The risk profile of wheat rotation systems in the Middle Swartland under Conservation Agriculture: A SDRF and SERF approach winter cereals crop rotation risk

Thesis (MScAgric)--Stellenbosch University, 2022.

ENGLISH SUMMARY : Wheat production in South Africa is largely driven by three of the country’s nine provinces, namely the winter rainfall region of the Western Cape and the summer rainfall regions of the Free State and Northern Cape. Conservation Agriculture (CA) is a comprehensive approach to sustainable farming to ensure food security and sustainability. There are three main conservation principles which govern CA namely minimum soil disturbance, permanent coverage of the soil and crop rotation. In 1996, the agricultural sector was deregulated and the Wheat Marketing Board was abolished. As a direct consequence of the deregulation of the agricultural sector, farmers were exposed to more volatile markets. This curated a more complex production system, wherein crop rotation in production systems needed to be considered and the complexity of decision making in cereal production areas in the Western Cape increased. The Langgewens Research Farm (LRF) were established in 1996. This was a long-term crop/pasture rotation trail. The aim of the project was to achieve the following objectives in the Swarland region: increase crop yield, increase protein and oilseed production, reduce input cost, increase diversification and improve financial stability. Limited research is available on the risk profile of the different rotation systems in the Swartland. The primary objective of this study is to evaluate the risk profile of the eight rotation systems on Langgewens experimental farm in the Western Cape. The gross margin analysis of the eight rotation systems from 2002 up to and including 2020 was utilised for this purpose. The stochastic dominance with respect to a function (SDRF) and stochastic efficiency with respect to a function approach (SERF) was used to evaluate the risk profile according to a decision makers risk preference. Wheat is still the largest crop produced in the Swartland and the main aim of the Langgewens farm is to increase farmers profitability. The effect of previous year’s crop on the current year’s wheat production was also utilised on a two year basis. The SDRF results indicated that System H (McWMcsW) was the optimal rotation system for a risk neutral and a risk averse decision maker, with System E (MWMW) and System F (McWMcW) rotation following close behind. These findings were supported by the results reported using the SERF method under a negative exponential utility function as well as the stoplight determination. Hence, the McWMcsW rotation system was overall found to be the optimal rotation system, followed by the MWMW and the McWMcW system for all decision makers with an absolute risk aversion coefficient (ARAC) between 0 and 0.000781. The results from a two year cycle showed that planting wheat after medic/clover in rotation had the highest yield and greatest value per ton with the lowest total expenses. In a dry season, wheat yield (kg/mm) was the highest after canola or lupin was planted in rotation, whereas higher yields were seen after planting medic/clover in rotation during rainy seasons.

AFRIKAANSE OPSOMMING : Koringproduksie in Suid-Afrika word grootliks deur drie van die land se nege provinsies aangedryf, naamlik die winterreënvalstreek van die Wes-Kaap en die somerreënvalstreke van die Vrystaat en Noord-Kaap. Bewaringslandbou is 'n omvattende benadering tot volhoubare boerdery om voedselsekerheid en volhoubaarheid te verseker. Daar is drie hoofbewaringsbeginsels wat bewaringslandbou beheer, naamlik minimum grondversteuring, permanente bedekking van die grond en wisselbou. In 1996 is die landbousektor gedereguleer en die Koringbemarkingsraad is afgeskaf. As 'n direkte gevolg van die deregulering van die landbousektor, is boere aan meer wisselvallige markte blootgestel. Dit het 'n meer komplekse produksiestelsel saamgestel, waarin wisselbou in produksiestelsels oorweeg moes word en die kompleksiteit van besluitneming in graanproduksiegebiede in die Wes-Kaap verhoog het. Die Langgewens Navorsingsplaas (LRF) is in 1996 gevestig. Dit was 'n langtermyn wisselbou proef vir gewas/weiding. Die doel van die projek was om die volgende doelwitte in die Swarland-streek te bereik: verhoog oesopbrengs, verhoog proteïen- en oliesadeproduksie, verlaag insetkoste, verhoog diversifikasie en verbeter finansiële stabiliteit. Beperkte navorsing is beskikbaar oor die risikoprofiel van die verskillende rotasiestelsels in die Swartland. Die primêre doelwit van hierdie studie is om die risikoprofiel van die agt rotasiestelsels op Langgewens proefplaas in die Wes-Kaap te evalueer. Die bruto marge-ontleding van die agt rotasiestelsels vanaf 2002 tot en met 2020 is vir hierdie doel benut. Die stogastiese dominansie met betrekking tot 'n funksie (SDRF) en stogastiese doeltreffendheid met betrekking tot 'n funksiebenadering (SERF) is gebruik om die risikoprofiel te evalueer volgens 'n besluitnemers se risikovoorkeur. Koring is steeds die grootste gewas wat in die Swartland geproduseer word en die hoofdoel van die Langgewens-boerdery is om boere se winsgewendheid te verhoog. Die effek van vorige jaar se oes op die huidige jaar se koringproduksie is ook op 'n twee jaar basis ondersoek. Die SDRF-resultate het aangedui dat Stelsel H (McWMcsW) die optimale rotasiestelsel was vir 'n risiko-neutrale en 'n risiko-sku besluitnemer, met Stelsel E (MWMW) en Stelsel F Stellenbosch University (McWMcW)-rotasie wat kort daarna volg. Hierdie bevindinge is ondersteun deur die resultate wat gerapporteer is deur gebruik te maak van die SERF metode onder 'n negatiewe eksponensiële nutsfunksie sowel as die stoplig bepaling. Daarom is gevind dat die McWMcsW-rotasiestelsel oor die algemeen die optimale rotasiestelsel is, gevolg deur die MWMW- en die McWMcW-stelsel vir alle besluitnemers met 'n absolute risiko-aversiekoëffisiënt (ARAC ) tussen 0 en 0.000781. Die resultate van 'n twee jaar siklus het getoon dat die aanplant van koring na medic/klawer in rotasie die hoogste opbrengs en grootste waarde per ton met die laagste totale uitgawes gehad het. In 'n droë seisoen was koringopbrengs (kg/mm) die hoogste nadat canola of lupiene in rotasie geplant is, terwyl hoër opbrengste gesien is na plant medic/klawer in rotasie gedurende reënseisoene.

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