Economic evaluation of a transport development programme for small‐scale cane‐growers

Abstract

The cost-benefit analysis procedure is used to determine the viability of a programme aimed at improving transport infrastructure for small-scale cane-growers. Two mill areas were evaluated, namely Amatikulu and Sezela, situated on KwaZulu-Natal's north and south coasts respectively. Three models were constructed, as the Sezela area was subdivided into the Kwa-Hlongwa (labour-intensive) and Cabhane (planthire) projects. The results reflecting the tangible costs and benefits indicate economic nett present values of R8,18 million, R7,91 million and R1,91 million for Amatikulu, Cabhane and Kwa-Hlongwa respectively. In view of the results obtained in the base models and sensitivity analyses, indications are that the benefits of the programme will outweigh the costs by a considerable margin, making the programme a viable investment decision.

F.R. Tomlinson Gedenklesing / F.R. Tomlinson Memorial Lecture

“…One exception to this focus on irrigation infrastructure can be found in Erasmus et al (1996), who use cost-benefit analysis to determine the viability of a programme to improve transport infrastructure for small-scale cane-growers in South Africa. The results indicate positive net present values, indicating that the benefits of the programme will outweigh the costs by a considerable margin.…”

THE RATE OF RETURN ON R&D IN THE SOUTH AFRICAN SUGAR INDUSTRY, 1925–2001

“…Millers gain from increased sugar production in the short run, as the capacity utilisation of mills was low during the early 1990's. The miller profit from increased mill-turnover has been estimated as a margin/ton sucrose for two mills; Amatikulu R22.2 and Sezela R30.0 (Erasmus, 1995). In the long run all costs are variable and the marginal milling profit will be less.…”