The Impact of Mungbean Research in China

mungbean research has generated high benefits,both for producers and consumers.In the second case we consider that Chinaexports mungbeans to other countries. We alsoinclude AVRDC as a region, since mungbean research(including training of Chinese researchers)at AVRDC-ARC has been influential for the researchsuccess in China. Total cost of mungbean researchat AVRDC that can be attributed to distribution ofgenetic material to China has been estimated at2.4 million US$, including plant breeding, plantphysiology, entomology, plant pathology, travel, andtraining. 6Again, we consider three different scenarios forthe reduction in production cost, 10%, 20% and25%. Note that the surplus for Chinese consumersis now slightly lower than for Chinese producers,but that taken together the surplus change achievedthrough mungbean research is substantial, of 105.8million US$ for the Chinese economy and 22 millionUS$ for consumers in importing countries inthe best scenario, and 42.4 million US$ surpluschange for the Chinese economy and 9.5 millionUS$ surplus change for consumers in mungbeanimporting countries in the most conservative estimateof 10% cost reduction. Compared to thebaseline scenario of a closed economy, the totalIRR is very similar; however, it is slightly reducedfor the Chinese economy. Yet, even in the mostconservative estimate of only 10% cost it stillreaches 72.5%, meaning that for every dollar invested72.5 cents have been returned to the Chinesesociety.The analysis has shown that the estimation oftotal benefits depends crucially on the size of kthat is assumed. Total benefits and the IRR do notdiffer substantially under the assumption of closedor trading economy, but the distribution of benefitsbetween Chinese consumers and those of importingregions is affected.Table 10. Net present values of costs and benefits, and internal rate of return (IRR) of mungbeanresearch, exporting economy and AVRDC research cost includedPresent Value of R&D BenefitsReturnsScenario Producer Consumer Total Costs (B-C) IRRk Region (1000 US$) (1000 US$) (1000 US$) (1000 US$) (1000 US$) B/C (%)25% China 56 234.5 49 559.4 105 794.0 3 481.5 102 312.5 30.4 109.0Importing regions 0 21 963.2 21 963.2 0 21 963.2AVRDC 0 0 0 2 131.7 -2 131.7 0Total NPV benefits 56 234.5 71 522.7 127 757.3 5 613.3 122 144.0 22.8 119.420% China 45 589.6 40 184.7 85 774.3 3 481.5 82 292.8 24.6 98.7Importing regions 0 17 799.0 17 799.0 0 17 799.0AVRDC 0 0 0 2 131.7 -2 131.7 0Total NPV benefits 45 589.6 57 983.8 103 573.4 5 613.3 97 960.1 18.5 108.310% China 24 401.5 21 515.8 45 917.3 3 481.5 42 435.8 13.2 72.5Importing regions 0 9 519.6 9 519.6 0 9 519.6AVRDC 0 0 0 2 131.7 -2 131.7 0Total NPV benefits 24 401.5 31 035.4 55 436.9 5 613.2 49 823.7 9.9 80.06 Estimate provided by S. Shanmugasundaram, Plant Breeder and Deputy Director General for Research at AVRDC.21