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Stellenbosch University (2020)

STRATEGIES IN THE BEAUFORT WEST REGION TO MITIGATE THE NEGATIVE FINANCIAL IMPACTS OF A DROUGHT

Parker, Robert Hamilton

Titre : STRATEGIES IN THE BEAUFORT WEST REGION TO MITIGATE THE NEGATIVE FINANCIAL IMPACTS OF A DROUGHT

Auteur : Parker, Robert Hamilton

Université de soutenance : Stellenbosch University

Grade : Master of Agricultural Sciences 2020

Résumé
Droughts are a frequent occurrence in South Africa’s arid and semi-arid rangelands and can have severe ecological and economic consequences. Most of the agricultural land area of South Africa is not conducive to crop production. These regions can get as little as 400 mm of rain annually. A deficit of 25% of normal annual rainfall is considered a severe drought. Droughts pose an increasing challenge to rangeland users as the global climate changes. Gaining access to relief from government in the form of subsidization grants has proved to be a lengthy and difficult process. The research aims to identify and evaluate whole farming strategies that a farmer in the Beaufort West region can employ to mitigate the negative financial impacts of a drought on a typical sheep farming enterprise. This study makes use of participatory research to acquire data for the farming models. To understand the effect of a strategy e.g. a feeding program in a whole farm system, requires a method that integrates, rather than ignores the effect of such a factor on the performance of the whole farm. The identification and construction of a typical farm model for the area provided a basis for comparison of the strategies identified to mitigate a drought. Whole farm modelling is an analysis of the current state of the farm, determining the available land, labour, capital and management resources. An incremental budget model in the traditional sense is a financial model in which budget proposals and allocations are based upon the funding levels of the previous year. Only new revenue is allocated to the expenses of the budget model. The research identified and evaluated four whole farming strategies that a farmer in the Beaufort West region can pursue to mitigate the negative financial impact of a drought on a sheep farming enterprise. The strategies are stated below. Feed through the drought at cost. Shrink breeding stock during drought and rebuild after (protect genetic material). Relocate the entire enterprise to area not experiencing drought. Sell off the entire enterprise, invest in the capital market and buy back at the end of the drought The strategy to shrink breeding stock during a drought proved to be the most financially feasible. The advantage of implementing this strategy is that genetic material of the farming livestock is protected through the period of the drought. Furthermore, the long run effect of the strategy is easily rectified post drought merely by adjusting the rate at which livestock are sold and retained on the farming enterprise.

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