PROFITABILITY OF PURDUE IMPROVED CROP STORAGE (PICS) BAGS FOR AFRICAN

COMMON BEAN PRODUCERS

Mike Jones, Corinne Alexander, and Jess Lowenberg-DeBoer

MAJOR COMMON BEAN STORAGE PESTS

A. obtectus, Z. subfasciatus Cowpea bruchids

Without grain protection, six month dry weight losses of 10-40% are common Kiula and Karel (1985)

How does this affect marketing producers wishing to store?

Source: (top) ethz.ch, (bottom) infonet-biovision.org,

MAJOR QUESTIONS

What economic benefit of PICS technology could exist for marketing common bean producers?

How would the profitability of common bean storage with PICS compare to other current methods?

COMMON BEAN STORAGE PROTECTANTS Songa and Rono (1998)

*Chemicals: Ex. Actellic Super *Solar Disinfestation: “Sunning and Sieving” (weekly)

Paul et al. (2009) *Botanicals

A. indica C. Ambrosioides

Dichotomous Earth: Keep Dry® Ash: S. and R. (1998) found much less effective *Hermetic?

Compare to cowpea losses until PICS data available, cite cowpea losses used in Moussa (2005)

COMMON BEAN HEDONIC PRICE FORMATION

(Weakly) link DWL to % Damaged through Mulungu (2006)

Common bean price discounts from Mishili et al. (2011) in Tanzania

A 2.3% price discount was found for every bruchid hole in 100 grain sample

Revenue Loss derived MOSTLY from quality loss and price discounts

DWL (%)

% Beans Damage

d*

% Revenue Loss

1.67 2.17 5.0

3.18 4.35 10.0

4.69 6.52 15.0

6.20 8.70 20.0

7.71 10.87 25.0

9.22 13.04 30.0*Conservative assumption of one hole per bean

TANZANIA: COMMON BEAN PRICE SEASONALITY

Source: FEWSNET

TANZANIA: COMMON BEAN PRICE SEASONALITY

Source: FEWSNET

COMMON BEAN PRICE SEASONALITY ACROSS EAST AFRICA

Percent Price Increase for High/Low Price Months

for Common Beans in Select East African Countries

 

Tanzania Kenya UgandaArusha 17.4% Kitui 16.8%

Lira 31.2%Dar es Salaam

21.1% Nairobi 20.1%

Dodoma

33.3% El Doret

27.5% Gulu 68.4%Mbeya 39.1%Songea 46.1%

Kisimu 33.5%Kamp

ala100%

Kigoma 58.7%

Source: FEWSNET (five-year average [nominal] monthly prices)

0.00 0.07 0.14 0.21 0.28 0.35 0.42 0.49 0.56 0.63 0.70 0.77 0.84 0.91 0.980%

20%40%60%80%

100%

Economic Threshold for Storage Profit

(Best-case Scenario: Perfect Protection- no weight or

value loss)8 months, OCC=0.25

PICS Bag, Cost= $1 PICS Bag, Cost= $2

Harvest Price/kg (USD)

Season

al P

rice I

ncre

ase (

%)

Opportunity Cost of Capital (OCC)

CASE STUDY: TANZANIA

Largest common bean producing country in East Africa

Focus on (green) production areas Kigoma Mbeya Songea Arusha

RETURNS TO VARIOUS METHODS: MBEYA Following losses from Songa and Rono

(1998), PICS should be competitive with chemical and solar methods.

Use of bag for second year is important

Mbeya Songea Kigoma$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

$18.00

5.95 5.90

14.92

7.35 7.30

16.33

Tanzanian Gains on Storage for Six Months

(OCC 25%)

PICS 1PICS 2

Un

co

rre

cte

d U

SD

WAY FORWARD

Need to incorporate incoming PICS data from current trials- Help link science and economics! Dry weight loss Holes in 100 grains/ % Beans Damaged

Quality is import and probably varies by region Room for economic research in price discounts

Understand greater impact of Opportunity Cost and credit constraints Will surely affect adoption for high-value beans Price seasonality must compensate!