Agricultural efficiency in South Africa's former homelands: Measurement and implications

This article uses data envelopment analysis to estimate agricultural efficiency in the former homelands of KaNgwane, Lebowa and Venda. Farm‐level survey data are used to estimate total production efficiency, and a distinction is drawn between technical and scale efficiency. Efficiency levels for the three ‘homelands’ are compared for the normal year of 1990/1, and then the effect of the 1992 drought year on efficiency is determined.

Relatively large efficiency gains can be achieved in the homelands by redistributing more land to some farmers, in order to increase the size of farms. Those farmers who are efficient in years of normal rainfall suffer greater efficiency losses in years of drought. In particular, they incur debts which will affect their credit position in the future. The implications are importantfor the design of Farmer Support Programmes in these areas.

Notes

Respectively, Department of Management, Birkbeck College, University of London; Department of Agricultural Economics, University of Pretoria, currently on sabbatical at the World Bank: Department of Agricultural Economics, University of Reading; and Department of Agricultural Economics, University of Pretoria. The authors are grateful to the Development Bank of Southern Africa for helpful discussions and for supporting this project financially, and to two anonymous referees for their valuable comments.