The methodologies of the studies - Institutional Constraints to Small Farmer Development in Southern Africa - page 319

economic theorym, a country is said to have comparative advantage if the DRC value
is less than 1.
• NPCO measures the degree of output transfer to support a production system.
• NPCI allow analysts to contrast the effects of distorting polices on tradable-inputs cost
in agricultural systems. An NPCI=1 indicate there is no transfer, an NPC>1 says there
is a negative transfer because inputs costs are raised by policy and an NPCI<1 denotes
a positive transfer because input costs are lowered by policy.
• EPC is a measure of incentive effects on commodity price policies but not as indicators
of the total impact of policies that influence prices and costs. An EPC>1 suggest
that government policies provide positive incentives to producers. While, an EPC<1
indicate the producers are no protected through policy interventions.
• PC is a measure of the degree to which net transfers have caused private profits to exceed
social profits. It provides total incentive effects of policy including those influencing
factor markets.
• SRP show the extent to which systems revenue have been increased or decreased because
of policy. The smaller the SRP, the less distorted the agricultural system. A SRP value
converted to percentage shows the output tariff equivalent required to maintaining
existing private profits if all other policy distortions and market failures are eliminated.
This indicates how much incentives disincentives the system receives from all the effects
of divergences.
In addition, a sensitivity analysis was conducted to determine the possible effects of changes
in pricing and yield on the key PAM ratios. The procedure employed for this analysis follows
closely the recommendation made by Tsakok (1990) in the appendix to her book.
A.4.2.2 Data
Data on consumption, imports, production, prices and tariffs employed in this study were
largely secondary data obtained from the databases of several organisations, particularly
the National Maize Corporation (NMC), the National Early Warning Unit for food
security and the Food and Agricultural Organisation (FAO) statistical database. In South
Africa, such information is obtainable from the various publications of the Department of
Agriculture, Forestry and Fisheries (formerly the National Department of Agriculture),
and Statistics South Africa, among others. Published research reports and other material
held at the Department of Agricultural Economics of the University of the Free State were
also consulted for valuable information, especially on price elasticities measured in identical
geographical and socio-economic settings. The welfare calculations were made for a six-year
marketing period starting from 1998/1999 to 2003/2004.