Empirical analysis of drought-induced cattle destocking in South Africa

Abstract

Destocking as a drought mitigation strategy exposes smallholder cattle farmers to adverse effects, including the distortion of farm planning and income loss, as cattle are sold off regardless of the market price. Factors influencing destocking as a drought mitigation strategy for smallholder cattle farmers have received less attention in the literature. The study assessed the relationship between drought and cattle destocking as well as factors that affect farmers’ destocking decision. The relationship between drought and cattle destocking was assessed using correlation analysis, while determinants of destocking were identified through the zero-inflated Poisson (ZIP) regression model, which controlled for structural zeros. The research covered the period 2008–2017 using secondary data from the National Income Dynamics Study (NIDS), the South Africa Weather Service and the Food and Agriculture Organisation (FAO). The study found that drought has direct correlation with the quantity of beef produced in South Africa at −0.67, with a 1% significance level. Farmers’ socioeconomic characteristics such as cattle herd size, income, secondary occupation, fodder purchase and ownership of land positively influenced cattle destocking decision while household size and cattle loss during drought influenced destocking decision negatively.

Contribution: The study estimated the determinants of smallholder cattle farmers’ decision to destock during drought, using a count model and accounted for socioeconomic and farmer-specific factors.