Citation
CIMMYT's Eastern Africa economics programme

Material Information

Title:
CIMMYT's Eastern Africa economics programme
Publisher:
Centro Internacional de Mejoramiento de Maizy Trigo
Publication Date:
Language:
English

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Subjects / Keywords:
Africa ( LCSH )
Farming ( LCSH )
Agriculture ( LCSH )
Farm life ( LCSH )
Spatial Coverage:
Africa -- East Africa
Africa

Notes

Funding:
Electronic resources created as part of a prototype UF Institutional Repository and Faculty Papers project by the University of Florida.

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Full Text
C 1 1 KY T'S E AS T BRN A FR I CA
E CONOM I C S 11R 0G RA MM E
CENTRO INTERNACIONAL DE MEJORAMIENTO DlE MAIZY TRIGO
INTERNATIONAL, MAIZE AND WHEAT fl4PROVEIMMN CENTER OCTOB3ER 1976




INTRODUCTION
CIPUIYT's mandate is to work with national programs in developing and diffusing new technologies in maize and wheat, In pursuing these ends the Center focuses on improving the genetic material available to national programs, on investigating the interaction among improved genetic material agronomic practices, and agroclimatic factors; and on training nationals in breeding and production techniques.
CILPMYT's economics section supports the activities of the crops programs in developing and diffusing new technologies. It is recognized that many elements impinge on farmers' behaviour and on their response to new technology. Some of these forces are natural, related to weather and soils. Other are biological, related to the interaction between plants and their environment. Still others are economic related to markets and to the allocation of resources.
The farmer reaches decisions about his farming activities by blending these elements. Research aimed at developing technologies must incorporate the same elements or run a substantial risk of being irrelevant to farmers. CI2.TYT's economics section emphasises incorporating the economic dimensions of farmer circumstances at the earliest stages of programs for developing and diffusing new technologies, "that is in planning the adaptive research work."
CIYMYT believes that appropriate technology is the key to successful agricultural development efforts. In rural development programmes, huge institutional and infrastructural edifices, perhaps covering roads, water supplies, marketing, extension and credit services are built up around a chosen technology to enable its use by farmers. If the wrong technology base is chosen for the programme, not only has the research effort in producing the technology been wasted, but a whole range of development resources have been misapplied. Even if the sheer weight of effort pushes the new techniques to some farmers, diffusion through the farming community will be poor and adoption is unlikely to be sustained once the special push is removed.
The more appropriate the new technology is to the needs and conditions of the majority of farmers in the community, the more rapidly will it spread and the more farmers it will eventually reach. A comparison of the effects of introducing (relatively) inappropriate (I) and appropriate (A) technology into a farming community is shown in Figure 1.
.... . .




s0 75
60 (A)
Percentage 7'
of farmers / /
using the 40 /lft 't (A
inovton I Benefits to (A)
innovation Bel//
20/ ,~ / over 5 years.
-" (I) Benefits to (I)
over 5 years.
1 2 3 4 5
Years
The appropriate technology (A) reaches 75 of the community in a threeyear period. The (relatively) inappropriate technology reaches only 20,., of the community over a five-year period. The incremental economic benefits to A over the five years, represented by the shaded area, are several times the benefits to I, possibly from a similar level of Government investment in research, enabling facilities and services.
The social benefits of reaching 75/', of the community in three years compared to 20 in 5 years are equally clear.
"Increasing the speed and extent of diffusion of improved technology
through a fanning community is a major thrust of CIIT31YT's efforts. CIM, YT has thus placed priority on improving procedures for formulating technologies. Economics has a significant, if little understood, role to play. Developing that role, demonstrating its utility, and promoting ito use are the goals of the East African program in economics. All of this will, of course, add to the dimensions of agricultural economics research in East Africa, strengthening one facet of the disciplines contribution to development",
THE ECONOMISTS CONTRIBUTION TO RESEARCH PLANTING
The key to these increased benefits in agricultural development efforts is in identifying and designing appropriate technology through problem
oriented research efforts.
The desirability of a contribution from economists is based on the fact that economics whether of family security or profit plays the dominant role in farmers' decisions. Farmers decide what they will produce, how much of it they will produce and how they will produce it in the light of the full set of circumstances in which they find themselves. This set of circumstances includes both natural conditions of climate and soil, important to the farmer for their economic implications,
. ../3. ..




