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15 July 2020

The COVID-19 pandemic has exposed the fracture lines in societies worldwide. South Africa is no different. The poor are less able to protect themselves from the danger posed by the virus. Workers in factories, mines, and the service sector went back to their places of work following the lifting of the strictest lockdown measures, while office workers, typically better paid, can generally work from home. Living conditions in informal settlements make social distancing all but impossible, while the middle class can largely stay at home and stay safe to a much larger extent. With many businesses shutting down, downsizing or rethinking their business models, it is often small and medium, as well as informal sector businesses that are most affected.  

The impact of COVID-19 comes on the back of a society and economy that was already under significant pressure following years of low economic growth and poor government performance. Many commentators have already questioned the social compact South Africans made in the mid-1990s, which marked the end of the apartheid regime. These divisions have become more glaring, with some civil society organisations considering challenging the Minister of Finance’s adjustment budget in the Constitutional Court, because the budget might result in a roll-back of the progressive realisation of the socio-economic rights mandated in the Constitution.

In this first of four webinars, academics from the UFS as well as invited experts reflect on the constitutional commitment South Africans made to one another two and half decades ago. Is it time for a new deal? Should we collectively recommit ourselves to our existing deal? Do we interpret that deal in the same way today as we did more than two decades ago? How does the economic reality we face, particularly in the aftermath of the COVID-19 crisis, affect that deal? What are the economic realities we face, and whose are they? And how should we think about human development in the context of our deal? 

Come and join us from 14:00 to 15:30 on 21 July. 

RSVP to Sibongile Mlotya at MlotyaS@ufs.ac.za no later than 19 July, upon which you will receive a Business for Skype meeting invite.

Speakers:
Prof Danie Brand on ‘New deal’ or collective recommitment? The Constitution under COVID-19 and beyond

Prof Melanie Walker on Human development and the capability approach in COVID-19 times

Prof Lochner Marais on Reflections on continuities and discontinuities after COVID-19

Prof Philippe Burger on Viewing the realisation of socio-economic rights in a post-COVID-19 South Africa through an economic lens

 

Please also mark the following dates in your diaries for the second through fourth Reflection webinars:
Gender Inequalities and Gender-based Violence 28 July 14:00-15:30
The quality of our democracy under COVID-19 and beyond 13 August 14:00-15:30
Urban living post-COVID-19 27 August 14:00-15:30

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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