Livelihoods, institutions and the small farmer - Institutional Constraints to Small Farmer Development in Southern Africa - page 289

12.5 Rural livelihoods dynamics
As indicated in Chapter 1, the intention was to present the smallholder setting as it
currently exists to provide a baseline picture against which the subsequent analyses can be
evaluated. This process led to a review of the current pattern of livelihoods pursuits and
official engagement. It is clear from the analysis that South Africa's post-apartheid economy
has maintained the same mindset that agriculture is the dominant occupation in the rural
areas and therefore continues to invest in agricultural development while all available
evidence points in a different direction. The persistence of poverty among households
despite the considerable expansion of investments in agricultural development might
suggest that the core livelihoods options have been misspecified by officialdom. There is
increasing realization among researchers that agriculture is only one part of what rural
people do for a living. Chapters 3 and 4 pick up this question by means of household and
community level data based on which simultaneous equations were developed to estimate
the determinants of both poverty and income from activities practised in representative
rural areas. The observation that wage employment and agricultural employment seemed
equally matched is an important one from the point of view of resource allocation for rural
development. The estimation of inequality carried out by means of Lorenz curves and Gini
decomposition technique revealed the same highly skewed income distribution observed
elsewhere in South Africa and the rest of the region. It is important to pay attention to
the key determinants of activity choice such as level of education, labour availability,
social capital, physical capital and geographical location. To improve rural income and
reduce poverty, urgent improvements in education, capital resources, infrastructure and
communication are necessary.
12.6 Dynamics of marketing channel choice
Chapter 5 focused on the central theme of the topic and examined the range of institutional
challenges smallholders confront in produce marketing. In turn, these challenges influence
their selection of marketing channels. By means of a multinomial logistic regression
model, the influence of these factors was tested and it was clear that access to market
information, expertise on grades and standards, availability of contractual agreements,
existence of extensive social capital, group participation and reliance on traditions remain
key considerations. The Kat River Valley exemplifies other communal areas of South Africa
and the region where interactions between modern systems and traditional practices work
to the disadvantage of the smallholder with limited means to face up to the challenges of
modern market participation.