Lending to Small-scale Farmers in South Africa PDF Download
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Author: Nontobeko Qwabe
Publisher:
ISBN:
Category :
Languages : en
Pages : 206
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Book Description
Author: Nontobeko Qwabe
Publisher:
ISBN:
Category :
Languages : en
Pages : 206
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Book Description
Author: Kojo Spio
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This study is an exploratory analysis of the impact and accessibility of formal agricultural credit to small-scale farmers, based on data collected from a sample of farmers in two regions of South Africa's Limpopo Province. The main aims of the research were to: -- Determine the impact of credit and its shadow price. -- Investigate the efficiency of the rural financial market. -- Determine the characteristics and factors that influence the accessibility of credit in the small-scale farming sector, as well as the differential access to credit within the sector. The results of the study indicate that productivity differs between borrowers and non-borrowers. The difference of 40% in favour of borrowers is caused both by credit use (21%) and the farmers' inherent characteristics. Thus, credit can increase a randomly selected farmer's output b 21 per cent. The marginal credit return rate is 2.10 at zero loan, implying a 110 per cent shadow price of capital. The hypothesis that non-borrowers are credit constrained is empirically supported. The marginal credit effect at mean loan size is 1.35, indicating that the average loan size is below income-maximising size. This implies that loan-quantity rationing is still prevalent among borrowers, and that it is possible that borrowers may still be liquidity constrained but to a lesser degree than non-borrowers. The estimated shadow-price of credit (35%) exceeds the average interest rate (18%) also suggesting that the rural credit markets in the survey areas are not o9perating in the most efficient manner. It also indicates that the farmers in the study area can afford to pay the prevailing market interest rate. About 29.4% of the farmers sampled for the study had access to formal credit. More than 57% of the credit used by small farmers comes from informal credit. Access to formal credit is also highly skewed, and shows greater ease of access for large farm size than smaller groups. Factors such as area cultivated, family labour, title deed, non-farm income, remittances and pensions (social benefits), awareness of the availability of credit, and repayment records are found to be important variables in predicting accessibility of credit to small scale farmers in the study area. The main findings are: -- Small-scale farmers have limited and differential access to credit: those with holdings approaching commercial size are better-off. -- Rural agricultural financial markets are inefficient. Borrowers and non-borrowers alike are credit constrained. -- Credit is not too expensive to be used profitably: it effects on productivity can improve the welfare of small-scale farmers. In view of these findings, the following policy proposals are suggested. Firstly, the policy of not providing interest rate subsidies for loans is justified. Credit subsidisation, with its unfortunate history, should be avoided. Secondly, there is the need to restructure costly and poorly performing rural financial institutions to effectively and efficiently provide the needed services to its clientele. To ensure rapid credit delivery, it is also imperative that agricultural institutions are encouraged to decentralise their activities. Expansion of banking outlets is one of the most important surge factors affecting financial services. In addition, policy makers should also focus on critical elements of the financial infrastructure, such as the information system and training facilities, which are necessary for the development of the rural financial system in South Africa. Finally, the threshold for entry into the financial market is simply too high for many. Hence, creating a conducive environment in rural areas is one of the areas that will require more attention. Investment in rural infrastructure will also act as catalyst for the establishment of some of the missing institutions that cause market failures in rural financial markets.
Author: N. Vink
Publisher:
ISBN:
Category : Agricultural prices
Languages : en
Pages : 88
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Book Description
Author: Naison Zumbika
Publisher:
ISBN:
Category : Agricultural credit
Languages : en
Pages : 88
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Book Description
Highlights the main characteristics of smallholder credit systems in Zimbabwe for the period 1980 to 1999.
Author: Herman D. van Schalkwyk
Publisher: Springer Science & Business Media
ISBN: 9086861687
Category : Science
Languages : en
Pages : 263
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Book Description
This book assesses the institutional, technical and market constraints as well as opportunities for smallholders, notably, emerging farmers in disadvantaged areas such as the former homelands of South Africa. Emerging farmers are previously disadvantaged black people who started or will start their business with the support of special government programs. Public support programs have been developed as part of the Black Economic Empowerment strategy of the South African government. These programs aim to improve the performance of emerging farmers. This requires, first and foremost, upgrading the emerging farmers skills by providing access to knowledge about agricultural and entrepreneurial practices. To become or to remain good farmers they also need access to suitable agricultural land and sufficient water for irrigation and for feeding their cattle. Finally, for emerging farmers to be engaged in viable farming operations, various factors need to be in place such as marketing and service institutions to give credit for agricultural inputs and investments; input markets for farm machinery, farm implements, fertilizers and quality seeds; and accessible output markets for their end products. This book develops a policy framework and potential institutional responses to unlock the relevant markets for smallholders.
Author: Leslie Nyagah
Publisher: Institute for Democracy in South Africa
ISBN: 9781920409678
Category : Agriculture
Languages : en
Pages : 0
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Book Description
"Seeds for Growth: Financing smallholder farming in southern Africa explores how governance and political decision-making about the allocation of resources could transform the smallholder agricultural landscape in southern Africa. It affirms the role smallholder agriculture can play in a national and regional political system in the pursuit of social and economic justice. The authors take a fresh look at the ways in which governments can allocate resources to the sector so that it achieves its potential to ensure food security, alleviate poverty and promote economic growth. This book challenges the "us" and "them" mentality and demonstrates the need to shift from the centralised policy-making and resource allocation, to a more integrated vision of governance, in which politically mature rural communities, together with their civil society partners, can support social and economic justice, and hold their governments accountable. It also examines how advocacy can support such a vision"--Publisher description.
Author: Peter B. R. Hazell
Publisher:
ISBN: 0199689342
Category : Business & Economics
Languages : en
Pages : 641
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Book Description
At the same time, many other smallholders are successfully intensifying and succeeding as farm businesses, often in combination with diversification into off-farm sources of income.
Author: Khalid Mohamed
Publisher:
ISBN:
Category : Credit
Languages : en
Pages : 64
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Book Description
Author: Sylvain Perret
Publisher: Editions Quae
ISBN: 9781919825922
Category : Art
Languages : en
Pages : 326
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Book Description
Author: Food and Agriculture Organization of the United Nations
Publisher: Food & Agriculture Org.
ISBN: 9251307113
Category : Technology & Engineering
Languages : en
Pages : 70
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Book Description
Through an array of project outcomes in different countries, this paper demonstrates that contract farming is a “win–win” solution because young workers gain access to markets, while private companies have access to produce without acquiring land or supervising labour.
