Effects of Market Access on Income of Cattle Farmers in the Capricorn District of Limpopo Province, South Africa

Abstract

Market access plays a crucial role in improving the income of small-scale farmers in rural areas parts of South Africa. Despite this, access to formal markets in the Limpopo Province is low due to a range of constraints. Small scale farmers' involvement in formal markets could lead to increased productivity, income and food security. The aim of the study was to determine the effects of market access on income of small-scale cattle farmers. The objectives were to describe the socio-economic characteristics of small cattle farmers in the Capricorn district and to analyse the factors affecting cattle farmers' access to the formal market as well as, the effect of market access on the gross income of farmers. The study was conducted in the Capricorn District of the Limpopo Province, South Africa. Data was collected from a sample of 159 small-scale cattle farmers with a minimum of 20 cattle in all four municipalities of the District. A proportionate random stratified sampling was used with each municipality covering 59% of the population. Data collected was captured and analysed using SPSS and STATA to obtain descriptive statistics, logistic regression and two stage least squares regression. The descriptive statistics were used to describe the socio-economic characteristics of small-scale cattle farmers. The results of the study show that males constituted 56% of the respondents. Furthermore, the majority of the respondents were married (59%), had at least secondary education (74%) and were farming with mixed livestock (46%).The most used type of market was open market (51%), followed by auctions (29%). It was revealed that farmers used this open market because the buyers were close to business (49%).The logistic regression results show that municipality, educational level, land tenure system, transport availability and total land size had a positive impact on farmers' access to the formal market. Two stage least squares regression was used to determine the effects of market access on the income of small-scale cattle farmers. The results show that transports costs, municipality, educational level, land size and land tenure system had a significant and positive relationship with farmers' income. Furthermore, market access, type of breed, road infrastructure, pricing strategy and gender were found to be negatively related to farmers' income. The study rejected the hypothesis that none of the socio-economic characteristics of small-scale cattle farmers affect access to the formal market based. Similarly, the hypothesis that market access has no effect on income of small-scale cattle farmers was also rejected based on two stage least squares regression results. Based on the findings of the study, several recommendations were made. These include improving access to land, formation of farmer groups and establishment of a one-stop service centre.