SEADS Handbook Location: Chapter 8
In the Somali region of Ethiopia, a humanitarian project funded by United States Agency for International Development’s (USAID) Office for Foreign Disaster Assistance supported small-scale irrigated crop production along the Shabelle River. The project provided pumps, fuel, seeds, tools, and training to crop producers who were organized into groups of up to 50 households. Crops grown included maize, sesame, onions, and tomatoes, and plot sizes were approximately 0.5 hectares per household. An impact assessment and benefit-cost analysis (BCA) was requested by USAID. The BCA considered benefits and costs that occurred during project implementation and that arose from a single harvest. It also predicted the benefits and costs over three years, including a two-year period after the project ended.
The impact assessment of the project reported that:
“… the project produced substantial gains in terms of the volume of agricultural production, and income from the sales of produce. These trends corresponded with increases in household consumption of produce, and more expenditure on health and education. These findings pointed to an overall benefit to those households which continued to farm, relative to the pre‐project period. However, these benefits were compared with the costs of the project, and the increased costs incurred by households (for example, for fuel and spare parts) for using pump irrigation. Not all project participants maintained their plots, and local informants described the various risks of crop production and marketing, and associated impacts on harvests. These risks were numerous and included crop diseases, crop damage by wild animals, flooding, high winds, salinity problems, human diseases, fuel price increases, storage problems, market instability, and conflict” (p. ii).
These issues were captured in the BCA. When only the project period was considered, the benefit-cost ratio was only 0.4:1 (Table 1). But even when a longer period was considered, covering three crop plantations, the benefit-cost ratio was still only 0.7:1.0. Although the benefits increased over time as more crops were produced and sold, the costs also increased over time as the water pumps became less efficient and required more fuel and spare parts. In addition, it was evident that water pumps could be acquired locally and privately at approximately half the cost of the pumps that were supplied by project.
|Type of CBA||Amount (US$)|
|CBA for one plantation (2008)|
|Cost of seed provided – seed cost, plus transport||5,918|
|Cost of pumps – 12 pumps x $1,698/ pump||20,385|
|Cost of fuel provided to groups – 20 barrels x $213/barrel||4,260|
|Cost of agricultural tools provided to groups||4,441|
|Training for group members||333|
|NGO technical and admin. staff costs||2,790|
|Project vehicle rent and fuel costs||3,686|
|NGO overhead costs||1,889|
|Sub-total project costs||43,702|
|Community costs (first plantation)|
|Initial contribution by groups||1,364|
|Transportation of produce to market||109/td>|
|Sub-total community costs||1,473|
|Estimated value of produce sales from 1st plantation||16,394|
|CBA for three plantations (2008–2010)|
|Community costs: reported total costs for three plantations||5,818|
|Estimated value of produce sales from three plantations||34,636|
PLI Policy Project (2010). Impact assessment of small-scale pump irrigation in the Somali Region of Ethiopia. Feinstein International Center, Friedman School of Nutrition Science and Policy at Tufts University, Addis Ababa. https://fic.tufts.edu/wp-content/uploads/CHF-impact-assessment-Somali-Region.pdf.