On smallholder crop productivity and on-farm entrepreneurship: empirical evidence from Ndumo-B and Makhathini irrigation schemes, KwaZulu-Natal, South Africa

Abstract

This study was conducted to examine the presence and empirical validity of the link between on-farm entrepreneurship and crop productivity in KwaZulu-Natal, South Africa. A sample of 221 smallholder farmers was drawn from Ndumo-B and Makhathini Irrigation Schemes, Jozini Local Municipality. Principal component analysis was employed to estimate a continuum proxy for on-farm entrepreneurship. Gross margin analysis, Cobb-Douglas production analysis, and the one-limit Tobit model were used to analyze the link between crop productivity and on-farm entrepreneurship. Compared to independent irrigators with better entrepreneurial attributes, scheme irrigators were found to have the lowest levels of entrepreneurial competency, followed closely by community gardeners. Due to the freedom they enjoy in making their own decisions, independent irrigators were more entrepreneurial, unlike scheme irrigators, where decisions are made collectively, free-riding behaviour is rampant, and incentive challenges are prevalent. The productivity of cabbages was found to increase at an increasing rate as farmer entrepreneurship increased. The study recommends that future training focus not only on entrepreneurial skills but also on entrepreneurial mindset and collective marketing of agricultural products. Future on-farm entrepreneurial development pathways should be planned, accounting for the heterogeneity and complexity of their farming systems.