Strategic perspectives on quitting or remaining in commercial agriculture in South Africa and why it matters

Abstract

ABSTRACT This paper explores reasons why some commercial producers in South Africa are expecting to quit and sell their farms, and others are not. Of 450 respondents to a voluntary survey, distinctly different groups of producers emerged concerning their longer-term strategic planning and how they experience and absorb current threats and challenges. Unsupervised learning on the dataset is imposed using a cluster analysis to explore the commonalities and the underlying factors why producers would expect to exit or not. Factors that we hypothesised might play a role included a producer's age and financial position, rural safety concerns, labor problems, industry-related problems, and opportunities for off-farm earnings. The factors the potentially exiting producers had in common were financial difficulty, which was uncorrelated to turnover, problems with access to dependable labor, uncertainty regarding land reform policy, and rural safety concerns. Intention to retire also played a role, although to a lesser extent. It is more often a combination of factors, rather than a single factor, that makes a producer more likely to decide to quit and sell in the future. With the exclusion of farm safety concerns and labor problems, the identified factors in this study are in step with those found internationally.