Cost benefit analysis of agroecological transition: A case of mango value chain in Kenya

Agroecology has been highlighted as a sustainable approach that could support food system transformation in many low- and middle-income countries (LMIC). However, there is limited evidence on the costs and benefits associated with agroecological transition. Moreover, existing evidence is only limited to farm level assessments, yet agroecology assessment needs to be done from a systems perspective. We conducted a cost benefit analysis associated with AE transition along two existing business models in the mango value chain in Makueni County, Kenya. At farm level, the agroecological interventions considered in the analysis include intercropping, activities related to reduced postharvest losses, and the use of organic inputs. At the business level, these interventions include physical expansion of the enterprises, product and market diversification and proper postharvest handling. Our findings show that the benefits associated with agroecological transition are significantly higher than the costs at both farm and business levels. At farm level the net present value (NPV) ranged between USD 300 and USD 400, a positive benefit cost ration (BCR) (>1) with a payback period of two years while the internal rate of return (IRR) ranged between 100% and 325%. At business level the NPV were above USD 10,000 with a positive IRR of between 15% and 37%, a BCR of >1 and a payback period of between three and four years. The results imply that agroecological transition is profitable both at farm and business level, although there is a waiting period which may be a barrier to many smallholder farmers and small businesses. Policy interventions to integrate agroecological approaches across key food value chains would promote sustainable food system transformation, especially in vulnerable contexts of LMIC. The social, health, and environmental benefits are also discussed.