Financing Agricultural Production from a Value Chain Perspective: Recent Evidence from South Africa. (March 2015)

• Record Type: Journal Article
• Authors: Oberholster, Cobus; Adendorff, Chris; Jonker, Kobus
• Is Part Of: Outlook on agriculture. Volume 44:Number 1(2015:Mar.)
• Page Start: 49
• Page End: 60
• Publication Date: 2015-03
• Subjects: agricultural production -- value chain competitiveness -- agricultural value chain financing; Agriculture -- Periodicals; Agriculture and state -- Periodicals; Agriculture; Agriculture and state; Periodicals; 630.5
• DOI: 10.5367/oa.2015.0197
• Languages: English
• ISSNs: 0030-7270

Abstract

World agriculture, despite numerous supply and demand challenges, has to increase its production capacity significantly to satisfy the increased demand for food. In addition, the sector has a significant developmental role to play. Access to credit is, however, a key enabler in this regard. This paper reports on a country-specific study performed to promote the success of agricultural value chain financing in South Africa, with a specific focus on the financing of agricultural production. The literature review provides a global overview of agricultural production, agricultural value chain financing and the potential role of leading chain actors as connecting institutions. The empirical study provides strong evidence of significant relationships between the dependent variable of the study, namely the perceived success of agricultural value chain financing in South Africa, and the intervening and independent variables. The independent variables value chain integration, strategic partnering, risk management, supporting services, sustainable production, product range and external financing positively influence the intervening variable – value chain competitiveness. In the same manner, the intervening variable of value chain competitiveness positively influences the perceived success of agricultural value chain financing in this study.