Journal of
Development and Agricultural Economics

  • Abbreviation: J. Dev. Agric. Econ.
  • Language: English
  • ISSN: 2006-9774
  • DOI: 10.5897/JDAE
  • Start Year: 2009
  • Published Articles: 528

Full Length Research Paper

Factors that influence the success and failure of land bank supported farming small, micro and medium enterprises (SMMES) in South Africa

V. M. Mmbengwa1*   T. Ramukumba¹, J. A. Groenewald2, H. D. van Schalkwyk2,  M. B. Gundidza3 and A. N. Maiwashe4
1School of Natural Resource Management, Nelson Mandela Metropolitan University (NMMU), George Campus, Republic of South Africa and University of Free State, South Africa. 2Department of Agricultural Economics, University of the Free State, Bloemfontein, republic of South Africa                                                                               3School of Therapeutic Sciences, University of Witwatersrand, Johannesburg 1710, Republic of South Africa. 4Livestock Business Division, Agricultural Research Council, P/Bag X2, Irene, 0062, Kampala in Uganda.
Email: [email protected]

  •  Accepted: 02 February 2011
  •  Published: 28 February 2011

Abstract

In order to establish reasons for their success and failure (defining failure as incapability to meet financial obligations, e.g. defaults), a study was undertaken to determine the problems faced by emerging or developing farmers, who are clients of, or are /funded by the Land Bank. Results from this study revealed that the farmers’ perceptions do depict a lack of capacity on essential prerequisites for their businesses, especially, their perception on the value of extension support and business plans. The objective analysis of farm profitability shows that emerging farmers are unable to accurately identify factors that influence their success and failure.  Extension support, sole proprietorship and business plans were found to be crucial for the farming supported farming small, micro and medium enterprises (SMMEs) to succeed and be profitable. It is therefore essential that agricultural stakeholders ensure that farming SMMEs have adequate support regarding the identified factors that may potentially influence profit and loan repayments, as these factors are crucial for the success of these enterprises.

 

Key words: Success, failure, farming supported farming small, micro and medium enterprises (SMMEs), profitability, emerging farmers.