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20 July 2018 Photo Leonie Bolleurs
Research informs about sustainable use of fresh water for food production
Conducting research on the topic of water-footprint assessment, are from the left: Dr Enoch Owusu-Sekyere, Dr Henry Jordaan, study leader and Senior Lecturer in the UFS Department of Agricultural Economics, Dr Frikkie Maré (Head of the Department of Agricultural Economics), and Adetoso Adetoro.

The fact that South Africa is a water-scarce country has been highlighted during the past couple of years, and even city dwellers were suddenly very aware of the drought due to the strict water restrictions. These are the words of Dr Frikkie Maré, Head of the Department of Agricultural Economics at the University of the Free State (UFS) and one of the graduates who received his PhD on water-footprint assessment studies at the recent June 2018 graduations.

The department is currently involved in various water-footprint and water-management research projects which assist in providing solutions for better water management in the future. “As department, we want to be at the forefront of research that will assist all agricultural producers with sustainable production practices to ensure economic, environmental, and social sustainable food and fibre products for the society at large,” said Dr Maré.

Research funded by Water Research Commission

The UFS recently conferred two PhD degrees (Drs Enoch Owusu-Sekyere and Frikkie Maré) and one master’s degree (Adetoso Adetoro) in the Department of Agricultural Economics. All three have been working in the field of water-footprint assessment. The research formed part of two different projects that were initiated and funded by the Water Research Commission.

According to Dr Henry Jordaan, Senior Lecturer in this department, four of his students already received their master’s degrees on the topic of water-footprint assessment, while two students are busy with PhDs and three more are working on their master’s degrees.

Topic gains momentum in research community
The water-footprint concept serves as a useful indicator to sensitise society about the impact of the food we eat on scarce freshwater resources – from agricultural producers using water to produce primary food crops and products on the farm, to the end consumer buying the food products in the retail store in town.

“Water-footprint assessment is a relatively new field aimed at informing the sustainable use of fresh water for food production. This topic is gaining momentum in the research community, given the substantial increase in the global population in the context of freshwater resources that is getting increasingly scarce. The challenge is to feed the growing population while still using the scarce freshwater resources sustainably.

Volume of water used to produce food

“In order to inform water users on how to use the resource sustainably, it is important to know the volume of water that was used to produce the required food products. Through our research, we are contributing to this knowledge by assessing the volume of water that was used to produce selected products, and to interpret the water use in the context of water availability to gain insight into the degree of sustainability with which the resource is used. The results are expected to inform water users, water managers, and policy makers regarding the sustainable use of fresh water for food production,” said Dr Jordaan.

News Archive

Producers to save thousands with routine marketing strategies, says UFS researcher
2014-09-01

 

Photo: en.wikipedia.org

Using derivative markets as a marketing strategy can be complicated for farmers. The producers tend to use high risk strategies which include the selling of the crop on the cash market after harvest; whilst the high market risks require innovative strategies including the use of futures and options as traded on the South African Futures Exchange (SAFEX).

Using these innovative strategies are mostly due to a lack of interest and knowledge of the market. The purpose of the research conducted by Dr Dirk Strydom and Manfred Venter from the Department of Agricultural Economics at the University of the Free State (UFS) is to examine whether the adoption of a basic routine strategy is better than adopting no strategy at all.

The research illustrates that by using a Stochastic Efficiency with Respect to a Function (SERF) and Cumulative Distribution Function (CDF) that the use of five basic routine marketing strategies can be more rewarding. These basic strategies are:
• Put (plant time)
• Twelve-segment pricing
• Three-segment pricing
• Put (pollination)(Critical Moment in production/marketing process), and
• Pricing during pollination phase.

These strategies can be adopted by farmers without an in-depth understanding of the market and market-signals. Farmers can save as much as R1.6 million per year on a 2000ha farm with an average yield.

The results obtained from the research illustrate that each strategy is different for each crop. Very important is that the hedging strategies are better than no hedging strategy at all.

This research can also be applicable to the procurement side of the supply chain.

Maize milling firms use complex procurement strategies to procure their raw materials, or sometimes no strategy at all. In this research, basic routine price hedging strategies were analysed as part of the procurement of white maize over a ten-year period ranging from 2002–2012. Part of the pricing strategies used to procure white maize over the period of ten years were a call and min/max strategy. These strategies were compared to the baseline spot market. The data was obtained from the Johannesburg Stock Exchange’s Agricultural Products Division better known as SAFEX.

The results obtained from the research prove that by using basic routine price-hedging strategies to procure white maize, it is more beneficial to do so than by procuring from the spot market (a difference of more than R100 mil).

Thus, it can be concluded that it is not always necessary to use a complex method of sourcing white maize through SAFEX, to be efficient. By implementing a basic routine price hedging strategy year on year it can be better than procuring from the spot market.

Understanding the Maize Maze by Dr Dirk Strydom and Manfred Venter (pdf) - The Dairy Mail


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