and availability of resources including capital and technology. In order to design appropriate improved technology, the orientation of
,research work and the content of experiments must reflect as closely no possible the set of circumstances which the farmer faces in taking his production decisions. The Work of the economist is in describing the set of circumstances in which the farmer operates, in evaluating
how these influence his production decisions, how he manifests these decisions in his farming system, and how this will colour the acceptability of the many jiotential facets of a new technology.
The acceptability of new techniques is coloured by the contribution they make to the farmer's basic production objectives:, family security, particularly important to the subsistence and semi-subsistence smallholder, and profitability. i,1any breeders and agronomists now accept that yield, in terms of physical output per unit area, is an inadequate criteria to measure the potential impact of a change in management ,practice on farmers' production objectives. Experimental yields, unlikely to be reproduced under farmers' conditions, are particularly problematical, only when representative of expected results in farmers' yields do they become a starting point for evaluation in economic terms. For evaluation, in addition to valuation of the physical output in market terms, yield data need three major qualifications to reflect farmers' production objectives adequately:
(1) By the costs to the farmer of achieving, the yield;
(2) By the year to year variability; of the yield, and of
the costs of achieving it;
(3) By the complexity of the management re-organisation
required to implement the practices needed to achieve
the yield.
Each set of qualifications creates 'costs of change' for the farmer, and deserves further comment:
(1) Farmers costs.
Costs to the farmer as a result of adopting new technology can be put into three categories:
(a) Direct costs; items to be purchased such as fertiliser,
insecticides, sprayer, etc. in order to implement the
practice.
(b) Increased labour costs when the methods involved in implementing the new technology and harvesting the extra output
take more labour than. under existing management.
(c) Opportunity costs, these are particularly relevant to the
small farmer who has no access to, or the means for, hiring extra resources. Modifying the timing of or increasing his
labour input in implementing the new technology may be at the expense of another crop which may not get planted, or
may not get weeded so well, so that its yield falls. These
losses are properly a cost of the new technology to the
farmer. These costs may be high when the losses are of crops
which contribute to security of the farm family food supply, or which are highly preferred as food by him and his family.
Opportunity costs are often difficult to measure in money
terms; nevertheless their identification, if not precise
measurement, is vital as they are often decisive to the farmers'
reaction to new technology.




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(2) Variability, year to Year, in yield, price and costs
Stability in the results to be expected from new technology is also of
particular importance to the small farmer, especially, in the case of the subsistence or semi-subsistence farmers, with new technology for their food crops. Such farmers live relatively close to subsistence level. Significant year to year variations in output, which to a large grower may make the difference in the size of car hlie can afford to run, may mean semi-starvation to the small farmier. Thus, although on a year to year average, results may be better from the new technology, with family security as a dominant objective of small farmers, wide variations in yields are unacceptable. Interactions between crops in the farming system are inevitable. IlTew technology on cash crops often demands changes in management on basic food crops. This also may increase the year to year variability of food production, reducing farmers' security.
Similarly security may be reduced by the uncertainty created by wide fluctuations in the costs of inputs required to implement the new technology.
(3) management complexity
Absorbing new technology into the farming system demands ,a degree of management reorganisation. The more complex the repercussions it creates
within the system, the more complex the reorganisation required. Hlanagerial ability is an attribute distributed approximately normally in
a farming population. The more complex the reorganisation required to absorb new technology, the fewer the farmers with the required ability and the poorer the diffusion of the technology over the population. Each component of a technological package (improved seed, correct spacing,
pure stand, correct time of planting, timely weeding, use of fertiliser, etc.) contributes both to added profitability and to added management
complexity. Dropping components which make large contributions to management complexity increases the degree and speed of diffusion over the farm population. More farmers are capable of handling the reorganization required by simpler new technology. At the same time, dropping such components entails some loss of profitability. Using hypothetical examples based on Fig. 1; if (I) is a complex technological package and (A) a relatively simple one, the comparison of benefits in a 100,000 farm population might be:
1) (A) (a) Profitability per farm of F.90, spreads to 75, of
farms over 3 years at 25/ per year.
(b) Aggregated benefits of F.27 million over a 5-year
period.
2) (I) (a) Profitability per farm of N.120, spreads to 20% of
farms over 5 years at 4% per year.
(b) Aggregated benefits of ..7 million over the 5-year
period.
From a similar investment in government services, gross economic benefits to the country would be three times as high from A. and would
be shared over 75% of the farming community, against 20% for benefits from I. Such a comparison, although based on hypothetical examples, clearly demonstrates the importance of management complexity as a criterion Identifying appropriate new technology.




