Economic Viability of System of Rice Intensification (SRI) Technology in Morogoro, Region, Tanzania

Abstract

The objective of this study is to analyze the benefits and costs of the system of rice intensification in the Morogoro Region, Tanzania. The  cost-benefit analysis theory was used in this study. Data were collected by using a questionnaire and checklists after a preliminary survey  that aimed at familiarizing the researcher with the study area and pre-test the questionnaire to gauge the relevance of the questions and  their comprehensiveness. The study adopted a multistage sampling method. The sample size of 384 farmers was randomly selected. The  viability of each production method (SRI and Conventional) was estimated using the Cost-Benefit Analysis. Overall, the results of the  comparison of economic viability between SRI and Conventional method projects indicated that the former (SRI) was more profitable and  viable than the latter (Conventional Method) at discount rates (Interest rates) equal to or less than 12% respectively. In terms of  both NPVs and BCRs interest rates often decrease, making borrowing money less expensive. However, the increase in NPV revealed that  the System of Rice Intensification was more profitable than the conventional method of rice production. The sensitivity analyses, of the  NPVs for the SRI and Conventional Method projects, respectively, were negative at discount rates of more than 54.17749% and 32.10396%,  indicating that the projects were not financially feasible at rates higher than these, but when measured in terms of IRR, SRI  outperformed the conventional technique. In general, the empirical findings showed that the System of Rice Intensification produces rice  at a higher profit than the conventional method. Therefore, it is important to encourage rice farmers to use the System of Rice  Intensification.