Forget about gold, diamonds, or property: If you want great returns, invest in vegetables
A recent study by the World Vegetable Center discovered rates of return on vegetable research the smart money should not ignore.
Showing donors how their investments in research resonate throughout communities and economies is essential for nonprofit institutions such as the World Vegetable Center (WorldVeg).
The Center, the only international nonprofit organization that develops improved vegetable lines for the public domain, regularly demonstrates its value through community impact evaluations. Increasingly, however, donors want to know if the financial support they provide has long-lasting structural influence. And although the importance of vegetables for human nutrition and smallholder incomes is generally understood, evidence for the impact vegetable research and development has at scale is lacking.
WorldVeg researchers Pepijn Schreinemachers and Philipo Joseph Lukumay and consultant Teresa Sequeros set out to investigate how the Center’s research on two crops—tomato and African eggplant—affected countries in East and Southern Africa, Tanzania in particular, from 1990 to 2014. They surveyed 87 seed companies and public sector organizations around the region to collect data on seed production, distribution and sales.
Their results, published in the July 2017 issue of Agricultural Economics, revealed some stunning figures regarding the distribution and adoption of vegetable seed and the economic value it has generated.
Read more: Schreinemachers P, Sequeros T, Lukumay PJ. 2017. International research on vegetable improvement in East and Southern Africa: adoption, impact, and returns. Agricultural Economics. DOI: 10.1111/agec.12368.
The study shows that tomato varieties developed by the World Vegetable Center now account for 50% of the tomato seed sold commercially in the region. The Center has been developing improved tomato breeding lines for Africa since the early 1990s in collaboration with Tanzania’s Horticultural Research and Training Institute (HORTI-Tengeru) and with support from the Agriculture Seed Agency (ASA), a direct link to seed companies. Distribution of improved varieties ‘Tanya’ and ‘Tengeru-97’ began in Tanzania in 1997 and expanded to other countries in the region through the networks of Alpha Seed, a private company. Other companies then added the seed to their portfolios. By 2003, nearly 70% of Tanzania’s tomato farmers had adopted the improved varieties.
The figures are even higher for African eggplant. Once a subsistence crop, African eggplant seed is now marketed commercially—and 98% of commercial seed sold in the region today comes from lines developed by WorldVeg and HORTI-Tengeru that were released in 2007.
For Tanzania alone, an investment of approximately USD 10 million in crop research and development generated economic gains of USD 255 million for tomato and USD 5 million for African eggplant. That amounts to an internal rate of return of 26% for tomato and 12% for African eggplant. Given the comparatively short period of time the improved African eggplant seed has been available, returns are expected to increase to 26% by 2024.
Every dollar invested in tomato research and development returned 12.5 dollars in economic gain.
“The returns to investment will continue to be attractive because of the large unexploited potential in vegetable production,” said Pepijn Schreinemachers, WorldVeg Socioeconomist.
With average farm-level tomato yields in Tanzania at just 12 tons per hectare, but average on-station yields at 50 tons per hectare (and up to 80 tons per hectare in Taiwan, the location of WorldVeg headquarters), there is scope for new, well-adapted varieties with better resistance to pests and diseases combined with better production practices to generate future economic gains in developing economies.
The primary objective of agricultural development in the past was to increase yields and production of staple crops. Today, as the nutritional challenges developing countries face increase, the focus is gradually shifting to an emphasis on providing more nutritious and diverse diets. The study by Schreinemachers, Sequeros, and Lukumay provides evidence for greater investment in vegetable research to achieve this goal.