Cost-benefit analysis of Purdue Improved Crop Storage bags for maize storage among smallholder farmers in northwest Ethiopia

Abstract

In Ethiopia, post-harvest losses caused by insects are a major challenge in crop production systems. Dried maize is particularly susceptible to insects during storage. Storage loss affects the livelihoods of small-scale farmers leading to food insecurity and loss of income. Therefore, the objective of this study was to assess the cost-benefit analysis of Purdue Improved Crop Storage (PICS) bags on maize storage in Northwest Ethiopia. Cross-sectional data was collected from 392 randomly selected households from both users and non-users of PICS bags, using stratified sampling technique. A structured questionnaire, key informant interviews, focus group discussions, individual in-depth interviews, and field observations were used to gather the data. A cost-benefit analysis was computed to evaluate the viability of PICS bags for maize storage. The binary logistic regression model was used to identify factors that affect the use of PICS bags. Descriptive statistics (percentage, mean, and standard deviation) and inferential statistics (t-test and chi-square test) were employed to analyze the data. The benefit-to-cost ratios (BCRs) of insecticide with both ordinary and PICS bags were greater than one, but PICS bags resulted in more than two-fold higher values as compared to insecticide with ordinary bags. The net present value (NPV) at 15% discount rate in 2018 was 20.73 USD and 25.35 USD per 100 kilograms of stored maize when insecticide was applied to ordinary and PICS bags, respectively. Sensitivity analysis with a 10% cost increment and up to 50% price discount showed that both technologies would still be viable for maize storage. However, PICS bags had higher NPV and BCR; making the technology more viable than insecticide with ordinary bags. The results of binary logit model indicated that educational level, gender, awareness, training, accessibility of the technology, perception of the technology, involvement in leadership activities in the community, and total income of the household positively influenced farmers’ decisions to use PICS bags, whereas price negatively affected the use of the PICS bags. PICS bags had clear economic advantage over insecticide with ordinary bags for maize storage in Northwest Ethiopia. Efforts should be made to disseminate and improve access to PICS bags for strengthening food security and increasing incomes of maize farmers in Northwest Ethiopia. Key words: Hermetic bag, smallholder farmers, profitability, post-harvest management, food security