Economic analysis of threshing and shelling machine service provision to reduce post-harvest loss in Ethiopia

Abstract

The Sasakawa Africa Association (SAA) has been addressing the neglected postharvest sector in Ethiopia through promoting improved storage facilities and introducing handheld and motorized crop shelling and threshing machines. However, post-harvest technologies are poorly adopted by the farmers although the traditional threshing methods often result in high grain losses and low-quality produces due to low awareness of the farmers and service providers on the benefits of the technologies. This study, therefore, was conducted in May 2020 to determine the socio-economic benefits of the threshing/shelling machine so as to inform the service providers on how to improve the adoption of the machine. A total of eight youth group service providers in four woredas of Oromia and Amhara regions in Ethiopia were selected for the study. In a unimodal rainfall production region, the Bako model maize sheller and the dehusker machines were assessed, whereas in a bimodal production region the multi-crop thresher was evaluated. Primary data were sourced through Focus Group Discussions (FGD) and Key Informant Interviews (KII) and secondary data were extracted through document review. Discounted economic parameters such as Net Present Value (NPV), Internal Rate of Return (IRR) and Benefit Cost Ratio (BCR) were used for determining the profitability of the businesses. The result of the actual cashflow analysis in the unimodal area showed that the multi-crop thresher generated a negative NPV (USD - 970)1 with IRR value of -6% and a BCR value of 0.87. On the contrary, in the bimodal area, the NPV was found to be positive (USD 1917.3) with a BCR of 1.21 and IRR value 36%. Congruently, the Bako model maize sheller machine resulted in NPV of USD 8227.5, BCR value of 3.51 with IRR value of 133%. On the other hand, the dehusker machine generated NPV of USD 2247.5 with a BCR of 1.45, and IRR of 24%. The partial budget analysis of the farmers revealed that the threshing machine reduced the threshing costs by USD158.2 (51.9%) per hectare of land compared to the traditional threshing method. On the basis of the minimum food energy requirement, in the two districts alone, the maize grain that was lost through traditional shelling would have fed 3,939 individuals or 788 households, whereas for teff crop, the loss would have fed 6,163 adults or 1233 households throughout the year. Based on the findings, the authors recommend to scale-up the introduction of the machines in the bimodal production areas where two harvesting seasons exist and increase the service charge and working hours- in the unimodal area to improve entrepreneurs’ profit and adoption of the machines.