A new approach for cost-benefit analysis of innovations to enhance smallholder farmers' resilience

Kramer B, Timu Anne. 2022. A new approach for cost-benefit analysis of innovations to enhance smallholder farmers' resilience. AICCRA Working Paper No.6. Accelerating Impacts of CGIAR Climate Research for Africa (AICCRA).

Enhancing smallholder farmers’ resilience has become an important objective for innovations in agricultural development. Cost-benefit analyses (CBA) of such innovations are essential in guiding future investments in agricultural development, but existing CBA methods often face challenges embedding non-monetary outcomes related to resilience. Resilience-enhancing innovations typically not only increase average incomes, but may also affect the variance of that income, and related welfare benefits depend on a beneficiary’s risk preferences. In addition, CBAs are typically unable to quantify costs and benefits in terms of gender-related outcomes such as women’s empowerment, or time use for women and men. This paper introduces a new approach to quantify costs and benefits related to such outcomes and demonstrates the approach using a case study of climate information services in Ghana. We argue that this is a more comprehensive method for impact assessment of innovations to enhance smallholder farmers’ resilience, enabling evidence-based investment prioritization.