A study of group dynamics in the South African dairy industry: A sequential Malmquist approach

van Niekerk, Hugh; Conradie, Beatrice; Piesse, Jenifer

A study of group dynamics in the South African dairy industry: A sequential Malmquist approach

Working Paper

2015-08

Publisher

University of Cape Town

Department

Social Survey Unit

Faculty

Faculty of Humanities

License

http://creativecommons.org/licenses/by/4.0/

Abstract

This study presents a sequential Malmquist index for twenty members of an Eastern Cape dairy study group for the period 2010 to 2013. On average these farms were at efficiency levels of 95% and more during this period. The group’s mean technical progress was 11% per year. This resulted in productivity growth of almost 14% per year. However, these estimates are probably inflated as they were obtained with the combination of a small dataset and a large model. The group is a success because it transfers knowledge and enables innovation. We found weak support for the belief that it is beneficial to operate mixed breed herds and showed that less intensively managed or smaller herds did better than larger herds or herds managed for the maximum amount of milk per cow. Productivity growth was positively correlated with various proxies for knowledge. It increased with self-sufficiency in hay production and expenditure on concentrates, and was inversely related to the unit hay cost. Rainfall was positively correlated with self-sufficiency but not with unit hay cost or productivity. To conclude: study groups could a useful tool for driving innovation in any industry. Innovation can happen quickly but is complex, and therefore it helps to have a single metric of progress. Good data are needed to develop accurate measures of innovation, but if available could be the difference between noting a potential disaster in time and failing altogether.

Reference:

Collections

Working Papers

Full item page