6. Results

Outcome variable	Brief recap	Interpretation and use of results
Adoption ceiling	The adoption ceiling determines the maximum crop area on which the new technology will be adopted. Two scenarios were considered in the priority assessment exercise: the high adoption scenario (‘higher adoption’) comprises the adoption ceiling estimated by the resource persons; for the more conservative adoption scenario (‘lower adoption’) the expert estimate was reduced by 50% while all other parameters were held constant.	The estimated maximum adoption area translates into the maximum number of farmers adopting the technology and thus into the likely number of beneficiaries of the new technology. This indicator is therefore important when making funding decisions as it shows how many people could potentially be reached by each banana research investment. Also, the adoption is the factor with which all yield/cost effects are multiplied. This means that it largely determines the total benefits. Including the second – more conservative – adoption scenario helps to correct for potential overestimation of benefits. We can probe if a research investment would still be sound if adoption was much lower than anticipated (as notoriously happens).
Net Present Value (NPV)	The Net Present Value gives us today’s value of net benefits generated by each research option. It is computed by deducting the discounted future costs from the discounted future benefits.	The minimum requirement for a sound banana research investment is that the expected Net Present Value is positive meaning that the discounted benefits exceed the discounted costs. If several research options that we assessed yield a positive Net Present Value, the option with the highest Net Present Value is usually chosen. Yet, since the Research and Development costs vary substantially across research options ($2.8 million–$47.7 million) and only a limited amount of money might be available for investment, the Net Present Value should not be used alone to rank the research options.
Internal Rate of Return (IRR)	The Internal Rate of Return is the discount rate at which the research investment breaks even. Technically, it is the discount rate at which the NPV equals zero meaning that the present value of costs of our research would exactly equal the present value of the research benefits.	Basically, the Internal Rate of Return is the interest rate earned on the research investment and can be compared to other interest rates earned by alternative use of the funds. Hence, the research project is considered a good investment if the Internal Rate of Return exceeds these other rates. In our case, the research investment is a sound investment if the Internal Rate of Return exceeds 10% (which is the discount rate applied in our Cost-Benefit Analysis model). In general, the higher the Internal Rate of Return of a banana research investment, the more desirable it is to undertake this project.
Number of beneficiaries	The number of beneficiaries represents the estimated number of households and persons who will benefit from the research option. The numbers are based on the adoption ceiling in each of the countries, the production area within those countries as well as the assumption of average banana production area of a farmer and the average family size.	Similar to the Net Present Value results, this information should be interpreted with respect to the different magnitude of the investments required/assumed across research options.
Poverty reduction	The poverty reduction results show how many people can be lifted out of poverty due to adopting a new technology resulting from the respective banana research investment.	Since the ultimate impact and goal of public agricultural research investments is to benefit the poor by eradicating poverty and hunger, the results of the poverty reduction model are an important additional indicator complementing the results from the Cost-Benefit Analysis. In this more equity focused consideration, we adjust for the specific region where benefits occur by including national poverty indicators and so-called region-specific ‘poverty elasticities’. As a consequence, the ranking of research options can be different from that resulting from the other indicators and generally research options with a larger share of expected adoption in Sub-Saharan Africa, where poverty rates are much higher than in Latin America & Caribbean and Asia, will rank higher based on the expected poverty reduction.

Technology	Adoption area		All benefits
	Lower Adoption	Higher Adoption	Lower Adoption		Higher Adoption
	(‘000 ha)	(‘000 ha)	NPV ($’000)	IRR (%)	NPV ($’000)	IRR (%)
Recovery from BBTV	404	807	1,340,032	63	2,740,802	79
BXW management: GM-resistant varieties	436	872	105,619	38	216,028	46
BXW management: cultural practices	643	1,287	1,980,437	76	4,083,161	95
Cropping system intensification*	627	1,253	547,506	43	1,127,387	54
Resistant EAHB (NEW)	592	1,185	98,516	23	214,366	28
Resistant EAHB (RELEASE)	397	795	300,974	51	612,477	61
Resistant plantain (NEW)	524	1,049	295,359	29	618,668	34
Resistant plantain (RELEASE)	449	898	1,110,961	64	2,264,126	75
Foc A: Quarantine – Scenario 1**	441	–	300,739	14	–	–
Foc A: Quarantine – Scenario 2***	396	–	193,661	13	–	–
Foc A: Quarantine – Scenario 3****	330	–	69,627	11	–	–
Foc B: Integrated Management	172	344	505,714	30	1,052,200	36
Foc C: Resistant cultivars	307	614	186,519	20	424,864	25
Foc D: GM resistant cultivars	63	127	137,024	28	286,030	34

