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The cost‐benefit analysis procedure is used to determine the viability of a programme aimed at improving transport infrastructure for small‐scale cane‐growers. Two mill areas were evaluated, namely Amatikulu and Sezela, situated on KwaZulu‐Natal's north and south coasts respectively. Three models were constructed, as the Sezela area was subdivided into the Kwa‐Hlongwa (labour‐intensive) and Cabhane (plant‐hire) projects. The results reflecting the tangible costs and benefits indicate economic nett present values of R8,18 million, R7,91 million and R1,91 million for Amatikulu, Cabhane and Kwa‐Hlongwa respectively. In view of the results obtained in the base models and sensitivity analyses, indications are that the benefits of the programme will outweigh the costs by a considerable margin, making the programme a viable investment decision.
Notes
Graduate student, Department of Agricultural Economics, University of Natal; Head of Department of Agricultural Economics, University of Natal; and Development Bank of Southern Africa, respectively.