Cost-Benefit Analysis of Africa RISING Technologies in Tanzania: Summary of initial results Bekele H. Kotu Contributing scientists: A. Kimaro, M. Swamila S. Lyimo,Yangole, V. Afari-Sefa, P. Lukuman, F. Ngulu, J. Kihara, A. Abass, Beatrice, M. Bekunda, I. Hoeschle- Zeledon Africa RISING East and Southern Africa Review and Planning Meeting, July 14-16, 2015, Malawi

The study  This study aims to assess the profitability of agricultural technologies under study by AR team in Tanzania  Research questions  Are the technologies profitable? (Absolute Assessment)  Are the technologies better than the base technologies in terms of financial benefit? (Relative Assessment)  We considered 59 technologies under trial in Tanzania (both Babati and Kongwa-Kiteto research zones)  11 technologies are base technologies while the remaining technologies are new ones

The study  Designed to increase the productivity/loss of several crops: maize, pigeon pea, eggplant, tomato, and amaranths  We have data for 2 years for 32 technologies, but only a one year data for the remaining technologies  The technologies can be categorized  Soil Fertility Management (SFM)= 46  High Value Crops (HVC)=9  Postharvest Management (PH)= 4

The study  More than 1400 data observations from 11 separate experiments  Used both biological and economic data  These include o Grain yields o Output prices o Labor input and costs, land cost, draft power costs, costs of commercial inputs (seeds, fertilizers and pesticides)

Analysis  Computed three economic indicators  Gross margin (TZS/ha)  Benefit-Cost –Ratio  Returns to labor (TZS/persondays)  Conducted sensitivity analysis  Output price changes  Input price changes  Wage rate changes

Results LowerSimilarHigher Gross Margin (GM)11433 Benefit Cost Ratio (BCR)12126 Returns to Labor (RNLB)12918 Table 1: AR technologies Vs Base technologies

Results AR technologyBase TechnologyT value MeanSDMeanSD GM * BCR * RNLB** Table 2: Performance of the technologies * Significant at 1% level **Average wage rate is 3596TZS/day

Results GMBCR RNLB MeanSDMeanSDMeanSD SFM a b b 5445 HVC b a a23520 PH* 11066c b b13868 Table 3: Performance of the technologies, by type *Based on changes in net benefit due to the new technologies a,b,c: means with similar letters are not different from each other at 5% level of significance

Results Figure 1: No. of technologies at different profit levels

Results Figure 1: No. of technologies at different profit levels SFM

Results Figure 1: No. of technologies at different profit levels HVC

Results Figure 1: No. of technologies at different profit levels PH

Sensitivity Analysis Figure 2: Sensitivity to output price, input price, and wage

Sensitivity Analysis Figure 3: Sensitivity by technology category (GM)

Sensitivity Analysis Figure 4: Sensitivity by technology category (BCR)

Sensitivity Analysis Figure 5: Sensitivity by technology category (RNLB)

Sensitivity Analysis Figure 6: Effect of output price changes on No. of profitable technologies

Sensitivity Analysis Figure 7: Effect of input price changes on # of profitable technologies

Sensitivity Analysis Figure 8: Effect of changes of wage rates on No. of profitable technologies

Sensitivity Analysis Figure 9: Number of technologies at various sensitivity level Median =4.4 Median=

Concluding remarks  Most of the technologies are either better than or as profitable as the base technologies  Profits mostly lie between the breakeven point and the 100% threshold  But profits can go even more than 100% for a few technologies  Profits are more sensitive to changes in output prices than changes in input prices or wage rates  The level of sensitivity also varies among the technology categories, SFM being the most sensitive ones  The results are initial: we included a one year data for some of the technologies  The study considers only economic parameters, and other advantages of the technologies are not considered  Moreover, profits have been considered from individual farmers’ point of view but not from society’s point of view.

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