The dynamics of price adjustment and relationships in the formal and informal beef markets in Namibia

Beef prices have increased significantly in Namibia in recent years. The main reason for the increase in beef producer prices is the high input cost and drought, leading to excessive culling of breeding herds among commercial farmers. Johansen multivariate test of co-integration and multivariate vector error correction model are used to investigate the price adjustment and the existence of long-run relationship among the beef prices at various stages of the value chain. The results show that the beef cattle prices are integrated and exhibit a long run relationship. Formal (for grade A) and informal (grade C) beef cattle prices suggest that they adjust to long-run equilibrium at different speeds. For instance, prices in the formal markets adjust to disequilibrium at about 81 per cent, while prices in informal markets adjust to disequilibrium at 63 per cent. Granger causality results indicates the log price of grade C beef cattle in the informal market does not cause Granger log price of grade A beef cattle in the formal market, log of wholesale beef price of grade A beef and log of export beef price of grade A unidirectional at the 1 per cent level of significance. The adjustment can be attributed to the objectives and the nature beef markets understudy, coupled to the lack of efficient price information linkages between formal and informal beef cattle markets.http://www.tandfonline.com/loi/ragr202018-08-24Agricultural Economics, Extension and Rural Developmen

Determinants and Interactions of Sustainability and Risk Management of Commercial Cattle Farmers in Namibia

We study the determinants and interactions of sustainability and risk management with a cross-sectional dataset on commercial cattle farming in semi-arid rangelands in Namibia. Cattle farmers in Namibia act within a coupled ecological-economic system that is subject to extensive degradation and high environmental risk. Based on survey data, we develop variables for sustainability and risk management within this context, identify their determinants and analyse relevant interactions. Our results show that the ecosystem condition is positively influenced when financial risk management strategies are applied. On-farm risk management, like additional feed for cattle or resting part of the rangeland, and collective risk management through interest groups or governmental support, instead, do not impact on the sustainability of the farm. Risk management itself is predominantly influenced by various risks linked to the farming business and the farmers' educational background. Furthermore, the gathered experience through operation time on farm decreases the application of on-farm risk management and favours the use of financial and collective risk management. Additionally, collective risk management is influenced by risk preferences, indicating that farmers who are more risk friendly apply forms of joint risk management strategies to a lesser extent. Risk friendliness is also negatively related to the economic sustainability, specified as the ability to sustain the livelihood of the farmer. However, the results show no indication whatsoever that time preferences impact on either sustainability or risk management