Estimating the economic rate of return to research in the South African deciduous fruit industry

Carter, Jonathan Edward David (1999-03)

Thesis (MScAgric)--Stellenbosch University, 1999.

Thesis

ENGLISH ABSTRACT: Historically, commercial agricultural research in South Africa has been state supported, but due to recent political changes in South Africa this is changing. The political transition has been accompanied by changing economic policies, causing a tightening of public funds allocated to agricultural research. In 1992 the Agricultural Research Council was formed, primarily to enable greater industry involvement in research as a result of the expected long term budget cuts in publicly funded research. As a result there has been an increased recognition of the need to evaluate research in terms of the economic returns to investment so that decision makers have hard evidence on which to prioritize their investments. This study employs the well known production function approach to evaluate the economic benefits of publicly funded research in the South African deciduous fruit industry. In reporting the results of the research the study proceeds from an overview of the deciduous fruit industry, as well as an analysis of the structure of deciduous fruit research in South Africa. This is followed by a description of the economics of research expenditure, a description of ex post methods of evaluating the economic benefits of research, and the manner in which the data for the analysis was collected. The analysis suggests there is a statistically significant relationship between research and development and industry output as well as industry prices and output. However the results should be interpreted with care, and more effort should be made to ensure that required data are gathered. Nevertheless, the results show that increased research expenditure m the industry is justified.

AFRIKAANSE OPSOMMING: Histories gesien is kommersiele landbou-navorsing in Suid Afrika deur die owerheid ondersteun, maar as gevolg van die onlangse politieke veranderinge in Suid Afrika is hierdie toedrag van sake besig om te verander. Die politieke oorgang in die land het gepaard gegaan met 'n verandering in ekonomiese beleid, wat 'n inkorting van owerheidsbefondsing aan die Landbounavorsingsraad meegebring het. Hierdie Raad is in 1992 gestig, met die primere doe! om grater privaatsektor betrokkenheid in navorsing vanuit die betrokke sektor te verseker, as gevolg van die verwagte onttrekking van owerheidsteun. As gevolg hiervan, is daar nou 'n toenemende erkenning aan die behoefte om navorsingsprojekte te evalueer in terme van die ekonomiese opbrengs op sulke investering, sodat besluitnemers geldige bewyse het waarvolgens bestedingsprioriteite gemaak kan word. Hierdie studie gebruik die bekende produksie-funksie benadering om die ekonomiese voordele van navorsing in die Suid-Afrikaanse sagtevrugte bedryf te evalueer. Die studie begin met 'n oorsig oor die sagtevrugtebedryf, insluitend 'n analise van die navorsingstruktuur wat tans heers. Bogenoemde word gevolg deur 'n beskrywing van die bestaande ex post metodes om ekonomiese voordele van navorsing te evalueer, sowel as die wyse waarop die data vir die analiese ingesamel is. Die resultate wys dat daar 'n beduidende statiese verhouding is tussen besteding op navorsing en pryse en die opbrengs behaal deur produsente in die bedryf Hierdie resultate moet egter met sorg gelnterpreteer word, en meer moeite moet gedoen word om te verseker dat die nodige data ingesamel word. Nietemin toon die resultate dat verhoogde navorsingsbesteding in die bedryf geregverdig is

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