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Citation Information

Type Journal Article - Botswana Journal of Agriculture and Applied Sciences
Title Measuring transaction costs in marketing cattle in Southern Botswana: A case study
Author(s)
Volume 9
Issue 2
Publication (Day/Month/Year) 2014
Page numbers 75-81
URL http://journals.ub.bw/index.php/bojaas/article/view/228
Abstract
This study attempted to identify factors responsible for transaction costs that private and communal livestock farmers in
the southern region of Botswana face. Sample survey data were used to estimate the parameters of a regression model.
The equation postulated in the model was estimated with Ordinary Least Squares (OLS). Results obtained suggest that
herd size, farmer age, wage (liquidity), and short term credit are determinants of transaction costs incurred by
respondents. Secure tenure was also suggested as a determinant of transaction costs that could motivate farmers to
increase supply of cattle to the abattoir. Respondents with private farms were found to have better access to the market
and tended to incur less transaction costs when they market their livestock. It is suggested that government should (a)
vigorously pursue the infrastructural development in Botswana as promulgated in the Agricultural Policy, (b) uphold
private property rights to land where they already exist; (c) privatise open access grazing to individual owner-operators
who have the resources (money) to do so and who will be required to keep an acceptable herd size and could be
motivated to increase supply of cattle to the Botswana Meat commission (BMC), (d) where privatisation to individuals is
not feasible, government should encourage users to convert the grazing into common property by subsidising
(transaction) costs of defining user groups and the boundaries of their resources, and of enforcing rules limiting individual
use and misuse of common property, (e) financial institutions be encouraged to offer short term credit for those farmers
who need it and (f) the government should pursue converting the traditional marketing cooperatives into the New
Generation Cooperatives (NGC) so as to reduce each producer’s transaction costs.

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