To illustrate the variety of facets which can be involved, a hypothetical example of an existing and recommended maize growing practice, showing what each offers the farmer and detailing the costs of changing to the recommended practice from the farmers point of view is set out as an
annex to this programme description,
The critical contribution of the economist is a description of the existing system in farming populations to allow advance diagnosis of the likely importance of these three sets, or sources, of costs of change. \7ith such a diagnosis, agricultural researchers can guide their programmes
into those components of new technology most compatible with farmers' production objectives and therefore most appropriate to the local situation. In short, the aim is to identify the line of least resistance to change in the existing farming system.
PROCEDURES FOR A C00-OPERATIVE EFFORT BET'EIT NATURAL SCIENTISTS AND ECOHIOMiISTS IN PLANNING ADAPTIVE AGRICULTURAL RESEARCH
Considerable space has been used in setting out the role of the economist because of the nowness of the idea of his contributing to research design.
As an agricultural research centre, CII'YT is by no means suggesting a take over by economists of research planning, almost certainly a disastrous step. The success of the approach recommended depends on interaction between natural scientists, as experts in crop and livestock improvement, and farm economists, as experts in the economic circumstances facing the farmer. There has been considerable reference in the
literature to the need for an interdisciplinary approach to research problems in developing agriculture, but little practical guidance as to how such an approach might be organised. Having noted that the economist has been playing an exposte role, usually in criticising the inappropriateness of the results of adaptive research programmes, CINIYT economists have sought procedures for a positive approach by bringing the economics input into research planning. To do this, a rapid turnover of data is needed which precludes a protracted full farm economic survey. The
emphasis is on descriptive information and an intuitive evaluation of the relationships it reveals, the whole effort demanding months rather than years. The sequence of procedures which follows is essentially an interaction: between natural scientists and economists to produce a more relevant orientation of research programs. The sequence would be appropriate for scientists working from a centre with responsibility for adaptive agricultural research in a region with a farming population
operating under a variety of natural and economic conditions. The sequence ban cover the orientation of as many crop or livestock research programmes an are mounted from the centre. The economist will liaise with each of the specialist groups involved. The sequence is outlined in relation to a single crop programme.
(1) Crop specialists, breeders, agronomists, pathologists, entomologists and soil scientists relate critical aspects of crop physiology to natural conditions as they occur in the region. Working from basic principles, they attempt to establish the relative importance of possible package components to potential yield, given local conditions of climate and soil, and the prevalent pathogens.
(2) The economist outlines critical aspects of crop economics, present end uses, product specifications, cropping patterns and existing production technology for all areas of the region.




