Participation by smallholder farming entrepreneurs in agro-processing activities in South Africa
Thindisa, Lesibana Mahlogedi Victor
South Africa faces numerous economic and social challenges. Three very important challenges are high unemployment rate, high poverty rate and high inequality. Agriculture is identified as a sector with the potential to contribute towards the amelioration of high unemployment and high poverty rates. Agro-processing in particular is identified as having the potential to improve the sustainability and profitability of farming enterprises. The potential of agro-processing remains unexploited. Agro-processing refers to a set of technological and economic activities undertaken on a basic agricultural product with the aim of transforming it into a usable item such as food, fibre, fuel or industrial material. The study addressed a research gap by focusing on smallholder farmers and linking entrepreneurship with agro-processing. This research empirically tested the relationships between participation in agro-processing activities by smallholder farming entrepreneurs and human capital, social capital and market access and the degree to which each was moderated by the transaction cost. Further, the study tested the relationship between participation in agro-processing activities, all variables jointly and cumulatively. Structured questionnaires were administered during smallholder farmer meetings in three provinces namely, Western Cape, Limpopo and Gauteng. A hierarchical multi-regression analysis was used as the main statistical tool to test hypotheses. The main findings of the study were that the relationship between human capital and participation in agro-processing activities by smallholder farming entrepreneurs is positive and significant. Similarly, the relationship between social capital and participation in agro-processing activities is positive and significant. However, the relationship between market access and participation in agro-processing activities was negative and significant. Finally, transaction cost had an enhancing moderating effect on the relationship between market access and participation in agro-processing activities by smallholder farming entrepreneurs. iii Findings further suggest that human capital is fundamental to sustainable development considering participation in agro-processing activities. Social capital of smallholder farming entrepreneurs may be enhanced through mentorships and partnerships with neighbouring commercial farmers and agro-processors. Lower transaction costs were likely to enhance market access by smallholder farmers.
Thesis (M.M. (Entrepreneurship and New Venture Creation))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2014.