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UFS scholar first to participate in the University of Michigan fellowship programme

04 October 2022 | Story Samkelo Fetile | Photo Supplied

Dr Sevias Guvuriro from the Faculty of Economic and Management Sciences at the University of the Free State (UFS) is the first UFS candidate to participate in the University of Michigan African Presidential Scholarship (UMAPS) fellowship programme. Dr Guvuriro is also a member of the Future Professoriate Group participating in the Transformation of the Professoriate Programme.

About the project

Dr Guvuriro’s main project during his five-month stay at the University of Michigan was on hazardous drinking and economic preferences among urban youth in South Africa. The project recognises that lifestyle behaviours in early life are important drivers of chronic disease later in life, and that harmful use of alcohol is among the main risk factors for non-communicable diseases in the world. According to Dr Guvuriro, persuasive behaviour-change approaches could be useful, especially in the context of developing countries, where the World Health Organisation’s non-communicable diseases ‘Best Buys’ interventions on alcohol use could be ineffective. Behavioural economics and experimental economics techniques could also be beneficial. "With the assistance of my host, Prof Erin Krupka from the University of Michigan School of Information, academics and other staff members, I have made very strong progress in analysing my survey and experimental data on the subject, which I obtained here in South Africa,” said Dr Guvuriro.

Unpacking UMAPS

UMAPS offers African scholars drawn from across Africa the opportunity to spend five months at the University of Michigan, working and interacting with faculty members who are leaders in their fields. Each year, applications for the fellowship open on 15 August and close on 15 October. The programme started in 2009, hosting a single cohort each year. From 2020, the programme hosted two cohorts of about 15 African scholars each. These scholars are selected annually from an application pool of about 600.

"It was an amazing experience, one that I wish all of my colleagues in the faculty and the institution at large could have," Dr Guvuriro said. “Other than meeting the faculty staff at the University of Michigan – who are amazing – I got to meet and interact with world leaders in the economics subdiscipline of my interest.”

He concluded by stating that this is a rare opportunity for scholars, and although competitive, he believes it is worth applying for. “Although I was the first from the UFS to attend, I know that the August to December 2022 cohort has another UFS staff member, which is great. My wish would be for our university to be represented annually.”

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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