On the Impact Assessment of ACIAR (Australian Centre for International Agricultural Research) Projects

The current ACIAR (Australian Centre for International Agricultural Research) guidelines for impact assessment of agricultural development projects see impact assessment as being useful for both accountability to stakeholders and as a learning tool to find out what works, what doesn’t work and why. The methodology involves the use of conventional economic evaluation and the estimation of a money metric based on measuring outcomes in terms of economic surplus changes attributable to directed actions and activities. On the question of accountability to stakeholders, this paper suggests that the money metric may not be the best outcomes-based measure of performance against development goals and that other performance indicators ought to be considered. The paper also suggests exploring other approaches to assess accountability including qualitative (narrative) methods as well as process-based accountability. On the question of using impact assessment as a learning tool, the paper suggests this might be quite useful for more traditional non-adaptive research, but is less useful for adaptive research projects involving participatory action research (PAR). With PAR projects, learning about what works, what doesn’t work and why already occurs as an integral part of the research process. The paper concludes with some thoughts about project evaluation of an ACIAR-funded project with which the authors are involved in northwest Cambodia focusing on upland crop production and marketing.Project evaluation, impact assessment, adaptive project management, Cambodia., Research and Development/Tech Change/Emerging Technologies,

Upland crop technologies in Cambodia: economic evaluations and some adoption issues

Agricultural research and development (R&D) has being conducted in the upland districts of Cambodia to develop new farming systems and crop management technologies. Levels of farm income in these areas are relatively low due to small farm sizes and low crop productivity. Work is also planned to encourage the process of adoption of these technologies, and here we investigate how this process can be facilitated. A literature review identifies two important technology characteristics, ‘relative advantage’ and ‘trialability’, for successful adoption. Minimum or target rates of return on investment in new technologies are discussed as a means of investigating how much improvement in relative advantage might be enough to encourage successful adoption of the technology. A number of economic assessments of new crop methodologies in Cambodian upland districts and farming systems are presented. Some technologies show an encouraging return on investment from the viewpoint of the Cambodian farmer – rhizobium inoculation of soybean seed had an indicated return of up to 600% on the investment depending on the cost to the grower. Other issues are also likely to be important in discussing change to farming systems, for instance social issues in the village/community context. We present a proposal for a participatory learning process in which economic and social issues are highlighted, to encourage adoption of new crop technologies in local Cambodian contexts.New technology, adoption, upland crops, Cambodia, economic assessment, social, Crop Production/Industries, Institutional and Behavioral Economics, Research and Development/Tech Change/Emerging Technologies,

An economic evaluation of the osmoregulation gene technology to the Australian wheat industry

Episodes of rainfall irregularity and soil moisture deficit have focused attention on the widespread limitation of water supply on winter cereal crop production in Australia. This has motivated a number of efforts at breeding for improved drought tolerance. A recent example involves a cellular adaptation which mitigates water loss through solute accumulation (osmoregulation or osmotic adjustment). An assessment of the performance of osmoregulation yield response in the presence of climate change found that wheat cultivars with this gene are unlikely to be adversely affected by hotter and drier conditions across the wheat belt. The results of an economic evaluation of potential future innovations (wheat cultivars) from the osmoregulation gene technology are that for Australia the net present value could range from $388 million to$3.6 billion, depending on the adoption of wheat cultivars with the gene. Associated benefit-cost ratios ranged from 43:1 to 390:1, and internal rates of return were 16% to 27%. Even under pessimistic assumptions the returns are quite healthy. For NSW-only adoption, internal rates of return ranged from 10% to 22%. This osmoregulation technology has the potential for inclusion in wheat cultivars bred for other purposes, and for other crops. As such it has implications for agricultural plant breeders and farmers both in Australia and overseas, and there are substantial potential spillover benefits.economic evaluation, wheat breeding, osmoregulation, Crop Production/Industries, Research Methods/ Statistical Methods,

Issues of scale and scope in bio-physical modelling for natural resource management decision making in New South Wales

Natural resource management decision making by Catchment Management Authorities in NSW is being aided by a project involving bio-physical modelling and the development of an alternative decision-making framework. The objective of the bio-physical modelling process is to generate predictions of environmental or natural resource outcomes rather than project outputs. These outcomes can then be used in an investment framework to help priority setting and project decision making. Questions that arise in bio-physical modelling include those relating to scale and scope. Scale issues include how to address the landscape impacts of particular (or a series of local) on-ground works proposals. Scope issues include assessment of multiple-attribute responses to particular changes. In a multi-disciplinary context the challenge is then to translate this information into units that can be adapted to a decision-support framework. Existing Catchment Management Authorities decisions are often based on scoring and weighting of environmental improvements using an environmental benefits index, however other economic frameworks are possible. We discuss the important context for these questions in the decision making framework.environmental benefits, bio-physical models, scale, scope, investment decisions, Resource /Energy Economics and Policy,

Environmental economics and valuation: towards a practical investment framework for Catchment Management Authorities in New South Wales

