Evolution and impacts of groundnut research and development in Malawi: An ex-post analysis uri icon

abstract

  • Groundnut is currently the second income earner for smallholder farmers in Malawi, and an inexpensivesource 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, noimpact assessment has ever been conducted to date. This study aims to assess the economic impactsof 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 sourcesincluding a smallholder household survey and secondary data provided by international and nationalagricultural research programmes, and non-governmental organisations. The economic surplusapproach (the PEDPIS method and the Akino-Hayami method) was employed to compute the internalrate of return (IRR) and the net present value (NPV). It was found that the IRR for the base scenario was22%, higher than the opportunity cost of capital being 11%, indicating that the investment wascompetitive as well as profitable. The NPV ranged from USD 204 million to USD 206 million, dependingon the calculation method. With sensitivity analyses, the NPV remained positive and the IRR stayedabove 11% in all scenarios except when the research and extension costs were raised by 50%. The IRRcompares well among impacts of crop research in sub-Saharan Africa. The result implies the need forpolicy formulation towards long term commitment to developing improved seeds, reinforcement of theseed systems, and enhancement of extension services to smallholders

publication date

  • 2016