Cost-Benefit Analysis of Conventional and Integrated Crop Management for Vegetable Production

Abstract

Smallholder vegetable farmers involved in agricultural production are confronted with numerous challenges which can adversely affect performance. Farmers would prefer to adopt the most profitable vegetable production systems. A cost-benefit analysis of integrated crop management (ICM) and conventional method (CM) systems for vegetable production was conducted. Primary data were solicited from 120 vegetable farmers using questionnaires. Descriptive statistics were used to describe levels of awareness and extent to which farmers understood use of the ICM system. A cash flow projection was done on a 0.4 ha size of land for 5 years. Net present value (NPV) and cost-benefit ratio (CBR) analyses were performed for farmers operating under the ICM and CM production systems. The NPV analysis indicated production of vegetables under both systems was viable. The incremental NPV for cabbage (Brassica oleracea var. capitata L.) and onion (Allium cepa L.) production, and the whole farm enterprise were all positive, indicating the ICM system was more financially viable than the CM system. The NPV increase was GHS 2563.58 (GHS is Ghanaian currency, 1$US = 3.5 GHS in January 2015 when data were collected) for cabbage and GHS 3949.43 for onion, and of the whole farm enterprise, i.e., combined cabbage and onion production, was GHS 6162.75. The CBR analysis indicated that vegetable production under the two systems was viable, confirming results of the NPV analyses. The CBR for cabbage production was 1.58 for the CM and 2.08 for the ICM systems; the CBR for onion production was 2.69 for the CM and 4.36 for the ICM systems. The CBR for whole farm enterprise was 2.42 for the CM and 3.93 for the ICM systems. Sensitivity analyses, under the assumption of a 5% reduction in yield and a 10% cost over-run, indicated positive NPVs for both production systems for cabbage and onion production, and the whole farm enterprise. The NPVs from use of the ICM system were higher than under the CM system. Overall, vegetable production is profitable under both the ICM and CM systems, and awareness is a factor influencing practice of the ICM system.