Marketing challenges and opportunities faced by the Nguni cattle project beneficiaries in the Eastern Cape Province of South Africa - Institutional Constraints to Small Farmer Development in Southern Africa - page 111

6.5.7 Condition of cattle
The poor condition of livestock results in lower farm gate prices, especially during dry spells
(Coetzee et al. , 2005). Livestock auctioneers and speculators often raise concerns that they
cannot pay competitive prices for animals that are in poor condition or not ready for the
market (Nkhori, 2004). When lower than expected prices are offered by buyers, small-scale
livestock farmers are discouraged from selling their cattle. On the part of the buyer, the poor
condition of animals creates doubts in the minds of the buyers about the wholesomeness of
the animal and may reduce the willingness to purchase the cattle. Condition of cattle was
treated as a categorical variable and entered the model as a dummy.
6.5.8 Method of payment
The method of payment determines after how long the farmer will get his/her cash after
selling cattle. The delay between when the cattle are sold and when the farmer gets liquid
cash is an important cost. According to Nkhori (2004), the shorter the time lag the greater
the greater the willingness on the part of the farmers to sell their cattle since, in most cases,
small scale farmers sell their cattle to cover up for emergences (Musemwa et al. , 2007). It
is therefore expected that the better the method of payment, measured by how fast the
transaction is concluded and materializes as cash, the greater the frequency of cattle sales
undertaken. Method of payment was treated as a categorical variable.
6.5.9 Herd size
Total herd is a continuous variable that reflects household wealth and a necessary condition
for market participation. According to Fidzani (1993), large herds generate a higher
marketable surplus than small herds. Fidzani (1993) also observed that larger herds mean
that the farmer would have a stronger bargaining power when negotiating on price with
prospective buyers. It is therefore expected that the larger the herd the more the farmer is
willing to sell.
6.5.10 Household characteristics
Four variables related to household characteristics were included in the model since it
is hypothesized that the household heads' backgrounds, circumstances, attitudes and
disposition may have a constraining effect on cattle sales. These include household size,
gender of household head, age of household head and level of education of household head.