A quantitative analysis of supply response in the Namibian mutton industry

[摘要] ENGLISH ABSTRACT: In terms of its contribution to the agricultural economic activity in Namibia, the small stock industry is the most important sector, second only tothe beef industry. This sector makes a significant contribution to the agricultural businessin Namibia due to the sector'sexports, itsprovision of employment, use of natural resources, contribution to GDP and to consumer spending as well as food security. Agricultural activities in Namibia contributed 5.5 percent to Namibia's GDP, while 70 percentof the population relies on agriculture for employment and day-to-day living.Livestock farming in Namibia is free ranging on natural pastures and therefore produces high-quality meat that is in high demand in both the national and international markets. Small stock production in Namibia is unstable due to the high variability of weather patterns, changes in economic and social environments, unpredictable droughts as well as political and structural changes.Due to the decline in mutton production over the last years, research in the supply economics of the mutton industry in Namibia is important.The purpose of this study is to investigate the relationships between the various price and non-price factors contributing to the supply dynamics within the mutton industry in Namibia. Two hypotheses are tested with the aid of econometric modellingtechniqueson monthly time series data. The Autoregressive Distributed Lag approach toco-integration was used to determine thelong-run and short-run supply response elasticities towards economic and climatology factors.Results showedasignificant long-runrelationship between the average Namibianmuttonproducer price and mutton supply. Results revealed that a one percent increase in the mutton producer price leads to a 1.97percent increase in mutton supply. Beef producer price, asubstitute product to mutton, showed a significant negativelong-runeffecttowards mutton production whereas rainfall showed a meaningful positive long-run contribution to mutton supply. These supply shifters towards mutton production alsoshowed significant short-runelasticities. Resultsfurtherrevealed that the systemtakes nearly two months to recover to the long-run supply equilibrium, should any disturbances occur within the supply system.The study showed thatprice-related and climatological factors play a major role intheNamibian mutton production industry. Industry stakeholders and policy makers should therefore incorporate these significant relationships between supply shifters and production output into future decisions and marketing policies to secure a healthy, growing and sustainable mutton industry in Namibia.

[发布机构] Stellenbosch University