The BFAP Farming Systems Analysis program was established with the main objective of assisting agri- and farm businesses with strategic decision-making under changing and uncertain market conditions and is strategically integrated within the BFAP system of linked models. This is done by means of advanced quantitative analyses of how different policy options, macroeconomic variables, and volatile commodity market conditions could impact the financial position of farm businesses in key production regions in South Africa. The program includes economic analysis of the production of grain, oilseed, livestock, wine, fruit, sugar, and vegetables. Typical farms across South Africa’s key producing regions are constructed according to a standard operating procedure (SOP). and are presented in the map below.
The farm-level activity of BFAP consists of three key components on which services to individual clients are based. These include the system of linked models between the sector and the BFAP FinSim farm-level models, the agri benchmark international network of representative farms and small-scale farm economics program.
The combination of above mentioned approaches allows for strategic decision-making in the agricultural industry of South Africa which can be summarised:
- Continuous collaboration between BFAP and its local partners enforces consistent exchange of knowledge, production information, international and financial analysis which assists in financial and managerial strategies for profitable and sustainable farming.
- Knowledge with regard to optimal production techniques (crop rotations, cultivation methods, tractors and implements used, fertilizing methods etc.) can be gained, compared and introduced on international and national level.
- The analysis provides critical data to analyse impacts on the agricultural sector with respect to “what if” questions and scenarios in conjunction with the linked BFAP system of sector and farm-level models.
For example: In 2012, a study was conducted to illustrate the potential impacts of increased wage rates on farm businesses. Similarly, changing macro-economic fluctuations and drivers can be measured and benchmarked and the respective impact can be illustrated on farm-level. Annually, a separate farm-level analysis section is included in the BFAP Baseline Outlook. The latter provides information on farm-level profitability in the intermediate term and can be utilized to address changing macro-economic conditions and the respective impact on farm-level decision-making. The BFAP farm-level model is linked with the BFAP sector model which entails that projections made by the BFAP sector model are reflected in the farm-level model output.
For more information on BFAP’s involvement in Sub-Sahara Africa, please see the African Regional Network tab.