro-processing industry plays a considerable role in the socio-economic development. It is among the sectors identified by the Industrial Policy Action Plan (IPAP), the New Growth Path and the National Development Plan (NDP). The involvement of smallholder farmers in agro-processing has the potential to contribute significantly to sustainable livelihoods (Thindisa, 2014; Wilkinson & Rocha, 2008). According to Sharma (2016), smallholder farming participation in the global value chains is perceived as of prime importance for their inclusion in the agricultural development in the developing countries
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