This paper summarizes the results from data collected during the study’s second year, 1997/98. The analysis is based on a sample of 210 smallholder farmers in Nampula Province using three different sets of production practices: the DNER/Sasakawa- Global 2000 Program (DNER/SG) high-input package (improved open-pollinated maize, 100 kg/ha each 12-24-12 and urea fertilizer on credit); improved planting and weeding practices only (using local seed, without fertilizer); and a control group of farmers using traditional practices (no improved seed or fertilizer). The objectives of the research were to: describe the characteristics, input use patterns and yield response by group; analyze the relative contribution to yield of the different technologies, environmental factors, and management practices; and assess the profitability of the three different technology types at the farm level.food security, food policy, Mozambique, maize, Crop Production/Industries, Q18,

Boughton, Duncan

Howard, Julie A.

Jeje, Jose Jaime

Kelly, Valerie A.

English

Research Papers in Economics

November 2000  No.  21E
http://www.aec.msu.edu/agecon/fs2/mozambique/flash21e.pdf
MARD-Directorate of Economics
*
 Comparing Yields and Profitability in MARD’s High- and Low-Input Maize Programs:
1997/98 Survey Results and Analysis 
by Julie Howard, José Jaime Jeje, Valerie Kelly and Duncan Boughton
**
INTRODUCTION AND OBJECTIVES: 
Mozambique, one of the poorest countries in the
world, must increase agricultural productivity to feed
its growing population and spur economic recovery
following years of civil war. Agricultural
intensification is one way to increase productivity, but
the use of technologies such as improved seed and
fertilizer is extremely limited.  
The Department of Rural Extension (DNER) in the
Ministry of Agriculture and Rural Development
(MARD) operates several programs to stimulate
maize production through the use of improved
technologies in Mozambique’s high-potential regions.
Until recently no formal analysis had been carried out
to assess the yield performance and profitability of the
improved technology packages.  In 1996/97 the
Department of Policy Analysis (DAP) in MARD’s
Directorate of Economics began a three-year study of
yields and profitability in alternative maize
intensification programs in collaboration with DNER.
This paper summarizes the results from data collected
during the study’s second year, 1997/98.
1  T h e
analysis is based on a sample of 210 smallholder
farmers in Nampula Province using three different
sets of production practices: (1) the DNER/Sasakawa-
Global 2000 Program (DNER/SG) high-input package
(improved open-pollinated maize, 100 kg/ha each 12-
24-12 and urea fertilizer on credit); (2) improved
planting and weeding practices only (using local seed,
without fertilizer); and (3) a control group of farmers
using traditional practices (no improved seed or
fertilizer).
The objectives of the research were to: (1) describe
the characteristics, input use patterns and yield
response by group; (2) analyze the relative
contribution to yield of the different technologies,
environmental factors, and management practices;
and (3) assess the profitability of the three different
technology types at the farm level.  We estimated
econometric yield models to quantify the effects of
key inputs and field practices on productivity.
Financial budgets were constructed to assess the
farm-level profitability of improved maize technology
use.  
YIELD RESULTS AND DETERMINANTS:
Average yields in the 1997/98 season ranged from
1.4 tons/ha for control group members (traditional
practices, no purchased inputs) to 1.7 tons/ha for
improved management only farmers (no
purchased inputs) and 2.0 tons/ha for high-input
farmers.  Yields for all groups exceeded average
yields for Nampula Province in previous years by a
wide margin.  Provincial averages were 0.8 ton/ha in
1994/95, 0.9 ton/ha in 1995/96 and 1.0 ton/ha in
1996/97.  Our analysis of socioeconomic
characteristics indicated that sample farmers are not
significantly better off  in terms of resources than
average farmers in Nampula Province.  The relatively
high sample yields for farmers using no improved
inputs (compared to provincial averages) suggest that
the sites included may have relatively better cropping
conditions than other areas in the province. Therefore
it will be important to use caution in generalizing
from these findings to areas where agroecological
conditions are less favorable.
* The views expressed here are those of the authors and do
