Benefit Cost Analysis of Major High Value Commodities

Project Description

The main objectives of the study was to establish a sound data base on cost of production and margins in cultivation of different high value agricultural products and alternative crops and suggest most suitable crops for different micro-climatic conditions based on their comparative and competitive advantages within the project district.

Assignment Description

Prepare annual crop calendars including identification of crops grown in different micro-climatic conditions in the project area; • Estimate the costs of production of major high value commodities grown in taking into considerations: • Microclimatic conditions and farmer type (subsistence, semi-commercial and commercial), • Human labor by gender (quantity and wage rate), sources of labor (family or hired) including distribution of labor by farm operations aggregated by monthly, yearly etc; animal labor (owned or hired) -quantity and wage; machinery, equipment and their costs including the estimate of deprecation costs etc. • Material costs- seed, fertilizer, agrochemicals, manure, (own or bought), land etc. • Estimation of the cost for each commodity grown jointly with other crops, if different crops grown in the same field at the same time. Explain the methods of allocating costs by enterprise. • Classification of cost of production; measure returns/benefits; • Estimation production, productivity and prices of main products and their prices(farm gate, current market price based on the nearest market), and byproducts and their prices(farm-gate, nearest market) • Compute of the breakeven price, break-even yields and break- even point & conduct simple sensitivity analysis (with changes in price, yield or other risks factors). • Computation of payback period, net present value and the B/C ratio including sensitivity analysis and cash flow statement; • Estimation of gross margin and net margin to producers including labor, land and capital productivity • Based on the findings provide indicative list of crops to be promoted in different micro-climatic conditions in the project area with justification.