An analysis of cooperative biodiesel production by smallholders in Kwazulu-Natal, South Africa
The South African biofuels industrial strategy promotes a development-oriented strategy with feedstock produced by smallholders and processed by traditional producer-owned cooperatives. This study examines a proposal to apply this strategy to small farmers in KwaZulu-Natal, using soybeans as feedstock for biodiesel production. First, it is argued that value-adding cooperatives established under South Africa’s Cooperatives Act would fail to attract the capital and expertise needed to process biodiesel owing to ill-defined voting and benefit rights. Second, a mixed integer linear programming model is used to check the viability of producing biodiesel from soybeans, viewed from the perspective of the smallholder as grower and co-owner of the processing plant. It is concluded that smallholder participation would require a rental market for cropland, coownership of the processing plant in an investor-share cooperative, information and training, and a high level of price support.... [Show full abstract]
Keywordsbiofuel; subsidies; smallholder marketing cooperatives; rural development; South African biofuels strategy
TypeConference Contribution - Published (Conference Paper)
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