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R&D and private investment: How to conserve indigenous fruit biodiversity of Southern Africa

Author

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  • Waibel, Hermann
  • Wesseler, Justus
  • Mithöfer, Dagmar

Abstract

Indigenous fruits contribute widely to rural incomes in Southern Africa but their availability is declining. A domestication program aims to increase farm-household income and conserve biodiversity through farmer-led tree planting. Planting domesticated indigenous fruit trees is an uncertain, irreversible but flexible investment. Our analysis applies the real option approach using contingent claims analysis, which allows solving the discounting problem. The article analyses (1) to what level fruit collection cost and/or (2) the necessary technical change, i.e. breeding progress, have to rise in order to render tree planting economical, using data from income portfolios of rural households in Zimbabwe. Results currently show that collecting indigenous fruits is more profitable than planting the trees. A combination of technical change and decrease in resource abundance can provide incentives for farmer-led planting of domesticated trees and biodiversity conservation. However, breeding progress must be significant for investment in tree planting to be economically attractive.

Suggested Citation

  • Waibel, Hermann & Wesseler, Justus & Mithöfer, Dagmar, 2005. "R&D and private investment: How to conserve indigenous fruit biodiversity of Southern Africa," Proceedings of the German Development Economics Conference, Kiel 2005 35, Verein für Socialpolitik, Research Committee Development Economics.
  • Handle: RePEc:zbw:gdec05:3508
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    File URL: https://www.econstor.eu/bitstream/10419/19826/1/Waibel.pdf
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    References listed on IDEAS

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    1. Eric Tollens, 2004. "Biodiversity versus transgenic sugar beet: the one euro question," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(1), pages 1-18, March.
    2. Henry, Claude, 1974. "Investment Decisions Under Uncertainty: The "Irreversibility Effect."," American Economic Review, American Economic Association, vol. 64(6), pages 1006-1012, December.
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    Cited by:

    1. Rahim, Afaf H. & van Ierland, Ekko C. & Wesseler, Justus, 2007. "Economic incentives for abandoning or expanding gum arabic production in Sudan," Forest Policy and Economics, Elsevier, vol. 10(1-2), pages 36-47, December.

    More about this item

    Keywords

    indigenous fruits; real option; technology adoption; uncertainty; ex ante impact assessment; Zimbabwe;

    JEL classification:

    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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