The Catchment Management Authorities in New South Wales have programs that are collectively investing $436 million over four years to achieve catchment-wide natural resource/environmental improvements. In this paper, we consider the question of how to best allocate these resources so as to increase the well-being of the public within catchments and the state. We consider the current approaches used by CMAs and make a case for Benefit-Cost Analysis as an alternative means of assessing ex ante questions of priority setting at the catchment level and for project appraisal. A major issue for BCA is the estimation of potential benefits from project investments, particularly the estimation of values that catchment communities and those living outside the catchments place on the non-use benefits associated with environmental improvements. We discuss alternative means of eliciting such values and propose the stated-preference method of Choice Modelling as a means of overcoming this Benefit-Cost Analysis shortcoming, because it incorporates advances in non-market valuation.environmental, economics, choice modelling, non-use values, investment framework, Environmental Economics and Policy,

Changes in Management Can Improve Returns from Cambodian Upland Crops

Farming systems research for wet-season non-rice upland crops in Cambodia is being conducted with the overall aim of poverty reduction and food security for farmers in the Provinces of Battambang and Kampong Cham. Some of these cash crops exhibit low and variable incomes, especially when grown in the early wet season. Cambodian farmers may borrow money to buy crop inputs and often sell their produce to companies and traders from neighbouring countries, hence they are price takers. Some new crop technologies are evaluated which relate to soil and crop fertility management interacting with climatic factors. The DSSAT crop simulation model is used to predict outcomes from alternative management strategies. Bio-economic analyses are conducted to assess the likely appeal of these technologies to Cambodian farmers in a return-on-investment context. The results show that management to adjust the nitrogen fertility available to corn, the use of rhizobium in soybean, and a delay in planting early-wet-season corn may all show substantial financial benefits. Further research and an associated farmer demonstration program involving local extension officers are recommended.Upland crops, Cambodia, technology, economics, simulation, risk, Crop Production/Industries,

ESTIMATING RETURNS FROM PAST INVESTMENTS INTO BEEF CATTLE GENETICS RD&E IN AUSTRALIA

This study aimed at estimating the costs and benefits of all beef cattle genetic improvement activity, across Australia, over the period 1970 to the present. The total cumulative Present Value (PV) of investments by industry, government and other agencies into selection, crossbreeding and grading up since 1963, and of imported genetics, was estimated to be $340m (in$2001 at a 7% discount rate). Using a suite of genetic evaluation models, farming systems models and an industry-level model, the cumulative PV of industry returns were estimated. Within-breed selection generated $944m; crossbreeding in southern Australia$255m; changing breed composition in southern Australia $62m; and changing breed composition in northern Australia$8.1bn. The benefit/cost ratio for this investment was 28:1 over the last 30 years.Livestock Production/Industries, Research and Development/Tech Change/Emerging Technologies,

Estimating the Returns from Past Investment into Beef Cattle Genetic Technologies in Australia

Research and Development/Tech Change/Emerging Technologies,

Policy responses to invasive native species: issues of social and private benefits and costs

Farm and catchment managers in Australia face decisions about controlling invasive native species (or scrub) which may infest agricultural land. The treatment of this land to remove the infestation and re-establish native pastures is likely to be expensive for landholders. Yet there are potential social benefits from such remediation and so a policy question arises of what to do to about facilitating such change. New South Wales state government legislation addresses this issue through regulations, and the Catchment Management Authorities are responsible for administering public funds to achieve associated natural resource improvements. However, the extent of the private costs and social benefits associated with such changes are not known, which precludes benefit-cost analyses using the traditional welfare economics framework. This paper reports results of a social and private economic analysis of the impacts of a typical infestation remediation decision. We show that for the landholder the private costs exceed the benefits achieved from increased livestock productivity. However, there are social benefits expressed by the willingness to pay by members of the local catchment community for improvements in native vegetation and biodiversity. When these social benefits are included, the economic analysis shows a positive social net benefit. This raises questions of how to reconcile the public and private accounting, and whether any changes to policies, regulations or procedures for natural resource management in New South Wales are warranted.Invasive native scrub, environmental values, choice modelling, financial, economic, Namoi catchment,

Profitability and risk evaluation of novel perennial pasture systems for livestock producers in the high rainfall zone: Context, Approach and Preliminary Results

The decision to invest in pasture improvement raises various questions for the livestock grazier, with the most pertinent being about the potential returns and risks. In the high rainfall zone of south-west Victoria, researchers have trialled novel perennial pasture systems with the aim of substantially increasing on-farm profits whilst simultaneously improving environmental outcomes. Results from the Hamilton EverGraze® proof site have shown potential to greatly improve livestock production. Promotion of the pasture technology is the next step. Key to this process is developing information about profitability and risk regarding the decision to invest in the new pasture. To help meet this need a model of a representative mixed livestock farm system for the region has been developed to generate information about profit, cash wealth and risk to aid extension and help inform decisions. The farm is comprised of a wool and meat producing sheep system and a beef enterprise. Using the model, the performance of two of the novel pasture systems can be evaluated against current practice, and compared to determine which of the two is the most beneficial EverGraze® option for the future. The risk associated with the pasture decision is assessed by considering different price structures and seasonal outcomes, and evaluating these effects on net benefits. Discounted cash flows, net present values and internal rates of return are estimated for the alternative systems, which include the effects of this price and seasonal variability. Preliminary results have been calculated, however further work is needed to confirm these. The method and results of the analysis provide information that is valuable for farm decisions about investing in a new pasture system and provide a basis for future economic analyses at the case study site and elsewhere.Farm Management,