(3) From these two sets of information
(a) The region is divided into 'Recommendation Domains' or
'Customer Zones'. This is an initial agro-economic zoning of the target population into domains which, because of the variability
among them in natural potential or economic conditions, are likely
to require different technologies and for which different experimental programmes may be justified. Zoning also creates a framework for deciding research priorities. If the criterion is the
greatest benefit for the greatest number, other things being equal,
zones with the largest farmer population would take priority in experimental work. However, crop scientists, economists and the
policy planners would weigh factors such as the number of growers
of the crop in each zone, the importance of the crop to these
growers, and the potential performance of the crop in each zone
in allocating priorities.
(b) The economist builds a schedule of descriptive information
required for each zone as a whole and for the on farm situation in each zone. The schedule for the on farm situation seeks a description of how farmers currently manage the crop, and how this
management interacts with management practices on other crops in
the farming system. It emphasises how farmers presently manage those aspects of the crop which the specialists have identified
as probably important to yield potential.
(4) The economist makes a preliminary, informal pre-survey of the zone.
He discusses the scheduled information with officials and farmers
in the area over a period of one or two weeks. This pre-survey verifies the homogeneity of farming within the zone and provides
a basis for the organisation of a farmer survey.
(5) The economist mounts a farmer survey within the zone. The main objective of the survey will be to verify the incidence of features of existing farm management and identified farmer problems among the farming population. Close coordination will be required with crop scientists in drawing up the survey content and training the enumerators. The survey will be used to establish the incidence of pests, diseases, present farming, as well as economic features of the farming population. The information is analysed and used, together with that collected less formally during the pre-survey, to give a detailed description of existing farm management practices. It will show how each facet contributes to the achievement of farmers' production objectives. The economist will identify the 'costs of change' related to each potential component of an improved technology package.
(6) Crop scientists discuss with the economist the weighting of these costs and the implications for experimental programmes aiming to develop technology to take advantage of 'lines of least resistance' into the existing system for easy absorption by the farming population. There will be four areas of discussion:
(a) Programme framework. It is important to breeding, agronomy and
crop protection work that a general context is fixed for the
I research programme. Ideally existing farm practice should form
a basic framework; any step away from it may contribute to
profitability and to 'costs of change' and need assessment in
the programme itself. Mixed cropping is a particularly pertinent
. .. ./7. ...




and critical example. For zones in which farmers grow .(say) 80 of the crop in question mixed with other crops, an explicit decision is required
whether improved varieties and management practices should be sought within the framework of a crop mixture. Crop scientists will evaluate the physiological inter-relationships between plant components and between plants and the local soil and water conditions. The economist will evaluate the importance of the practice to the farmers' production
objectives and the management complexities consequent on reverting to pure stands. It may be decided that mixtures are crucial to water r utilisation or soil conservation, arid to the subsistence farmers' preferred food supply patternsor that the managerial consequences of changing to pure stands would be too complex for most farmers to cope with In this case, the best strater:y would be research to imo-rove the productivity of the mixtures; breeding and agronomy within the context of mixtures already present, On the other hand it may be decided that there are no physiological or crop protection or soil conservation advantages to mixtures, nor are the managerial consequences of changing to pure stands too complex. In this case the experimental work would be done in the context the crop scientists believe would offer the greatest potential for the improvement
of crop productivity. The important point is that the framewvrork for the experimental programme is given explicit consideration and not settled by default. An important part of the framework for consideration would usually be whether experimentation should be done within the rotatioiinal sequence followed by'the farmer
(b) Specification of supplementary breeding criteria Present cultural practices as well as harvesting, processing and storage techniques will have implications for desirable features in any new varieties An economic assessment can be made of the costs of changing present practices or, alternatively, of the losses i.xvolved in putting a poorly adapted variety through the existing techniques.
(c) Locational characteristics of experimental fields The descriptive
survey data will allow the location of experimental work on the soil types and topographical situations characteristic of farmers fields
(d) The content of agronomic trials. Perhaps the most detailed area of discussion is the content of agronomy trials. Having emphasised the need to document the profitability and complexity of each step away from existing farmer practices to allow the compiling of appropriate technological packages, in practical terms few research programmes have the capacity to treat all management practices as experimental variables. The selection of experimental variables requires a detailed dialogue between the agronomist and the economist.
(i) The description of present management practice from the survey provides a basis for control treotnents in the agronomy programme,
Similarly it provides a basis for the levels of all non-experimental
treatments.
(ii) All potential experimental variables facets of management which the agronomist believes will improve the yield of the crop should
Sbe discussed by the agronomist and the economist The agronomist
will be concerned to estimate, from first principles, their likely
impact on yield. The economist will be concerned to establish the 'costs of change', including management complexity, for the farmer in absorbing each facet Those facets which will -have no
or low costs of change but have a significant potential impact on
yield may be readily incorporated as blanket, non-experimental
treatments for all plots except the control under farmers' practice.




