Modelling the exiting of South African producers from commercial agricultural production - an agent-based model

This paper explores the prospects of commercial producers who would be willing to exit voluntarily in the near future to make land available in the market. In addition, it also considers what factors are restricting the acceleration of this rate of exit from a land-supply perspective with respect to barriers to exit. The prospect of structural change from such acceleration is also explored using three scenarios. An agent-based mathematical model is used to implement the three scenarios. This model is constructed from a dataset of 450 commercial producers across South Africa. The results suggest that a reasonable amount of arable land could be available for redistribution, with only modest structural change regarding animal production, despite drastic alterations in veld. These results provide some guidelines on how assistance for struggling producers can make land available for efficient producers, which could make the sector stronger. All potential exiting commercial producers have common reasons for doing so, which could be used to initiate a positively inclined, structured discussion on land supply.

Automated summary

This paper examines the potential of commercial producers voluntarily exiting to make land available in the market, and identifies the factors hindering the acceleration of this exit rate from a land-supply perspective. It also explores the possibility of structural change through three scenarios, using an agent-based mathematical model constructed from data collected from 450 commercial producers in South Africa. The results indicate that there is a reasonable amount of arable land that could be redistributed, with only modest changes in animal production despite significant changes in veld. These findings provide guidance on how assistance for struggling producers can contribute to making land available for efficient producers, thereby strengthening the sector. The common reasons for potential exiting commercial producers could initiate a positively-inclined, structured discussion on land supply.