Economic modelling of coconut based farming systems. Annual report. Dec. 1995 - Nov. 1996

With regard to the economic modelling component of the project 'Coconut based Farming Systems', the following activities were undertaken between December 1995 and November 1996: (a) literature and software review of economic models for tree based intercropping systems; this activity was started in 1995 and continued until March 1996; (b) identification of potential partners to create a computer version of the economic model; in this respect, the BEAM project of the University of Wales, Bangor, was approached in May 1996; (c) request to PCA and CCTP for information so that modelling exercise could be started; Information was obtained in July 1996; (d) field visits to the Philippines and Tanzania in October 1996; (e) re-design of model, this was started in November 1996. The basic principles of the economic model can be summarised as follows: (a) the biological model, to be prepared by CIRAD, and the economic model, to be prepared by NRI, will be linked, allowing the analysis of the profitability of coconut based farming systems and relevant projects; (b) the software version of the model, which will be driven by Excel 5.0, mainly consists of templates for data input, and the elements where the actual analysis takes place; the link with the CIRAD model will be provided via a bio-physical template; (c) the model allows the calculation of indicators such as Net Present Value, Internal Rate of Return, Gross and Net Margins, and Labour Requirements. (d) the model follows the principles of partial analysis, owing to the complexity of farming systems in Africa and Asia and the fact that often only parts of a farm are dedicated to coconuts. In addition, the analysis will be based on an incremental cash-flow analysis, allowing the comparison of situations 'with' and 'without' coconut based intercropping on the same piece of land. As for the activities to be carried out between December 1996 and the end of 1997, these include the following: (a) finishing of the economic model by mid 1997; this includes the preparation of guidelines for potential users; (b) presentation of the model to CIRAD; (c) linking of the bio-physical and the economic models (to be undertaken by CIRAD); (d) participation in end-of-project seminar where model will be presented by all collaborators to the European Commission. (e) training of staff of both DRC/PCA and ARI in the application of the model. The exact procedures for this need to be established. Aside from this, DRC/PCA staff are likely to require an up-grade of their computer hardware, and additional training in survey methodologies and financial appraisal