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Economic Analysis of Alternative Maize Storage Technologies in Kenya

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  • Kimenju, Simon Chege
  • De Groote, Hugo

Abstract

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.

Suggested Citation

  • Kimenju, Simon Chege & De Groote, Hugo, 2010. "Economic Analysis of Alternative Maize Storage Technologies in Kenya," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96419, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae10:96419
    DOI: 10.22004/ag.econ.96419
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    Citations

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    Cited by:

    1. Christiaensen,Luc & Kaminski,Jonathan & Christiaensen,Luc & Kaminski,Jonathan, 2014. "Post-harvest loss in Sub-Saharan Africa -- what do farmers say ?," Policy Research Working Paper Series 6831, The World Bank.
    2. Xi Chen & Chenyang Shuai & Ya Wu, 2023. "Global food stability and its socio‐economic determinants towards sustainable development goal 2 (Zero Hunger)," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1768-1780, June.
    3. Kadjo, Didier & Ricker-Gilbert, Jacob & Alexander, Corinne, 2015. "Does quality affect maize prices in sub-Saharan Africa? Evidence from Benin," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205503, Agricultural and Applied Economics Association.
    4. Aggarwal, Shilpa & Francis, Eilin & Robinson, Jonathan, 2018. "Grain today, gain tomorrow: Evidence from a storage experiment with savings clubs in Kenya," Journal of Development Economics, Elsevier, vol. 134(C), pages 1-15.
    5. Jeremiah Ng’ang’a & Christopher Mutungi & Samuel M. Imathiu & Hippolyte Affognon, 2016. "Low permeability triple-layer plastic bags prevent losses of maize caused by insects in rural on-farm stores," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(3), pages 621-633, June.
    6. Gitonga, Zachary M. & De Groote, Hugo & Kassie, Menale & Tefera, Tadele, 2013. "Impact of metal silos on households’ maize storage, storage losses and food security: An application of a propensity score matching," Food Policy, Elsevier, vol. 43(C), pages 44-55.

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    Keywords

    Crop Production/Industries;

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