BBTV = Banana Bunchy Top virus; BXW = Banana Xanthomonas wilt; Foc = Fusarium oxysporum f. sp. cubense

Remarks: Lower adoption scenario: analysis with 50% lower adoption ceiling; NPV calculated using a real interest rate of 10%; *Benefits from reduced yield variability and improved status of (on-farm) natural resources (e.g., soil fertility) have not been included in this assessment, which thus likely shows an underestimation or lower boundary of the effect;
**Scenario 1: Doubling of arrival time and 50 percent reduced increase of loss rate (12.50%) once Foc reaches the country as compared to a scenario without intervention;
***Scenario 2: Arrival time as in Scenario 1 minus 5 years; 50 percent reduced increase of loss rate (12.50%) once Foc reaches the country;
****Scenario 3: Arrival time as in Scenario 1 minus 5 years; 25 percent reduced increase of loss rate (18.75%) once Foc reaches the country;

Source: Results of Strategic Assessment of Banana Research Priorities

In a nutshell, all assessed research options yield sizeable positive Internal Rates of Return (i.e., returns on the investment well above a standard 10% interest rate). Internal Rates of Returns are positive and above 10%, even under the (50%) lower adoption scenario. There is, however, considerable variation in the return on investment between research options, with “BXW management: cultural practices” yielding an estimated 76% and the “Foc A: Quarantine – Scenario 3” an estimated 11%.

Estimated Net Present Values are positive throughout, confirming profitable investments. Since Research and Development costs (i.e., the level of investment) vary substantially across research options, the two indicators Internal Rate of Return and Net Present Value produce somewhat different rankings of the research options in terms of their profitability.

The table also displays the estimated area on which the new technology will be adopted under both the lower and higher adoption scenarios. As per definition of the scenarios, the adoption ceiling reached under the lower adoption scenario is half of the higher adoption scenario area. The estimated adoption area is an additional indicator to be considered when making funding decisions as it translates into the likely number of beneficiaries of the new technology.

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Technology	Number of beneficiaries				Poverty reduction
	Lower Adoption		Higher Adoption		Lower Adoption	Higher Adoption
	Households [‘000]	Persons [‘000]	Households [‘000]	Persons [‘000]	Persons [‘000]	Persons [‘000]
Recovery from BBTV	2,018	9,674	4,036	19,348	638	1,285
BXW management: GM-resistant varieties	2,173	10,745	4,346	21,489	155	311
BXW management: cultural practices	3,217	15,665	6,434	31,329	1,611	3,287
Cropping system intensification	1,397	6,428	2,794	12,856	342	686
Resistant EAHB (NEW)	934	4,326	1,869	8,652	953	1,935
Resistant EAHB (RELEASE)	634	2,937	1,267	5,874	389	782
Resistant plantain (NEW)	1,979	8,820	3,957	17,641	390	800
Resistant plantain (RELEASE)	1,696	7,566	3,393	15,133	247	50
Foc A: Quarantine – Scenario 1*	2,014	9,772	–	–	836	–
Foc A: Quarantine – Scenario 2**	1,810	8,799	–	–	738	–
Foc A: Quarantine – Scenario 3***	1,489	7,200	–	–	639	–
Foc B: Integrated Management	817	3,938	1,634	7,875	79	157
Foc C: Resistant cultivars	1,475	7,204	2,950	14,408	430	865
Foc D: GM resistant cultivars	306	1,371	612	2,743	44	89

BBTV = Banana Bunchy Top virus; BXW = Banana Xanthomonas wilt; Foc = Fusarium oxysporum f. sp. cubense
Remarks: Lower adoption scenario: analysis with 50% lower adoption ceiling; *Scenario 1: Doubling of arrival time and 50 percent reduced increase of loss rate (12.50%) once Foc reaches the country as compared to a scenario without intervention; **Scenario 2: Arrival time as in Scenario 1 minus 5 years; 50 percent reduced increase of loss rate (12.50%) once Foc reaches the country; ***Scenario 3: Arrival time as in Scenario 1 minus 5 years; 25 percent reduced increase of loss rate (18.75%) once Foc reaches the country;
Source: Results of Strategic Assessment of Banana Research Priorities

The last two columns in the table show the results of the calculation of the estimated poverty reduction effects of the different research options. These results show a different “ranking” of research options. The expected number of poor persons lifted out of poverty is partly determined by the magnitude of the Net Present Value, which is an input used for the calculation.

