The Economic Benefits of the South African Agricultural Research Council’s Wheat Breeding Program: 1992–2015

Although classified as an upper middle-income country by the World Bank, food insecurity is still a concern throughout South Africa, as was evident in 2014–2015 when a drought left 22% of households food insecure. As such, agricultural research in South Africa is needed specifically in plant breeding to increase yields and help mitigate future food insecurity. To fill this need, the South African government funds the Agricultural Research Council (ARC), which conducts holistic research on wheat and other crops. Wheat is important to South African food security; due to the significant drop in wheat area planted since the abolishment of the fixed price marketing system provided by the wheat board in 1997, South Africa has become a net wheat importer. Further, recent political uncertainty has resulted in the South African Rand devaluing (by 58% to the USD during 2012-2017), leaving South Africa exposed to risk in global wheat and exchange rate markets and increasing its food insecurity vulnerability. Thus, an assertive effort has been made to break South Africa\u27s dependence on imported wheat by increasing wheat yields per hectare. This study estimates the proportion of increases in yield of ARC\u27s wheat cultivars which is attributable solely to genetic improvements. In total, 36,507 yield observations were analyzed from 125 country-wide test plots from 1998 to 2014. We found that South African farmers who adopted the ARC\u27s wheat varieties during 1992-2015 experienced an annual yield gain of 0.86%, 0.58%, and 0.31% in winter, facultative, and irrigated spring wheat types, respectively. Using actual area sown to ARC varieties we estimated that wheat producers gained $94.56 million (2016 USD) during 1992–2015 via the adoption of ARC varieties. We estimate that every dollar invested in the ARC wheat breeding program generated a return of $4.49. This study is relevant because South Africa only has limited funds allocated to agricultural research and development. Without reliable estimates of the return on investment by the South African government, the ARC runs the risk of decreased funding, and the South African populous could run the risk of increased food insecurity