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Institutional Innovation To Increase Farmers' Revenue: A Case Study Of Small Scale Farming In Sheep: Transkei Region, South Africa

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  • D'Haese, Marijke F.C.
  • Verbeke, Wim
  • Van Huylenbroeck, Guido
  • Kirsten, Johann F.
  • D'Haese, Luc

Abstract

Commercial producers, brokers, exporters and spinners dominate the wool supply chain in South Africa. Until recently smallholder farmers in the Transkei region had limited access to a profitable market outlet for their wool. In response, the South African wool industry has taken the initiative to help local farmers by building shearing sheds, under which the local association can bulk the wool and trade directly with the brokers. More direct access to the wool brokers is a prerequisite for the farmer to develop a viable business. This article investigates on the effect of membership in the local shearing shed association on the farmers' revenue. A two-step regression model of the gross margin is used to analyse whether farmers selling through the local association have better financial records as compared to those who sell their wool to local traders. This article exemplifies how institutional innovation through local marketing associations can contribute to economic development in poor rural areas.

Suggested Citation

  • D'Haese, Marijke F.C. & Verbeke, Wim & Van Huylenbroeck, Guido & Kirsten, Johann F. & D'Haese, Luc, 2003. "Institutional Innovation To Increase Farmers' Revenue: A Case Study Of Small Scale Farming In Sheep: Transkei Region, South Africa," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25888, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae03:25888
    DOI: 10.22004/ag.econ.25888
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    1. Getaneh, Wubalem & Bekabil, Fufa, 2008. "Integrating Small Scale Farmers into Bread Wheat Marketing Chain through Contract Farming in Ethiopia," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52101, African Association of Agricultural Economists (AAAE).

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