The model also adjusts for the specific region where benefits will occur by including national poverty indicators and region-specific elasticities. As a consequence, research options that have a high share of adoption predicted within Sub-Saharan Africa (e.g., breeding for resistant EAHB) rank higher using this performance indicator and those with larger share of adoption in Latin America and the Caribbean (e.g., breeding for resistant plantain varieties) rank lower.

The following table displays information about the regional distribution of the adoption area for the different research options. We note that these numbers are determined by the choice of countries to be included and, although resource persons have compiled the lists of countries to be included based on the severity/presence of the constraint or the suitability of the new technology, there may be scope to broaden the target region(s) and/or adapt the innovations in question to other areas. Also, the regional distribution of benefits is not only driven by the adoption area, but also by other parameters used in the model, such as productivity and cost effects, crop prices, and likely success rate.

Technology	Adoption area after 25 years (higher adoption scenario)
	Africa		Latin America & Carribean		Asia/Pacific		ALL
	[‘000 ha]	Share [%]	[‘000 ha]	Share [%]	[‘000 ha]	Share [%]	[‘000 ha]
Recovery from BBTV	706	87	–	–	101	13	807
BXW management: GM-resistant varieties	872	100	–	–	–	–	872
BXW management: cultural practices	1,287	100	–	–	–	–	1,287
Cropping system intensification	1,051	84	69	5	134	11	1,253
Resistant EAHB (NEW)	1,185	100	–	–	–	–	1,185
Resistant EAHB (RELEASE)	795	100	–	–	–	–	795
Resistant plantain (NEW)	646	62	371	35	31	3	1,049
Resistant plantain (RELEASE)	548	61	315	35	35	4	898
Foc A: Quarantine – Scenario 1*	203	46	44	10	194	44	441
Foc A: Quarantine – Scenario 2**	181	46	39	10	175	44	396
Foc A: Quarantine – Scenario 3***	157	47	39	12	135	41	330
Foc B: Integrated Management	6	2	21	6	317	92	344
Foc C: Resistant cultivars	217	35	23	4	373	61	614
Foc D: GM resistant cultivars	18	14	3	2	106	83	127

BBTV = Banana Bunchy Top virus; BXW = Banana Xanthomonas wilt; Foc = Fusarium oxysporum f. sp. cubense

Remarks: Lower adoption scenario: analysis with 50% lower adoption ceiling; *Scenario 1: Doubling of arrival time and 50 percent reduced increase of loss rate (12.50%) once Foc reaches the country as compared to a scenario without intervention; **Scenario 2: Arrival time as in Scenario 1 minus 5 years; 50 percent reduced increase of loss rate (12.50%) once Foc reaches the country; ***Scenario 3: Arrival time as in Scenario 1 minus 5 years; 25 percent reduced increase of loss rate (18.75%) once Foc reaches the country; Given that quarantine and surveillance measures are executed at the national level, we assumed that all farmers “adopt” or benefit from the technology once the country implements the Foc A quarantine schemes. The Foc A figures in this table represent only the area where Foc would spread and could be contained;

Source: Results of Strategic Assessment of Banana Research Priorities

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• The key parameter driving the assessment is the adoption area of the new technology. In the results section you have seen that we have already included a much more conservative “low adoption” scenario which assumes a 50% lower adoption ceiling. For the purpose of testing the robustness of our results, we have gone even further and tested if investments would still be profitable if adoption was only 25% of what experts predicted. Even under this extremely conservative scenario, all assessed research options reach positive Net Present Values and the Internal Rates of Return are well above the 10% benchmark level. Since a reduced adoption ceiling affects all research options in the same way, the ranking of the research options is not changed.
• Furthermore, everything always takes more time than initially anticipated, thus we considered a later start of benefits. Delays in adoption are common and could be caused by e.g. a longer research period than anticipated, and/or delays in the subsequent out-scaling and dissemination efforts which ensure the technology is available to the farmers. We assumed that adoption would start 2 years later than originally planned, while keeping the adoption ceiling and pace at the same level. While this reduces Net Present Values and Internal Rates of Return for all research options (and considerably so for some), all research options would still be ranked as economically viable investments.
• Only when combining the two scenarios outlined above, i.e. computing the results for much reduced adoption AND a delay, the Net Present Value and Internal Rate of Return indicators slip for some research options.

In summary, our sensitivity analysis shows that the results of the priority assessment are robust even under rather extreme scenarios such as much lower (only 25%) adoption or delays. If you are interested in the detailed results of the sensitivity analysis for (a) specific research option(s), please have a look at the sensitivity analysis section of our report.