Economic Evaluation of Improved Irrigated Bread Wheat Varieties with National and International Origins and Its Impacts on Transfer of Supply Function

بوم شناسی کشاورزی

Article 4, Volume 8, Issue 3 - Serial Number 29, September 2016, Pages 476-489   

Document Type: Scientific - Research

DOI: 10.22067/jag.v8i3.56140

Authors

Hormoz Asadi¹; Gholamreza Zamanian^{* 2}; Mohammad Nabi Shahiki Tash²; Mohammad Ghorbani³; Mohammad Reza Jalal Kamali⁴

¹Department of Agricultural Economy, University of Sistan and Baluchestan, Zahedan, Iran

²Department of Economic, Faculty of Management and Economics, University of Sistan and Baluchestan, Zahedan, Iran

³Department of Agricultural Economy, Faculty of Agriculture, Ferdowsi University of Mashhad, Mashhad, Iran

⁴International Maize and Wheat Improvement Center, Karaj, Iran

Abstract

Introduction
Agricultural research is important and one of the determinant factors of development of technologies in agricultural sector. Among agricultural research disciplines, breeding programs, especially, wheat breeding programs are one of the applied approaches in improving of production and food security. Based on a study by Byerlee & Traxler (1995), economic benefits and Internal Rate of Return (IRR) for Impact of International Wheat Improvement (for all breeding programs) were estimated US$3.0 billion per year with internal rate of 53%, and economic benefits for Impact of International Wheat Improvement (Attributed to IWIN) was estimated US$1.5 billion per year during 1966-90.

Materials and methods
The main objectives of this research were to determine shift of supply function of variety and impacts of breeding wheat varieties on reduction costs, and determination of economic return of released irrigated bread wheat in breeding program for the period of 1991-2000. Wheat varieties included; 23 varieties of released irrigated bread wheat by wheat breeding program of Seed and Plant Improvement Institute (SPII) and Provincial Agricultural Research Centers. Ex-ante and Ex-post methods were used in this study. Measuring criteria for these methods were; quantity of shift in supply function, cost-benefit analysis and internal rate of return of varieties. For estimation of reduction costs and shift of supply function of varieties in breeding program were calculated following Brennan et al. (2002):



Where:
Cvb: Cost reduction due to breeding program, TCh: Cost production per ha, Yv (without): yield of check variety in breeding plots, Yv (with): yield of new variety in breeding plots, PSS: % supply shift in breeding program and Pw: price of wheat grain per kg
For assessing economic criteria, Net Present Value (NPV), Cost-Benefit Analysis and Internal Rate of Return (IRR) were used: Following Brennan et al (2002), gross benefit of irrigated bread wheat research in different regions (B), annual shift of genetic improvement of variety due to breeding program (kt) and Fixed and Variable costs due to research and extension of irrigated wheat breeding in experiment years (TVC) were estimated as follow:






Where:
Pt: Price of wheat grain in year t, Qt: Quantity of wheat grain production in year t, Vit: Proportion of area of varieties in year t, gi: Genetic improvement for varieties i, S: Number of full time breeders and technicians involved in irrigated wheat breeding program, Cs: The costs of breeders and technicians in year t and Cvt: Fixed and variable costs of research and extension activities in year t
For economic analyses of genetic improvement of a variety, profitability indexes including Net Present Value (NPV), Benefit- Cost Ratio and Internal Rate of Return (IRR) were calculated following Brennan et al. (2002):

Where:
PVB: Present value of benefits, PVC: Present value of Costs, r: Discount rate and n: period

Results and discussion
According to the results of this study, the mean reduction of costs for released irrigated bread wheat varieties during 2001- 2010 was estimated as 109.8 rials. The mean of shift in supply function for released irrigated bread wheat varieties during these years was estimated as %5.31. The mean of Net present value (NPV) for released irrigated bread wheat varieties in study periods was estimated 4463.5 billion Iranian Rials. Based on results, breeding program of irrigated bread wheat was economic.

