Assessing the profitability and feasibility of climate-smart agriculture investment in Southern Malawi

Ada Ignaciuk, Giuseppe Maggio and Nicholas Sitko

No 312207, ESA Working Papers from Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA)

Abstract: This working paper analyses the financial cost and benefit of adopting two different bundles of climate-smart agriculture (CSA) practices, which are tailored for the diverse conditions that prevail in southern Malawi. The results show the integration of CSA practices, including soil conservation, agroforestry, and livestock diversification, into conventional maize-legume and maize monocrop systems is profitable for farmers. Moreover, the profitability of these systems increases under extreme weather conditions that occur with increasing frequency in the region. However, the upfront costs and cost variability associated with the adoption of these CSA scenarios is high relative to conventional practices. In addition, while the Net Present Value is positive for the CSA scenarios, the monetary returns are small and are spread over a long investment period. These factors act as significant barriers to adopting CSA practices. Supporting farmers through climate financing or other mechanisms to make long-term private investment in CSA, based on the public benefits these investments generate for the environment, is critical for achieving widespread adoption.

Keywords: Agricultural and Food Policy; Agricultural Finance (search for similar items in EconPapers)
Pages: 24
Date: 2021-07-07
New Economics Papers: this item is included in nep-agr and nep-env
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/312207/files/A ... outhern%20Malawi.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:faoaes:312207

Access Statistics for this paper

More papers in ESA Working Papers from Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().