Economic analysis of 50% non-pollinating (FNP) maize varieties, a promising new seed production technology for Africa

Hugo De Groote, Mariam Gharib, Jill E. Cairns and Michael S. Olsen

No 364817, 2023 Seventh AAAE/60th AEASA Conference, September 18-21, 2023, Durban, South Africa from African Association of Agricultural Economists (AAAE)

Abstract: Maize is the most important food crop in sub-Saharan Africa, but production cannot keep up with population growth. New technologies are needed, especially for low N environments. 50% non-pollen producing (FNP) maize, based on male-sterile dominant genes, makes maize more N-efficient, increasing yields by 200 kg/ha even on poor soils. Moreover, by selectively applying the technology to new varieties, varietal turnover can be increased, adding yield benefits of younger varieties (20.9 kg/ha/year). We calculate the benefits of the technology with the economic surplus model. Yield benefits are derived from field trials and extrapolated using secondary data and parameters from the literature. Calculations show that FNP will increase maize yields in SSA directly by 192 kg/ha, indirectly by 136 kg/ha. Assuming an adoption rate of 10% of current hybrid maize area, the maize supply will shift by 460k tonnes. In equilibrium, production increaseses by 210k tonnes, while prices drop by US$4.6/tonne, leading to an annual economic surplus of $781 million. The discounted costs of the project are relatively small, $29 million, compared to the discounted benefits of $3,6 billion, with a benefit cost ratio of 125. Sensitivity analysis shows that even with half the yield benefits and half the adoption rate, the benefits will still be four times the costs. We conclude that the benefits of the technology are very high compared to the costs, and the technology is worth pursuing, both for its direct effect on yield and for its effect on increasing varietal turnover.

Keywords: Research; and; Development/Tech; Change/Emerging; Technologies (search for similar items in EconPapers)
Pages: 35
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae23:364817

DOI: 10.22004/ag.econ.364817

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