Bananas and Food Security - Bioversity International

710 Les productions bananières / Bananas and food security – Session 4
second plantain crops) and compounded to the present values using the appropriate
interest rates. The economic viability of each production strategy was then determined.
Measures of returns
Two measures of returns were calculated for the ex-post evaluation of the production
strategies (Gittinger 1982):
1. The Benefit-Cost ratio (B/C) which is defined as the ratio of the present value of benefits
from a management strategy to the present value of the flow of expenditures. The
Benefit-Cost ratio was expressed as:
t=n t=n
B/C =∑ (1+r) t Bjt /∑ (1+r) t Cjt t=1 t=1
2. The Net Present Value (NPV) which is defined as the present value of the net cash flow
from a management strategy. The NPV was expressed as:
t=n
NPV =∑ (1+r) t (Bjt - Cjt )
t=1
where:
Bjt = benefit from a strategy ‘j’ in year ‘t’
Cjt = cost of a strategy ‘j’ in year ‘t’
t = 1, 2 – – – n
n = number of years from the present study year
r = interest (compound) rate.
The extra returns received from changing from the traditional method of plantain
production to a new improved method was estimated as the compensation to the farmer.
This was calculated for treatments 2 (treated material, farmer’s management with
intercropping) and 4 (treated material, researcher’s management with intercropping)
compared with treatment 1 (untreated material, farmer’s management with
intercropping).
A plantain production strategy was considered to be economically viable if it had a
B/C of greater than one and a positive NPV, at appropriate rates of capital. Greater
consideration was, however, given to the NPV, since it is the preferred measure of project
worth choosing among mutually exclusive projects or project options (Gittinger, 1982).
Data collection
Data were obtained from the researchers, extension staff (Ministry of Food and
Agriculture, Ghana) and farmers involved with the trial and from a farm market survey.
Farm level expenditures for each treatment were structured to include:
• Quantity of suckers required (treated or untreated) and their cost,
• Labour used (family labour, hired labour) and wage rates,
• Number of weedings per year and time taken to weed,
• Land/plot size and rent,