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University of Fort Hare (2017)

Farm level cost-benefit analysis of conservation agriculture for maize smallholder farners in Okhahlamba Municipality in Kwa-Zulu Natal Province, South Africa

Tafa, Sanelise

Titre : Farm level cost-benefit analysis of conservation agriculture for maize smallholder farners in Okhahlamba Municipality in Kwa-Zulu Natal Province, South Africa

Auteur : Tafa, Sanelise

Université de soutenance : University of Fort Hare

Grade : MASTERS OF SCIENCE IN AGRICULTURE (AGRICULTURAL ECONOMICS) 2017

Résumé
Land degradation is a serious problem that many poor communities face and this worsens their vulnerability and therefore, poses a threat to food security, as it reduces yield, forces farmers to use more inputs, and disproportionately affect the smallholder farmers in remote communities that also suffer diverse infrastructure disadvantages. In response to that, the international development agencies, donors, and Non-Governmental Organizations (NGOs), especially faith-based organizations have turned towards sustainable farming approaches. Much attention has been paid to a combination of sustainable farming measures which are packaged under the “Conservation Agriculture” (CA) banner. The previous work in the KZN Province and elsewhere has demonstrated that CA has the potential to improve the soil structure, thereby reversing the effect of soil degradation. Consequently, many of the farmers in the areas in which these demonstrations have been conducted appreciate the ecological and economic value of adopting CA. However, the on-farm financial benefits of adopting a CA specific tillage practice are not as well known or thought to be as pronounced. By means of integrating field survey, reviewed literature, and econometric analysis, this study assessed the farm level cost-benefit analysis of conservation agriculture for smallholder maize farmers in OLM, specifically in one demonstration village of Bergville town. The analysis is based on the case study of the NGO’s work in which they had selected a community and participating households who received assistance in a number of ways such as maize seed, soil preparation, and CA planters. To analyse the farm level cost-benefit analysis, descriptive, linear regression, gross margin (GM) and appraisal indicators such as Net Present Value (NPV), Benefit Cost Ratio (BCR) and Internal Rate of Return (IRR) were used. The descriptive analysis, used to analyse the factors affecting the extent of adoption of CA revealed that socio-economic characteristics have the influence on the level to which a farmer responds to incentives. Linear regression model used in this study showed that years in farming, involvement in joint farmer’s group, and use of cover crops have the significant effect on the extent of adoption of CA. Moreover, the calculated gross margins of the two tillage systems were different, revealing higher Gross Margins for CA plots than for conventional plots. The major cause of the difference was found to be differences in the variable costs. When using appraisal indicators (NPV, BCR, and IRR) the study projected a 10-year period at 8% and 10.5% discount rates. The study also revealed positive NPVs for both CA and conventional agriculture. The positive sign implies that there are positive pay-offs for investing in both trial and control plots. However, trial plots have larger NPVs compared to control plots, meaning that there are less additional returns for investing in control plots compared to trial plots. Results also reveal that with 10.5% discount rate, the NPVs are lower than with 8% discount rate, showing that lower discount rates are consistent with higher performance over the long term. This therefore means that at lower discount rate, it is more viable to produce maize using CA than using conventional tillage system. In the case of BRC presented in the study, it was revealed that at both low and high discount rates, the trial plots were more viable than the control plots. Finally, the IRR presented in the study reveal that the trial plots would be able to pay their way much faster than the control plots. Overall, the study found that there are incentives to adoption of CA compared to conventional farming. The message from the different results arising from the use of different discount rates is that farmers should receive assistance at low cost of capital in order for their o

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