Agriculture: A perspective on medium‐term prospects

Abstract

Future developments, both in rehabilitation of commercial agriculture, and commercialization of subsistence agriculture, depend on product markets, both local and foreign. International markets are depressed because of monetary factors, product expansion and agricultural policies of the USA and EC. Sanctions can harm export and local markets. Market expansion also depends on marketing efficiency. Increased incomes normally cause expansion of markets for animal products and feed grains. These products tend to have elastic demands, and exhibit a large degree of substitutability. Human demand for grain products is inelastic. Increased revenues will cause substitution of bread for white maize. Price and income elasticities of demand for vegetables are low. Market segmentation can be important in future. High elasticities of demand for certain fruits, some of which are mainly exported, provide scope for local market expansion. The 1990s may experience higher rainfall than the 1980s. Agricultural supply is inelastic. New developments, for example in present technology in much of the commercial sector, are inappropriate for new development. The same applies to product choice.

Notes

University of Pretoria.