-.8
(iii) Out of the remainder, candidates for the experimental variables,
a balance will be struck between the vneighting given by the
agronomist in terms of possible contribution to yield and that
given by the economist in terms of 'costs of chanCe'. Initial factorials should incorporate as experimental variables those facets of management with the highest possible contribution to
yield and the lowest 'costs of change' to the farmer
This sequence .of interaction between crop scientists and the economist
will be extended to lower priority customer zones as manpower and fund
permit expansion of the research programmes There more quantities
information on existing resource use and productivity is required to
crystallise the costs of change to the farmer, a full scale farm economic
survey may be mounted as a follow-up to the initial survey aimed primaS rily at identifying the nature of these costs, In most cases the initial,
rcn-quantative but rapid survey will be adequate to Provride clear research
guidelines. ThLe diagram attached shows the sequence.
TIHE OPERATION OF CIMLY~T'S EAST AFRICAN REGIONAL ECONOTTIC PROGRAMMIE
CIMYT fully appreciates the scarcity of research personnel and funds.
The initial and very limited projects are as a result of an interest
expressed by research administrators, and are in association with ongoing research programmes, The aim, as already stated, is to convince
workers in these programmes and particularly the administrators
responsible for research policy, that this interdisciplinary approach
has considerable potential benefits. Benefits measured in terms of
the effectiveness of the research programaes in producing new technology which is appropriate for and therefore rapidly accepted by farmers.
Given interest by research administrators, CIMYT's Regional economist
f works to bring together local professional staff in small demonstrations
of the approach. CI 4MIYT provides professional advice and supplementary
funding if required.. By co-operating with interested local professionals
rather than using its ovmwn staff, CIUIYT seeks to create an awareness of the approach, and the capacity to implement it, within national research
services.
The belief is that if the demonstration is convincing, a demand for this approach will arise amongst research workers and a willingness to supply
funds and manpower will arise among research adinistrators. At this
stage CIMYT will cooperate with research administrators in identifying
ways for incorporating the approach into the national agricultural
research planning process.




DIAGRAMl: IITTEIIACTIONS BET EM I'lCROP SCIElNTISTS AKTD ECONOMISTS I1N THlE
ORIEUTTATION AND PLAt!'ING Or, A PROGRAIIE OF AGRICULTURAL RESEA CH{
CROP SCIENTISTS ECP.IS
identify vital crop characteristics mdui?;narket and production
-to guide initial zoning and focus a characteristics of~ the crop to
preliminary survey r~uide initial zonitg and focue
a preliminary survey
INITIAL ZONING AND DOMAIN DEVINITIO11 SELECTION Or PRIORITIES
PREL1.IIARY INFORPIALj PRE- SURVEY
FAR1,1ER SURVEY
Assesis possible improvementsi.- crop Assess corstF of
yield fromn all potential revisionsD in associated with:.varbty
management practice and breeding charac te risties3 P'nd' 'otential
criteria revisions in-mian'oaeient
practice
CLOSELY FOCUSED TRIALS, PRO GRA1,l IE
TRIALS EVALUATION
PAEI:Z!DR RECO1111ITDATIOTT AND DDEI.IONSTRAT IONS




