Abstract
ABSTRACT A dynamic linear programming matrix is assembled in order to model the South African summer grain industry. Supply, demand and production risk, including interactions with production substitutes, are considered. The model is tested by imposing all of the policies which were in operation at that time to see if it adequately simulates the prevailing situation. The model is used to evaluate the possible structural effects of subsidising farmers to change over land under cash crop production to pastures for beef, taking into account the inter-relationships in grain markets in Southern Africa. These effects are evaluated under different marketing policies with regard to changes in land use, prices, labour requirements and producer and consumer welfare. The main conclusion reached from this analysis is that by reforming or helping some industry or group of producers, its problems are merely transferred to other industries or producers owing to the inter-relationships in agriculture and the economy. It emphasises the need for an overall policy plan.
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