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ASSESSMENT OF PROSPECTIVE IMPACT OF FRUITS AND VEGETABLES RESEARCH AT THE INDUSTRY LEVEL IN THE PHILIPPINES: THE CASE OF THE ACIAR – PCAARRD HORTICULTURE PROJECT. Dr. Roehlano M. Briones and Ivory Myka R. Galang Philippine Institute for Development Studies. Outline. Objectives

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dr roehlano m briones and ivory myka r galang philippine institute for development studies

ASSESSMENT OF PROSPECTIVE IMPACT OF FRUITS AND VEGETABLES RESEARCH AT THE INDUSTRY LEVEL IN THE PHILIPPINES: THE CASE OF THE ACIAR – PCAARRD HORTICULTURE PROJECT

Dr. RoehlanoM. Briones and Ivory Myka R. Galang

Philippine Institute for Development Studies

outline
Outline
  • Objectives
  • Research and Development (R&D)
  • Assessment method
  • Results of the assessment
  • Analysis of the results
objectives
Objectives
  • Analyze the contribution of the fruits and vegetables subsector in agricultural development.
  • Evaluate the potential impact of R&D on selected horticulture crops.
  • Draw implications for investment allocation and institutional framework for the agricultural R&D system.
research and development
Research and Development
  • Budgetary allocation trend
    • Table 1. By Major Final Output (OPIF; World Bank ; in P millions)
research and development1
Research and Development
  • Budgetary allocation trend
    • Table 2. Breakdown of MFO 1 (OPIF; World Bank; in P millions)
research and development2
Research and Development
  • Investment in agricultural R&D
    • one of the major drivers of agricultural productivity.
  • Most of the agricultural research and development efforts (funding) come from the government agencies.
    • Agricultural research as a public good
    • Stakeholders (workers and farmers) are poor
research and development3
Research and Development
  • General trends
    • Table 3. Global public agricultural research-intensity ratios, 1981-2000
research and development4
Research and development
  • Public-sector agri research intensity ratio, 2002
    • PHILIPPINES: 0.46 %
      • Higher than Vietnam [0.17 %], Indonesia [0.22 %], Laos [24%]
      • Lower than Malaysia [1.92 %]
      • Higher than the overall average for Asia (2000) : 0.41 %
      • Lower than the average for developing countries (2000) : 0.53 %
research and development5
Research and Development

Source: David (1998)

assessment method
Assessment Method
  • Economic Surplus Approach
    • Change in economic surplus arises from farm productivity improvement due to innovation (k-shift), which propagates by a diffusion process
    • Together with research cost, permits calculation of measures of project worth
      • Net present value (NPV)
      • Benefit-cost ratio (BCR)
      • Internal rate of return (IRR)
assessment method1
Assessment method
  • K-shift  NPV, BCR, & IRR
  • Unable to get good estimates of k-shift

Reverse

  • NPV, BCR, and IRR  threshold k-shift
    • minimum value to justify the amount invested in the research
    • NPV=0, BCR=1, IRR= discount rate

A model named ‘welfare impact simulator for evaluating research’orWISER has been developed to automatically calculate the prospective impact of a new technology generated from fruit and vegetable R&D.

philippines horticulture program
Philippines Horticulture Program
  • Fruits
    • C1: Analysis of Papaya supply chain constraints
    • C2: Durian/Jackfruit Phytophthora Integrated Management
    • C3: Papaya Integrated Crop Management
    • C4: Improved and Sustainable Mango Value Chain
  • Vegetables
    • C1: Integrated soil and crop nutrient management
    • C2: Development of a cost-effective protected cropping system
    • C3: Management of bacterial wilt and other wilting diseases in Solanaceous crops
    • C4: Analysis of selected vegetable value chains
  • Fruits and vegetables
    • C5: Economic impacts of new technologies and policy constraints
  • Research cost: financing by the Australian Centre for International Agricultural Research (ACIAR) and in-kind contribution by the Philippines.
assessment method2
Assessment method

Assumptions to calibrate the diffusion process:

  • High adoption scenario
    • admax (maximum adoption): 20 %
    • adop20 (adoption after 20 years) : 15 %
  • Low adoption scenario
    • admax : 5 %
    • adop20 : 4 %
assessment method3
Assessment method
  • Table 4. Research cost (over 4 years)
preliminary results
Preliminary results
  • Table 5. Threshold k-shift estimates in percent

NPV=0; BCR=1

(Evenson, 2003)

analysis of the results
Analysis of the Results
  • Modest levels of k-shift are needed to justify research investment
  • It is expected that the actual k-shifts of the research project would be higher than the k-shift estimates in this study.
  • The computed k-shifts can help the research stakeholders to potential benefit of research to society via farm-level productivity improvement