@article{Mazwane:334767,
      recid = {334767},
      author = {Mazwane, Sukoluhle},
      title = {Economic returns of the Agricultural Research Council’s  Table Grape Cultivar Development Programme in South Africa},
      address = {2019-05},
      pages = {84},
      year = {2019},
      abstract = {The table grape industry, in line with national policy  imperatives such as the National Development Plan (NDP),  plays an important role in the South African (SA) economy  through employment creation, rural development and foreign  currency earnings. The industry has continued to expand  over the years. The yields of table grapes have increased  considerably in South Africa. For continued growth and  sustainability, research and development (R&D) initiatives,  among other factors, are important. The Agricultural  Research Council’s (ARC) Table Grape Cultivar Development  Programme (TGCD) is an R&D initiative that supports the  industry with breeding of table grape cultivar varieties  suitable for SA conditions. It was established in 1952, and  has successfully bred 37 table grape cultivar varieties.  However, the impact of the programme on yields and  contribution to the economy remains unknown. Therefore, the  study sought to estimate the economic returns of the ARC’S  TGCD to the South African economy. The impact of the ARC  TGCD programme was estimated using a two-stage approach. In  the first stage of analysis, the impact on yield of table  grapes was estimated using the Just-Pope production  function. The first stage of analysis addressed two  specific objectives: to determine the yield gains  attributable to the ARC’s TGCD Programme; and to determine  whether attempts to increase yields and quality of table  grapes has compromised yield stability. The second stage of  analysis employed a benefit-cost analysis to quantify the  benefits in monetary terms. Specifically, BCR and MIRR were  estimated. Expert advice was used to select seven ARC  popular varieties for which data was available in complete  form, for the period 2008 to 2017. v The results of the  Just-Pope revealed that the adoption of ARC table grape  varieties led to average annual yield gains of 0.79% (or  41% for the entire period) for South African table grapes  producers from 1965 to 2014. The results of the Just-Pope  also revealed that attempts to increase yields or yield  quality of table grapes through development of new table  grapes varieties did not influence yield stability. The  average annual economic benefit that accrued to South  African table grapes farmers as a result of the cultivar  development programme was R144 203 964 (in 2010 monetary  values) for the same period. This means increased foreign  currency earnings through increased and stabilised yields.  With reference to net economic benefits, the Benefit Cost  Ratio (BCR) and the Modified Internal Rate of Return (MIRR)  were 4.85:1 and 18%, respectively. This meant that every R1  invested in the Programme is associated with about R5  benefits. Therefore, there is a proportion of the yields  that is attributable to the ARC’s TGCD Programme, over and  above improvement in viticultural practices and farmers’  experiences over time. With regard to efficiency, the  programme is justified (i.e. the benefits derived from the  table grape breeding programme are larger than the costs by  a multiple of about 5). The huge and sustainable net  economic benefits from the TGCD Programme suggest that an  increased injection of public funds should be made to the  point, at least, where marginal social benefits are equal  to marginal social costs. The restructuring of the TGCD  Programme should also consider incorporating the land  reform programme. This would mean greater support for the  programme through increased smallholder farmer targeting  and participation, together with the revitalisation of  rural development initiatives for the table grapes  industry. These, together with future studies that evaluate  the competitiveness of the programme by examining factor  and demand conditions, supporting industries; and the  programme strategy, structure and rivalry, would generate  maximum benefits for the South African economy.},
      url = {http://ageconsearch.umn.edu/record/334767},
      doi = {https://doi.org/10.22004/ag.econ.334767},
}