Analysis of smallholders’ farm diversity and risk attitudes in the Stellenbosch local municipal area

Thesis (MScAgric)--Stellenbosch University, 2015.

ENGLISH ABSTRACT: The objective of this study was to consider whether smallholders operate within homogenous or differentiated farming systems i.e. a similar “‘one type”’ system or a system that could be described as a smallholder typology consisting of a number of farming types. The enquiry firstly described and analysed farm diversity and then developed risk attitude profiles of smallholder farmers in the Stellenbosch local municipal area in the Western Cape province of South Africa. The problem statements, directing this study is that there is a general misconception that smallholders are all “‘the same’” and that they all operate within one ‘“representative farming model”’; and that the majority of smallholders are risk averse. These views also argue that all smallholder farmers are not primarily directed at profit objectives, but that social considerations are most relevant and that different social orientations are shaping farming systems. These views are investigated in this study and the hypotheses directing this analysis is that smallholders in the study area are not a homogenous group; rather types within a broader farming typology, with different orientations and objectives and with different risk attitude profiles. The study originated as part of an international collaborative investigation – the South African Agrarian Diagnoses project, a joint research project of the Agro Paris Tech/Agence Francaise de Development, the Standard Bank Centre for Agribusiness Development and Leadership, Stellenbosch University and the University of Pretoria in to farmer diversity and farmer typologies in South Africa. This investigation looked at smallholder farming in different agrogeographical areas in South Africa, with this particular study focussing on potential smallholder farmer diversity in the Stellenbosch local municipal area. The Stellenbosch local municipality and Western Cape Department of Agriculture provided logistical support, information to this investigation and participated in focus group sessions. Smallholder activity in this study was defined to include both small scale farming activities and the mobilisation of smallholders/farm workers in so-called ‘“farm worker equity schemes’” – a type not included in the other regions. Data was collected from eight smallholders’ farming communities and the four different farm workers’ equity share schemes through surveys and interviews. The following towns and hamlets: Franschhoek, Kylemore, Lanquedoc (Herbal View and Spier Corridor), Pniel, Jamestown, Raithby, Lynedoch and Koelenhof; and four farm workers’ equity share schemes were: Swartrivier vineyard project, Koopmanskloof vineyard project, Enaleni Trust and Poker Hill vineyard project. Personal interviews and focus group discussions were conducted and cluster analysis was used for the diversity (typology) analysis and the Likert scale was employed to measure risk attitude profiles. A non-probability sampling approach was used to select a sample size of 49 respondents. The reason for using non-probability sampling technique was that when one wants to do the diversity analysis, one must try to include many respondents in the sample and the farmers that are included must be representative of the population from which they are selected. The variables selected as determinants of farm diversity included information about: demographics and households, land ownership and occupation, farming activities, farming objectives, agricultural inputs, labour, equipment, farming constraints, access to markets, financial support services, educational and training services, extension services and reasons for quitting farming activities. From this, different farming types and typologies were identified, described and structured. Preference indications for different risk management strategies were then used to measure and describe the risk attitudes of different types of smallholder farmers using the Likert risk attitudinal scale. The results and findings confirmed the study hypotheses relating to diversity in smallholder farming in the target area, namely that smallholders in this geographical area are not a homogenous group and rejects the stated hypotheses that most smallholder farmers are risk averse. A Stellenbosch smallholder typology, with six different farming types were established viz: type 1 – farmland-occupying but non-farming households (10.2% of the sample), type 2 – pensioner – livestock farmers (16.3% of the sample), type 3 – part-time cattle farmers (14.3% of the sample), type 4 – commercial equity share farmers (16.3% of the sample), type 5 – retirement planning crop producers (20.4% of the sample), and type 6 – commercial crop producers (22.5% of the sample). With regard to risk profiles, risk attitudes varied between these types and also within each type, hence risk attitudes for smallholders are also not found to be similar. The results revealed that those smallholder farmers moving on a development path towards commercial agriculture (types 4, 5 and 6) were risk preferring; less commercially orientated farm types (types 1, 2 and 3), showed risk averse and risk neutral orientations. The risk profile percentages of farmers interviewed were 43.2%, 34.1% and 22.7%, respectively for risk preferring, risk neutral and risk averse; this finding rejects the stated hypotheses. From these results, a number of issues, relevant to development support programmes, were proposed for further agricultural economic research. The most important of these are related to: appropriate development support strategies related to farm types and the potential development paths for each type; and the structuring of appropriate ‘“risk management instruments”’ for each type, in particular to support smallholder farmers; with a development trajectory towards commercial farming, i.e. to support emerging commercial farmers – an important category of farming listed in current government policy and in the National Development Plan.

