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Efficiency Of Land Use

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  • Nieuwoudt, W. L.

Abstract

In the communal agricultural sectors three reasons for market failure were advanced (a) free access to communal grazing which is a problem if the group is larger than the immediate family (b) lack of incentive to invest in improved pastures and fodder production due to the free rider situation and (c) opportunity cost of land differs from what market forces will determine. Commercial land expropriated should be resettled on a private individual tenure basis by small scale farmers and not on a communal basis. Under a communal system the return (rent) on grazing land is zero while the return on arable land is low due to lack in permanent tenure. This explains idle arable land in KwaZulu in spite of population pressure. The rental value is the cost to the farmer for non usage of land if it can make a positive contribution. The market mechanism penalizes the commercial farmer for the non usage of commercial land. A land tax does not increase this cost and will thus not bring unproductive land into production. (The supply of land is not perfectly inelastic due to improvements). Taxes on agricultural land have certain advantages such as (a) avoidance less possible than income taxes(b) a wealth tax and (c) may better target to wealthy landowners who with the assistance of tax experts arc better able to avoid taxes. Disadvantages of land taxes are that administration cost may be high and the tax is the same in good and bad years.

Suggested Citation

  • Nieuwoudt, W. L., 1990. "Efficiency Of Land Use," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 29(4), December.
    • Handle: RePEc:ags:agreko:267313
    DOI: 10.22004/ag.econ.267313
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    References listed on IDEAS

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    Cited by:

    1. Knight, S & Lyne, M & Roth, M, 2003. "Best Institutional Arrangements For Farm-Worker Equity-Share Schemes In South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 42(3).
    2. Sparks, Garreth D. & Ortmann, Gerald F. & Lyne, Michael C., 2011. "PR - An Analysis Of Cooperative Biodiesel Production By Smallholders In Kwazulu-natal, South Africa (p444-462)," 18th Congress, Methven, New Zealand, 2011 345597, International Farm Management Association.
    3. Kille, G. S. & Lyne, M. C., 1993. "Investment On Freehold And Trust Farms: Theory With Some Evidence From Kwazulu," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 32(3), September.
    4. Ortmann, Gerald F., 2005. "Promoting the competitiveness of South African agriculture in a dynamic economic and political environment," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(3), pages 1-35, September.
    5. Lyne, M. C. & Thomson, D. N. & Ortmann, G. F., 1996. "Institutional Change To Promote Land Rental Markets I In The Developing Regions Of Southern Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 35(1), March.
    6. Ortmann, Gerald F., 2000. "Promoting competitiveness in South African agriculture and agribusiness: The role of institutions," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 39(4), pages 1-33, March.
    7. Wynne, Adrian T. & Lyne, Michael C., 2003. "Rural Economic Growth Linkages and Small Scale Poultry Production: A Survey of Poultry Producers in KwaZulu-Natal," 2003 Annual Conference, October 2-3, 2003, Pretoria, South Africa 19095, Agricultural Economics Association of South Africa (AEASA).
    8. Dengu, T. & Lyne, Michael C., 2007. "Secure land rental contracts and agricultural investment in two communal areas of KwaZulu-Natal," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(3), pages 1-12, September.
    9. Lyne, M. C. & Ortmann, G. F., 1992. "Suggestions For Agricultural Economics Research In South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 31(4), December.
    10. Oosthuizen, L.K., 1998. "Agriculture As A Driving Force Of Economic Development: Suggestions For Agricultural Development Policy In Southern Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 37(4), pages 1-21, December.
    11. Wynne, Adrian T. & Lyne, Michael C., 2004. "Rural economic growth linkages and small scale poultry production: A survey of producers in KwaZulu-Natal," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 43(1), pages 1-21, March.
    12. Mahabile, M & Lyne, M & Panin, A, 2002. "Factors Affecting The Productivity Of Communal And Private Livestock Farmers In Southern Botswana: A Descriptive Analysis Of Sample Survey Results," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 41(4).
    13. Moor, G. M. & Nieuwoudt, W. L., 1995. "The Interaction Between Land Tenure Security And Agricultural Productivity In Zimbabwe," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 34(4), December.
    14. Mahabile, M. & Lyne, Michael C. & Panin, A., 2005. "An empirical analysis of factors affecting the productivity of livestock in southern Botswana," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(1), pages 1-19, March.

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    Keywords

    Land Economics/Use; Productivity Analysis;

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