Abstract
Groundnut is currently the second income earner for smallholder farmers in Malawi, and an inexpensive source of balanced protein. Owing to the continued crop improvement research and extension efforts, production has risen by more than 15 times in the past two decades. Despite the dramatic growth, no impact assessment has ever been conducted to date. This study aims to assess the economic impacts of investments in groundnut research and development (R&D) in Malawi, covering the period 1982-2013. Relevant information on investments and changes in outputs was gathered from a range of sources including a smallholder household survey and secondary data provided by international and national agricultural research programmes, and non-governmental organisations. The economic surplus approach (the PEDPIS method and the Akino-Hayami method) was employed to compute the internal rate of return (IRR) and the net present value (NPV). It was found that the IRR for the base scenario was 22%, higher than the opportunity cost of capital being 11%, indicating that the investment was competitive as well as profitable. The NPV ranged from USD 204 million to USD 206 million, depending on the calculation method. With sensitivity analyses, the NPV remained positive and the IRR stayed above 11% in all scenarios except when the research and extension costs were raised by 50%. The IRR compares well among impacts of crop research in sub-Saharan Africa. The result implies the need for policy formulation towards long term commitment to developing improved seeds, reinforcement of the seed systems, and enhancement of extension services to smallholders. Key words: Groundnut, economic surplus, Akino-Hayami, internal rate of return, net present value, Malawi.
Highlights
Malawi ranks among the world's least developed countries
This study aims to assess the economic impacts of investments in groundnut research and development (R&D) in Malawi, covering the period 1982-2013
The study provides for the first impact assessment of groundnut R&D over the past three decades in Malawi, with a focus on economic impacts
Summary
Malawi ranks among the world's least developed countries. The country’s economy is predominantly agrarian, in which agriculture accounts for 27% of gross domestic product and 85% of export revenues. 90% of the population reside in rural areas, and are engaged in small-scale farming activities (World Bank, 2014). Despite the economy’s heavy dependence on agriculture, the government has been allocating less and JEL classification: C81, O11, O13, O55.
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
