Economics of Early Generation Seed Production in Ethiopian

Abstract

Improving effectiveness and efficiency of the seed system is key to catalyzing agricultural transformation. The aim of this study was to generate information on cost structure, cost effectiveness of resource use, and feasibility of early generation seed (EGS) production as a business. Primary production cost and revenue data were collected for selected cereals, pulses and vegetable crops. Total cost, revenue, gross margin, profit margin, benefit-cost ratios (BCRs) and sensitivity analysis were calculated to present the data. The study revealed that labor requirement and related costs were large for most crops in consideration. The implication is that the use of cost-minimizing or labor-saving technologies are critical in seed production to minimize production costs and improve productivity. We found positive net benefit and the BCRs were greater than one for maize, wheat, common bean, soyabean and onion confirming the profitability of participating in EGS production of these crops. In general, creating a conducive working environment and encouraging private producers’ participation in EGS production is important to improve smallholder farmers’ access to improved seed. Improving labor use efficiency and crop productivity are also important to maximize profitability. Finally, the cost record keeping should be institutionalized in the research system for better decision-making using time series data for accuracy.