Estimating the economic value of the national cultivar trials in South Africa: A case for sorghum, sunflower, soybeans and dry beans

This study assesses the economic impacts of the national cultivar trials in South Africa over the period 1978 - 2012. The study uses experimental yield data to estimate the yield losses that have been prevented by providing farmers with information that has facilitated the selection of adapted cultivars on their localities. Using attribution methods, the study estimates the contribution of the programme to yield growth, along a range of assumed plausible yield gain estimates attributable to the trials. It finds that the yield benefits are equivalent to 13.10kg and 7.67kg for sunflower and sorghum output per hectare per year, respectively, whilst the soybean and dry bean trials contributed yields equivalent to 16.42 kg and 17.13 kg per hectare per year, respectively, at the assumed plausible yield gain estimate attributable to the trials of 5 percent. In present value terms, the estimated total economic benefits that have accrued to South Africa over the period 1978 – 2012 amounted to R200 million in 2012 prices, which is equivalent to 4 percent of the total gross value of production for these crops in 2012. Of these benefits, about R23.2 million came from the evaluation of sunflower cultivars, R84.7 million from dry beans, R85. 7 million from soybeans and R6.6 million from the evaluation of sorghum cultivars. Overall, the results imply a benefit-cost ratio of 1.90, using a real discount rate of 7.8% per annum and a modified internal rate of return of 16% per annum. These results confirm that investment in the national cultivar trials at the ARC has been a profitable undertaking for South Africa and that continuing with the trials would be justified.