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Economic returns from investment in beef cattle improvement research in South Africa

Nevondo, Takalani T., Chaminuka, Petronella, Nhundu, Kenneth, Liebenberg, Frikkie
Agrekon 2019 v.58 no.1 pp. 113-124
beef, beef cattle, beef production, cattle husbandry, costs and returns, econometrics, genetic improvement, production technology, time series analysis, South Africa
The national beef cattle improvement scheme was introduced by the South African government with the objective of improving the biological and ecological efficiency of beef production through genetic improvement and enhanced cattle management practices. This has been achieved through various structural and technological changes targeted at increasing beef production and promoting sustainable production systems. Despite the technical success of the programme, and the substantial investment made into it, there is limited information on the returns to investment made in the beef improvement scheme in South Africa. Using time series data from 1970–2014, the study uses an econometric approach modelled through the Almon Polynomial Distribution to estimate the lead period and rate of return from investment in beef cattle improvement research. The lag effect and absence of a lead-time suggest that research impacts beef production in the current year of investment. A marginal rate of return of 32 per cent implies that South Africa received R32 for every rand invested towards the scheme. This suggests that the research investment is worthwhile and motivates for continuation of the beef cattle improvement research given significant and positive economic efficiency measures.