Modelling the exiting of South African producers from commercial agricultural production – an agent-based model

ABSTRACT

This paper explores the prospects of commercial producers who would be willing to exit voluntarily in the near future to make land available in the market. In addition, it also considers what factors are restricting the acceleration of this rate of exit from a land-supply perspective with respect to barriers to exit. The prospect of structural change from such acceleration is also explored using three scenarios. An agent-based mathematical model is used to implement the three scenarios. This model is constructed from a dataset of 450 commercial producers across South Africa. The results suggest that a reasonable amount of arable land could be available for redistribution, with only modest structural change regarding animal production, despite drastic alterations in veld. These results provide some guidelines on how assistance for struggling producers can make land available for efficient producers, which could make the sector stronger. All potential exiting commercial producers have common reasons for doing so, which could be used to initiate a positively inclined, structured discussion on land supply.

KEYWORDS:

• Barriers to exit
• agent-based modelling
• structural change
• production output
• commercial agriculture

JEL CODES:

• Q12
• Q15

Acknowledgements

We would like to thank Stefan Mann, Gabriele Mack and Jan C Greyling for their comments in previous draft of the paper. We also appreciate the constructive comments of the editor and two anonymous reviewers.

Data availability statement

The datasets generated during and/or analysed during the current study are available from the corresponding author on reasonable request.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by National Research Foundation. Opinions expressed and conclusions arrived at, are those of the author/s and are not necessarily to be attributed to the NRF.