Ex-ante analysis of economic returns from biological control of coconut mite in Benin and Tanzania: a market chain perspective

Thesis

The economic impacts resulting from the biological control of coconut mite in Benin and Tanzania are scrutinized using an ex ante analytical framework. The study sought to assess the empirical evidence about the benefits of biological control of coconut mite being implemented in the selected coconut growing areas in the two countries. The study also sought to enrich the knowledge base needed for formulating policies that will develop the coconut value chains in these two countries and others facing similar conditions. Results from the economic surplus model show that biological control will produce a welfare gain of US$15 5213.4 in Benin, whereas in Tanzania technology will create welfare gains of USS 33 47006 per year. The estimated discounted economic returns- expressed as Net Present Values (NPV) varied a great deal with varying interest rate. Considered at a discount rate of 12% for the period 2008-2027, Net Present Value was about US$ 20 7721 in Benin, and US$ 23 5611 in Tanzania. The Internal Rates of Return (IRR) or break­ even discount rates are substantially high; being 13.21% in Benin and 52% in Tanzania respectively. The analysis of current coconut marketing chain shows that producers receive only 17% and 8% of the prices paid by consumers in Benin and Tanzania respectively. The coconut subsector is hampered by challenges that range from production, processing to marketing. Despite these challenges there are possibilities to develop coconut value chains in these countries if critical challenges are addressed. Areas that need attention for developing the coconut subsector include; (i) increasing productivity and -production at the farm level, (ii) to achieve increased production, the industry should expand the planting and replanting programme so that supply increases to feed growing markets. Apart from renovation of old coconut plantations, research efforts through public support should be directed toward improving low performing coconut varieties as well as sustaining the success of biological control of coconut mite, (iii) Strengthening farmers’ organizations/platforms to enable them to undertake collective action for efficient marketing of their products, improved bargaining power for better prices with their buyers, and better coordination in obtaining available services and resources from the government, NGOs and the private sectors may also contribute to improving the sub-sector.

Dutch Science Research Foundation through the University of Amsterdam (WOTRO project)