not necessarily reflect the official position of the Ministry of
Agriculture and Rural Development.
**Howard, Kelly and Boughton are faculty members in the
Dept. of Agricultural Economics, MSU.  Jeje is an analyst
with the Economics Directorate, MARD.
1The full report is also available: Howard, Julie, José Jaime
Jeje, Valerie Kelly and Duncan Boughton.  2000.  Comparing
Yields and Profitability in MARD’s High- and Low-Input
Maize Programs: 1997/98 Survey Results and Analysis. 
Research Report No. 39.  Maputo: Ministry of Agriculture and
Rural Development.2
Although average high-input yields exceeded
improved management only and control group yields
across the sample, when the results are disaggregated
by region they reveal that high-input yields are
significantly higher than improved management
yields only in Monapo/Meconta Districts (Region 8).
Average high-input yields in Region 8 were 2.7
tons/ha, compared to 2.0 tons/ha for improved
management only farmers, and 1.8 tons/ha for control
group members.  Differences between groups in
Regions 7 and 10 were not statistically significant. 
Despite this apparent evidence of poor average
performance from high-input technology, our
econometric analysis of yield determinants
revealed a very strong and positive relationship
between higher yields and the use of improved
seed and fertilizer together with increased plant
density.  The results suggest that high-input maize
technology holds considerable potential for
increasing yields, but the performance of the
improved input package in 1997/98 may have been
compromised by poor program implementation.
In two of three regions, improved seed and fertilizer
were delivered late and planting was subsequently
delayed by 2-5 weeks.  The results also show that use
of high-input technology is riskier (i.e., yields are
less stable) than low-input or traditional methods.
This is an especially important consideration if high-
input technology is extended to farmers in more
marginal agroecological areas or with fewer
household resources for whom a yield loss in one
season could be catastrophic.  
The analysis indicates that increasing plant density
is critical to improving yields of high-input maize.
While high-input program participants in our sample
had significantly higher plant densities than plots of
improved management only or control groups, high-
input densities were still well below recommended
levels: 30,808 plants/ha compared to the
recommended level of 50,000 plants/ha.  Further
investigation is required to determine the factors
underlying these discrepancies and for the large
variation in density across plots.
Seed and fertilizer recommendations in the high-input
package were standard across the three agroecological
regions we examined, but the analysis suggests that
differences between the three agroecological regions
are significant.  Fine-tuning seed, fertilizer, and
crop management recommendations could
improve yields, given the differences in soil types,
rainfall, altitude and other agroecological
characteristics between the three regions.  Farmers
also noted yield losses due to locally severe problems
with termites and rats, wind damage in higher-
elevation areas and drought.  More region-specific
adaptive research is needed to identify specific
solutions, e.g., recommendations on pesticide use and
ways to increase its availability at the local level, and
on specific varieties that could better withstand wind
and drought conditions.
The lack of clarity regarding whether input credit
would have to be repaid, combined with the late
delivery of inputs in two of the three regions, may
have compromised the technical performance of the
improved seed and fertilizer and reduced farmer
incentives to manage their plots – especially weeding
– as well as they might have. 
FINANCIAL ANALYSIS:  The yield results
indicate that farmers can significantly increase maize
yields through the application of the recommended
improved seed and fertilizer package, if inputs are
delivered on time and crop management
recommendations are followed.  The results of the
financial analysis are more sobering.  A summary of
the results is presented in Table 1.  Under the
conditions faced by smallholder farmers in 1997/98
(including uncertainty about weather conditions, the
timing of input delivery and commodity prices), the
analysis indicates that in most scenarios (sales in
September, shortly after harvest, or in November, or
January) the yield gains did not compensate for the
high cost of the inputs, if net income/ha is used as
