Economic Analysis of Alternative Maize Storage Technologies in Kenya

Upcoming technologies for maize storage have sometimes been promoted without being subjected to trials and economic analysis. In the recent past, new storage technologies, actellic super, super grain bag and the metal silo have been developed. In this paper, the results of crop loss trials are combined with measures of project worth to determine the attractiveness of investing in new storage technologies. Determination of the benefit was based on the amount of loss the new technology could abate. A one ton metal silo, with negligible % crop loss abated USD 100 in 12 months. These benefits were found to increase with time meaning that a farmer benefits by storing longer. Measures of project worth, the NPV and BCR were used to analyze the attractiveness of investing in the new technologies at a discount rate of 15% and an investment period of 15 years. Sensitivity analysis was done by varying the discount rate and the investment period. When six metal silo sizes were subjected to this analysis, the results showed that the three largest silos were attractive for all these scenarios. On the other hand, the smaller the silo size the higher the requirement that the interest rate be small and the period of investment bigger for it to be an attractive investment. Therefore, promoting larger silos would be more cost-effective to the farmer.


Issue Date:
2010-09
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/96419
Page range:
18
Total Pages:
17




 Record created 2017-04-01, last modified 2017-08-25

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