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Dr. Roehlano M. Briones and Ivory Myka R. Galang Philippine Institute for Development Studies

ASSESSMENT OF PROSPECTIVE IMPACT OF FRUITS AND VEGETABLES RESEARCH AT THE INDUSTRY LEVEL IN THE PHILIPPINES: THE CASE OF THE ACIAR – PCAARRD HORTICULTURE PROJECT. Dr. Roehlano M. Briones and Ivory Myka R. Galang Philippine Institute for Development Studies. Outline. Objectives

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Dr. Roehlano M. Briones and Ivory Myka R. Galang Philippine Institute for Development Studies

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  1. ASSESSMENT OF PROSPECTIVE IMPACT OF FRUITS AND VEGETABLES RESEARCH AT THE INDUSTRY LEVEL IN THE PHILIPPINES: THE CASE OF THE ACIAR – PCAARRD HORTICULTURE PROJECT Dr. RoehlanoM. Briones and Ivory Myka R. Galang Philippine Institute for Development Studies

  2. Outline • Objectives • Research and Development (R&D) • Assessment method • Results of the assessment • Analysis of the results

  3. Objectives • Analyze the contribution of the fruits and vegetables subsector in agricultural development. • Evaluate the potential impact of R&D on selected horticulture crops. • Draw implications for investment allocation and institutional framework for the agricultural R&D system.

  4. Research and Development • Budgetary allocation trend • Table 1. By Major Final Output (OPIF; World Bank ; in P millions)

  5. Research and Development • Budgetary allocation trend • Table 2. Breakdown of MFO 1 (OPIF; World Bank; in P millions)

  6. Research and Development • Investment in agricultural R&D • one of the major drivers of agricultural productivity. • Most of the agricultural research and development efforts (funding) come from the government agencies. • Agricultural research as a public good • Stakeholders (workers and farmers) are poor

  7. Research and Development • General trends • Table 3. Global public agricultural research-intensity ratios, 1981-2000

  8. Research and development • Public-sector agri research intensity ratio, 2002 • PHILIPPINES: 0.46 % • Higher than Vietnam [0.17 %], Indonesia [0.22 %], Laos [24%] • Lower than Malaysia [1.92 %] • Higher than the overall average for Asia (2000) : 0.41 % • Lower than the average for developing countries (2000) : 0.53 %

  9. Research and Development Source: David (1998)

  10. Assessment Method • Economic Surplus Approach • Change in economic surplus arises from farm productivity improvement due to innovation (k-shift), which propagates by a diffusion process • Together with research cost, permits calculation of measures of project worth • Net present value (NPV) • Benefit-cost ratio (BCR) • Internal rate of return (IRR)

  11. http://www.web-books.com/eLibrary/NC/B0/B63/032MB63.html

  12. Assessment method • K-shift  NPV, BCR, & IRR • Unable to get good estimates of k-shift Reverse • NPV, BCR, and IRR  threshold k-shift • minimum value to justify the amount invested in the research • NPV=0, BCR=1, IRR= discount rate A model named ‘welfare impact simulator for evaluating research’orWISER has been developed to automatically calculate the prospective impact of a new technology generated from fruit and vegetable R&D.

  13. Philippines Horticulture Program • Fruits • C1: Analysis of Papaya supply chain constraints • C2: Durian/Jackfruit Phytophthora Integrated Management • C3: Papaya Integrated Crop Management • C4: Improved and Sustainable Mango Value Chain • Vegetables • C1: Integrated soil and crop nutrient management • C2: Development of a cost-effective protected cropping system • C3: Management of bacterial wilt and other wilting diseases in Solanaceous crops • C4: Analysis of selected vegetable value chains • Fruits and vegetables • C5: Economic impacts of new technologies and policy constraints • Research cost: financing by the Australian Centre for International Agricultural Research (ACIAR) and in-kind contribution by the Philippines.

  14. Assessment method Assumptions to calibrate the diffusion process: • High adoption scenario • admax (maximum adoption): 20 % • adop20 (adoption after 20 years) : 15 % • Low adoption scenario • admax : 5 % • adop20 : 4 %

  15. Assessment method • Table 4. Research cost (over 4 years)

  16. Preliminary results • Table 5. Threshold k-shift estimates in percent NPV=0; BCR=1 (Evenson, 2003)

  17. Analysis of the Results • Modest levels of k-shift are needed to justify research investment • It is expected that the actual k-shifts of the research project would be higher than the k-shift estimates in this study. • The computed k-shifts can help the research stakeholders to potential benefit of research to society via farm-level productivity improvement

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