Benefits
Farmers
Tinsmiths
National Economy
Training and Development Organizations
Government and Donor Agencies
Farmers’ profits depend on the earnings from grain sales and the percentage of the harvest preserved due to the POSTCOSECHA technology. With their own storage facilities farmers typically do not sell for average market prices, but sell during peak periods. This pro-cyclical effect is even stronger with the largest silo size: since only the grain amount above subsistence/reproduction needs is sold, farmers with harvests big enough to fill large silos will sell a higher percentage of their harvest at peak prices than average farmers.
Figure 1 shows the positive correlation between the farmers’ aggregate storage capacity and their accumulated net profit from 1981 to 2000 (Source: own data).
The investment in the new technology consists of monetary costs (purchase price of the silo, fumigation costs, interests on a potential loan, price of the storage technology replaced by the POSTCOSECHA technology) as well as nonmonetary costs (time invested in learning how to manage the new technology, information costs about the market for loanable funds). There exist also some uncertainties concerning the life expectancy of the silo, inflation, interest rate or market price fluctuations, etc.
The benefits to farmer families in general are: a low investment with rapid amortization, high return on investment, the strengthening of their bargaining position vis-à-vis traders, the diversification of livelihood strategies, a safe storage of family staples and seeds in a self owned storage facility in their house, dwellings free of rodents and poisonous chemicals, after sale services readily available with local tinsmiths.
A representative calculation (based on overall average estimates) for a Central American farmer would be:
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Silo technology costs
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4.5 USD/year |
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Silo technology benefits |
20 USD/year |
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Net average profit due to silo technology |
15.5 USD/year |
Tinsmiths’ profits depend on the number of silos sold and the sales price of the silos. The production costs consist of monetary costs (price of tools, price of silo raw materials, labor costs, storage costs, rental for studio/workshop, interests on a potential loan) as well as nonmonetary costs (time invested in learning how to produce silos, information costs about market for loanable funds). The tinsmiths’ uncertainties concern the life expectance of the tools, sales risk (fall in demand), inflation, etc.
Further benefits to local tinsmiths are the diversification of production, an additional income source, improved management competencies.
A representative calculation for a Central American tinsmith would be:
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Silo production costs
|
2067 USD/year |
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Silo sales benefits
|
2400 USD/year |
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Net average profit due to silo production |
333 USD/year |
Benefits to the national economy depend on the significance of the postharvest losses prevented (significance of the grain production for the national economy, scale of postharvest losses) as well as on the coverage with POSTCOSECHA technology (percentage of harvest stored at farm level, percentage of farm level storage covered with POSTCOSECHA technology).
Further impacts on the national economy are: the creation of new tinsmith jobs, price stabilization of basic grain staples on the market for grains (less scarcity), positive spillover or welfare effect because people not owning silos also benefit once the silo density is high.
An illustration of national economy impacts from Central America: in 2005, with roughly 500’000 silos in use, 45’000 tons of grain were preserved per year, representing a market value of roughly 10 million USD/year. Plus 200 new tinsmith jobs were created.
Training and Development Organizations
Training and development organizations benefit from a proven technology ready for dissemination.
Governments and Donor Agencies
Governments and donor agencies have at their disposal a low risk strategy with proven success on poverty reduction and sustainable economic growth. Decentralized storage is buffering lean seasons and avoids the use of centralized storage facilities with high distribution costs.
Additional Information and Documents
Beneficios del Silo
1998
Author: Programa Regional POSTCOSECHA
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Download (JPG, 107 KB): [es] |