q
ANNEX: AN EXAMPLE OF COSTS OF CHANGE
Present practice: -Maize production is wholly for subsistence.
Maize is grown in mixtures with groundnuts and sweet potatoes.
Maize is planted into the prepared field spaced approximately 75 ems between rows and 75 cms in the row. A weeding is done at three weeks
when grounds and sweet potatoes are interplanted and rapidly cover the ground. No further weeding is done. Three or four fields are planted with this mixture at intervals, as the rain falls, between
mid-November gnd mid-January. A short term variety of maize is used
for the first and final plantings.
This enterprise gives the farmer the following returns:
(a) Dry maize, usually sufficient to feed his family until the
following harvest, mainly from the middle plantings of a longer term
variety which has good storage qualities under traditional storage
practice.
(b) A complementary, high flavour food in the form of.groundnuts
used to garnish the maize staple as the basic dish in the, local menu.
(c) The staggered planting times give a prolonged flow of fresh foods;
initially green maize from the short term variety planted early, then
green maize from subsequent plantings followed by the sequence of
sweet potatoes.' In a good year the family will have fresh foods
available as part of their diet the season round, as the sweet potatoes
can be kept in the ground and used, fresh, as required.
(d) The staggered planting reduces the risk of crop failure as maize will be at varying stages, with varying water requirements,' over dry
periods.
(e) The short term variety used in the first planting gives early
food availability in seasons following poor harvests. The short term
variety used in the final plantings fits into the water availability
pattern where a longer term variety would come under sever~,itress at
tasselling from the same planting date.
Recommended practice for maize growing: Paize should be planted in a pure stand in the first week of December. Fresh hybrid s'eed ( a. long
term variety) should be purchased each year. The seeds should be
spaced 75 cms between rows and 30 ems between plants in the row.
Vleeding should be done at 2, 5 and 8 weeks. 50kg/ha P should be applied
in the seedbed and 75 kg/ha N top dressed after the second weeding.
At knee high the crop should be protected from stalk-borer by the
application of DDT dush into the funnels of the plants.
This gives the farmer (if planted on the same area as his traditional
maize mixture enterprise) more dry maize than he needs to feed his
family in most years. A relatively short period of green maize before
the crop dries off. It can be questioned whether the new maize
enterprise is really a substitute for the old one. Costs of changing, as they will appear to the farmer, are listed under the three sources:
Direct costs, Opportunity costs and Complexity.
(1) Direct costs Direct costs of the change will be for hybrid seed,
P and N fertilisers and DDT dust.
Where hired labour is used, the costs of extra labour for planting,
increased weeding, fertiliser application, thinning and harvesting the larger crop will all be direct, additional costs to be set against the
Value of the increased output. The changes in the timing of operations,




a2
when it creates peaks, may require an additional work force to adhere to the recommended crop calendar. These would be additional direct
costs.
(2) Opportunity costs In farming situations where additional resources are not available for one reason or another, opportunity costs are incurred when resources are re-allocated from other uses to implement the change and are represented.by the. lost output from other uses or opportunities. In situations.where there is a full knowledge of the existing farming system, 6f"'Ahe resource allocations and their productivities, these costs c8n~ie ,quantified. In situations where there is little or no knowledgeof'the farming system, quantification becomes difficult and even impossible. Even where there is knowledge of the system, quantification is difficult where risk is a large factor weighting farmers' decisions, and when a significant part of the farm operations are in subsistence production. The opportunity costs in this example can be divided into: (a) Possible quantifiable; (b) not quantifiable in practice.
(a) Possible quantifiable: 17here there is no labour market and existing labour resources must be re-organised to implement the change:
(i) Extra labour required may mean reducing the production of
another existing enterprise.
(ii) The concentration of planting date, or indeed any change in
the timing of operations, may create or increase labour peaks,
at planting time, weeding time or harvest time. This also
may enforce a reduction in the size of other farm enterprises,
the losses from which would represent a cost of the change.
(b) Not usually quantifiable in practice.
(i) Concentration of planting time will increase the risk of
crop failure in areas of uncertain rainfall.
(ii) le can say that the recommended hybrid is a relatively poor
keeper under existing storage and processing practices.
(iii) The single planting time reduced the length of the period
when green maize as a preferred food is available. Together with the fact it is a long term variety, this also sacrifices
early staple food in years when stocks are poor and sacrifices early green maize from the early planted short term
variety in all years.
(iv) The pure stand involves: the sacrifice of the legume intercrops grown as complementary food; the sacrifice of sweet potatoes which gave a fresh food to follow the period of
green maize.
(3) Complexities Several facets of this change create complexities in the management re-organisation required to absorb it successfully.
(a) Growing maize in a pure stand raises the problem of how to obtain
the legumes and sweet potatoes valued for their dietary contribution.
(b) Shifting the time of planting, and consequently of most subsequent
and preceding operations, involves re-scheduling of long-established
routine timetables both on the maize mixture enterprise and other
enterprises. Where there are periods of labour shortage or capital
scarcity, re-allocation problems may present difficult management
situations.




-3
(o) The purchase and application of inputs demands a new management
function. It may also aggravate the capital allocation problem.
'3hich of these costs and complexities are relevant, and whether the extra labour requirements will be direct costs or will create opportunity costs, depends on a detailed description of the local
farming system for which the adaptive research programme is
being planned. But it is clear that evaluating the true profitability of such a change to the farmer requires consideration
of all these aspects.