Profitability of Smallholder Sugarcane Farming in Swaziland: The case of Komati Downstream Development Programme (KDDP) Sugar Farmers’ Associations, 2005-2011

Smallholder sugarcane growing is central to rural development and poverty alleviation in Swaziland. The main objective of the study was to investigate the profitability of smallholder sugarcane farmers’ associations under KDDP and to explain the determinants of sugarcane profitability. The study used data from 2004/05 to 2010/11 production seasons for 15 smallholder sugarcane farmers’ associations under KDDP. A structured questionnaire was used to solicit production and financial data. Secondary data were obtained from accounting records of the farmers. The associations were purposively selected because of their experience in sugarcane production. Descriptive statistics such as mean, standard deviation, minimum and maximum values were used in data analysis. The cost and returns analysis was used to assess the profitability, whilst multiple linear regression analysis was used in identifying the determinants of profitability.The associations were found to be profitable with a mean profit per hectare of E5080.00.The further results indicated that variables such as farm size, farming experience, sucrose price, labour cost per hectare and fertilizer cost per hectare significantly (p<0.01) influence the profitability of smallholder sugarcane farmers’ associations in the study area. The adjusted R2 was 0.623, suggesting that about 62.3% in the variation in profit per hectare is explained by the explanatory variables. It is, therefore recommended that good crop husbandry practices like timely weeding, fertilization, and irrigation should be adopted to produce a good crop which will enhance profitability. There is need for the promotion of collective action as an institutional means to improve bargaining power of farmers, especially when procuring inputs. Collective action will enable smallholder sugarcane farmers to buy in bulk and be entitled to discounts and that can enhance sustainability of profitability of the farmers.