Efficiency of a mixed farming system in a marginal winter rainfall area of the Overberg, South Africa, with implications for thinking about sustainability

ABSTRACT This study presents a preliminary analysis of the productivity performance of a small group of mixed winter rainfall farms over the past decade. Results indicate that there has been no technical progress in the sector over the past decade and group members are falling further behind their own benchmark as time passes. Relative rankings have remained stable, with most of the group riding the peaks and troughs of good and bad years without breaking rank. There is clearly room for fresh thinking. Drought does not offer a simple explanation for the observed trends. This group’s total factor productivity is inversely correlated with farm size despite evidence that their technology is increasing returns-to-scale. This is difficult to explain. Woolled sheep seems to be the solution to drought, but too much land under planted pastures lowers overall efficiency. There is much more investigation to do, including to cast the net wider so that a more sophisticated efficiency model can be fitted. There was no information on heat stress or rainfall variability, or the date of adoption of conservation agriculture, which is known to be a good strategy against unreliable rainfall. We also could not model the effect of farmers’ skills and ambitions on their performance. The study’s main contribution is to debunk the myths that rainfall places an absolute limit on performance and that a larger scale of operation is always beneficial.