the measure of profitability.  Farmers achieved higher
returns (net income/ha) when they used only
improved management techniques without purchased
seed or fertilizer. Only in Region 8
(Monapo/Meconta), where inputs were delivered on
time and weather conditions were good, did the
profitability of the high-input package exceed that of
improved management alone, and then only if farmers
waited until January to sell maize (benefitting from a
price rise of 100% between September 1997 and
January 1998).  
The results of the financial analysis also suggest that
farmers – regardless of the technology package used
– can potentially benefit from gains to storage and
later sale of maize, especially when insecticide is used
to reduce grain losses to storage pests.  Gains from
storage are not assured, however.  In 1997/98
seasonal price rises were impressive, but in 1998/993
Table 1: Summary of Results from Farm-Level Maize Enterprise Budgets
Region 7 -- Ribaue District Region 8 -- Monapo/Meconta Districts Region 10 -- Malema District
Hi Input  Improved
Management
Only
Control
Group
Hi Input  Improved
Management
Only
Control
Group
Hi Input  Improved
Management
Only
Control
Group
Maize grain yield
a 1.3 1.3 1.1 2.7 2.0 1.7 1.9 2.0 1.2
1.  September 1998
September price (mt/kg) 1,050 1,050 1,050 1,050 1,050 1,050 1,050 1,050 1,050
Net income (mt/ha) (68,134) 1,272,828 1.030,941 1,204,39 1,660,743 1,434,016 214,509 1,399,380 1,210,142
Net income/labor day (1,117) 13,686 9,458 16,059 10,315 7,628 4,564 12,957 10,432
2a.  November 1998
November price (mt/kg) 1,714 1,714 1,714 1,520 1,520 1,520 1,714 1,714 1,714
Net income (mt/ha) 667,211 2,010,923 1,637,274 2,204,76 2,400,548 2,090,409 1,245,76 2,488,099 1,906,364
Net income/labor day 10,938 21,623 15,021 29,397 14,910 11,119 26,506 23,038 16,434
2b. November 1998
storage insecticide used
Net income (mt/ha) 704,017 2,047,153 1,667,036 2,263,53 2,443,390 2,128,422
Net income/labor day 11,541 22,012 15,294 30,180 15,176 11,321
3a.  January 1999 prices
January price (est.) 2,100 2,100 2,100 2,100 2,100 2,100 2,100 2,100 2,100
Net income (mt/ha) 985,418 2,352,652 1,917,998 3,367,18 3,269,044 2,860,985 1,700,97 2,992,906 2,228,308
Net income/labor day 16,154 25,297 17,596 44,896 20,305 15,218 36,191 27,712 19,210
3b.  January 1999
storage insecticide used
Net income (mt/ha) 1,087,2 2,452,805 2,001,104 3,573,49 3,417,817 2,993,118 1,843,05 3,139,634 2,323,833
Net income/labor day 17,824 26,374 18,359 47,647 21,229 15,921 39,214 29,071 20,033
4.  If credit is not repaid
Net income (mt/ha) 1,263,5 2,536,09 1,546,20
Net income/labor day 20,714 33,815 32,898
Source: Survey data, CLUSA and SIMA reports (for price data)4
because of increased production in Malawi and the
southern Africa region generally prices have been
much flatter. 
The main finding from the financial analysis is that
while the use of improved technology on maize can
result in increased yields and profitability, but the
level of risk and uncertainty surrounding use of
improved maize technology, and the cost of
supplying improved seed and fertilizer, are very
high.  In 1997/98 the yield increases generated
through the use of the technology package generally
did not compensate for the high cost of the inputs
given  prevailing output prices.
CONCLUSIONS:   The results of this analysis
suggest the need for policy and program actions,
and further research, to reduce (1) the risks and
uncertainty of input use at the farm level, and (2)
the cost of input supply, to allow Mozambican
smallholders to benefit from technological
improvements that can potentially increase yields,
food security and incomes.  Possible actions and
research include:
Reducing production risk by fine-tuning
agronomic recommendations.  There were
significant differences in yield response between the
three agroecological regions studied.  Because a
large part of the differences may be attributable to
variations in altitude, rainfall, and soils, this
suggests the need for fine-tuning the current blanket
agronomic recommendations.  Institutional
incentives are required to motivate researchers and
extensionists to modify technology
recommendations for specific areas by synthesizing
the results from on-station and on-farm trials,
including INIA’s national geographically-
referenced database on soil quality and response to
fertilizer.  
Focusing more adaptive research and extension
effort on solving problems that seriously affect
maize yield.  Our analysis indicates that plant
density -- in conjunction with improved seed and
fertilizer 
use-- is the most important determinant of maize
