An economic appraisal of a South African producer co‐operative

Abstract

In an earlier article in this journal, the authors analysed the financial results of a South African producer co‐operative over a ten‐year period. The study focused on the commercial viability of the cooperative in terms of the exigencies of the market place expressed in current prices. In the present study, cost‐benefit techniques are used to extend the analysis to an investigation of the economic viability of the co‐operative and an assessment of whether scarce financial and other resources have been misallocated. The concept of investment cost per Job is widened to include the cost of maintaining a Job. Various scenarios such as sales growth, lower wages and the benefits of government incentives were simulated to analyse the viability of the enterprise under differing conditions.

Notes

Department of Economics, University of Natal. Pietermaritzburg.