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Yield and economic benefits of the national cultivar trials for wheat in South Africa: 1998–2016

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  • Nhundu, Kenneth
  • Chaminuka, Petronella
  • Nemakhavhani, Sedzani
  • Booyse, Mardé

Abstract

Cultivar choice is an important production decision by which producers aim to achieve highest returns with the lowest risk, for yield optimisation. Cultivar testing through evaluation trials provides information on selected cultivar characteristics and performance under different conditions, which farmers use to minimise risk elements associated with limited cultivar performance information. In South Africa, the Agricultural Research Council conducts national wheat cultivar trials funded from public resources. However, the economic value of the programme remains unknown. The study estimates aggregate economic benefits associated with the programme using data from 1998 to 2016 and attribution methodologies used in other studies, modified within the context of this study. Yield gain estimates are used as indicators to estimate the contribution of seed choice to yield growth at selected levels of the assumed plausible yield gains. Overall, the study estimates that 0.04 ton (40 kg) per hectare of extra wheat yields accrued to wheat producers as a result of cultivar trials in the period under consideration. The net present value was found to be R173 million (in 2016 prices), while South Africa received R4.33 for every Rand invested into the programme. An estimated MIRR of 7 per cent suggests that investments into the programme have been a worthwhile use of public funds. The observed yield gains and favourable efficiency measures motivate continuation of the programme.

Suggested Citation

  • Nhundu, Kenneth & Chaminuka, Petronella & Nemakhavhani, Sedzani & Booyse, Mardé, 2019. "Yield and economic benefits of the national cultivar trials for wheat in South Africa: 1998–2016," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 58(01), March.
    • Handle: RePEc:ags:agreko:347859
    DOI: 10.22004/ag.econ.347859
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    References listed on IDEAS

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    1. Terrance M. Hurley & Xudong Rao & Philip G. Pardey, 2014. "Re-examining the Reported Rates of Return to Food and Agricultural Research and Development," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1492-1504.
    2. Thirtle, Colin G. & Townsend, Rob F. & Amadi, Juliana & Lusigi, Angela & van Zyl, Johan, 1998. "The Rate Of Return On Expenditures Of The South African Agricultural Research Council (Arc)," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 37(4), pages 1-11, December.
    3. Pardey, Philip G. & Alston, Julian M. & Chan-Kang, Connie, 2012. "Agricultural Production, Productivity and R&D over the Past Half Century: An Emerging New World Order," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 131824, International Association of Agricultural Economists.
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