ECONOMIES OF SCALE FOR SMALL AND LARGE SUGAR CANE FARMS IN KWAZULU-NATAL
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This paper gives a profile of a sample of a small and large sugar cane farms in the North
coast region of the KwaZulu-Natal sugar cane belt. The survey was conducted during
May 1995. Farms studied varied between one and 600 hectares. Values for small farms
were significantly lower than large farms for human capital resources, farm resource
utilisation, rate of search and utilisation of farm information, and adoption of appropriate
and improved cultural farm practices. Such differences may account for the differences in
farm productivity between small and large farms that exist in the South African sugar
industry. A linear discriminant function model shows that small and large farms studied
differ significantly on lines of human resources and cost of borrowed capital (market
related). The findings of the study show that large cane farms face lower market related
interest rates, are relatively better equipped in human resource capital, and are in a
position to implement appropriate and recommendable farm practices (soil analysis and
use of certified seedcane) compared to small farmers.