The Business Performance of small-scale tomato farmers in the Thulamela Local municipality

Abstract

This study investigates the determinants of business performance among small-scale tomato farmers in Thulamela Local Municipality, South Africa, focusing on three critical factors: access to capital, technology adoption and labour productivity. Small-scale farming plays a vital role in South Africa's rural economy, contributing to food security and employment. However, these farmers face significant challenges, including limited financial resources, low adoption of modern technologies and labour inefficiencies, which hinder their business performance and sustainability. The study aims to identify strategies to enhance the business performance of smallholder tomato farmers by examining the impact of these key determinants. Using a quantitative research approach, data were collected through structured surveys from a stratified random sample of 100 small-scale tomato farmers in Thulamela. The data were analysed using SAS software's exploratory factor analysis (EFA), reliability testing, correlation analysis and regression modelling. The findings reveal that technology adoption (β = 0.495, p < 0.001) is the strongest predictor of business performance, followed by access to capital (β = 0.361, p < 0.001) and labour productivity (β = 0.293, p = 0.001). These results align with the Resource-Based View (RBV), Innovation Diffusion Theory (IDT) and Sustainable Livelihoods Framework (SLF), highlighting the importance of financial, technological and human resources in enhancing smallholder business performance. The study’s key recommendations include expanding microfinance programmes, subsidising agricultural technology and strengthening workforce training initiatives. In conclusion, this study underscores the interconnectedness of financial, technological and human capital in driving smallholder business performance. By addressing these determinants, small-scale tomato farmers can achieve greater productivity, profitability and resilience, contributing to broader economic development and food security in South Africa.