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

Nhundu, Kenneth, Chaminuka, Petronella, Nemakhavhani, Sedzani, Booyse, Mardé
Agrekon 2019 v.58 no.1 pp. 86-101
agricultural research, cultivars, economic valuation, farmers, financial economics, grain yield, prices, risk reduction, wheat, South Africa
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.