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 116

had access to markets are likely to sell more cattle than those that had little or no access
to markets. The presence of markets that farmers like in or near their communities will
facilitate cattle sales. The constraint of not having a market has also been reported to reduce
cattle sales (Nkhori, 2004) as the lack of markets also increases transactional costs.
6.7.2 Access to information
Keeping everything else constant, insufficient access to information reduced cattle sales.
Thus, a negative and significant relationship was not expected. This deviation from
expectation could be due to the farmers becoming more informed about market prices and
trends to enable them make rational, relevant decisions and strengthen their negotiating
ability during transactions with buyers and consequently prevent possible exploitation by
better informed buyers as noted by Coetzee et al. (2004).
Access to information will then result in small scale farmers not completing deals with
buyers who, in most cases, would be exploiting farmers. The failure to complete deals,
consequently, reduces cattle sales. The study showed that more than 30% of the respondents
preferred to sell their cattle through auctions of which most of the buyers at auction are
speculators and butcheries who would want to maximize profits by exploiting the farmers
and as the farmers become informed about market prices, they would not sell their cattle if
buyers offer them prices lower than the prevailing market prices, resulting in the reduction
of cattle sales.
6.7.3 Availability of transport
Another positive and significant factor that affected the probability of farmers selling their
cattle was the availability of transport. Using the law of demand, the more the transport is
available the cheaper the cost of transporting the cattle and the more the farmers can sell.
Cattle sales are high if transport costs are low as farmers will be able to sell even in far away
markets as transactional costs would be low. The positive probability of farmers selling as
transport becomes more available is in line with the theoretical expectation as well as with
Nkhori (2004).
6.7.4 Condition of cattle
All things being equal, an increase in the condition of cattle decreases the probability of
small scale farmers selling their cattle. The negative relationship was not expected since
small scale farmers, in most cases, sell animals in poor condition (Musemwa et al., 2006).
The better the condition of the cattle the more the farmer is motivated to retain the animals
rather than sell them. The condition of cattle has a significant effect on the probability of
selling cattle in rural areas of the Eastern Cape Province.