The Israeli Moshav in Nigeria: An Estimate of Returns

This article provides an estimate of prospective social returns to the Israeli form of agricultural-settlement unit introduced into Western Nigeria in 1961. Evaluation is based on FAO data covering 13 farm-settlement units and including 19 crop and livestock-raising activities. Benefit-cost analysis is used to determine whether the project meets the minimum criteria applied to investment components of the 1962–1968 Nigerian Development Plan, and the evaluative framework is designed (a) to isolate cases where the project can be judged without recourse to measurement of external benefits from those cases where such estimation is required, and (b) to permit examination of the effects on estimated returns resulting from different assumptions about product and factor prices. If the FAO projections of product prices and the government wage and borrowing rates are used as a basis for evaluation, the project appears to be a justifiable component of the National Development Plan; this conclusion is severely weakened when the product- and factor-price assumptions are examined. Acceptability of the project is found to be very sensitive to the possibility of capital rationing and to rather tenuous assumptions about the prices of cocoa and poultry products. Finally it is noted that the rapid expansion of the project leaves it open to substantial losses if the technical assumptions about inputs and yields prove incorrect.