Economic Implications

The economic implications of these estimates are quite important. We estimate that IRGC, IRPB and the INGER programmes of germplasm exchange have caused a larger number of varietal releases than would otherwise have occurred. We show that the varieties produced in this expansion are probably not qualitatively different in terms of characteristics from all other varieties (see

Evenson and Gollin, 1991). In order to develop estimates of the value of these varieties, we require an estimate of the average value of modern rice varieties in farmers' fields.

Evenson and David (1993) report estimates of modern variety impacts for India, Pakistan, Bangladesh, the Philippines, Thailand, Indonesia and Brazil. These range from a relatively high value for India to lower values for the other countries. The approximate value of modern varieties in 1990 in indica rice regions was US$3.5 billion. If we consider this to be the cumulated contribution of the first 1400 modern varieties, we obtain an average value of a released variety of US$2.5 million per year, and this annual value continues into perpetuity because we assume varietal improvements to be additive.

Using simple arithmetic, this allows us to estimate the economic effects of various IRRI activities. First, consider the consequences of ending the INGER programme. We estimate that this would reduce the flow of released varieties by 20 varieties per year. There is a time lag between appearance in INGER and production: suppose this to be 5 years, then further suppose that the INGER effect lasted only 10 years (i.e. INGER chiefly speeded up the release of varieties that would have been released an average of 10 years later). The present value of the 20 varieties over the 6th-15th years discounted at 10% is US$1.9 billion. This is an estimate of the loss if INGER nurseries were to be eliminated.12

We can also compute the value of adding 1000 catalogued accessions to IRGC. According to our estimate, this will generate 5.8 added released varieties. This will generate an annual US$145 million income stream with a delay of, say, 10 years. The present value of this stream at a 10% discount rate is US$325 million.13

The value of an added landrace introduced by IRRI is also high. (This is a landrace not previously used in a released variety that is incorporated into a new released variety through IRRI's efforts. Think, for example, of IRRI's introduction of a gene from a wild species.) Our results indicate that after an IRRI landrace is added, varietal releases expand by 0.68 varieties in the first year, 2 X 0.68 in the second year, etc. Assuming that this process begins after 5 years and then continues for 10 more years, we can compute the present value of an IRRI-added landrace to be US$50 million discounted at 10%.14

There is thus little question that the continued operation of INGER, the operations of IRGC and the completion of accessions to IRGC are economically justified. These are high payoff activities. In addition, the expansion of the landrace pool by IRRI has a high payoff.

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