Determinants of cotton production in Swaziland.

The task of this study has been to identify and estimate the impact of price and non-price factors on cotton supply in Swazi Nation Land (SNL) smallholder farms for the period between 1970 and 1996. Given that the cotton industry contributes to foreign exchange earnings and generates employment, a thorough study on cotton supply is justified partly for addressing cotton production problems and partly to equip the policy making process. The study has used primarily secondary data, however, a small case of interviewed representatives of farmers on different regions has also been done. The Ordinary Least Squares (OLS) technique has been employed in testing the hypotheses of the study. The major findings for the period under review are that (i) the producer price of cotton has a strong positive effect on cotton production; (ii) the producer price of maize (a competing crop) is statistically insignificant; (iii) there is a positive relationship between cotton supply and the number of people retrenched in the non-agricultural sectors; (iv) cattle population has a very strong positive effect on cotton supply i.e. farmers use cattle for collateral requirements in financial institutions; (v) cotton supply is positively related to favourable rainfall patterns; (vi) improved infrastructure has a positive influence on cotton supply; (vii) cotton supply is inversely related to the growth of the number of registered companies in the modern sector. On the basis of this study which has taken a long period, the findings have shown that although cotton supply respond positively to own producer price, non-price factors are more relevant in explaining the supply of cotton. Therefore, the government's effort to arrest the problems facing the cotton industry should go beyond price adjustments. The major limitation of this study is that it has been based more on secondary data.