Evolution and impacts of groundnut research and development in Malawi: An ex-post analysis

Groundnut is currently the second income earner for smallholder farmers in Malawi, and an inexpensive\udsource of balanced protein. Owing to the continued crop improvement research and extension efforts,\udproduction has risen by more than 15 times in the past two decades. Despite the dramatic growth, no\udimpact assessment has ever been conducted to date. This study aims to assess the economic impacts\udof investments in groundnut research and development (R&D) in Malawi, covering the period 1982-2013.\udRelevant information on investments and changes in outputs was gathered from a range of sources\udincluding a smallholder household survey and secondary data provided by international and national\udagricultural research programmes, and non-governmental organisations. The economic surplus\udapproach (the PEDPIS method and the Akino-Hayami method) was employed to compute the internal\udrate of return (IRR) and the net present value (NPV). It was found that the IRR for the base scenario was\ud22%, higher than the opportunity cost of capital being 11%, indicating that the investment was\udcompetitive as well as profitable. The NPV ranged from USD 204 million to USD 206 million, depending\udon the calculation method. With sensitivity analyses, the NPV remained positive and the IRR stayed\udabove 11% in all scenarios except when the research and extension costs were raised by 50%. The IRR\udcompares well among impacts of crop research in sub-Saharan Africa. The result implies the need for\udpolicy formulation towards long term commitment to developing improved seeds, reinforcement of the\udseed systems, and enhancement of extension services to smallholders