Cost-benefit Analysis and Financial Feasibility of Rosemary Production in Southern Ethiopia

Abstract

This study was conducted at Wondo Genet Agricultural Research Center experimental field from January 2018 to March 2021. The study examined the financial feasibility of WG-Rosemary-III rosemary variety for fresh herbs and WG-Rosemary-II rosemary variety for dry herb production. For this study, both rosemary varieties were planted on 100m2 land areas with an intra and inter-row spacing of 60cm. All cost and benefit data were collected during the cultivation period. The study utilized financial analysis methods such as net present value (NPV) and benefit-cost ratio (BCR) to analyze the feasibility of their production. The study found that the net present value of production of WG-rosemary-III for fresh herbs was ETB 2,603,219.63 per hectare in its entire three years of production, indicating that its production is financially feasible. The benefit-cost ratio of production of WG-rosemary-III for fresh herbs was 7.94 which indicates that a 1 ETB outlay for this rosemary production results in a net return of ETB 6.94 per hectare. Besides, the net present value of production of WG-rosemary-II for dry herb was ETB 1,186,051.02 per hectare in its entire three-year course of production, which indicates that its production is financially feasible. The benefit-cost ratio of production of WG-rosemary-II for dry herbs was 4.22 which indicates that a 1 ETB outlay for this rosemary production results to gain a net return of ETB 3.22. The results indicate that the production of these rosemary varieties is profitable. Therefore, the government and other concerned stakeholders should further scale up the production of these rosemary technologies through training and awareness creation for farmers and investors through extension agents, thereby these rosemary technologies are utilized as a significant source of income and contribute to the enhancement of household well-being.