AFRIKAANSE OPSOMMING: Die doelwit van hierdie studie was om ondersoek in te stel na die tipe kleinboere-stelsel (smallholder farming systems) wat voorkom in die Stellenbosch munisipale gebied in die WesKaap provinsie van Suid Afrika en die eenvormigheid al dan nie daarvan te ontleed. Eerstens is plaasdiversiteit ondersoek en ontleed; en daarna die risikohoudings van sondagie kleinboere. Die ontledings is dan gebruik om uitspraak te gee oor die eenvormigheid of diversiteit van kleinboerestelsels in die geogafiese gebied. Die probleemstelling wat hierdie studie gerig het, was dat daar ’n algehele wanbegrip mag bestaan dat kleinboere almal “dieselfde” is, of binne n ‘“eenvormige verteenwoordigende boerderymodel”’ funksioneer; en dat, gekoppel hieraan, die meerderheid kleinboere risikoafkerig is. Hierdie sienings hou ook voor dat alle kleinboere nie noodwendig op winsdoelwitte fokus nie, maar dat maatskaplike oorwegings ook relevant is en dat verskillende oriëntasies boerderystelsels vorm. Hierdie sienings word in hierdie studie ondersoek en die hipotese wat die analise rig, is dat die kleinboere in die studie nie ’n eenvormige of homogene groep is nie, eerder verskillende soorte/tipes kleinboere met verskillende oriëntasies en doelwitte en dus ook met verskillende risikohoudings. Die studie het sy oorsprong as deel van ’n internasionale samewerkende ondersoek – die South African Agrarian Diagnoses-projek van die Agro Paris Tech/Agence Francaise de Development, die Standard Bank Sentrum vir Agribesigheidsontwikkeling en Leierskap, Universiteit van Stellenbosch endie Universiteit van Pretoria oor die diversiteit en tipologieë van kleinboere in Suid Afrika. Hierdie ondersoek het gekyk na verskillende agro-geologiese gebiede in SuidAfrika, met hierdie studie wat gefokus het op die potensiële diversiteit van boere in die Stellenbosse plaaslike munisipale gebied. Die Stellenbosche Munisipaliteit en Departement van Landbou in die Wes Kaap het ondersteunend gestaan met logistiek en deelname aan fokusgroep gesprekke. Kleinboeraktiwiteit in hierdie studie is gedefinieer om beide kleinskaalse boerderyaktiwiteite op klein grond persele, as ook die mobilisering van kleinboere/plaaswerkers in sogenaamde gedeelde boerdery - eienaarskapskemas in te sluit – n unieke tipe wat nie in die ander streke ondersoek is nie.. Data is vanuit agt kleinboergemeenskappe en die vier verskillende gedeelde eienaarskapskemas vir plaaswerkers deur middel van opnames en onderhoude bekom. Die boerderygemeenskappe was in die volgende dorpe en klein dorpies gevestig: Franschhoek, Kylemore, Lanquedoc (Herbal View en Spier Corridor), Pniel, Jamestown, Raithby, Lynedoch en Koelenhof; en die vier gedeelde eienaarskapskemas vir plaaswerkers was: die Swartrivier wingerdprojek, die Koopmanskloof wingerdprojek, Enaleni Trust en die Poker Hill wingerdprojek. Persoonlike onderhoude en fokusgroepbesprekings is gehou en cluster analise is gebruik vir die diversiteit (tipologie) analise en die Likertskaal is gebruik risiko houding profiele te meet. 