Analysis of labor opportunity cost on the economic profitability of fertilizer microdosing (FM) in Burkina Faso

Abstract

This paper analyses the effect of labor opportunity cost on economic profitability of fertilizer microdosing (FM) in Burkina Faso. In order to assess the incremental change in net income when the investment cost increases and takes into account labor opportunity cost, the marginal value cost ratio (MVCR) approach is used. Using data from farmer's field, the results showed that for both crops, the median yield of the fertilizer microdosing plots is 500 kg.ha-1 , which is slightly higher than yield from recommended dose plots. Moreover, the rate of fertilizer microdosing plots of millet with a marginal value cost ratio above 2 shifts from 50% (without labor opportunity cost) to 41% (with labor opportunity cost) and not even one recommended dose plots reached this threshold. These findings argued that fertilizer microdosing adopters remain economically profitable for farmers compared to traditional practices despite the opportunity cost of labor. However, because of its importance in the process of fertilizer microdosing adoption, labor costs must be included in its economic evaluation. The results of this study confirm the need to accelerate mechanization of fertilizer microdosing application.

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“…For example, in Malawi, drought-tolerant maize varieties are typically no more costly than other hybrid maize varieties (Holden & Fisher, 2015), and have been shown to increase yields by 44% (Katengeza & Holden, 2020). Micro-dosing of fertilizer reduces overall input use relative to recommended dose approach to fertilizer application (Okebalama et al, 2016; Mamadou et al, 2020). Mechanization reduces labor costs for specific on-farm tasks (Norman et al, 1988; Afridi et al, 2020).…”