Financial Analysis of an Agricultural Extension Initiative in a Conflict-Vulnerable Area of Mindanao

An economic assessment of a pilot agricultural extension initiative relating to vegetable growing in a conflict-vulnerable area of Zamboanga Sibugay, Mindanao was undertaken. There are minimal micro or macro level studies in the literature attempting to measure the economic returns to agricultural extension. Those studies have typically suffered from an attribution problem in relation to the separation of extension costs and benefits from other influencing factors. In conflict vulnerable areas such as reported here, agricultural extension is generally limited or absent. In this example, the application of the extension initiative was the only change affecting farmers’ practices, so the study is somewhat unique in being able to isolate the extension effect. The analysis indicates that the present value of benefits from the extension initiative is 1.6 million pesos while the present value of costs is 1.1 million pesos, with a net benefit of 570 thousand pesos. The benefit cost ratio is 1.54 and the internal rate of return is 34%. These various measures are all significantly positive and lend credibility to the idea that agricultural extension applied to conflict-vulnerable areas can represent an acceptable return on money invested. The research can also be seen as a component of a broader ‘action research’ agenda whereby initial research outcomes are evaluated before progressing to the next step of wider implementation/adaptation.