'N niewaarskynlikheidsteekproefneming benadering is gebruik om 'n steekproefgrootte van 49 respondente te kies. Die rede vir die gebruik van nie-waarskynlikheidsteekproefneming tegniek was dat wanneer 'n mens die diversiteit ontleding te doen, moet 'n mens probeer om soveel respondente in die monster en die boere wat ingesluit is, moet verteenwoordigend van die bevolking waaruit hulle gekies word om te sluit. Onderhoude is gedoen met sulke kleinboere en trosanalise is gebruik vir die analise van diversiteit (tipologie), en die Likert-skaal is gebruik om risikohoudingsprofiele te meet. Die veranderlikes wat as determinante van plaasdiversiteit gekies is, het inligting oor demografie en huishoudings, grondeienaarskap en -besetting, boerderyaktiwiteite, boerderydoelwitte, landboukundige insette, arbeid, toerusting, boerderybeperkings, marktoegang, finansiële ondersteuningsdienste, opvoedkundige en opleidingsdienste, uitbreidingsdienste en redes hoekom boerdery laat vaar is, ingesluit. Hieruit is verskillende boerderytipes geïdentifiseer en gekonstrueer. Voorkeure opsies vir verskillende risikobestuurstrategieë is gebruik om die risikohoudings van die deur middel van die Likert risikohoudingskaal te meet. Die resultate van hierdie studie het die hipotese oor die aanwesigheid van diversiteit bevestig, naamlik dat kleinboere in hierdie geografiese gebied nie ’n homogene groep is nie n verwerp die gestelde hipoteses dat die meeste kleinboere is risiko-sku. ’n Stellenbosch-tipologie, bestaande uit ses verskillende boerderytipes, is vasgestel: tipe 1 – huishoudings wat nie boer nie maar wat op landbougrond woon (10.2% van die monster), tipe 2 – pensioenaris-veeboere (16.3% van die monster), tipe 3 – deeltydse veeboere (14.3% van die monster), tipe 4 – kommersiële gedeelde eienaarskapskema boere (16.3% van die monster), tipe 5 – gewasprodusente wat aftrede beplan (20.4% van die monster), en tipe 6 – kommersiële gewasprodusente (22.5% van die monster). Met betrekking tot risikoprofiele het risikohoudings tussen die tipes en ook binne elke tipe gewissel, dus is die risikohoudings van kleinboere ook nie gevind om dieselfde te wees nie. Die resultate toon dat kleinboere wat in die rigting van kommersiële landbou beweeg (tipes 4, 5 en 6) risiko-voorkeurend is; daarenteen het minder kommersieel gerigte plaastipes (tipes 1, 2 en 3)risiko-afkerige en risiko-neutrale instellings getoon. In die geheel was die persentasies 43,2%, 34.1% en 22.7% vir risiko-voorkeurend, risiko-neutraal en risiko-afkerig onderskeidelik, wat ook die diversiteitshipotese ondersteun. Vanuit hierdie bevindings word ’n aantal kwessies wat relevant is vir ontwikkelingsondersteuningsprogramme vir kleinboere op verskillende ontwikkelingstrajekte, voorgestel vie verder elandbou ekonomiese navorsing. Die belangrikste hiervan hou verband met die aangewese ontwikkelingstrajekte per kleinboer tipe en daarmeegepaardgaande gepaste “risikobestuurinstrumente” – veral vir die ondersteuning van kleinboere met ’n ontwikkelingstrajek na kommersiële boerdery, m.a.w. opkomende kommersiële boere – ’n belangrike boerderykategorie wat in huidige regeringsbeleid en in die Nasionale Ontwikkelingsplan geprioritiseer word.

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