See below for a guest post on how USAID is using cost-benefit analysis to measure the impact of development programs and, ultimately, use the data to make these programs more sustainable. This post originally appeared on USAID’s Impact blog and the State Department’s Dipnote blog.
In the world’s newest nation of South Sudan, the legacy of four decades of civil war continues to challenge efforts to gather reliable current statistics on health, education, the economy and other factors. USAID and other development partners are seeking to help the South Sudanese people build a robust and resilient economy. Key to that effort is modernizing and expanding the agriculture sector. Because decades of war often forced people from their land, South Sudan as a whole lost much of its agricultural knowledge base. As a result, most of South Sudan’s food is imported, despite significant arable land, plentiful water and good quality soil. In spite of the challenges, most South Sudanese are still involved in agriculture, typically as subsistence farmers producing crops such as maize, sorghum, cassava and groundnuts. Production levels are low, however, and even farmers in the most fertile region—the “Greenbelt” that crosses the three Equatoria states—are affected by a number of adverse conditions, including poor quality seeds, deficient farming equipment, lack of roads to get their goods to market and post-harvest losses due to inadequate or nonexistent storage.
To examine the effects of USAID’s assistance in South Sudan’s agriculture sector since 2012, a USAID team led by economist Paul Pleva recently completed a cost-benefit analysis of the $26 million in USAID funds currently being spent annually in South Sudan in support of the Feed the Future Initiative. Part of the analysis examined two different techniques for improving crop yields, both being promoted under USAID’s Food, Agribusiness and Rural Markets (FARM) project. Begun in 2010, the FARM project seeks to boost agricultural growth through improved inputs, strengthen market linkages, improve the conditions for private sector investment and improve infrastructure to facilitate trade.
Pleva analyzed the two techniques being implemented through the FARM project to improve crop yields. One technique required relatively expensive farming inputs, but promised potentially dramatic yield increases. A second technique focused on more simple improvements such as improved seeds, proper weeding and seed row spacing for more modest yield increases. The team observed actual outcomes produced by the two techniques and considered the sustainability of each.
Pleva led a collaborative effort to collect data from multiple sources, identify inconsistencies and compare the quality of those sources. He used inexpensive technologies such as Google Apps to ensure that USAID implementing partners around the world could provide input.
After comparing the results, the USAID team found that of the two interventions, the cheaper technique of improving farming yields resulted in greater profitability for South Sudanese farmers and provided a much better chance of sustainability after the project ends. The evidence for this finding was significant and, as a result, USAID turned the focus of the project toward the cheaper and more sustainable intervention.
Small sums can generate big returns—in this case for both farmers and USAID. USAID made a modest investment of resources—the staff time of a small team—to conduct the cost-benefit analysis, and in doing so, increased the development impact of taxpayer dollars significantly. Farmers in South Sudan, one of the world’s poorest countries, stand to benefit economically from the findings of this analysis—a potential path out of poverty.
By using economic analysis to prove that simple techniques can best assist South Sudan’s farmers, USAID had avoided an all too common trap in development—unsustainable projects that fall apart when donors conclude a project or cease assistance to a sector or country. Lessons like this one not only save money in the short-term, but by helping people to increase their household income and food security they also decrease the likelihood that emergency funds will be needed to help these communities in the future.