African Journal of Agricultural Economics and Rural Development

African Journal of Agricultural Economics and Rural Development ISSN 2375-0693 Vol. 8 (8), pp. 001-007, August, 2020. © International Scholars Journals

Full Length Research Paper

Cost-benefit analysis of common bean productionin the Central Rift Valley (CRV) of Ethiopia

Tamirat Fikadu, Mekonnen Sime and Yitayal Abebe

*Ethiopian Institute of Agricultural Research, Melkassa Agricultural Research Center P. O. Box 436.

Accepted 12 April, 2020

Abstract

This study investigated the economic viability of smallholder farmer’s common bean production in the central rift valley of Ethiopia. Plot level data were collected from 31 farmers in three districts using a well-designed datasheet. The data were analyzed using descriptive statistics, profitability ratio, and enterprise budget analytical methods. The result showed that labor, oxen draft power, fertilizer and seed were the major input costs of common bean production accounting for 58%, 20, 13 and 10 percent, respectively. Results further showed that farmers obtained about 14017 and 1807 (ETB) per hectare on average from common bean yield revenue and common bean straw sales, respectively. The total variable cost of common bean incurred by the respondents averaged ETB 9459.00/ha, with an average Gross Return (GR) of ETB 15825.00/ha, which resulted in a Gross Margin (GM) of ETB 6366.00/ha. The benefit-cost ratio (BRC) of 1.67 showing the enterprise is profitable in the CRV of Ethiopia.

Keywords: Common bean, gross margin, production economics, profitability and smallholder.