Economic Returns of public research and development funding in South Africa: Evidence from the Agricultural Research Council’s table grapes cultivar development programme

Abstract

The study sought to estimate the genetic gains and associated monetary value contributed by the TGCD programme of the Agricultural Research Council (ARC). The Just-Pope production function and cost benefit analysis (benefit cost ratio -BCR, and modified internal rate of return -MIRR) were employed to analyse the administrative programme costs and industry yield data for the ARC's cultivars. The results revealed an average annual yield gain of 0.21 t/ha for the period from 1965 to 2014, and a BCR of 4.85. An MIRR of 18% was also revealed. This means that for every Rand invested in the programme, R4.85 is realised and the high MIRR further confirms the worthwhileness of these investments. Thus, these results are useful as evidence for the missing information on the effectiveness and efficiency of public funds expended in table grapes research and as motivation for increased funding, as well as for participation by other industry stakeholders.