Cost and benefit analysis of Climate-Smart Agriculture interventions in the dryland farming systems of northern Ghana

Abstract

There is a need for more focus in understanding the economic benefits of Climate-Smart Agriculture (CSA) interventions, particularly in sub-Saharan Africa, where extreme climate events are significantly affecting agriculture and rural livelihoods. This study used the Net Present Value (NPV), Internal Rate of Return (IRR), Benefit-Cost Ratio (BCR), and payback period to evaluate the economic viability of the adopted CSA interventions in the three villages (Doggoh, Jeffiri, and Wulling) of the dryland farming systems of northern Ghana, where CSA interventions were mostly practiced. Data were collected from 161 farm households by the questionnaire survey. The results showed that CSA interventions including livestock-crop integration, mixed cropping, crop rotation, nutrient integration, and tie ridging enhanced crop yield and the household income of smallholder farmers. The five CSA interventions selected by smallholders were in the following order of priority: livestock-crop integration (BCR=2.87), mixed cropping (BCR=2.54), crop rotation (BCR=2.24), nutrient integration (BCR=1.98), and tie ridging (BCR=1.42). Results further showed that livestock-crop integration was the most profitable CSA intervention even under a pessimistic assumption with a long payback period of 5.00 a. Moreover, this study indicated that the implementation of CSA interventions, on average, was relatively profitable and had a nominal financial risk for smallholder farmers. Understanding the economic viability of CSA interventions will help in decision-making process toward selecting the right CSA interventions for resilience development.

Keywords

• Climate-Smart
• Agriculture (CSA)
• Economic viability
• Internal Rate of Return (IRR)
• Benefit-Cost Ratio (BCR)
• Payback period