Conclusion
In general, released irrigated bread wheat varieties with national and international origins in irrigated wheat breeding program of Seed and Plant Improvement Institute (SPII), Iran, was economically profitable. New Released irrigated bread wheat varieties have had considerable impacts on cost reduction and increasing of farmers income.

Acknowlegemnets
Authors would like to extend their sincere acknowledgements to the University of Sistan and Baluchestan and Seed and Plant Improvement Institute (SPII) for their technical and scientific supports.

Keywords

Breeding Research; Investment; Measurement; Return

References

Asadi, H. 2007. Investment Return in Wheat Research in Iran p. 467-479. In: Buck, H. T., Nisi, J.E., and Salomon, N. (Editors). Wheat production in stressed environments. Springer, The Netherlands.

Anonymous. 2014. Annual Reports. Seed and Plant Improvement Institute (SPII). Agricultural Research, Education and Extension Organization (AREEO ), Ministry of Jihad-e-Agriculture 34 pp. (In Persian)

Brennan, J.P., Aw-Hassan, A., Quade, K.J., and Nordblom, T.L. 2002. Impact of ICARDA Research on Australian Agriculture, Economic Research Report. No. 11, NSW. Agriculture, Wagga Wagga 83 pp.

Braunschweig, T. 1999. Priority setting in agricultural biotechnology research: Supporting public decisions in developing countries with the analytic hierarchy process. PhD dissertation. Swiss Federal in Institute of Technology Zurich.

Byerlee, D., and Traxler, G. 1996. National and international wheat improvement research in the post-green revolution period: Evolution and Impact. American Journal of Agricultural Economics 77: 268-278.

Esfandiarypoor, E., Heydarpoor, D., Tavazo, M., Ahmadifar, M., and Khanchi, M. 2013. Multiplication and preparation of wheat program in 2014-2015. Wheat Project. Plant Production, Ministry of Jihad-e-Agriculture 227 pp. (In Persian)

Jalal Kamali, M.R., Najafi Mirak, T., and Asadi, H. 2012. Wheat: Research and Management Strategics in Iran. Published in Agricultural Education, Agricultural Research, Education and Extension Organization (AREEO), Ministry of Jihad-e-Agriculture 227 pp. (In Persian)

Lantican, M.A., Braun, H.J., Payne, T.S., Sonder, K., Baum, M., Ginkel, M.V., and Erenstein, O. 2015. How wheat improvement research impacts the world. 9th International Wheat Conference, Sydney.

Marasas, C.N., Smale, M., and Singh, R.P. 2003. "The economic impact of productivity maintenance research: Breeding for leaf rust resistance in modern wheat. Agricultural Economics 14: 253-263.

Nalley, L.L. 2007. "The genetic and economic impact of the CIMMYT wheat breeding program: A policy analysis of public wheat breeding. PhD dissertation Kansas state university.

Nikooei, A., Bageri, A., Ghandi, A., and Zare, A. 2006. Study of investment return in agricultural researches: Case study of irrigated wheat research (Mahdavi variety) in Esfahan province. Agricultural Science 12(2): 251-260. (In Persian with English Summary)

Nikseresht, R., Mohammadi, A., Majidi Hervan, A., and Mostafavi, K.H. 2014. Study of advanced bread wheat lines in with and without drought stresses (F7). Journal of Agroecology 6(1): 97-197. (In Persian with English Summary)

Soltani, G.R. 2007. Economic Engineering. Published in Shiraz university 295 pp. (In Persian)

Shahnavazi, A., and Hosaini, S. 2011. Assessment of economic benefits for research and extension Almond variety in Iran. Agricultural Economic and Development 25(2): 266-274. (In Persian with English Summary)

Voegele, J., and Kropff, M. 2016. Global wheat: Breeding returns billions in benefits but stable financing remains elusive. World bank working a world free of poverty. http://blogs.worldbank.org/voices/global-wheat-breeding-returns-billions-benefits-stable-financing-remains-elusive .