Agricultural supply response for sunflower in South Africa (1947–2016): The partial Nerlovian framework approach

Abstract

The study estimates sunflower supply response in South Africa using time series data from 1947 to 2016, modelled through the Nerlovian Partial Adjustment approach. Short- and long-run price elasticities of 0.238 and 0.313 respectively, suggest that farmers do not easily adjust acreage devoted to sunflower given price changes, indicating the influence of other non-price factors. An adjustment coefficient of 0.272 indicates that the time taken to adjust from the actual to the desired acreage level is slow, at 27% per year. The estimated elasticities provide some scope for using price and non-price incentives to influence sunflower production in the long-run. This could facilitate decision-making by sunflower producers to spearhead internal and external adjustment processes. The study contributes to a growing body of literature on agricultural supply response determinants, thus providing evidence-based macro-economic tools towards agricultural policy-making and reform process.

Keywords:

• supply response
• elasticities
• sunflower
• acreage
• Nerlovian partial adjustment

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 The major influential changes in the global sunflower market were characterized by the transformation of a highly regulated international industry to an essentially free one (Meyer 2005; SAGIS 2006).

2 These crops were chickpea, lentil, mung, mash, wheat, cotton, sugarcane, maize and rice.

3 This builds from work on a poster presented at the 55th AEASA conference by Mamabolo et al. (2017) on agricultural research data rescue through collaborative partnerships.

4 https://www.resbank.co.za/Research/Rates/Pages/SelectedHistoricalExchangeAndInterestRates.aspx