Economic viability of the gliricidia-maize systems in selected dryland areas of Dodoma region, Tanzania
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Date
2023
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Sokoine University of Agriculture
Abstract
The optimal agricultural productivity in dryland areas of Sub-Saharan Africa (SSA) is
hindered by the ongoing high extent of land degradation and climate change. In addition,
smallholder cereal food producers in these areas apply no or sub-optimal quantities of
mineral fertilizers due to socio-economic and technical factors like high prices and risk of
crop failure. Agroforestry using intercropping of Gliricidia (Gliricidia sepium (Jacq.)) and
Maize (Zea mays L.) was developed to complement conventional soil fertility
management technologies. This thesis is based on the case studies conducted in Kongwa
and Chamwino districts in Dodoma, Tanzania between 2017 and 2020. Data gathered
from Focus Group Discussions (FGDs) and simulation work carried out by the World
Agroforestry (ICRAF) using the Next Generation versions of Gliricidia and maize models
of the Agriculture Production Systems sIMulator (APSIM) were used to assess adoption
potential, profitability, and risks associated with the Gliricidia-maize systems. These
assessments were made in comparison with the base case of growing maize as a sole crop,
with and without mineral fertilizers. Inspired by new tools that incorporate risk associated
with crop yields and returns per hectare due to climatic variability, integrated ex-ante
analytical approaches were used to advance understanding of the economic viability of
the Gliricidia-maize relative to the sole maize systems. These analyses aimed to provide
valuable insights to farmers, policy makers and development practitioners, to inform
adoption and scaling up decisions. The results revealed variations in peak adoption levels,
with Gliricidia intercropping exhibiting peak adoption of 67.6% in 12 years. The most
influential factor affecting adoption is the upfront cost of investing in Gliricidia
intercropping and mineral fertilizer technologies. The Cost-Benefit Analysis (CBA)
results showed significant variations in profitability indicators in absolute and relative
economic terms. The Gliricidia-maize systems exhibited higher Net Present Values
(NPV) compared to the sole maize systems, with ranges of Tsh 12 967 021.45
(unfertilized Gliricidia-maize) to Tsh 17 592 701.74 (fertilized Gliricidia-maize) in
contrast to Tsh 5 374 391.66 (fertilized sole maize) and Tsh 3 264 874.27 (unfertilized
sole maize). The Benefit-Cost Ratio (BCR) varied from 1.86 (unfertilized sole maize) to
3.75 (fertilized Gliricidia-maize). Sensitivity analysis revealed that a decrease in output
prices has a more significant negative impact on profitability of the Gliricidia-maize
systems compared to an increase in input prices. A 30% decrease in output prices
decreased NPV by 67.04% (fertilized Gliricidia-maize) to 74.4% (unfertilized Gliricidia-
maize). Conversely, NPV declined by 11.7% to 14.5% following a 30% increase in input
prices. Despite the higher initial costs of establishing agroforestry, the increase in input
prices affects the sole maize systems more negatively in absolute economic terms, with a
decrease in NPV of 27.7% to 48.4% compared to 11.7% to 14.5% for Gliricidia-maize
systems. However, in relative economic terms, an equal change in input prices had a
similar effect on the sole mize and the Gliricidia-maize systems. This result implies that
the monetary benefits accrued after the first year of agroforestry establishment offset the
initial investment costs. Risk analysis revealed that risk to net returns is higher in the sole
maize than the Gliricidia-maize systems. The Coefficient of Variation (CV) for the net
returns ranged from 64.04% to 66.88% and 51.38% to 52.63% for the sole maize and the
Gliricidia-maize systems, respectively. The Gliricidia-maize systems presented 40% to
90% probability of exceeding the income poverty line of around Tsh 600 000 per adult
equivalent per year in contrast to 0% probability presented by the sole maize systems. All
production systems presented 0% probability of earning negative net returns except for
the unfertilized sole maize system which had 5% probability. Stochastic efficiency
analysis results show that the Gliricidia-maize systems are more preferred than the sole
maize systems at lower (0) and upper (4) Risk Aversion Coefficients (RAC). The
certainty equivalent values of yields of Gliricidia-maize are 139% and 78% higher than
the sole maize systems at lower and upper RAC, respectively, under the negative
exponential utility function. This suggests that both risk-neutral and extremely risk-averse
decision makers would tend to prefer the Gliricidia-maize systems. Therefore, the
Gliricidia-maize systems are economically viable and can contribute to increased
household income and food security. Helping farmers to overcome initial investment
costs and manage agroforestry systems well to generate additional benefits is critical for
the successful scaling of Gliricidia-maize intercropping technology in dryland areas of
Dodoma, Tanzania.
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Keywords
agricultural productivity, gliricidia, maize systems, dryland areas, Dodoma region