yield.  There were very high levels of variation in
plant density among high-input farmers, 26,000-
33,000 plants per hectare, compared to the
recommended level of 50,000 plants per hectare.
Closer extension supervision at planting time may
be required, but adaptive research is also needed to
address other problems identified by farmers (e.g.,
termites, rats, early season mini-droughts).
Adjusting agronomic recommendations
according to farmers’ ability to bear risk.
Recommendations, particularly for expensive inputs
such as commercial fertilizer, may also need to be
adjusted on the basis of farmers’ capacity to bear
risk.  For example, farmers who have more than one
commercial crop (e.g., cotton, maize, oilseeds,
beans) may have a higher risk threshold than
farmers with a single marketable commodity. In the
event of a poor return on one crop,  input loans can
be paid off with returns from another.  More
research needs to be carried out to understand how
farmers perceive risks and the attractiveness of
alternative investments within the farming system.
Preliminary results suggest the need for
recommendations geared not only to agroecological
differences but to variations in farmers’ ability to
spread risk among different crops in the farming
system, or among different on- and off-farm
enterprises.
Improving research and extension on the costs,
returns and risks of alternative technologies in a
cropping systems context.  Through the efforts of
the Cooperative League of the USA (CLUSA) and
other NGOs, farmers in Nampula Province are
becoming more aware of the need to analyze
potential costs and returns from alternative
commercial crops, e.g., cotton, maize, sunflower,
sesame, pigeon pea. Researchers and extensionists
can contribute to this discussion by (1) collecting
data on labor inputs and carrying out financial
analysis of trials (especially on-farm trials) of new
technology and crop management techniques; (2)
making information on yield and profitability
available to farmers in an easy-to-understand
extension bulletin format; (3) DNER, DAP and
SIMA (Market Information System) collaboration
to assess and extend information about the price risk
associated with alternative commodities and input
use; and (4) improving research and extension on
alternative crops and technologies in a cropping
systems context. 
Reducing the cost of input supply.  Our analysis
showed that the cost of improved seed and fertilizer
represented 68-80% of production costs (exclusive
of family labor) for sample farmers.  Reducing costs
at strategic points in the input sector will clearly
improve the farm-level profitability of improved5
technology.  The research activity described in this
paper did not focus on the impact of government
and donor policies and programs on input supply,
but these are discussed at length in a recent DAP
study on constraints and strategies for the
development of the Mozambican inputs sector.  Key
recommendations of that paper include: (1)
investments to reduce transport costs, including
road, rail and shipping infrastructure, and incentives
to the private sector to expand and maintain rural
transport fleets; (2) government withdrawal from
management of the KRII program for supply of
fertilizer, pesticides and machinery; (3) reduction of
policy barriers to regional trade in inputs by the
private sector, and research to explore the
possibility of reducing shipping and transport costs
through bulk ordering of fertilizer with partners in
neighboring countries; (4) expansion of programs to
train input dealers in rural areas; and (5) programs
to supply improved seed varieties to remote, less
commercially developed areas of Mozambique.
Farmer associations are increasingly active in
Nampula Province and present one of the most
promising avenues for lowering input and output
marketing costs.  Farmer associations can
potentially lower the private sector costs of input
supply and credit recovery, and increase extension
effectiveness, by (1) aggregating input demand from
scattered rural villages; (2) organizing local delivery
to member villages after inputs are delivered to a
central location; (3) organizing extension assistance
on a group basis; and (4) providing group
guarantees for input loans. 
2MARD/DE/DAP.2000.Avaliação dos Impedimentos
para o Desenvolvimento do Sector dos Insumos
Agrícolas e Veterinários.  Rascunho.  Maputo:MARD.

Comparing Yields and Profitability in MARD's High- and Low-Input Maize Programs 1997/98 Survey Results and Analysis

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