A simulation approach for the economic appraisal of the Smallholder Market Access and Food Supply Project revised phase 1 (1992–1995) in Papua New Guinea

Abstract

The Smallholder Market Access and Food Supply Project (SMAFSP) is one of the Public Investment Projects under the Papua New Guinea Government's Medium Term Development Programme which is being implemented by the Department of Agriculture and Livestock and various Provincial Governments. SMAFSP seeks to develop the identified 31 nutritionally-disadvantaged and least developed areas of Papua New Guinea. The broad goal of the project is to improve the standard of rural living and to provide diversified employment opportunities for smallholder families. The major objectives are: to improve subsistence food production and consumption; to increase cash cropping and market access; to strengthen rural extension and adaptive research services; and to increase opportunities for earning cash incomes. The implementation of the original SMAFSP Phase 1 which started in 1988 encountered several problems in its early years due partly to its poor formulation and design, and the lack of economic analysis. The Government decided in 1990, after a mid-term review, that the project should be completely revised through a new planning exercise to ensure that major development objectives for the project areas are fully achieved. The revised appraisal was conducted in 1991 and it involved the development of an economic simulation model using the Lotus 1–2–3 spreadsheet package, the most readily available simple appraisal package in Papua New Guinea. The economic simulation model developed is useful for the continuous appraisal and monitoring of the different phases of SMAFSP based on actual annual allocation of Government budget funds and the degree of achievement of production targets.