Size efficiency of sugarcane farms in KwaZulu-Natal

Abstract

The analysis is based on survey data collected from small and large sugarcane farms during 1995 in the North Coast region of KwaZulu-Natal. A non-parametric research procedure to analyse farm efficiency was employed. Results indicate that farms smaller than eight hectares exhibit substantial economies of size; such economies tend to decline with size of enterprise; and farms larger than 10 hectares appear to have near constant returns to scale. This implies that efficiency of very small scale sugarcane farms can be enhanced by land consolidation while giving small scale farmers larger than 10 hectares access to the large scale commercial sector, may not lead to a loss in efficiency. Results are relevant as South Africa is embarking on settling small scale farmers on former large scale commercial farm land.